EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made June 26,
2009, by and between General Employment Enterprises, Inc. (the
"Company") and Xxxxxxx Xxxxx (the "Employee") (collectively the
"Parties"). For valuable consideration , the sufficiency of which is
hereby acknowledged, the Parties agree as follows:
1. EMPLOYMENT AGREEMENT
Upon the terms and subject to the conditions contained in this
Agreement, the Company hereby offers and the Employee hereby accepts
employment with the Company. All other employment agreements between
the Employee and the Company are revoked and shall have no force or
effect.
2. TERM OF EMPLOYMENT
The term of this Agreement shall be for two (2) consecutive years
commencing upon the closing date of the Stock Purchase Agreement
between the Company and PSQ, LLC ("Closing Date").
3. SERVICES
The Employee shall be the Vice President of Operations with
responsibility for oversight of branch operations for the permanent
placement / direct hire division of the Company, or such other
employment consistent with the Employee's background and experience
and the Company's needs as determined in good faith by the Chief
Executive Officer ("CEO") of the Company. Employee shall perform her
duties under this Agreement in accordance with such reasonable
standards expected of employees with comparable positions in
comparable organizations and as may be established from time to time
by the Company's Board of Directors. Employee shall devote her best
efforts and her full business and professional time to the faithful
fulfillment of her duties hereunder.
4. COMPENSATION
The Employee shall receive an annual salary of $150,000 per year.
Employee shall also receive as additional compensation a grant of an
additional twenty-five thousand (25,000) non-qualified stock options
of which one-half (1/2) shall vest immediately and the remainder shall
vest one (1) year after the Closing Date. These options shall have an
exercise price equal to the Company's trading price on the date of the
grant and have a ten (10) year term. The options shall terminate
three (3) years after Employees termination of employment with the
Company for any reason other than cause. If Employee is terminated
for cause all options not yet vested shall immediately terminate.
5. FRINGE BENEFITS AND PERQUISITES
The Employee shall be entitled to all fringe benefits and
perquisites that may be provided generally for the most senior
executive officers of the Company pursuant to policies established
from time to time by the Company's Board of Directors, including, but
not limited to annual vacations of five weeks per year (which vacation
shall accrue pro rata over each year of employment and shall not carry
over from year to year without the consent of the CEO), and
participation in the Company family medical plan, and any pension plan
or profit sharing plan the Company may institute. At no time shall
Employee's benefits be reduced to exclude current coverage's.
6. REIMBURSEMENTS
The Employee shall be reimbursed for all direct and substantiated
out-of-pocket expenditures duly made on the Company's behalf in the
performance of her services under this Agreement, subject to timely
reporting requirements imposed from time to time by the Company's
Board of Directors.
7. OFFICE SPACE
The company will provide the employee with office space in the
Chicago area suitable for the Employee's use in carrying out her
responsibilities, including appropriate support and technology
resources. If the corporate office would become unavailable, one of
the existing branch offices would be utilized. In the event that the
corporate headquarters should be relocated out of the Chicago area,
the employee agrees to reasonable travel as needed to carry out her
responsibilities, at Company expense.
8. COVENANT NOT TO COMPETE
In consideration for the term of employment, salary and benefits
paid to the Employee by the Company as described herein, Employee
agrees that during the term of her employment hereunder and for the
two-year period following termination of her employment she will not
solicit the customers of the Company, or directly or indirectly
solicit for employment any employees of Company. For purposes hereof,
"Company" shall include any entity into which the Company may be
merged or to which the substantially all the business and assets of
the Company are transferred, and shall include all affiliates of the
Company at the date of termination. For purposes hereof, "affiliate"
shall include any business controlling, controlled by, or under common
control with General Employment Enterprises, Inc and its successors.
Employee has carefully read and considered the provisions of this
paragraph and, having done so, agrees that the restrictions set forth
therein, including, but not limited to, the time period of restriction
and geographical areas of restriction, are fair and reasonable and are
reasonably required for the protection of the interests of the
Company.
If, notwithstanding the foregoing, any of the provisions hereof
shall be held to be invalid or unenforceable, the remaining provisions
shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable parts had not been included. In the event
that any provision relating to the time period and/or the areas of
restriction and/or related aspects shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such
court deems reasonable and enforceable, the time period and/or areas
of restriction and/or related aspects deemed reasonable and
enforceable by the court shall become the maximum restriction in such
regard, and the restriction shall remain enforce able to the fullest
extent deemed reasonable by such court.
In the event of a breach or threatened breach of any of the
covenants herein, the Company shall have the right to seek equitable
relief, including specific performance by means of an injunction
against the Employee and against the Employee's partners, agents,
representatives, servants, employers, employees, and/or any and all
persons acting directly or indirectly by or with it or them, to
prevent or restrain any breach or further breach. In the event
Company obtains any such equitable relief, the party against whom
relief is obtained shall reimburse Company for its reasonable
attorney's fees and costs related thereto.
9. TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE
Company shall have the right to terminate Employee's employment
with the immediate discontinuation of payments hereunder for Cause
herein defined as:
(A) The intentional and substantial failure by Employee to
perform Employee's duties with Company; or
(B) Employee's material ("material" qualifying each of the
following) personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit, willful
violation of any law, rule or regulation (other than traffic
violations or similar offenses) or cease-and-desist order, or breach
of any material provision of this Agreement, in each case directly
involving the Company or its affiliates customers or suppliers; or
(C) Employee is unable to perform her duties hereunder for more
than sixty (60) consecutive days or ninety (90) days within a
consecutive twelve (12) month period as a result of his becoming
disabled. "Disabled" shall mean the inability of the Employee, due to
mental of physical disability certified by a physician selected by the
Company and reasonably satisfactory to the Employee, to substantially
perform his duties hereunder. The Employee shall make herself
available for examination by such physician upon reasonable request;
or
(D) Engages in repeated conduct causing the Company or any of
its subsidiaries substantial public disgrace or disrepute or public
harm, including, without limitation, chronic drug or alcohol abuse; or
(E) Employee dies.
10. TERMINATION OF EMPLOYMENT BY EMPLOYER WITHOUT CAUSE
If the Company terminates the employment before the end of the
contract term for any reason other than Cause the salary for the
balance of the two year period will be due and payable in ordinary
course through payroll until the end of the term. In the event any
payment due is not made within 60 days of the due date any balance due
will accelerate and become due and payable to Employee. Company will
also continue to provide health insurance coverage to the employee for
the remainder of the period under the same terms it provided during
active employment.
11. TERMINATION OF EMPLOYMENT BY EMPLOYEE
If the Employee terminates employment before the end of the
contract period for any reason other than Good Reason, as defined
below, no further payments shall be due Employee pursuant to this
Agreement. If Employee terminates for Good Reason the salary for the
balance of the two year period will be due and payable in ordinary
course through payroll until the end of the term. In the event any
payment due is not made within 60 days of the due date any balance due
would accelerate and become due and payable to Employee. Company will
also continue to provide health insurance coverage to the employee for
the remainder of the period under the same terms it provided during
active employment. Good Reason shall be defined as the requirement by
the Company, without the Employee's consent, that the Employee's
services be preformed primarily at a location outside the Chicago
metropolitan area.
12. DIRECTORS AND OFFICERS LIABILITY INSURANCE
The company will include the employee under its directors and
officers' liability insurance and the indemnification provisions of
its charter and bylaws during the term of the agreement, and for any
historical policies purchased during the Employees term of Employment.
13. COMPLETE AGREEMENT
This document contains the entire agreement between the parties
and supersedes any prior decision, negotiations, representations or
agreements between them respecting employment of the Employee. No
alterations, additions or other changes to this Agreement shall be
binding unless made in writing and signed by both parties to this
Agreement.
14. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance
with the internal laws of the state of Florida.
15. CODE SECTION 409A.
This Agreement is intended to comply with Code Section 409A and
the interpretative guidance thereunder, including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and
in-kind distributions, and shall be administered accordingly. This
Agreement shall be construed and interpreted with such intent. If a
payment under this Agreement does not qualify as a short-term deferral
under Code Section 409A and Treas. Reg. Section 1.409A-1(b)(4) (or any
similar or successor provisions), and the Employee is a Specified
Employee (as defined below) as of his termination, distributions to
the Employee may not be made before the date that is six months after
the date of his termination or, if earlier, the date of the Employee's
death (the "Six-Month Delay Rule"). Payments to which the Employee
would otherwise be entitled during the first six months following the
termination (the "Six-Month Delay") will be accumulated and paid on
the first day of the seventh month following the termination.
Notwithstanding the Six-Month Delay Rule set forth in this Section
16(B):
(A) To the maximum extent permitted under Code Section 409A and
Treas. Reg. Section 1.409A-1(b)(9)(iii) (or any similar or successor
provisions), during each month of the Six-Month Delay, the Company
will pay the Employee an amount equal to the lesser of (i) the total
monthly severance provided under this Agreement, or (ii) one-sixth
(1/6) of the lesser of (1) the maximum amount that may be taken into
account under a qualified plan pursuant to Code Section 401(a)(17) for
the year in which the Employee's termination occurs, and (2) the sum
of the Employee's annualized compensation based upon the annual rate
of pay for services provided to the Company for the taxable year of
the Employee preceding the taxable year of the Employee in which his
termination occurs (adjusted for any increase during that year that
was expected to continue indefinitely if the Employee had not had a
termination); provided that amounts paid under this sentence will
count toward, and will not be in addition to, the total payment amount
required to be made to the Employee by the Company under this
Agreement; and
(B) To the maximum extent permitted under Code Section 409A and
Treas. Reg. Section 1.409A-1(b)(9)(v)(D) (or any similar or successor
provisions), within ten (10) days of the termination, the Company will
pay the Employee an amount equal to the applicable dollar amount under
Code Section 402(g)(1)(B) for the year of the Employee's termination;
provided that the amount paid under this sentence will count toward,
and will not be in addition to, the total payment amount required to
be made to the Employee by the Company under this Agreement.
(C) For purposes of this Agreement, "Specified Employee" has the
meaning given that term in Code Section 409A and Treas. Reg.
1.409A-1(c)(i) (or any similar or successor provisions). The
Company's "specified employee identification date" (as described in
Treas. Reg. 1.409A-1(c)(i)(3)) will be December 31 of each year, and
the Company's 'specified employee effective date' (as described in
Treas. Reg. 1.409A- 1(c)(i)(4) or any similar or successor provisions)
will be February 1 of each succeeding year."
(D) Each payment under this Agreement or any Company benefit
plan is intended to be treated as one of a series of separate payments
for purposes of Code Section 409A and Treasury Regulation Section
1.409A-2(b)(2)(iii) (or any similar or successor provisions).
(E) For purposes of this Agreement, the Employee's employment is
terminated when the Employee experiences a "separation from service"
within the meaning of Code Section 409A.
General Employment Enterprises, Inc. Employee
By: /s/ Xxxxxxx X. Xxxxxx, Xx. /s/ Xxxxxxx X. Xxxxx
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Chairman, President Xxxxxxx Xxxxx
and Chief Executive Officer
