EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 11, 2005, between GENERAL PHYSICS
CORPORATION, a Delaware corporation with principal executive offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and
_________________, residing at __________________________________("Employee").
W I T N E S S E T H
WHEREAS, the Company desires to employ Employee to perform services for
the Company, and any successor or assign of the Company, and Employee desires to
perform such services, subject to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual promises,
covenants, and conditions herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound hereby agree as follows:
1. Term. The Company agrees to employ Employee, and Employee agrees to serve, on
the terms and conditions of this Agreement for a period commencing on the date
of this Agreement and ending two years from the commencement date, or such other
period as may be provided for herein. The period during which Employee is
employed hereunder is hereinafter referred to as the "Employment Period." Upon
the expiration of the Employment Period, the Employee shall be an
employee-at-will of the Company.
2. Duties and Services. During the Employment Period, Employee shall be employed
in the business of the Company as Vice President or in such other capacity or
capacities as shall be assigned to Employee by the President, Chief Executive
Officer or Board of Directors of the Company (the "Board") that are consistent
with being an executive of the Company. In performance of his/her duties,
Employee shall be subject to the direction of the President, Chief Executive
Officer or another senior executive of the Company as designated by the
President, Chief Executive Officer or Board. Employee agrees to his/her
employment as described in this Section 2 and, subject to any qualifications and
limitations set forth herein, the Employee agrees to devote all of his/her
business time and efforts to the performance of his/her duties under this
Agreement and to promote and advance the business interests of the Company.
Employee shall comply with the policies and procedures of the Company adopted
from time to time. Employee shall be available to travel as the needs of the
business reasonably require.
3. Compensation. As full compensation for his/her services hereunder, the
Company shall provide Employee during the Employment Period the following:
(a) Base Salary. During the Employment Period, the Company shall pay
to Employee a base annual salary at the rate paid by the Company to Employee
immediately prior to the Employment Period, payable at such intervals (at least
monthly) as salaries are paid generally to other employees of the Company. On
April 1 of each year, beginning in 2006, the base annual salary shall be
increased, as determined by the Board, by a minimum of the greater of (i) 3% and
(ii) the percentage increase in the Consumer Price Index (All Urban Consumers)
published by the U.S. Department of Labor during the prior calendar year. During
any period in which Employee is eligible to receive salary replacement payments
under the provisions of any
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EXHIBIT 10.1
benefits plan(s) sponsored or maintained by the Company, the Company's
obligation to pay salary shall be reduced by an amount equal to the amount of
benefits paid or payable under such plan(s).
(b) Employee Benefit Plans. Employee shall be entitled to
participate in all employee benefit plans maintained by the Company for its
executives or employees, including without limitation the Company's medical,
dental, disability, life, stock option and 401(k) Plans and Bonus Plan, if
he/she meets the eligibility requirements. The Company shall maintain the
existing life and disability insurance policies covering Employee or comparable
policies. The cost of such benefits to Employee shall not exceed the cost of
such benefits to the Company's vice presidents generally.
(c) Paid Time Off. Employee shall be entitled to reasonable
vacations and other paid time off in accordance with the then regular procedures
of the Company governing executives.
(d) Automobile. The Company shall provide Employee with an
automobile (comparable to the automobile provided by the Company to Employee
immediately prior to the Employment Period) of his/her choice on the same terms
as currently provided to officers of the Company. Alternatively, Employee may
elect to receive a monthly allowance equal to such amount as the Company shall
then pay its vice presidents who elect to use his/her own automobile, and assume
personal responsibility for the cost of operating and maintaining such vehicle,
rather than to use a Company-provided automobile.
(e) Cellular Telephone. The Company shall, at its expense, provide
the Employee with a cellular telephone, and pay all charges associated
therewith, for his/her use in connection with the performance of his/her duties
hereunder.
(f) Stock Unit Grant. Within thirty (30) days after the beginning of
the Employment Period, Employee shall be granted _______ Stock Units ("Units")
of GP Strategies Corporation ("GPSC") Common Stock ("Common Stock") pursuant to
the GPSC 2003 Incentive Stock Plan (the "Plan"). Such grant shall be subject to
the provisions of the Plan and shall be on the terms and conditions, and subject
to the restrictions, set forth herein and in the form of grant attached hereto
as Exhibit A.
(g) Change in Control or Sale of the Company. Upon the occurrence of
a "Change in Control" or a "Sale of the Company" during the Employment Period,
all stock options to purchase GPSC common stock granted to Employee shall
immediately become fully vested and exercisable and all Units granted to
Employee shall immediately be paid in unrestricted shares of Common Stock. For
purposes of this Agreement, a "Change in Control" is deemed to have occurred if
any person who was not on March 18, 2005 a "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of GPSC representing 15% of more of the combined
voting power of GPSC's outstanding securities becomes the beneficial owner,
directly or indirectly, of securities of GPSC representing 25% or more of the
combined voting power of GPSC's outstanding securities and a "Sale of the
Company" is deemed to have occurred if (i) GPSC engages in a transaction or
series of transactions (including, without limitation, a merger or
consolidation) with another corporation, partnership, limited liability company,
joint venture, trust or other entity, and the stockholders of GPSC immediately
prior to such transaction(s) do not, after such transaction(s), hold at least
50% of the voting power of GPSC or its successor, (ii) GPSC and its affiliates
cease to own more than 80% of the voting stock of the Company, (iii) all or
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EXHIBIT 10.1
substantially all of the assets of GPSC, the Company, or the business unit of
the Company with regard to which Employee is assigned are sold, or (iv) the
Common Stock is neither listed on a national securities exchange nor authorized
to be quoted in an inter-dealer quotation system of a registered national
securities association.
4. Expenses. Employee shall be entitled to reimbursement for reasonable travel
and other out-of-pocket expenses necessarily incurred in the performance of
his/her duties hereunder, upon submission and approval of written statements,
receipts and bills in accordance with the then regular procedures of the
Company.
5. Representations and Warranties of Employee. Employee represents and warrants
to the Company that (a) Employee is under no contractual or other restriction or
obligation which is inconsistent with the execution of this Agreement, the
performance of his/her duties hereunder, or the other rights of the Company
hereunder and (b) Employee is under no physical or mental disability that would
preclude his/her performance, with or without reasonable accommodation, of the
essential duties of his/her position.
6. Non-Competition, Non-Solicitation. In view of the unique and valuable
services that it is expected Employee will render to the Company, the knowledge
of the customers, trade secrets, and other proprietary information relating to
the business of the Company and its customers and suppliers that Employee has
obtained and that it is expected Employee will obtain, and in consideration of
the compensation to be received hereunder, Employee agrees (a) that he/she will
not during the period he/she is employed by the Company under this Agreement or
otherwise Participate In (hereinafter defined in this Section 6) any other
business or organization (other than not-for-profit professional, civic, or
similar organizations that do not compete with the Company), whether or not such
business or organization now is or shall then be competing with or of a nature
similar to the business of the Company, and (b) for a period of six months after
he/she ceases to be employed by the Company under this Agreement or otherwise,
he/she will not (i) compete with, or Participate In any other business or
organization which during such six-month period competes with, the Company, with
respect to any product or service sold within the twelve (12) month period
preceding such cessation, except that in each case the provisions of this
Section 6 will not be deemed breached merely because Employee owns not more than
1% of the outstanding common stock of a corporation, if, at the time of its
acquisition by Employee, such stock is listed on a national securities exchange,
is reported on NASDAQ, or is regularly traded in the over-the-counter market by
a member of a national securities exchange; (ii) directly or indirectly reveal
the name of, solicit or interfere with, encourage to leave the Company, or
endeavor to entice away from the Company any of its suppliers, customers, or
employees; or (iii) directly or indirectly employ any person who, at any time
within ninety (90) days prior to such cessation, was an employee of the Company.
The term "Participate In" shall mean: "directly or indirectly, for his/her own
benefit or for, with, or through any other person, firm, or corporation, own,
manage, operate, control, loan money to, or participate in the ownership,
management, operation, or control of, or be connected as a director, officer,
employee, partner, consultant, agent, independent contractor, or otherwise with,
or acquiesce in the use of his/her name in." Since a breach of the provisions of
this Section 6 or Section 8 could not adequately be compensated by money
damages, the Company shall be entitled, in addition to any other right and
remedy available to it, to seek an injunction restraining such breach or a
threatened breach, and in either case no bond or other security shall be
required in connection therewith. Employee agrees that the provisions of this
Section 6 are necessary and reasonable to protect the Company in the conduct of
its business. If any restriction contained in this Section 6 shall be deemed to
be
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EXHIBIT 10.1
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such restriction to the extent,
duration, geographical scope, or otherwise that is necessary to render it valid,
legal and enforceable, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby.
7. Patents, Etc. Any interest in patents, patent applications, inventions,
copyrights, developments, and processes ("Such Inventions") which Employee has
acquired or hereafter acquires during the period he/she is employed by the
Company relating to the fields in which the Employee has been, or shall be,
engaged on behalf of the Company shall belong to the Company; and forthwith upon
request of the Company Employee shall execute all such assignments and other
documents and take all such other action as the Company may reasonably request
in order to vest in the Company all his/her right, title, and interest in and to
Such Inventions free and clear of all liens, charges, and encumbrances caused by
acts of Employee.
8. Confidential Information. All confidential information which Employee may now
possess, may obtain during or after the Employment Period, or may create prior
to the end of the period he/she is employed by the Company under this Agreement
or otherwise relating to the business of the Company or any of its affiliates or
of any customer or supplier of the Company or any of its affiliates shall not be
published, disclosed, or made accessible by him/her to any other person, firm,
or corporation either during or after the termination of his/her employment or
used by him/her except during the Employment Period in the business and for the
benefit of the Company, in each case without prior written permission of the
Company. Employee shall return all tangible evidence of such confidential
information to the Company prior to or at the termination of his/her employment.
In the event that any of the provisions of this Section 8 should ever be held to
exceed their time, scope or other limitations permitted by applicable law, it is
hereby declared to be the intention of the parties hereto that such provision be
reformed to reflect the maximum time, scope and other limitations that are
permitted by law.
9. Termination. Notwithstanding anything herein contained, if on or after the
date hereof and prior to the end of the Employment Period,
(a) either (i) as a result of a serious health condition (as defined
in the Family and Medical Leave Act of 1993), and after giving effect to any
reasonable accommodation required by law, Employee shall be physically or
mentally incapacitated or disabled or otherwise unable fully to discharge
his/her duties hereunder for a period of ninety (90) consecutive days, (ii)
Employee shall be convicted, plead guilty, or enter a plea of nolo contendere to
a felony or a crime involving moral turpitude, (iii) Employee shall commit any
act or omit to take any action in bad faith and to the detriment of the Company,
or (iv) Employee shall fail to perform his/her duties or obligations hereunder
or shall breach any term of this Agreement and shall not correct such failure or
breach within ten (10) days after receipt of written notice thereof, then, and
in each such case, the Company shall have the right to give notice of
termination of Employee's services hereunder as of a then present or future date
to be specified in such notice, Employee's employment shall terminate on the
date so specified, the Company shall pay Employee his/her base annual salary
through the date of termination only, and, except as provided by law or the
terms of the applicable benefit plan, Employee shall continue to receive the
other benefits set forth in Section 3 through the date of termination only.
(b) If (i) (A) Employee resigns for "Just Cause," as defined below,
or (B) the Company terminates Employee's employment for reasons other than those
specified in
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EXHIBIT 10.1
Section 9(a) and (ii) Employee is in full compliance with his/her obligations
under Sections 6 and 8 or corrects any failure to comply within ten (10) days
after receipt of written notice, then, for the period (the "Remaining Period")
that would have been remaining in the Employment Period if Employee had not so
resigned or been terminated or for a period of 6 months after termination
(whichever is longer), (x) the Company shall pay Employee his/her base annual
salary at the rate in effect on the date of such employment termination, payable
at such intervals (at least monthly) as salaries are paid generally to executive
officers of the Company, (y) Employee shall continue to be eligible to receive
such benefits as Employee would have been entitled to under Section 3 had
his/her employment not terminated, and (z) for purposes of the Units only,
Employee shall be deemed to be employed by the Company for the Remaining Period.
For the purposes hereof, the Employee shall be deemed to have resigned for "Just
Cause" in the event that the Employee resigns within thirty (30) days following
either (A) the Company, without the express written consent of the Employee, (i)
imposes any significant change in the Employee's function, duties, or
responsibilities that is not consistent with the Employee being an executive of
the Company and fails to rescind or modify such change within ten (10) business
days after receipt of written notice from the Employee, or (ii) fails to make
any material payment, or provide any material benefit to the Employee,
contemplated hereunder, and fails to correct any such deficiency within ten (10)
business days after receipt of written notice from the Employee, or (B) the
Company shall breach any other term of this Agreement and shall not correct such
failure or breach within thirty (30) days after written notice from Employee.
The payments to be made to the Employee hereunder shall be made without regard
to any compensation or remuneration earned by the Employee from any source after
the date of the termination of his/her employment.
(c) If (i) (A) Employee resigns for "Just Cause," as defined above,
or (B) the Company terminates Employee's employment for reasons other than those
specified in Section 9(a) and (ii) Employee is not in full compliance with
his/her obligations under Sections 6 and 8 and does not correct any failure to
comply within ten (10) days after receipt of written notice, the Company shall
pay Employee his/her base annual salary only through the date of termination of
employment and, except as provided by law or the terms of the applicable benefit
plan, Employee shall continue to receive the other benefits set forth in Section
3 through the date of termination only. Employee shall repay to the Company any
amounts previously paid to which Employee was not entitled.
(d) If Employee shall die, then this Agreement shall terminate on
the date of Employee's death, whereupon Employee or his/her estate, as the case
may be, (i) shall be entitled to receive only his/her salary at the rate
provided in Section 3 to the end of the calendar month within which the date of
termination shall take effect, plus his/her salary at the rate provided in
Section 3 for the next two calendar months, and (ii) for purposes of the Units
only, Employee shall be deemed to be employed by the Company for the period that
would have been remaining in the Employment Period if Employee had not so died.
Nothing contained in this Section 9 shall be deemed to limit any other right the
Company may have to terminate Employee's employment hereunder upon any ground
permitted by law.
10. Merger, Etc. In the event of a future disposition of (or including) the
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, or otherwise, then the Company shall assign this
Agreement and all of its rights and obligations hereunder to the acquiring or
surviving corporation or other entity, and such corporation or other entity
shall assume in writing all of the obligations of the Company hereunder.
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EXHIBIT 10.1
11. Survival. The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
12. Modification. This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements between them concerning such subject matter, and may be modified only
by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, given by Federal Express, Express Mail, or similar overnight
delivery or courier service, or delivered against receipt to the party to whom
it is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 13). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 13. Any notice or other communication given shall be deemed given at the
time of receipt thereof.
14. Waiver. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
15. Binding Effect. Employee's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, such rights shall not be subject
to commutation, encumbrance, or the claims of Employee's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Employee and his/her
heirs and personal representatives, and shall be binding upon and inure to the
benefit of the Company and its successors and those who are its assigns under
Section 10.
16. Separability. If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
17. No Third Party Beneficiaries. This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person not a party to
this Agreement (except as provided in Section 15).
18. Headings. The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
19. Counterparts; Governing Law. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall be governed by
and construed in accordance with the laws of the State of Maryland, without
giving effect to conflict of laws principles.
20. Indemnification. The Company shall indemnify the Employee, to the maximum
extent permitted by applicable law and in accordance with the Company's By-Laws,
from any and all claims relating to or arising out of the performance by the
Employee of his/her duties hereunder,
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EXHIBIT 10.1
or his/her acts or omissions as an officer, director or employee of the Company,
and the Company shall hold harmless the Employee from any and all costs or
expenses actually and reasonably suffered or incurred by him/her in connection
with the defense against any such claim. However, the Company shall not be
required to indemnify the Employee with respect to any proceeding initiated by
the Employee against the Company, or any counterclaim, cross-claim, affirmative
defense or similar claim of the Company in connection with any such proceeding,
except as provided in Section 21 below.
21. Legal Expenses. In the event of any litigation arising out of, or relating
to, this Agreement or the Employee's employment with the Company, the prevailing
party shall be entitled to recover from the other party his/her/its legal fees,
expert witness fees, court costs, and other reasonable expenses incurred in
connection with any such litigation.
[For Executive Vice Presidents Only][22. Units. If the Employment Period
terminates on or after the second anniversary of the date of this Agreement and
before the third anniversary of the date of this Agreement and during the period
commencing on the date of termination of the Employment Period and ending on the
third anniversary of the date of this Agreement, (i) (A) the Employee resigns
within thirty (30) days following the Company's, without the express written
consent of the Employee, (I) imposing any significant change in the Employee's
function, duties, or responsibilities that is not consistent with the Employee
being an executive of the Company and failing to rescind or modify such change
within ten (10) business days after receipt of written notice from the Employee,
or (II) materially reducing Employee's compensation or benefits from those
provided under this Agreement, and failing to rescind such reduction within ten
(10) business days after receipt of written notice from the Employee, or (B) the
Company terminates Employee's employment for reasons other than (I) as a result
of a serious health condition (as defined in the Family and Medical Leave Act of
1993), and after giving effect to any reasonable accommodation required by law,
Employee shall be physically or mentally incapacitated or disabled or otherwise
unable fully to discharge his/her duties hereunder for a period of ninety (90)
consecutive days, (II) Employee shall be convicted, plead guilty, or enter a
plea of nolo contendere to a felony or a crime involving moral turpitude, (III)
Employee shall commit any act or omit to take any action in bad faith and to the
detriment of the Company, or (IV) Employee shall fail to perform his/her duties
or obligations to the Company and shall not correct such failure or breach
within ten (10) days after receipt of written notice thereof and (ii) Employee
is in full compliance with his/her obligations under Sections 6 and 8 or
corrects any failure to comply within ten (10) days after receipt of written
notice, then, for purposes of the Units only, Employee shall be deemed to be
employed by the Company until the third anniversary of the date of this
Agreement. ]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
GENERAL PHYSICS CORPORATION EMPLOYEE
By: _____________________________ ________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
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EXHIBIT 10.1
The undersigned hereby agrees to the provisions of Sections 3(f), 3(g), 9(b),
and 9(d) of this Agreement to the extent such provisions relate to options to
purchase GPSC common stock or to Units.
GP STRATEGIES CORPORATION
By: _____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
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