UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
March 1, 2007
Date of report (Date of earliest event reported)
TSR, INC.
(Exact Name of Registrant as Specified in its charter)
Delaware 0-8656 13-2635899
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(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
400 Oser Avenue, Hauppauge, NY 11788
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(Address of Principal Executive Offices) (Zip Code)
(631) 231-0333
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions.
[ ] Written communication pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
TSR, Inc. (the "Company") entered into an employment agreement dated March
1, 2007 with Christopher Hughes, who has recently been elected as a Senior Vice
President of the Company and President of the Company's TSR Consulting Services,
Inc. subsidiary. The employment agreement is for a term of five years, provides
for an annual base salary of $200,000, and for an annual discretionary bonus
based on standards to be approved annually by the Compensation Committee of the
Board of Directors of the Company. The employment agreement provides for
severance, in the event of termination without cause, equal to the base salary
for two years. The employment agreement also contains a change in control
agreement pursuant to which Mr. Hughes will receive a payment equal to two times
his base salary and then current bonus if his employment is terminated in
connection with or following a change of control.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Number Description
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10.1 Employment Agreement dated March 1, 2007 between the Company
and Christopher Hughes
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TSR, INC.
By: /s/ John G. Sharkey
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Name: John G. Sharkey
Title: Vice President and Secretary
Date: March 6, 2007
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Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT effective this 1st day of March, 2007 by and between TSR, Inc., a
Delaware corporation, with offices at 400 Oser Avenue, Hauppauge, New York
11788 (hereinafter called the "Corporation") and Christopher Hughes, residing at
xxxxx New York (hereinafter called "Executive").
W I T N E S S E T H :
WHEREAS, the Corporation desires to employ Executive and Executive is
willing to undertake such employment on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. The Corporation hereby employs Executive as President of TSR Consulting
Services, Inc. and Senior Vice President of the Corporation or such other
position as he may be appointed to by the Board of Directors, with the
Corporation or any subsidiary thereof to perform such duties on behalf of the
Corporation and TSR Consulting Services, Inc. as the Chairman may from time to
time determine.
2. Executive hereby accepts such employment and agrees that throughout the
period of his employment hereunder, he will devote his full time, attention,
knowledge and skills, faithfully, diligently and to the best of his ability, in
furtherance of the business of the Corporation and to promote the interest of
the Corporation, will perform the duties assigned to him pursuant to Paragraph 1
hereof, subject, at all times, to the direction and control of the Chairman of
the Board of Directors of the Corporation and the Corporation's Board of
Directors. Executive shall at all times be subject to, observe and carry out
such rules, and regulations as the Corporation from time to time shall
establish. During the period of Executive's employment hereunder, Executive
shall not be entitled to additional compensation for serving in any office of
the Corporation or any of its subsidiaries to which he is elected, including
without limitation as a director of the Corporation.
3. Executive shall be employed for a term of five (5) years commencing as of
the 1st day of March, 2007 and ending on the 28th day of February, 2012 (the
"Term"), unless his employment is terminated prior to the expiration of the Term
pursuant to the provisions hereof.
4. (a) As full compensation for his services hereunder, the Corporation will
pay to Executive a salary (the "Base Salary") at the rate of Two
Hundred Thousand ($200,000) Dollars per annum, payable in equal
installments in arrears no less frequently than semi-monthly. In
addition, the Corporation's Compensation Committee of the Board of
Directors, shall in good faith, after the end of each fiscal year
consider and cause the Corporation to grant to Executive a
discretionary bonus, based upon standards which the Chairman of the
Corporation, subject to the approval of the Corporation's Compensation
Committee of the Board of Directors, shall establish with Executive at
the beginning of the each fiscal year commencing after the date of
this Agreement and for the period from the date of the Agreement until
May 31, 2007 and which standards may be modified thereafter with the
approval of the Compensation Committee. The bonus provided for
hereunder shall be payable by the Corporation to Executive within 120
days of the end of the fiscal year, for the period to which such bonus
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relates. The Company shall pay to the Employee as an advance payment
of the bonus within 30 days after the end of each fiscal quarter an
amount equal to the bonus which would have been earned through the end
of such fiscal quarter, based on the standards approved by the
Compensation Committee. Each such advance payment of the bonus shall
be approved by the Compensation Committee unless it is paid in
accordance with a formula approved in advance for such fiscal year. In
the event that following any fiscal quarter or following completion of
the Company's audited financial statements, any advance payment of the
bonus previously paid with respect to any fiscal year (or portion
thereof) exceeds the amount that Executive is entitled to through the
end of such fiscal quarter or fiscals year, Employee shall promptly
return such excess.
(b) In addition, Executive shall be entitled to participate, to the extent
he is eligible under the terms and conditions thereof, in any pension,
profit-sharing, retirement, hospitalization, insurance, medical
services, or other employee benefit plan generally available to
executives of the Corporation which may be in effect from time to time
during the period of his employment hereunder. The Corporation shall
be under no obligation to institute or continue the existence of any
such employee benefit plan. Executive is entitled to executive medical
benefits and also shall be entitled to a car (leased or owned at sole
discretion of the Corporation) in such amounts for the car as shall be
determined by the Board of Directors of the Corporation. Any or all of
such entitlements in the preceding sentence may be discontinued at the
end of any contract year at the discretion of the Chairman.
5. The Corporation shall reimburse Executive for all expenses reasonably
incurred by him in connection with the performance of his duties hereunder and
in connection with the business of the Corporation, upon the submission to the
Corporation of appropriate vouchers therefor and approval thereof by the
Treasurer of the Corporation. Such reimbursements shall be subject to the
expense reimbursement policies of the Corporation, which are in effect from time
to time. Executive shall be entitled to three (3) weeks vacation time per annum
in accordance with the regular procedures of the Corporation governing executive
officers as determined from time to time by the Corporation's Board of
Directors.
6. (a) Notwithstanding any provision contained herein to the contrary, if
on or after the date hereof and prior to the end of the Term,
Executive is terminated for "Cause" (as defined below) then the
Corporation shall have the right to give notice of termination of
Executive's services hereunder as of a date to be specified in such
notice and this Agreement shall terminate as of the date so specified.
Termination for "Cause" shall mean Executive shall (i) be indicted of
a felony, (ii) commit any act or omit to take any action in bad faith
and to the detriment of the Corporation, (iii) commit an act of fraud
against the Corporation or (iv) materially breach any term of this
Agreement or any policy established by the Corporation's Board of
Directors and fail to correct such breach within ten days after
written notice of commission thereof.
(b) If, during the Term, Executive is unable to perform his duties
hereunder on account of illness, accident or other physical or mental
incapacity and such illness or other incapacity shall continue for a
period of six (6) consecutive months or an aggregate of one hundred
and eighty (180) days in any consecutive twelve (12) month period, the
Corporation shall have the right, on fifteen (15) days written notice
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(given after such period) to Executive, to terminate this Agreement.
In such event, the Corporation shall be obligated to pay to Executive
his Base Salary for the calendar month in which such termination
occurs. However, if prior to the date specified in such notice,
Executive's illness or incapacity shall have terminated and he shall
have taken up the performance of his duties hereunder, Executive shall
be entitled to resume his employment hereunder, as though such notice
had not been given.
(c) In the event of Executive's death during the Term, this Agreement
shall terminate immediately, and Executive's legal representatives
shall be entitled to receive his Base Salary for the calendar month
during which his death shall have occurred together with any approved
expenses as contemplated under Section 5 and as may otherwise be
provided under any insurance policy or similar instrument.
(d) In the event that this Agreement is terminated for "Cause" pursuant to
Section 6(a), then Executive shall be entitled to receive only his
Base Salary for the month in which such termination shall take effect.
(e) The Corporation may terminate this Agreement and Executive's
employment hereunder for any reason other than as provided under
Section 6(a), (b), or (c), upon thirty (30) days' written notice to
Executive and, in such event, the Corporation shall be obligated to
pay to Executive an amount equal to any unpaid, approved expenses as
contemplated under Section 5 and a severance payment equal to two (2)
year's salary at the Base Salary, payable in forty-eight (48) equal
semi-monthly installments.
In the event the Corporation terminates Executive for any reason other
than as provided under Section 6(a), (b), or (c) Executive will remain
eligible for a period of eighteen (18) months after termination to
participate in the health benefit program provided to all employees of
the Corporation which may then be in effect. The cost of providing
such coverage under health benefit program will be paid by the
Corporation.
7. In the event that during the Term the Executive's employment is terminated
without Cause in anticipation of or within one year after a "Change in Control"
(as defined below):
(a) (i) the Corporation shall pay to Executive his full salary through the
date of termination at the Base Salary in effect at the time notice of
termination is given plus his bonus prorated through the date of
termination; and
(ii) in lieu of any further salary or bonus payments to Executive for
periods subsequent to the date of termination, the Corporation shall
pay within 60 days of the date of termination as severance pay to
Executive:
(A) his full salary at the Base Salary in effect at the date of
termination for two years.
(B) two (2) times his bonus for the then current fiscal year, or if
that amount can not be determined, two (2) times the amount of
the bonus paid in the prior fiscal year.
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(C) the Company will continue to provide all benefits enumerated in
Paragraph 4 of this Agreement for a maximum of eighteen (18)
months.
(b) As used herein, the term "Change in Control" shall mean:
(i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
which is not currently a person who controls (within the meaning of
Rule 12b-2 promulgated under the Exchange Act), individually or as a
member of a group, the Company is or becomes the "beneficial owner"
(as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
50.1% or more of the combined voting power of the Corporation's then
outstanding securities.
(ii) the shareholders of the Corporation approve a merger or
consolidation involving the Corporation resulting in a change of
ownership of a majority of the outstanding shares of capital
stock of the Corporation, or
(iii) the shareholders of the Corporation approve a plan of
liquidation or dissolution of the Corporation or the sale or
disposition by the Corporation of all or substantially all the
Corporation's assets.
8. The Corporation and Executive are on this day entering into a Maintenance of
Confidence and Non-Compete Agreement, the terms of which are hereby expressly
incorporated into this Agreement, provided, however, that the Maintenance of
Confidence and Non Compete Agreement shall continue to be effective
notwithstanding any termination of Executive's employment hereunder and shall
continue in effect upon expiration of this Agreement pursuant to the terms of
the Maintenance of Confidence and Non-Compete Agreement.
9. (a) The Corporation shall have the right from time to time to
purchase, increase, modify or terminate insurance policies on the life
of Executive for the benefit of the Corporation, in such amounts as
the Corporation shall determine in its sole discretion.
(b) In connection with paragraph 9(a) above, Executive shall, at such time
or times and at such place or places as the Corporation may reasonably
direct, submit himself to such physical examinations and Executive
shall deliver such documents as the Corporation may deem necessary or
desirable.
10. Executive shall hold in a fiduciary capacity for the benefit of the
Corporation all information, knowledge and data relating to or concerned with
its operations, sales, business and affairs, and he shall not, at any time
hereafter, use, disclose or divulge any such information, knowledge or data to
any person, firm or corporation other than the Corporation or its designees or
except as may otherwise be required in connection with the business and affairs
of the Corporation.
11. The parties hereto acknowledge that Executive's services are unique and
that, in the event of a breach by Executive of any of his obligations under this
Agreement, the Corporation will not have an adequate remedy at law. Accordingly,
in the event of any such breach or threatened breach by Executive, the
Corporation shall be entitled to such equitable and injunctive relief as may be
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available to restrain Executive from the violation of the provisions thereof.
Nothing herein shall be construed as prohibiting the Corporation from pursuing
any other remedies at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
12. This Agreement together with the Maintenance of Confidence and Non-Compete
Agreement executed on the same date hereof, constitute the entire agreement of
the parties hereto with respect to the subject matter hereof and no amendment or
modification hereof shall be valid or binding unless made in writing and signed
by the party against whom enforcement thereof is sought.
13. Any notice required, permitted or desired to be given pursuant to any of the
provisions of this Agreement shall be deemed to have been sufficiently given or
served for all purposes if delivered in person or sent by certified mail, return
receipt requested, postage and fees prepaid as follows:
If to the Corporation at:
Chairman of the Board
TSR, Inc.
400 Oser Avenue
Hauppauge, New York 11788
With a copy to:
Mr. John Sharkey
Vice President of Finance
TSR, Inc.
400 Oser Avenue
Hauppauge, New York 11788
If to the Executive at:
Mr. Christopher Hughes
xxxxxxx
xxxxx, New York
Either of the parties hereto may at any time and from time to time change
the address to which notice shall be sent hereunder by notice to the
other party given under this paragraph 13. The date of the giving of
any notice sent by mail shall be the date of the posting of the mail.
14. Neither this Agreement nor the right to receive any payments hereunder may
be assigned by Executive. This Agreement shall be binding upon Executive, his
heirs, executors and administrators and upon the Corporation, its successors and
assigns.
15. No course of dealing nor any delay on the part of the Corporation in
exercising any rights hereunder shall operate as a waiver of any such rights. No
waiver of any default or breach of this Agreement shall be deemed a continuing
waiver or a waiver of any other breach or default.
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16. This Agreement shall be governed, interpreted and construed in accordance
with the laws of the State of New York applicable to agreements entered into and
to be performed entirely therein.
17. If any clause, paragraph, section or part of this Agreement shall be held or
declared to be void, invalid or illegal, for any reason, by any court of
competent jurisdiction, such provisions shall be ineffective but shall not in
any way invalidate or affect any other clause, paragraph, section or part of
this Agreement.
18. Executive acknowledges that he is not subject to any agreement, which would
in any way restrict him from carrying out his employment as contemplated
hereunder.
19. This Agreement supersedes any prior employment agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day in year first above written.
/s/ Christopher Hughes
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Christopher Hughes
Executive
TSR, Inc.
By: /s/ Joseph F. Hughes
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Name: Joseph F. Hughes
Title: Chairman