EXHIBIT 10.8- EMPLOYMENT AGREEMENT RELATING TO CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
RELATING TO CHANGE OF CONTROL
EMPLOYMENT AGREEMENT (the "Agreement") by and between TechTeam Global,
Inc., a Delaware corporation (the "Company") and ______________________ (the
"Executive") dated as of the _____ day of ______________.
The Board of Directors of the Company (the `Company Board") has
determined that it is in the best interests of the Company and its shareholders
to diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or potential Change of
Control and to encourage the Executive's full attention and dedication to the
Company currently and in the event of any potential or pending Change of
Control, and to provide the Executive with a severance package if the Executive
is terminated after a Change of Control. Therefore, in order to accomplish these
objectives, the Company Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the date on which a
Change of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change of Control or (ii) otherwise
arose in connection with or in anticipation of the Change of Control, then for
all purposes of this Agreement, the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) "Change of Control" of the Company shall mean:
(i) The sale of all then outstanding shares of common
stock of the Company or 51% of the then outstanding voting securities of the
Company entitled to vote generally in the election of the directors (the
Outstanding Company Voting Securities"); or
(ii) The consummation of the sale or other disposition of
all or substantially all of the assets or operations of the Company.
3. Employment Period. The "Employment Period" shall be the period
commencing on the Effective Date and ending on the anniversary of such date.
4. Terms of Employment.
(a) Position and Duties. During the Employment Period,
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities.
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(b) Compensation. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") at least
equal to twelve times the highest monthly base salary paid or payable to the
Executive by the Company in the twelve-month period immediately preceding the
month in which the Effective Date occurs. Executive shall be eligible to
participate in any bonus program in force at the time of the Change of Control,
or otherwise adopted by the Company. Executive shall be entitled to participate
in all savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company. Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs).
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period
or Disability that continues for 30 days after the Company provides Executive of
notice of its determination of Disability. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean (i) violations by the Executive of the Executive's
obligations under Section 4(a) (other than as a result of incapacity due to
physical or mental illness) which are demonstrably, willful and deliberate on
the Executive's part, which are committed in bad faith or without reasonable
belief that such violations are in the best interests of the Company and which
are not remedied in a reasonable period of time after receipt of written notice
from the Company specifying such violations or (ii) the conviction of the
Executive of a felony involving moral turpitude.
(c) The Executive's employment may be terminated during
the Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's position, authority,
duties or responsibilities prior to the Change of Control, or any other action
by the Company which results in a diminution in such position, authority, duties
or responsibilities that a reasonable person holding a similar position would
find untenable, and the continuance of such assignment of duties or other such
action for a period of six (6) months;
(ii) the Company's requiring the Executive to be
based at any office or location other than in Southeastern Michigan, except for
any short-term assignment where the Company pays all travel or temporary
relocation costs incurred by the Executive;
(iii) any failure by the Company to comply with
and satisfy Section 10(c), or any failure by any successor to assume and offer
to perform this Agreement in accordance with Section 10(c) provided that such
successor has received at least ten days prior written notice from the company
or the Executive of the requirements of Section 10(c).
(d) Notice of Termination. Any termination by the Company
for Cause, or by the
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Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 11(b). For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, and (ii) to
the extent practicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. The Company and the Executive are
not precluded from asserting any other fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be; (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination; and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.
6. Obligations of the Company upon Termination.
(a) Good Reason: Other than for Cause, Death or
Disability. If, during the Employment Period, the Company shall terminate the
Executive's employment other than for Cause, Death or Disability or the
Executive shall terminate employment for Good Reason the Company shall;
(i) pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) the Executive's
Annual Base Salary through the Date of Termination to the extent not theretofore
paid, and (2) the product of (x) the Annual Bonus as if earned at the target
level and (y) a fraction, the numerator of which is the number of days from
beginning of the calendar year in which the Date of Termination occurs through
the Date of Termination, and the denominator of which is 365, and (3) any
accrued vacation pay, in which case to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2) and (3) shall be hereinafter
referred to as the "Accrued Obligations");
B. the amount (such amount shall be
hereinafter referred to as the "Severance Amount") equal to the Executive's
Annual Base Salary; and
(ii) provide the Executive with executive
outplacement services for a period of up to twelve (12) months through a
recognized outplacement provider that is agreed to by the Company and the
Executive;
(iii) continue benefits to the Executive and/or
the Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies of the
company as if the Executive's employment had not been terminated for a period of
twelve (12) months; provided, however, that if the Executive becomes re-employed
with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility (such continuation of such
benefits for the applicable period herein set forth shall be hereinafter
referred to as "Welfare Benefit Continuation"). Any benefits received by the
Executive pursuant to this Section 6(a)(iii) shall not reduce the period of time
the Executive is entitled to receive COBRA continuation health coverage as a
result of the Executive's termination of employment.
(iv) immediately upon termination vest any
options, restricted stock, or
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performance stock granted to Executive, pursuant to the Company's 1990
Nonqualified Stock Option Plan (the "Plan") or any Plan which succeeds the Plan,
and the Executive will have thirty (30) days in the next open window under the
Company's Insider Trading Policy to exercise these options.
(v) pay to the Executive the proceeds of the
Executive Savings Plan, including all accumulated interest and dividends.
(b) Death, Retirement or Disability. If the Executive's
employment is terminated by reason of the Executive's death, retirement or
Disability during the Employment Period, this Agreement shall terminate without
further obligations to the Executive's legal representatives or the Executive,
as the case may be, under this Agreement.
(c) Cause, Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period or if the
Executive terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
Annual Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by the Executive, in each case to the extent
theretofore unpaid.
7. Limitation on Payment. In the event that the Executive is a
"disqualified individual" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended ("the Code"), the parties expressly agree that
the payments described in Paragraph 6 of this Agreement and all other payments
to the Executive under any other agreements or arrangements with any persons
that constitute "parachute payments" within the meaning of Section 280G of the
Code are collectively subject to an overall maximum limit. The maximum limit
shall be One Dollar ($1.00) less than the aggregate amount that would otherwise
cause any such payments to be considered a "parachute payment" within the
meaning of Section 280G of the Code, as determined by the Corporation.
Accordingly, to the extent that the payments would be considered a "parachute
payment" with respect to the Executive, then the portions of such payments shall
be reduced or eliminated in the following order until the remaining payments
with respect to the Executive are within the maximum described in this Paragraph
7.
(a) First, any cash payment to the Executive;
(b) Second, any "parachute payments" not described in
this Agreement; and
(c) Third, any forgiveness of indebtedness of the
Executive to the Corporation.
The Executive expressly and irrevocably waives any and all
rights to receive any "parachute payments" that exceed the maximum limit
described in this Paragraph 7.
8. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company and its respective
businesses, which has been obtained by the Executive during the Executive's
employment by the Company which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 9 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
9. Non-Competition Covenant.
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(a) In consideration for entry into this Agreement,
Executive covenants and agrees that he/she shall not, either directly or
indirectly, for his/her own account or as agent, servant or employee, or as a
shareholder of any corporation, or as a member of any firm engage or attempt to
engage in the production, development, sale, distribution, solicitation or
promotion of the sale or distribution of the Services (as herein defined) for
one (1) year after the Date of Termination (hereinafter referred to as "the
Restriction Period"), in any areas within a fifty (50) mile radius of any of the
Company's offices ("the Restricted Area"). Executive further covenants and
agrees that he/she will not directly or indirectly solicit or call on any
customer (as hereinafter defined) with respect to the Services during the
Restriction Period. The Executive will not assist any member of his family,
including his spouse, parents, brothers, sisters, children, aunts, uncles or
cousins, in any business venture which engages in the production, development,
sale or distribution of the Services or which calls on any Customer with respect
to the Services. However, the Executive may at any time own, as an inactive
investor, or acquire securities of any competitor corporation listed on a
national securities exchange or the over-the-counter market, so long as his/her
holdings in any one such corporation shall not constitute more than 5% of the
voting stock or 5% of the outstanding capital stock of such corporation.
(b) Executive further covenants and agrees that he/she
shall not, either directly or indirectly for his/her own account or as an agent,
servant or employee, or as a shareholder of any corporation, or member of any
firm, solicit or call on any Customer with respect to the Services during the
Restriction Period.
(c) Executive further covenants and agrees that he/she
shall not, either directly or indirectly, for his/her own account or either as
an agent, servant or employee, or as a shareholder of any corporation or member
of any firm, engage, hire, employ or solicit the employment of any employee of,
or independent contractor working for, the Company, or any of its subsidiaries
or affiliates, if any, during the Restriction Period.
(d) As used in this Section 10, the term "Services" shall
mean the goods, merchandise, products, data processing services, financing
business, training services, contract services, direct placement business, and
other services of the Company or its successors or assigns (or any goods,
products or services similar thereto), sold distributed, or rendered by the
Company or its subsidiaries or affiliates at the time the Executive's employment
ceased or during any period six (6) months prior thereto.
(e) As used in this Section 10, the term "Customer" shall
mean all persons, firms or corporations for whom the Company or its subsidiaries
or affiliates performed services or to whom the Company or its subsidiaries or
affiliates sold its Services at the time the Executive's employment ceased or
during any period six (6) months prior thereto, notwithstanding the fact that
some or all of such persons, firms or corporations may have been induced to give
their patronage or business to the Company or its subsidiaries or affiliates by
the solicitation of the Executive or due to Executive's employment by the
Company. The Executive will not violate this provision if he/she is selling
products or services other than Services to a Customer.
(f) If any of the restrictions set forth above should,
for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
(g) The Executive recognizes that the foregoing
territorial and time limitations are reasonable and properly required for the
adequate protection of the business of the Company, and that in the event that
any such territorial or time limitation is found to be unreasonable by a court
of competent jurisdiction, then the Executive agrees and submits to the
reduction of either said territorial or time limitation to such an area or
period as the court shall find reasonable.
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(h) In the event that the Executive shall be in violation
of the aforementioned restrictive covenants, then the time limitation thereof in
respect of the Executive shall be extended for a period of time equal to the
period of time during which such breach or breaches should occur; and, in the
event the Company should be required to seek relief from such breach in any
court, board of arbitration or other tribunal, then the covenant shall be
extended for a period of time equal to the pendency of such proceedings,
including all appeals.
10. Successors and Assigns.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, without reference to
principles or conflict of laws. All litigation related to this Agreement shall
be brought in a court located in the State of Michigan, and each party, for the
purposes of such litigation, hereby submits to the exclusive jurisdiction and
venue of that court. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
or at the most current address of record designated in the Executive's personnel
file.
If to the Company:
Chief Executive Officer
TechTeam Global, Inc.
27345 West 11 Mile Road
Southfield, Michigan 48034-2231
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
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(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 5(c)(i)-(iii), shall
not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
(f) The Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between
the Executive and the Company, the employment of the Executive by the Company is
"at will" and, prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date,
the Executive's employment with the Company terminates, then the Executive shall
have no further rights under this Agreement. The Executive further acknowledges
that this Agreement does not give the Executive any additional right to
participate in any plan, program, etc. The Executive and the Company agree that
this Agreement supercedes any separation policy of the Company.
(g) This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof. Any prior
understandings, representations, promises, undertakings, agreements or
inducements, whether written or oral, concerning the subject matter hereof not
contained herein shall have no force and effect.
(h) This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives. An agreement to amend this
Agreement can be entered into on behalf of the Company only by the President of
the Company after approval of the Company Board.
IN WITNESS WHEREOF, the Company has by its appropriate officer executed
this Agreement and Executive has executed this Agreement.
TECHTEAM GLOBAL, INC.
By: ____________________________
Chief Executive Officer
EXECUTIVE
By: ____________________________
EXHIBIT 10.14- TECHTEAM GLOBAL, INC. EXECUTIVE ANNUAL INCENTIVE PLAN
TECHTEAM GLOBAL, INC. EXECUTIVE
ANNUAL INCENTIVE PLAN
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