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Executive Employment Agreement

Executive Employment Agreement

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GEE GROUP INC. | GEE Group Inc

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: Florida     Date: 8/15/2016
Industry: Business Services     Sector: Services

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EXHIBIT 10.56

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and effective as of August 12, 2016 (the "Effective Date"), between GEE Group Inc., an Illinois corporation, formerly known as General Employment Enterprises, Inc. whose principal place of business is One Tower Lane, Suite 2200, Oakbrook Terrace, IL 60181 (the "Company" or "Employer") and Derek Dewan, an individual whose address is in Jacksonville, Florida. (the "Executive").

 

RECITALS

 

A. The Employer is an Illinois corporation and is principally engaged in the business of staffing and permanent placement, and related personnel activities, including benefit and insurance programs (the "Business").

 

B. The Employer recognizes that the Executive's talents and abilities are unique, and have been integral to the success of the Employer and thus wishes to secure the ongoing services of the Executive on the terms and conditions set forth herein,

 

C. The Employer desires to employ the Executive and the Executive desires to be employed by the Employer.

 

D. The parties agree that a covenant not to compete is essential to the growth and stability of the Business of the Employer.

 

E. Executive previously entered into that certain Senior Executive Employment Agreement dated as of July 28, 2014 with Scribe Solutions, Inc., a wholly owned subsidiary of the Employer, which is being terminated effective on the Effective Date (the "Scribe Executive Agreement").

 

 

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NOW, THEREFORE, in consideration of the mutual promises and agreements and covenants, and subject to the terms and conditions contained in this Agreement, the Employer and Executive, intending to be legally bound, hereby agree as follows:

 

1. Employment . Employer hereby employs Executive as President and Chief Executive Officer, and Executive hereby accepts employment by Employer, in accordance with and subject to the terms and conditions of this Agreement.

 

2. Duties and Authority . During the Employment Period (as hereinafter defined), Executive will occupy the position of President and Chief Executive Officer and report directly to the Employer's Board of Directors. As President and Chief Executive Officer, Executive shall be in charge of the operations of Employer and shall have full authority and responsibility, subject to the general direction and control of the Board of Directors of Employer (the "Board"), for formulating policies and administering the affairs of Employer in all respects, and otherwise performing such duties as are customarily performed by the President, Chief Executive Officer and member of the board of directors of a company of similar size and structure to Employer. Executive agrees to devote his full time, attention and best efforts to the performance of his duties hereunder; provided, however, it shall not be considered a violation of the foregoing for the Executive to serve on corporate, industry, civic, or charitable boards or committees, so long as such activities do not materially interfere with the performance of the Executive's responsibilities as an employee of the Employer in accordance with this Agreement.

 

3. Initial Term; Employment Period . The initial term of employment shall begin on August 15, 2016 and end on August 15, 2021 (the "Term of this Agreement"). The Term of this Agreement shall be extended automatically for one year on August 15, 2021 and each annual anniversary thereof (the "Extension Date") unless, and until, at least 90 days prior to the applicable Extension Date either the Employer or the Executive provides written notice to the other party that this Agreement is not to be extended (the later of August 15, 2021 or the last date to which the Term is extended shall be the "End of Term"). For purposes of this Agreement, the period beginning on August 15, 2016 and ending on the Date of Termination (as hereinafter defined) shall be referred to herein as the "Employment Period."

 

 

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4. Compensation . During the Employment Period which is in the Term of this Agreement, Executive shall receive the following compensation:

 

a) Base Salary . A base annual salary of $300,000, payable in accordance with the Employer's standard practice for other senior executives. Executive's base salary shall be subject to annual review by the Board's Compensation Committee for discretionary periodic increases in accordance with the Employer's compensation policies. References to "Base Salary" in this Agreement shall be to the base salary set forth in this Paragraph 4.a and shall include any increases to such base salary made hereby.

 

b) Incentive Compensation . Executive shall be eligible for a discretionary or formula bonus as determined by the Board's Compensation Committee and be eligible to participate in one or more compensation plan(s) of Employer, subject to the terms and conditions of those plans.

 

5. Equity Incentives .

 

a) Equity Incentives - General . Stock options of Employer and other forms of equity compensation such as restricted stock, stock appreciation rights or phantom stock (collectively, "Equity Incentives") may be granted to executive from time to time at the discretion of the Compensation Committee of the Board of Directors (the "Compensation Committee").

 

b) Investment Representation . Executive agrees that he will not sell or otherwise dispose of all or any part of the common stock of Employer acquired as part of the Equity Incentives unless he shall have received an opinion of counsel, in form and substance satisfactory to counsel for Employer (each party to bear the expense of its own counsel), to the effect that registration of the shares to be sold or disposed of is not required under the Securities Act of 1933, as amended (the "Act"), or unless there shall be in effect a registration statement under said Act with respect to the proposed sale or disposition of the shares to be sold or disposed of, and Executive shall have complied with all applicable provisions of the Act and the rules and regulations thereunder.

 

 

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c) Registration . If stock options for common stock or other forms of equity compensation of Employer are granted to Executive as Equity Incentives, then it is acknowledged that the grants by the Compensation Committee may, in the Compensation Committee's sole discretion, require that Executive be provided with the right to require Employer, as soon as reasonably possible, to register Executive's shares upon vesting and exercise of the stock options or vesting of other forms of equity compensation pursuant to the appropriate form of registration statement under the Act and to thereafter maintain such registration statement's effectiveness at all required times.

 

d) Exercise . Any stock options granted after the effective date of this Agreement as Equity Incentives, may include the following terms and conditions, to the extent expressly approved by the Compensation Committee. These terms and conditions are:

 

(i) exercisability of vested options (including those vested under paragraph 5.d)(ii) below) for at least 2 years following the Executive's termination of employment with the Employer or if sooner, 10 years from date of grant of the option;

 

(ii) full vesting of options upon a Change in Control (as hereafter defined) or termination of the Executive's employment with the Employer for reasons other than (A) by the Employer for Cause (as hereafter defined), or (B) by the Executive without Good Reason (as hereafter defined); and

 

(iii) exercisability only to the extent vested on the date of the Executive's termination of employment with the Employer, in the event of termination (A) by the Employer for Cause, or (B) by the Executive without Good Reason.

 

 

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6. Benefits . Executive shall receive the following additional benefits at no cost to the Executive:

 

a) Life Insurance . During the Employment Period, if requested by Executive in writing, Employer shall reimburse Executive up to $15,000 annually for Executive's cost of life insurance, covering Executive's life.

 

b) Disability Insurance . During the Employment Period, until Executive attains the age of 65, if requested by Executive in writing, Employer shall reimburse Executive for up to $15,000 annually for Executive's cost of disability insurance covering Executive.

 

c) Medical, Dental and Hospital Insurance; General . During the Employment Period, if requested by Executive during the Employment Period, Employer shall include Executive, his spouse and his dependents in any group medical, dental and hospital or similar plan of Employer in existence for senior executives from time to time until Executive and his spouse attain the age of 65. Employer will purchase individual medical, dental and hospital insurance for Executive, his spouse and his dependents if group coverage is not in existence or is unavailable.

 

d) Post-Employment Medical, Dental and Hospital . If requested by Executive, post-employment medical, dental and hospital insurance, either as group coverage or an individual policy, will be provided at Employer's expense at the same level as other senior executive officers as follows:

 

(i) to Executive's wife, Camellia B. Dewan, until she attains age 65; and

 

(ii) to Executive and Executive's dependents until Executive attains age 65.

 

e) Vacation . Executive shall be entitled to five (5) weeks of paid vacation during each calendar year and time off for all holidays as designated by the Employer. Unused vacation time will be paid to Executive at calendar year end.

 

 

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f) Automobile . Executive shall be eligible to receive an automobile allowance at the sole discretion of the Compensation Committee.

 

g) Club Dues . Employer shall pay or reimburse Executive for Executive's membership and club dues for the Gate Governor's Club, the River Club, Sawgrass Country Club (the maximum payment or reimbursement for all clubs not to exceed the total of $10,000 per annum). Upon Compensation Committee approval, Employer shall pay for such other club dues and membership fees for Executive as are reasonable and customary from time to time.

 

h) Communications and Other Equipment . Employer shall provide Executive with, and shall pay all costs of operating and maintaining, cellular telephones, pagers, telephone and cable lines, notebook and desk top computers, facsimile machines, hand-held organizers/palm tops, and such other equipment necessary for Executive to perform his duties at Executive's offices or residences as deemed necessary by Executive.

 

i) Expense Reimbursement . Subject to compliance with Employer's business expense reimbursement policies, Executive shall be entitled to reimbursement for all reasonable expenses, including meals, telephone, travel, and entertainment, incurred by Executive in the performance of his duties. Executive will maintain records and written receipts as required by federal and state tax authorities to substantiate expenses as an income tax deduction for Employer and shall submit vouchers for expenses for which reimbursement is made. Credit card receipts (American Express, etc.) and other receipts are acceptable along with other corroborative evidence.

 

j) Other Benefits . To the extent not otherwise provided herein (it being the intent not to duplicate benefits), Employer shall provide Executive with no less than the same type and level of other benefits provided by the Employer from time to time to its other executive officersas a groupand Board membersas a groupif these are materiallyhigher than whathas been provided to Executive. These include, but are not limited to, life and health insurance benefits, participation in pension and profit sharing plans, stock option and stock purchase plans, restricted stock grants, stock appreciation rights, and stock warrants.

 

 

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7. Non-Compete and Non-Solicitation; Confidentiality . In consideration of the employment of Executive by Employer, Executive agrees as follows:

 

a) Non-Compete and Non-Solicitation . During the Employment Period and for a period of two (2) years after the Date of Termination, Executive will not, directly or indirectly, within a fifty (50) mile radius of any office of Employer (or a consolidated subsidiary) in existence on the Date of Termination, own, manage, be employed by, work for, consult for, be an officer or director of, advise, represent, engage in or carry on any business which competes with the Business of the Employer at that time. During the Employment Period and for a period of two (2) years after the Date of Termination, Executive will not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of the Employer (or a consolidated subsidiary) to leave the Employer (or a consolidated subsidiary) for any reason whatsoever, or solicit the services of any employee of the Employer (or a consolidated subsidiary). Currently the "consolidated subsidiaries" of Employer include, without limitation: (i) Scribe Solutions, Inc., (ii) Access Data Consulting Corporation, (iii) Agile Resources, Inc., (iv) Paladin Consulting, Inc. The term "consolidated subsidiary" means an entity that is (i) wholly owned by Employer or (ii) is partially owned by Employer such that, for generally accepted accounting principles, its financials are Consolidated in the consolidated financials of Employer.

 

b) Non-Disclosure of Information . Executive will not at any time, during or after the term of this Agreement, in any fashion, form, or manner, either directly or indirectly, divulge, disclose, or communicate to any person, firm, or corporation, in any manner whatsoever, any information of any kind, nature, or description concerning any matters affecting or relating to the Business of the Employer, including, but not limited to, the names of any of its customers or prospective customers or any other information concerning the Business of the Employer, its manner of operation, its plans, its vendors, its suppliers, its advertising, its marketing, its methods, its practices, or any other information of any kind, nature, or description, without regard to whether any or all of the foregoing matters would otherwise be deemed confidential, material, or important; provided, however, that this provision shall not prevent disclosures by Executive to the extent such disclosures are (i) believed by the Executive, in good faith and acting reasonably, to be in the best interest of the Employer, (ii) of information that is public at the time of the disclosure (other than as a result of the Executive's violation of this Paragraph 7(b)), or (iii) as required by law or legal process (and, if the Executive is so required to disclose, Executive shall provide the Employer notice of such to allow the Company the opportunity to contest such disclosure).

 

 

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8. Termination of Employment .

 

a) Death or Disability . The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. Additionally, if the Employer determines in good faith that the Executive has incurred a Disability, it may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Employer shall terminate effective on the later of (i) the date in the notice, (ii) the day after receipt of such notice by the Executive, or (iii) the date the Disability has been considered to occur (the "Disability Effective Date"), provided that, prior to such date, the Executive shall not have returned to full-time performance of the Executive's duties.

 

b) Cause . The Employer may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean (i) a material breach by the Executive of the Executive's obligations under paragraph 2 above (other than as a result of temporary incapacity due to physical or mental illness, or Disability) which is demonstrably willful and deliberate on the Executive's part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Employer and which is not remedied in a reasonable period of time after receipt of written notice from the Employer specifying such breach; (ii) the conviction of the Executive of a felony; or (iii) a breach of the Executive's fiduciary duty to the Employer or willful violation in the course of performing his duties for the Employer of any law, rule or regulation (other than traffic violation or other minor offenses). (No act or failure to act on the Executive's part shall be considered willful unless done or


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