EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is by and between Dean G.
Walberg (the "Executive") and Nationwide Staffing, Inc., a Delaware corporation
(the "Company"), which parties agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment by the Company, upon the terms and subject
to the conditions hereinafter set forth.
2. DUTIES. The Executive shall serve as the Senior Vice
President/Operations of the Company. The Executive will perform the duties
attendant to his executive position with the Company under the direction of the
Company's Chief Executive Officer. The Executive agrees to (a) devote his full
time and best efforts to the performance of his duties to the Company, (b)
devote his best efforts to promote the success of the Company's business, and
(c) cooperate fully with the Chief Executive Officer and the Board of Directors
of the Company ("Board") in the advancement of the best interests of the
Company. The Executive shall faithfully adhere to, execute and fulfill all
policies established by the Company from time to time. If the Executive is
elected as a director of the Company or as a director or officer of any of its
affiliates, the Executive will fulfill his duties as such director or officer
without additional compensation.
3. COMPENSATION. In consideration for the services of the Executive
hereunder, unless terminated sooner pursuant to the terms hereof, commencing on
the (i) date hereof and continuing until the date of the earlier of the
consummation or abandonment of the Company's underwritten initial public
offering of the Company's Common Stock (the "IPO"), the Executive will be
compensated by the Company at the rate of $7,500 per month; and (ii) date of the
consummation of the IPO and continuing for the remaining term hereof, the
Company will pay the Executive an annual salary of $150,000 (the "Salary"),
which will be payable in equal periodic installments according to the Company's
customary payroll practices but no less frequently than monthly. In addition,
the Executive shall be eligible to receive an annual cash bonus in an amount up
to 100% of the Salary in the event that the Company achieves certain annual
financial performance targets. The specific performance objectives of the bonus
plan shall be established each year by resolution of the Board.
Furthermore, during the term of the Executive's employment, the Company
shall provide to the Executive the following:
(i) group hospitalization, major medical, long-term disability,
vacation, life insurance coverages and pension, profit sharing, bonus and
other employee benefit plans on
substantially the same terms and conditions as these benefits are made
available to the Company's other executive officers.
(ii) an option, subject to the vesting described below, to purchase
50,000 shares of the Company's Common Stock at a price per share equal to
the price per share that the Company's Common Stock is sold in the IPO and
on other terms to be agreed upon between the Executive and the Board (or
the appropriate committee thereof), which terms shall be consistent with
the terms of any stock option plans adopted by the Company and the terms
of Section 6 hereof.
(iii) a vested option to purchase 50,000 shares of the Company's
Common Stock at a price per share equal to the price per share that the
Company's Common Stock is sold in the IPO less $3 per share and on other
terms to be agreed upon between the Executive and the Board (or the
appropriate committee thereof), which terms shall be consistent with the
terms of any stock option plans adopted by the Company and terms of
Section 6 hereof.
With respect to the options described in Section 3(ii), the Executive may
exercise the options after the date on which the Securities and Exchange
Commission ("SEC") declares effective the Company's registration statement on
Form S-8 (the "S-8"), and shall vest as follows: (a) beginning the first
anniversary of the date of this Agreement, the Executive shall have the right to
acquire 16,666 shares of the Company Common Stock subject to the options; (b)
beginning the second anniversary of the date of this Agreement, the Executive
shall have the right to acquire 16,667 shares of the Company Common Stock
subject to the options; and (c) beginning the third anniversary of the date of
this Agreement, the Executive shall have the right to acquire the remaining
16,667 shares of the Company Common Stock subject to the options.
With respect to the options described in Section 3(iii) hereof, the
Executive may exercise the options at any time after (i) consummation of the IPO
and (ii) the date on which the SEC declares effective the Company's S-8.
If not exercised sooner, the options described in Section 3(ii) and the
options described in Section 3(iii) shall all expire on the fifth anniversary of
the date of this Agreement.
4. TERM AND TERMINATION. The term of the Executive's employment pursuant
to this Agreement shall commence on the date hereof and shall continue until the
third anniversary of the consummation of the IPO (the "Initial Term") and shall
continue after the Initial Term on a year-to-year basis on the same terms and
conditions contained herein unless either party gives to the other written
notice of termination no fewer than 30 days prior to the expiration of any such
term that the party does not wish to extend this Agreement. However, the term of
Executive's employment pursuant to this Agreement shall also terminate earlier
in any one of the following ways:
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(i) upon the death of the Executive;
(ii) upon the disability of the Executive immediately upon notice
from either party to the other;
(iii) upon 30 days prior notice of resignation by the Executive to
the Company;
(iv) upon 30 days prior notice by the Company to the Executive of
termination "without cause";
(v) upon notice by the Company to the Executive of termination "for
cause";
(vi) at the Executive's option, upon notice by the Executive to the
Company within 60 days following a Constructive Termination; or
(vii) immediately in the event (a) the IPO is not consummated on or
before March 15, 1998 (the "Failure of the IPO") or (b) the IPO is
abandoned by the Board.
DEFINITION OF DISABILITY. For purposes of Section 4(ii), the Executive
will be deemed to have a "disability" if, for physical or mental reasons, the
Executive is unable to perform the Executive's duties under this Agreement for
120 consecutive days, or 180 days during any twelve month period, as determined
herein. The disability of the Executive will be determined by a medical doctor
selected by written agreement of the Company and the Executive upon the request
of either party by notice to the other. If the Company and the Executive cannot
agree on the selection of a medical doctor, each of them will select a medical
doctor and the two medical doctors will select a third medical doctor who will
determine whether the Executive has a disability. The determination of the
medical doctor selected under this Section 4 will be binding on both parties.
The Executive must submit to a reasonable number of examinations by the medical
doctor making the determination of disability under this Section 4, and the
Executive hereby authorizes the disclosure and release to the Company of such
determination and all supporting medical records. If the Executive is not
legally competent or is otherwise unable to act, the Executive's legal guardian
or duly authorized attorney-in-fact will act in the Executive's stead under this
Section 4, for the purposes of selecting a medical doctor, submitting the
Executive to the examinations, and providing the authorization of disclosure,
required under this Section 4.
DEFINITION OF TERMINATION FOR CAUSE. For purposes of Section 4(v), the
Executive's termination "for cause" shall be defined to mean: (a) the
Executive's material breach of this Agreement, including, without limitation,
his failure to perform his obligations hereunder in a reasonably satisfactory
manner (other than any such failure resulting from incapacity or disability due
to physical or mental reasons); (b) without specific disclosure by the Executive
to the Board and
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the Board's prior written approval, the appropriation (or attempted
appropriation) of a material business opportunity of the Company, including
attempting to secure or securing a personal benefit in connection with any
transaction entered into on behalf of the Company; or (c) the Executive's fraud
or dishonesty with respect to the business or affairs of the Company or if the
Executive is convicted of, indicted for (or its procedural equivalent) or pleads
nolo contendere or guilty to, any felony criminal offense or any civil offense
involving fraud or moral turpitude, the equivalent thereof, or any crime with
respect to which imprisonment is a possible punishment.
DEFINITION OF CONSTRUCTIVE TERMINATION. For purposes of Section 4(vi), the
term "Constructive Termination" shall be defined to mean (i) a material
reduction in the Executive's duties and responsibilities without the Executive's
consent; or (ii) a reduction in or the failure by the Company to pay when due
any portion of the Salary.
COMPENSATION IF TERMINATED BY DEATH. If Executive's employment is
terminated because of the Executive's death, the Executive will be entitled to
receive the portion of the Salary that is due at the end of the calendar month
in which his death occurs. The payment of a bonus, if any, will be determined by
reference to the terms of the applicable bonus plan.
COMPENSATION IF TERMINATED BY DISABILITY. If the Executive's employment is
terminated by either party as a result of the Executive's disability, the
Company will pay the Executive the portion of the Salary that is due at the end
of the calendar month during which such termination is effective and for the
lesser of (a) six consecutive months thereafter, or (b) the period until
disability insurance benefits, if any, commence under the disability insurance
coverage, if any, furnished by the Company to the Executive. The payment of a
bonus, if any, will be determined by reference to the terms of the applicable
bonus plan.
COMPENSATION IF TERMINATED BY EXECUTIVE'S RESIGNATION OR FOR CAUSE. If the
Company terminates the Executive's employment "for cause" or if the Executive
resigns his employment with the Company, the Executive will be entitled to
receive the portion of the Salary that is due through the date such termination
is effective. No bonus will be payable, notwithstanding any terms of any bonus
plan to the contrary.
COMPENSATION IF TERMINATED WITHOUT CAUSE OR BY CONSTRUCTIVE TERMINATION.
In the event the Executive's employment with the Company is terminated by the
Company "without cause" or by the Executive within 60 days following a
Constructive Termination, the Company will pay the Executive, as the Executive's
sole remedy in connection with such termination, a severance payment in an
amount equal to $300,000 (the "Severance Payment"). The Severance Payment shall
be payable to the Executive in equal monthly payments over a period of 24 months
following the date of termination. The Company will also pay the Executive the
portion of the Salary that is accrued but unpaid from the last payment date to
the date of termination.
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COMPENSATION IF FAILURE OR ABANDONMENT OF THE IPO. If this Agreement is
terminated due to the Failure of the IPO due to the Board's abandonment of the
IPO, thereafter the Executive will not be entitled to receive from the Company
any more Salary, any bonus or any of the other benefits hereunder.
5. ACCRUED BENEFITS. The Executive's accrual of, or participation in plans
providing for, benefits will cease at the effective date of the termination of
the Executive's employment and the Executive will be entitled to accrued
benefits pursuant to such plans only as provided in such plans. Notwithstanding
anything herein to the contrary or in any plan, the Executive will not receive,
as part of his termination pay pursuant to Section 4, any payment or other
compensation for any vacation, holiday, sick leave, or other leave unused on the
date of termination.
6. EFFECT OF TERMINATION ON OPTIONS. All options described in Section
3(ii) to purchase the Company's Common Stock held by the Executive will
automatically and immediately expire if the Executive's employment with the
Company is terminated "for cause" or if the Executive voluntarily leaves the
employment of the Company. If the Executive's employment with the Company ends
for any reason other than termination for cause, voluntary departure or death,
then any options will remain exercisable and will vest and expire in accordance
with the terms of the applicable option agreements. If the Executive dies while
employed by the Company, then any options shall become fully exercisable on the
date of his death and shall expire twelve months thereafter.
7. CONFIDENTIALITY. The Executive acknowledges that he will have access to
confidential information regarding the Company, the Acquired Companies and their
businesses. The Executive agrees that he will not, during or subsequent to his
employment, divulge, furnish, or make accessible to any person (other than with
the prior written consent of the Board) any information or plans of the Company
or any subsidiary. However, confidential information or plans shall exclude
information or plans which: (a) at the time of disclosure already is in the
public domain or which, after disclosure, is published or otherwise becomes part
of the public domain through no fault of the Executive; (b) the Executive can
show was in his possession at the time of the Company's disclosure to the
Executive and was not acquired, directly or indirectly, from the Company or from
a third party under an obligation of confidence; or (c) the Executive can show
was received by the Executive after the time of the Company's disclosure from a
third party who did not require the Executive to hold it in confidence.
8. NONCOMPETITION. During the period of the Executive's employment by or
with the Company and for two years after termination of the Executive's
employment hereunder, so long as the Company is not in breach of its obligations
under this Agreement, the Executive will not, for any reason whatsoever (i)
engage directly or indirectly, alone or as a shareholder, owner, partner,
officer, director, sales representative, employee or consultant in, of or to any
temporary employment, "PEO" or staff leasing, permanent placement or human
resource outsourcing or consulting services or other
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business activities which are competitive with any business owned or operated or
being actively considered to be owned or operated by Company or any subsidiary
prior to the Executive's termination or at the time of such termination (a
"Designated Business"); (ii) divert to any competitor of the Company or any
subsidiary in a Designated Business any customer of the Company or any
subsidiary; (iii) solicit or encourage any officer, employee, or consultant of
the Company or any subsidiary to leave its employ for employment by or with any
competitor of the Company or any subsidiary in a Designated Business; or (iv)
call upon any prospective acquisition candidate, on the Executive's own behalf
or on behalf of any competitor, which candidate was, to the Executive's
knowledge, either called upon by the Company or any subsidiary or with respect
to which the Company or any subsidiary made an acquisition analysis, for the
purposes of acquiring such entity.
The parties hereto acknowledge that the Executive's noncompetition
obligations hereunder will not preclude the Executive from owning less than 1%
of the common stock of any publicly traded corporation conducting business
activities in the Designated Business. The Executive will continue to be bound
by the provisions of this Section 8 until their expiration and will not be
entitled to any compensation from the Company with respect thereto. If at any
time the provisions of this Section 8 are determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 8 will be considered divisible and will become
and be immediately amended to only such area, duration and scope of activity as
will be determined to be reasonable and enforceable by the court or other body
having jurisdiction over the matter; and the Executive agrees that this Section
8 as so amended will be valid and binding as though any invalid or unenforceable
provision had not been included herein.
9. REIMBURSEMENT OF EXPENSES. The Company will reimburse the Executive for
all reasonable out-of-pocket costs and expenses incurred by him in connection
with his employment hereunder (the "Reimbursable Expenses"). Such Reimbursable
Expenses shall include the Executive's out-of-pocket costs and expenses for
travel, hotel rooms, long-distance telephone calls, delivery charges, parking
fees and copying charges. On or about the last day of each month, the Executive
will submit a report to the Company describing in reasonable detail the
Reimbursable Expenses to be reimbursed. All such invoices shall include adequate
supporting documentation, including receipts where appropriate. All such
invoices will be reimbursed by the Company within 30 days of the Company's
receipt of the report.
10. ARBITRATION. Any dispute between the Company and the Executive arising
out of or related to this Agreement or breach thereof shall be settled by
binding arbitration in accordance with the rules of the American Arbitration
Association. The arbitration shall be conducted by three neutral arbitrators who
shall sit in Houston, Texas. Any award made by such arbitrators shall be binding
and conclusive for all purposes, may include injunctive relief, as well as
orders for specific performance, and may be entered as a final judgment in any
court of competent jurisdiction. No
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arbitration arising out of or relating to this Agreement shall include, by
consolidation or joinder or in any other manner, parties other than the Company,
or the Executive and other persons substantially involved in common question of
fact or law whose presence is required if complete relief is to be afforded in
arbitration. The cost and expenses of such arbitration shall be borne in
accordance with the determination of the arbitrators and may include reasonable
attorneys' fees. Each party hereby further agrees that service of process may be
made upon it by registered or certified mail or personal service at the address
provided for herein.
11. RETURN OF DOCUMENTS. The Executive agrees that all documents, plans,
records, financial statements, manuals, lists, computer programs, computer
disks, equipment, computers, notes, drawings, models and other materials
(whether or not secret or confidential) that he receives, prepares or otherwise
acquires during his employment with the Company, and which pertain to the
business or affairs of the Company or any subsidiary, are the property of the
Company or the subsidiary. The Executive will promptly deliver to the Company
all originals and all copies of such materials in his possession or under his
control without request by the Company upon termination of the Executive's
employment. In the event of his termination of employment with the Company for
whatever reason, the Executive shall produce to the Company for its inspection
all such materials then in his possession or under his control.
12. EQUITABLE RELIEF. In the event of a breach by the Executive of any of
the provisions of Sections 7, 8 or 11, the Company shall, in addition to any
other rights and remedies existing in its favor, be entitled to receive from any
court of law or equity of competent jurisdiction order(s) for specific
performance and injunctive or other relief in order to enforce or prevent any
violations of the provisions thereof.
13. SURVIVAL. The rights and obligations of the parties hereto shall
survive the term of the Executive's employment under this Agreement to the
extent that any performance is required under this Agreement after the
expiration of the Executive's employment.
14. MISCELLANEOUS.
14.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. This
Agreement supersedes all letters, memoranda and term sheets previously prepared
in connection with the negotiations surrounding the execution of this Agreement.
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any third party
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
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14.2 NOTICES. Any notices permitted or required to be given under
the terms of this Agreement shall be in writing and shall be deemed given if
delivered to the party to be notified at the address specified below, by first
class mail, overnight courier or fax with hard copy being sent by first class
mail or overnight courier. Such notice shall be deemed received 24 hours after
it is sent via fax (with receipt confirmed) or overnight courier. Any notice
given in any other manner shall be effective only if and when received.
The Executive: Mr. Dean G. Walberg
12218 Glenview Drive
Montgomery, Texas 77356
Telephone No.: (409) 448-1006
Facsimile No.: (409) 582-6881
The Company: Nationwide Staffing, Inc.
600 Travis, Suite 6200
Houston, Texas 77002
Attention: President
Telephone No.: (713) 223-7750
Facsimile No.: (713) 223-7747
The address of any party may be changed by notice given in the manner provided
in this Section 14.2.
14.3 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEMENT OF
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT
GIVING EFFECT TO CHOICE OF LAW OR CONFLICTS OF LAWS PRINCIPLES.
14.4 WITHHOLDING. All payments required to be made by the Company
under this Agreement to the Executive will be subject to the withholding of such
amounts, if any, relating to federal, state and local taxes as may be required
by law.
14.5 PRESERVATION OF BUSINESS; FIDUCIARY RESPONSIBILITY. Throughout
the term of the Executive's employment hereunder, the Executive shall use his
best efforts to preserve the business and organization of the Company, to keep
available to the Company the services of its employees and to preserve the
business relations of the Company with suppliers, customers and others. The
Executive shall not commit any act which would injure the Company. In addition,
the Executive shall observe and fulfill proper standards of fiduciary
responsibility attendant upon his service and office.
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14.6 SEVERABILITY. If a provision of this Agreement is declared
unenforceable by a court of last resort, such provision shall be enforced to the
greatest extent permitted by law, and such declaration shall not affect the
validity of any other provision of this Agreement.
14.7 REPRESENTATION BY SEPARATE COUNSEL. The Executive acknowledges
that he has been advised to retain separate legal counsel to represent his
interests under this Agreement and he has done so.
14.8 AMENDMENTS AND WAIVERS. This Agreement may be amended only by a
written instrument designated as an "amendment" to this Agreement and signed by
the parties hereto, and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument signed by the person specifically
waiving such observance.
14.9 MULTIPLE COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original but all of
which shall be deemed one instrument.
Executed as of the 19th day January, 1998.
THE EXECUTIVE:
/s/DEAN G. WALBERG
Dean G. Walberg
THE COMPANY:
NATIONWIDE STAFFING, INC.
By:/s/LARRY E. DARST
Name: Larry E. Darst
Title: President
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