EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made June 26,
2009, by and between General Employment Enterprises, Inc., an Illinois
corporation, (the "Company") and Kent M. Yauch (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. Upon the Closing Date, the employment
agreement between the Employee and the Company dated December 5, 2001,
as amended, shall be 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 Chief Financial Officer with such
duties as are consistent with that of a company's chief financial
officer, with Employee's background and experience, and with the
Company's needs as determined in good faith by the CEO. Employee shall
perform his 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 his
best efforts and his full business and professional time to the
faithful fulfillment of his duties hereunder.
4. COMPENSATION
The Employee shall receive an annual salary of $150,000 per year,
payable in installments no less frequently than monthly. 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 Employee's termination of employment with the Company for
any reason other than Cause, as defined below. If Employee is
terminated for Cause all options not yet vested shall immediately
terminate.
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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 four (4) 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's 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 coverages,
including, but not limited to, group health, life, and disability
insurance.
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 his 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 his
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 his
responsibilities, at Company expense, said travel not to exceed two
weeks per quarter without Employee's written consent.
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 his employment hereunder and for the
two-year period following termination of his employment he 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 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 the Company 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.
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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. If the Company fails to
obtain equitable relief, the Company shall reimburse the Employee for
his reasonable attorney's fees and costs related thereto.
9. TERMINATION OF EMPLOYMENT BY THE COMPANY 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 his 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 or 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 himself
available for examination by such physician upon reasonable request;
or
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(D) Employee 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.
provided, however, that prior to the determination that "Cause" under
clause (A), (B), or (D) of this Section has occurred, the Company
shall provide to the Employee in writing, in reasonable detail, the
reasons for the determination that such "Cause" exists, and afford the
Employee a reasonable opportunity to remedy any such breach, if such
breach is capable of being remedied. For purposes of this Agreement,
no act or failure to act on the Employee's part shall be considered
"willful" unless it is done, or omitted to be done, by him in bad
faith or without reasonable belief that his action or omission was in
the best interests of the Company or any successor or affiliate. Any
act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of
counsel for the Company or any successor or affiliate shall be
conclusively presumed to be done, or omitted to be done, in good faith
and in the best interests of the Company or any successor or affiliate
thereof.
10. TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE
If the Company terminates the employment before the end of the
contract term for any reason other than Cause, the Company will
continue to pay the Employee his salary for the balance of the
two-year period in the ordinary course through payroll until the end
of the term. Company will also continue to provide health insurance
coverage to the Employee for the remainder of the period at no cost to
the Employee
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, other than as required by law and the terms of the
Company's employee benefit plans. If Employee terminates for Good
Reason, the Company will continue to pay the Employee his salary for
the balance of the two-year period in the ordinary course through
payroll until the end of the term. Company will also continue to
provide health insurance coverage to the employee for the remainder of
the period at no cost to the Employee. Good Reason shall be defined
as the requirement by the Company, without the Employee's written
consent, that the Employee's services be performed primarily at a
location outside the Chicago metropolitan area or the Company's
material breach of this Agreement.
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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 a
period of six years following the Employee's 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 Illinois. The Parties agree
and consent to submit to personal jurisdiction in the State of
Illinois in any state or federal court of competent subject matter
jurisdiction situated in Du Page County, Illinois.
15. EFFECT ON OTHER OBLIGATIONS.
Payments and benefits herein provided to the Employee by the
Company will be made without regard to and in addition to any other
payments or benefits required to be paid to the Employee at any time
hereafter under the terms of any other plan or agreement between the
Employee and the Company. No payments or benefits provided the
Employee hereunder will be reduced by any amount the Employee may earn
or receive from employment with another employer or from any other
source without violation of this Agreement. In no event will the
Employee be obliged to seek other employment or take any other action
by way of mitigation of the amounts payable to the Employee under any
of the provisions of this Agreement.
16. 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):
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(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/ Herbert F. Imhoff, Jr. /s/ Kent M. Yauch
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Its: Chairman, President Kent M. Yauch
and Chief Executive Officer
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