EXHIBIT 10.10
AGREEMENT
This Agreement ("Agreement") is made by and between, and shall inure to
the benefit of and be binding upon, the following parties:
KEVIN T. COSTELLO, hereinafter referred to, together with his heirs,
estate, executors, administrators, successors, assigns and other personal
representatives, as COSTELLO; and
TEAM MUCHO, INC., an Ohio corporation formerly known as Team America
Corporation, hereinafter referred to, together with all its past, present and
future assigns, successors, affiliates, parent and subsidiary organizations,
divisions, and corporations, and including all past, present and future
officers, directors, shareholders, employees, and agents of the same, as well as
their heirs, executors, administrators, successors, assigns and other personal
representatives, individually and in their respective corporate capacities, as
the COMPANY.
In consideration of the mutual provisions and promises of this
Agreement and of the 2001 Employment Agreement and Release of Claims of even
date herewith ("2001 Agreement"), COSTELLO and the COMPANY (also referred to
collectively as the "Parties") as follows:
1. PAYMENTS.
(A) In consideration of COSTELLO agreeing that his employment
agreement, dated as of October 26, 1999, has been terminated
and is rendered null and void, the COMPANY agrees to pay
COSTELLO payments totaling Eight Hundred Seventy Five Thousand
Dollars ($875,000.00), less any required withholdings and
deductions, payable in weekly installments of $5,288.46 from
December 27, 2001 through December 26,
2003 and $6,250.00 from December 27, 2003 through December 26,
2004. The entire balance of payments herein shall become
immediately payable upon a "Liquidity Event" for the COMPANY.
For purposes of this Agreement, Liquidity Event shall mean:
(i) a merger whereby the COMPANY is not the
surviving entity, except that (1) a merger
to effect a corporate reorganization or (2)
any other merger, reorganization or
reclassification whereby the shareholders of
the COMPANY prior to such event continue to
own a majority of the COMPANY shares after
the event shall not be deemed a Liquidity
Event; or
(ii) a sale of substantially all of the assets or
stock of the COMPANY.
(iii) a secondary offering of TEAM common stock
with aggregate proceeds of at least
$50,000,000 to TEAM.
(B) The parties acknowledge that as material consideration for entering
into this Agreement, COSTELLO is waiving his right to a severance
payment in the amount of $750,000.00 (the "Severance Provision") that
is provided for in his 1999 Employment Agreement. If the COMPANY shall
materially breach this Agreement, and shall not have cured such breach
within 30 days of receipt of notice from COSTELLO informing the COMPANY
of an alleged material breach and specifying the precise nature of such
breach, then the Severance Provision shall be reinstated, and the
parties shall have all of their rights and defenses with respect to the
Severance Provision as they would have had had the 1999 Employment
Agreement not been
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rendered null and void. The COMPANY shall have the right within the 30
day period provided for the cure of any breach to initiate Arbitration
on the issues of breach of this Agreement and the reinstatement of the
Severance Provision, which issues shall be arbitrated during the same
arbitration although the parties may agree to bifurcate the issues. The
termination of the 1999 Employment Agreement and COSTELLO's agreement
to such termination shall not be construed as an admission by COSTELLO
of any liability or wrongdoing in any arbitration. The COMPANY shall
have within 30 days following the final determination in such
proceeding to cure any breach, in which event the Severance Provision
shall not be reinstated as a result of such breach. In the event the
COMPANY and/or COSTELLO initiates Arbitration on the issues of breach
of this Agreement and the reinstatement of the Severance Provision, it
is agreed that it is mandatory for the COMPANY to pay COSTELLO all
continuing payments under this Agreement, the Release and Waiver of Age
Discrimination Claim Agreement and the 2001 Employment Agreement, until
this matter is finally determined by Arbitration.
2. RELEASES, WAIVERS AND COVENANTS NOT TO SUE.
In consideration of the benefits provided above and in the 2001
Employment Agreement, the adequacy and sufficiency of which COSTELLO hereby
expressly acknowledges, and all other consideration relating to the same,
COSTELLO, as defined in this Agreement, hereby RELEASES, WAIVES AND FOREVER
DISCHARGES the COMPANY, as defined in this Agreement, of and from any and every
action, cause of action, complaint, claim, demand, administrative charge, legal
right, compensation, obligation, damages (including exemplary or punitive
damages), benefits (except as set forth herein), liability, cost and/or expense
(including
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attorney's fees), that he has, may have, or may be entitled to against the
COMPANY, whether legal, equitable or administrative, whether based on tort,
contract, vicarious liability, or any other theory of recovery, whether known or
unknown, contingent or fixed, suspected or unsuspected, liquidated or
unliquidated, which arise directly or indirectly out of, or are related in any
way to, COSTELLO's employment with or separation from the COMPANY or any other
matter whatsoever up to the date he signs this Agreement, and he agrees and
covenants not to bring any claim, suit or other action against the COMPANY for
any other reason, act, or omission, specified or unspecified, occurring or
arising prior to the date he signs this Agreement, except that this Release,
Waiver and Covenant Not to Sue does not apply to any claim arising after the
effective date of this Agreement which pertains or relates to any rights
COSTELLO may have under this Agreement, or the 2001 Employment Agreement.
In exchange for COSTELLO's promises set forth in this Agreement and the
2001 Employment Agreement, the COMPANY hereby RELEASES, WAIVES AND FOREVER
DISCHARGES COSTELLO, as defined in this Agreement, of and from any and every
action, cause of action, complaint, claim, demand, administrative charge, legal
right, compensation, obligation, damages (including exemplary or punitive
damages), benefits (except as set forth herein), liability, cost and/or expense
(including attorney's fees), that the COMPANY has, may have, or may be entitled
to against the COSTELLO, whether legal, equitable or administrative, whether
based on tort, contract, vicarious liability, or any other theory of recovery,
whether known or unknown, contingent or fixed, suspected or unsuspected,
liquidated or unliquidated, which arise directly or indirectly out of, or are
related in any way to, COSTELLO's employment with or separation from the COMPANY
or any other matter whatsoever up to the date he signs this Agreement, and the
COMPANY agrees and covenants not to bring any claim, suit or other
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action against COSTELLO for any other reason, act, or omission, specified or
unspecified, occurring or arising prior to the date he signs this Agreement,
except that this Release, Waiver and Covenant Not to Sue does not apply to any
claim arising after the effective date of this Agreement which pertains or
relates to any rights COMPANY may have under this Agreement or the 2001
Employment Agreement.
3. KNOWLEDGE OF RIGHTS. COSTELLO acknowledges that he is aware of his
rights under federal, state and local statutory and common law, including those
relating to Ohio's employment discrimination laws, and understands that the
consideration being paid to him herein is expressly conditioned on him waiving
all claims relating, directly or indirectly, to his employment with and
termination from the COMPANY, excluding any claims under the federal Age
Discrimination in Employment Act but including, and not limited to, any and all
claims under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1990, the Employee Retirement Income Security Act, Ohio's
employment discrimination laws, and any and all contract, tort, and common law
claims.
4. NON-DISCLOSURE AND RETURN OF THE COMPANY'S "CONFIDENTIAL MATERIAL."
COSTELLO warrants and covenants that he will not use, divulge, or disclose, the
COMPANY's trade secrets or confidential business information including, but not
limited to, internal strategic, profit, critical issue, capital, operation and
marketing plans, internal compliance policies and practices, personnel files and
evaluations, lists of client organizations, client contact personnel and
preferences, lists of worksite employees, R&D data, any other of the COMPANY's
internal business plans and forecasts, information systems, computer data bases
and any related business information, and/or the COMPANY's non-public financial
information, assets or liabilities, and/or payroll, wage and benefit information
(excluding payroll, wage and benefit information that pertains to him
personally). Before or on the termination date of his Continued Employment
Period with the Company, as defined in the 2001 Employment Agreement, COSTELLO
agrees to return to the COMPANY, to its human resources department or legal
counsel, all such
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documentation or property that contains or reflects any of the foregoing trade
secrets or confidential business information.
5. NO RE-EMPLOYMENT. COSTELLO agrees that, following the termination of
his Continued Employment Period with the COMPANY, he will not at any time seek
re-employment with the COMPANY, covenants not to bring any suit or claim against
the COMPANY should he seek and be denied employment, and agrees that this
Agreement shall act as a complete bar to any claim based upon denial of
employment. In the event, however, that COSTELLO is employed by a business
entity that purchases or acquires COMPANY, this provision will not apply.
6. NON-COMPETITION AND NON-PIRACY.
A. A. NON-COMPETITION. During the Restricted Period
(ashereinafter defined), COSTELLO shall not directly or
indirectly compete with the COMPANY by owning, managing,
controlling or participating in the ownership, management or
control of, or be employed or engaged by or otherwise
affiliated or associated with, any Competitive Business in any
state from which the COMPANY derives more than 10% or more of
its total gross revenue as of the effective date of this
Agreement. Ownership of not more than 10% of the stock for any
publicly traded company shall not be deemed a violation of
this provision. As used herein, the term "restricted period"
means the sooner of the 2 years from the effective date of
this Agreement or the occurrence of any one of the following:
(1) the merger of the COMPANY, (2) the sale of substantially
all of the assets of the COMPANY, (3) the filing of a petition
for protection under Federal Bankruptcy Laws or (4) the
appointment of a Receiver for the COMPANY. As used herein, a
"Competitive Business" is
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any other corporation, partnership proprietorship, firm,
association or other business entity which provides any of the
following services: professional employer organization (PEO)
services; administrative service organization (ASO) services;
business process outsourcing (BPO) services or any other
substantially similar form of services which competes with the
COMPANY's business or the provision or which causes the
recipient of such services to decline to become or cease being
a client of the COMPANY.
B. NON-PIRACY. For a period of five (5) years following the
execution of this agreement, COSTELLO shall not induce or
solicit any client of the COMPANY or any person doing business
with the COMPANY to terminate his or her employment or
business relationship with the COMPANY or otherwise interfere
with any such relationship, nor shall COSTELLO engage in any
way in a Competitive Business with any client or entity which
has been a client of the COMPANY during the 12 months
preceding the effective date of this Agreement.
7. CONFIDENTIALITY AND NON-ADMISSION OF LIABILITY. The parties agree to
keep the terms of this Agreement, and the settlement it embodies, strictly
confidential. The parties, unless this Agreement is made public by the COMPANY
under the laws and rules applicable to a publicly traded company, further agree
not to disclose or permit disclosure outside the COMPANY of any information
concerning this Agreement to any other person, commercial or non-profit entity,
and/or on the internet or to any print, radio, or television news media,
including any commercial or non-profit newspaper, publication or broadcast, of
any kind whatsoever, except: (a) as required to do so either by court order or
pursuant to the demand or requirement of
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any governmental agency or authority; (b) as necessary for tax planning and/or
preparation or to respond to inquiries or audits by a federal, state or local
taxing authority; (c) as evidence in any subsequent proceeding in which either
party alleges a breach of this Agreement; or (d) to legal counsel and immediate
family (spouse, children, parents and siblings), with the understanding that the
party shall advise such persons to comply with the terms of this paragraph. The
parties further agree that nothing in or related to this Agreement constitutes
an admission by the PARTIES of any violation of any federal, state or local law.
8. SOLICITATION OR RECRUITMENT OF COMPANY EMPLOYEES, CONTRACTORS OR
AGENTS. COSTELLO agrees that he will not at any time solicit or recruit any
employee, contractor, or agent of the COMPANY away from her/his/its employment
and/or contractual or business relationship with the COMPANY.
9. CONSULTATION WITH COUNSEL. COSTELLO and the COMPANY agree and
acknowledge that COSTELLO has been advised by this writing to consult legal
counsel concerning the terms of this Agreement prior to executing it. COSTELLO
and the COMPANY further agree that they have been given ample time and
opportunity to fully review and discuss the terms of this Agreement with their
respective attorneys, that this agreement is written in a manner that they both
understood, and that they have had the opportunity to fully review with their
attorneys the legal claims and rights which are being released and the
obligations of each party under this Agreement. Based upon that review and
discussion with counsel, COSTELLO and the COMPANY acknowledge that they fully
and completely understand and accept the terms of this agreement and enter into
it freely, voluntarily and of their own free will.
10. BREACH. COSTELLO and the COMPANY agree and acknowledge that this
Agreement may be used as evidence in any subsequent arbitration or related
proceeding in which either party alleges a breach of this Agreement or asserts
claims inconsistent with its terms. COSTELLO and the COMPANY further agree that
all future disputes they may have under this Agreement will be submitted to
binding arbitration, including any disputes over the enforcement of the terms of
this Agreement, excepting only a request for equitable relief from a court of
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competent jurisdiction to enjoin an ongoing violation of this Agreement and to
preserve the status quo pending the arbitration proceedings required under this
provision.
If either party contends that they have a claim of any kind against the
other, or that any provisions of this Agreement are not being complied with,
written notice of alleged non-compliance shall be given to the other party
within a reasonable period following discovery of the alleged dispute or
non-compliance. Such notice must be either hand-delivered or sent by certified
mail to the party's last known address. The party receiving such notice shall
have ten (10) business days from receipt of such written notice to resolve the
alleged dispute(s) or non-compliance through mutual efforts of conciliation. The
parties may mutually agree in writing upon additional time to endeavor to
resolve the alleged dispute(s) or non-compliance. In the event the parties are
unable to conciliate the dispute(s) or non-compliance within the five (5)
business days mentioned above (or within the additional period of time to which
the parties may have mutually agreed), at the conclusion of the five-day
business period the parties agree to submit the dispute(s) or issue(s) of
non-compliance to binding arbitration, upon the request of either party.
The binding arbitration shall be administered by the American
Arbitration Association ("AAA") under its Employment Dispute Resolution
Arbitration Rules. The arbitration shall take place in Columbus, Ohio. The
arbitrator's award shall be accepted as final and binding upon the parties. All
arbitration expenses shall be borne by the COMPANY. Notwithstanding the pendency
of any dispute or controversy concerning a breach of this Agreement, or the
effects thereof, the COMPANY shall continue to make all payments specified in
this Agreement until the dispute is finally resolved. Judgment may be entered on
the arbitrators' award in any court having jurisdiction; provided, however, that
COSTELLO shall be entitled to seek specific performance of his right to be paid
during the pendency of any dispute or controversy arising under or in connection
with Agreement. The AAA, the arbitrator, the parties and any non-party witnesses
thereto shall keep the entire arbitration proceeding and any award or decision
relating
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completely confidential. This agreement to arbitrate may be compelled under the
Federal Arbitration Act.
11. ATTORNEY FEES The COMPANY shall pay and reimburse COSTELLO for all
legal fees and expenses incurred in contesting or disputing any breach of this
agreement, enforcing any right or benefit provided by this agreement, or in
interpreting this agreement.
12. ENTIRE AGREEMENT. COSTELLO and the COMPANY expressly agree and
acknowledge that this Agreement and any written agreements entered into between
the COMPANY and COSTELLO on or after the date COSTELLO signs this Agreement
contain and comprise the entire agreement and understanding between the parties
with respect to the subject matters addressed in this Agreement. They also agree
that no other representation, promise, covenant or agreement of any kind
whatsoever has been made to cause any party to execute this Agreement. The
parties further agree and acknowledge that the terms of this Agreement are
contractual, and not a mere recital, and the parties intend this Agreement to be
a substituted contract, not an executory accord. The parties also agree that the
terms of this Agreement shall not be amended or changed except in writing and
signed by COSTELLO and an authorized representative of the COMPANY. The parties
to this Agreement further agree that this Agreement shall be binding on and
inure to the benefit of KEVIN T. COSTELLO and TEAM MUCHO, INC. as defined and
described above in this Agreement.
13. EFFECTIVE DATE. The effective date of this Agreement shall be
December 27, 2001.
14. OHIO LAW. This Agreement shall be interpreted and enforced pursuant
to the laws of the State of Ohio without regard to Ohio's or any other state's
choice of law rules.
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15. REFERENCES. S. Cash Nickerson shall be designated to provide
employment references for COSTELLO to prospective employers. The COMPANY agrees
to provide positive work references to prospective employers without an
reference to negative performance issues or situations where management of the
COMPANY may believe they have evidence of actions which may have constituted
grounds for termination for cause.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THE FOREGOING AGREEMENT,
FULLY UNDERSTAND IT AND HAVE VOLUNTARILY SIGNED THIS AGREEMENT ON THE DATE
INDICATED, SIGNIFYING THEREBY THEIR ASSENT TO, AND WILLINGNESS TO BE BOUND BY,
ITS TERMS:
12/28/02 /s/ Kevin T. Costello
- ------------------------------- -------------------------------------
Date KEVIN T. COSTELLO
TEAM Mucho, Inc., f/k/a Team America
Corporation
Date: 12/28/02 By: /s/ S. Cash Nickerson
-------------------------- ----------------------------------
S. Cash Nickerson, Chairman
and Chief Executive Office