Exhibit 10.1
EMPLOYMENT AGREEMENT
     THIS AGREEMENT is made on the 3rd day of October, 2008 by and between Kevin
Wilson (the “Employee”) and TEAMSTAFF, INC., a New Jersey corporation (the
“Company”) and is effective as of the 1st day of October, 2008.
WITNESSETH:
     WHEREAS, the Company and its subsidiaries are engaged in the business of
providing staffing services; and
     WHEREAS, the Employee is currently employed by the Company and the Company
desires to continue the employment of the Employee and secure for the Company
the experience, ability and services of the Employee; and
     WHEREAS, the Employee desires to continue his employment with the Company,
pursuant to the terms and conditions herein set forth, superseding all prior
oral and written employment agreements, and term sheets and letters between the
Company, its subsidiaries and/or predecessors and Employee;
     NOW, THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
ARTICLE 1
DEFINITIONS
     1.1 Accrued Compensation. Accrued Compensation shall mean an amount which
shall include all amounts earned or accrued through the “Termination Date” (as
defined below) but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for business expenses incurred by the Employee on
behalf of the Company, pursuant to the Company’s

 

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expense reimbursement policy in effect at such time, (iii) vacation pay, and
(iv) unpaid bonuses and incentive compensation earned and awarded prior to the
Termination Date.
     1.2 Cause. Cause shall mean: (i) willful disobedience by the Employee of a
material and lawful instruction of the Chief Executive Officer or the Board of
Directors of the Company; (ii) formal charge, indictment or conviction of the
Employee of any misdemeanor involving fraud or embezzlement or similar crime, or
any felony; (iii) conduct amounting to fraud, dishonesty, gross negligence,
willful misconduct or recurring insubordination; or (iv) excessive absences from
work, other than for illness or Disability; provided that the Company shall not
have the right to terminate the employment of Employee pursuant to the foregoing
clauses (i), (iii), and (iv) above unless written notice specifying such breach
shall have been given to the Employee and, in the case of breach which is
capable of being cured, the Employee shall have failed to cure such breach
within thirty (30) days after his receipt of such notice.
     1.3 Change in Control. “Change in Control” shall mean any of the following
events:
          (a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the “Voting Securities”) by any “Person” (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”)) immediately after which such
Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of twenty percent (20%) or more of the combined voting power
of the Company’s then outstanding Voting Securities; provided, however, that
“Person,” as used in this subparagraph 1.3(a), shall not include any Person who
is the Beneficial Owner of 10% or more of the combined voting power of the
Company’s outstanding Voting Securities on the date hereof; and provided further
that in determining whether a Change

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in Control has occurred, Voting Securities which are acquired in a “Non-Control
Acquisition” (as defined below) shall not constitute an acquisition which would
cause a Change in Control.
               (i) A “Non-Control Acquisition” shall mean an acquisition by
(1) an employee benefit plan (or a trust forming a part thereof) maintained by
(x) the Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Company (a “Subsidiary”), or (2) the Company or any
Subsidiary.
               (ii) Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because a Person (the “Subject Person”) gained
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Voting Securities which increases the percentage of the
then outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.
          (b) Except as otherwise provided in subparagraph 1.3(c)(i), the
individuals who, as of the date this Agreement is approved by the Board, are
members of the Board (the “Incumbent Board”), cease for any reason to constitute
at least two-thirds of the Board; provided, however, that if the election, or
nomination for election by the Company’s stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered and defined as a
member of the

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Incumbent Board; and provided, further, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual “Election Contest” (as described in Rule 14a-11
promulgated under the 1934 Act) or other solicitation of proxies or consents by
or on behalf of a Person other than the Board (a “Proxy Contest”); or
          (c) Approval by stockholders of the Company of:
               (i) A merger, consolidation or reorganization involving the
Company, unless: (1) the stockholders of the Company, immediately before such
merger, consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least sixty percent
(60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation or
reorganization, and (2) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least a majority of the members of
the board of directors of the Surviving Corporation. A transaction described in
clauses (1) through (2) shall herein be referred to as a “Non-Control
Transaction”; or
               (ii) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company, which sale or disposition
includes the TeamStaff Government Solutions subsidiary or operating assets, to
any Person, other than a transfer to a Subsidiary, in one transaction or a
series of related transactions;
               (iii) The stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company.

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          (d) Notwithstanding anything contained in this Agreement to the
contrary, if the Employee’s employment is terminated prior to a Change in
Control and the Employee reasonably demonstrates that such termination (i) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a “Third Party”) or
(ii) otherwise occurred in connection with, or in anticipation of, a Change in
Control, then for all purposes of this Agreement, the date of a Change in
Control with respect to the Employee shall mean the date immediately prior to
the date of such termination of the Employee’s employment.
     1.4 Continuation Benefits. Continuation Benefits shall be the continuation
of the Benefits, as defined in Section 5.1, for the period commencing on the
Termination Date and terminating six months thereafter, or such other period as
specifically stated by this agreement (the “Continuation Period”) at the
Company’s expense on behalf of the Employee and his dependents; and (ii) the
level and availability of benefits provided during the Continuation Period shall
at all times be subject to the post-employment conversion or portability
provisions of the benefit plans. The Company’s obligation hereunder with respect
to the foregoing benefits shall also be limited to the extent that if the
Employee obtains any such benefits pursuant to a subsequent employer’s benefit
plans, the Company may reduce the coverage of any benefits it is required to
provide the Employee hereunder as long as the aggregate coverage and benefits of
the combined benefit plans is no less favorable to the Employee than the
coverage and benefits required to be provided hereunder. This definition of
Continuation Benefits shall not be interpreted so as to limit any benefits to
which the Employee, his dependents or beneficiaries may be entitled under any of
the Company’s employee benefit plans, programs or practices

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following the Employee’s termination of employment, including, without
limitation, retiree medical and life insurance benefits.
     1.5 Disability. Disability shall mean a physical or mental infirmity which
impairs the Employee’s ability to substantially perform his duties with the
Company for a period of sixty (60) consecutive days and the Employee has not
returned to his full time employment prior to the Termination Date as stated in
the “Notice of Termination” (as defined below).
     1.6 Good Reason. “Good Reason” shall mean without the written consent of
the Employee: (A) a material breach of any provision of this Agreement by the
Company; (B) failure by the Company to pay when due any compensation to the
Employee; (C) a reduction in the Employee’s Base Salary; (D) failure by the
Company to maintain the Employee in the positions referred to in Section 2.1 of
this Agreement; (E) assignment to the Employee of any duties materially and
adversely inconsistent with the Employee’s positions, authority, duties,
responsibilities, powers, functions, reporting relationship or title as
contemplated by Section 2.1 of this Agreement or any other action by the Company
that results in a material diminution of such positions, authority, duties,
responsibilities, powers, functions, reporting relationship or title;
(F) relocation of the principal office of the Company or the Employee’s
principal place of employment to a location outside a 25 mile radius of the
present location in Loganville, Georgia, without the Employee’s written consent;
or (G) a Change in Control, provided the event on which the Change of Control is
predicated occurs within 90 days of the service of the Notice of Termination by
the Employee, it being understood that Employee shall have the right to
terminate his employment under this Section 1.6 (G) for any reason or no reason
within such 90 day period; provided, however, that the Employee agrees not to
terminate his employment for Good Reason pursuant to clauses (A) through
(G) unless (a) the Employee has given the Company at least 30

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days’ prior written notice of his intent to terminate his employment for Good
Reason, which notice shall specify the facts and circumstances constituting Good
Reason; and (b) the Company has not remedied such facts and circumstances
constituting Good Reason to the reasonable and good faith satisfaction of the
Employee within a 30-day period after receipt of such notice.
     1.7 Notice of Retention. Notice of Retention shall mean a written notice
from the Company to the Employee prior to, or within ten business days after, a
Change of Control stating: (A) the Change of Control event; (B) that the Company
will retain Employee in Employee’s current position after the date of the Change
of Control event; and (C) the period of time (the “Retention Period”) not to
exceed six months from the date of the Change of Control event specified in the
Notice of Retention that the Employee will be retained in Employee’s position.
     1.8 Notice of Termination. Notice of Termination shall mean a written
notice from the Company, or the Employee, of termination of the Employee’s
employment which indicates the provision in this Agreement relied upon, if any
and which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee’s employment under the provision
so indicated. A Notice of Termination served by the Company shall specify the
effective date of termination.
     1.9 Pro Rata Bonus. “Pro Rata Bonus” shall mean an amount equal to the
lesser of (i) the Targeted Bonus, as defined in section 4.2, multiplied by a
fraction, the numerator of which shall be the number of days from the
commencement of the fiscal year to the Termination Date, and the denominator of
which shall be the number of days in the fiscal year in which Employee was
terminated; and (ii) $75,000.
     1.10 Severance Payment. “Severance Payment” shall mean an amount equal to
the sum of six months of Employee’s Base Salary in effect on the Termination
Date. The Severance

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Payment shall be payable in equal installments on each of the Company’s regular
pay dates for executives during the six months commencing on the first regular
executive pay date following the Termination Date. The Severance Payment is
conditioned on the Employee executing a termination agreement and release in a
form reasonably acceptable to the Employee and the Company.
     1.11 Termination Date. Termination Date shall mean (i) in the case of the
Employee’s death, his date of death; (ii) in the case of Good Reason, 30 days
from the date the Notice of Termination is given to the Company, provided the
Company has not remedied such facts and circumstances constituting Good Reason;
(iii) in the case of termination of employment on or after the Expiration Date,
the last day of employment; and (iv) in all other cases, the date specified in
the Notice of Termination; provided, however, if the Employee’s employment is
terminated by the Company for any reason except Cause, the date specified in the
Notice of Termination shall be at least 30 days from the date the Notice of
Termination is given to the Employee, and provided further that in the case of
Disability, the Employee shall not have returned to the full-time performance of
his duties during such period of at least 30 days.
ARTICLE II
EMPLOYMENT
     2.1 Subject to and upon the terms and conditions of this Agreement, the
Company hereby agrees to employ the Employee, and the Employee hereby accepts
such employment, as President of TeamStaff Government Solutions, Inc. (f/k/a RS
Staffing Services, Inc.).
ARTICLE III

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DUTIES
     3.1 The Employee shall, during the term of his employment with the Company,
and subject to the direction and control of the Company’s Chief Executive
Officer, perform such duties and functions as he may be called upon to perform
by the Chief Executive Officer during the term of this Agreement, consistent
with his position as President of TeamStaff Government Solutions.
     3.2 The Employee shall perform, in conjunction with the Company’s Executive
Management, to the best of his ability the following services and duties for the
Company and its subsidiary corporations (by way of example, and not by way of
limitation):
          (i) Those duties attendant to the position of President of TeamStaff
Government Solutions;
          (ii) Establish and implement current and long range objectives, plans,
and policies, subject to the approval of the Chief Executive Officer;
          (iii) Compliance with local, state and federal regulations and laws
governing business operations; and
          (iv) Promotion of the relationships of the Company with its employees,
customers, suppliers and others in the business community.
     3.3 The Employee agrees to devote full business time and his best efforts
in the performance of his duties for the Company and any subsidiary corporation
of the Company.

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     3.4 Employee shall undertake regular travel to the Company’s executive and
operational offices, and such other occasional travel within or outside the
United States as is or may be reasonably necessary in the interests of the
Company. All such travel shall be at the sole cost and expense of the Company
and shall include reasonable lodging and food costs incurred by Employee while
traveling.
ARTICLE IV
COMPENSATION
     4.1 During the term of this Agreement, Employee shall be compensated
initially at the rate of $200,000 per annum, subject to such increases, if any,
as determined by the Board of Directors, or if the Board so designates, the
Management Resources and Compensation Committee, in its discretion, at the
commencement of each of the Company’s fiscal years during the term of this
Agreement (the “Base Salary”). The base salary shall be paid to the Employee in
accordance with the Company’s regular executive payroll periods.
     4.2 Employee may receive a bonus in the sole discretion of the Management
Resources and Compensation Committee of the Board of Directors. Employee will
have an opportunity to earn a cash bonus (the “Targeted Bonus”) of up to 70% of
Employee’s Base Salary for each fiscal year of employment. The Bonus will be
based on performance targets and other key objectives established by the Chief
Executive Officer. Thirty percent of the bonus shall be based on achieving
revenue targets, 60% shall be based on achieving EBITDA targets and 10% shall be
based on achieving corporate goals established by the Chief Executive Officer.
At the sole discretion of the Management Resources and Compensation Committee,
Employee may be eligible for additional compensation for exceeding performance
targets.

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     4.3 The Company shall deduct from Employee’s compensation all federal,
state, and local taxes which it may now or hereafter be required to deduct.
     4.4 Employee may receive such other additional compensation as may be
determined from time to time by the Board of Directors including bonuses and
other long term compensation plans. Nothing herein shall be deemed or construed
to require the Board to award any bonus or additional compensation.
ARTICLE V
BENEFITS
     5.1 During the term hereof, the Company shall provide Employee with the
following benefits (the “Benefits”): (i) group health care and insurance
benefits as generally made available to the Company’s senior management; and
(ii) such other insurance benefits obtained by the Company and made generally
available to the Company’s senior management. The Company shall reimburse
Employee, upon presentation of appropriate vouchers, for all reasonable business
expenses incurred by Employee on behalf of the Company upon presentation of
suitable documentation.
     5.2 In the event the Company wishes to obtain Key Man life insurance on the
life of Employee, Employee agrees to cooperate with the Company in completing
any applications necessary to obtain such insurance and promptly submit to such
physical examinations and furnish such information as any proposed insurance
carrier may request.
     5.3 For the term of this Agreement, Employee shall be entitled to paid
vacation at the rate of four (4) weeks per annum.
ARTICLE VI
NON-DISCLOSURE

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     6.1 The Employee shall not, at any time during or after the termination of
his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company’s business , finances,
marketing, accounting , personnel and/or staffing business of the Company and
its subsidiaries, including information relating to any customer of the Company
or pool of temporary or permanent employees, governmental customer or any other
nonpublic business information of the Company and/or its subsidiaries learned as
a consequence of Employee’s employment with the Company (collectively referred
to as the “Proprietary Information”). For the purposes of this Agreement, trade
secrets and confidential information shall mean information disclosed to the
Employee or known by him as a consequence of his employment by the Company,
whether or not pursuant to this Agreement, and not generally known in the
industry. The Employee acknowledges that trade secrets and other items of
confidential information, as they may exist from time to time, are valuable and
unique assets of the Company, and that disclosure of any such information would
cause substantial injury to the Company. Trade secrets and confidential
information shall cease to be trade secrets or confidential information, as
applicable, at such time as such information becomes public other than through
disclosure, directly or indirectly, by Employee in violation of this Agreement.
     6.2 If Employee is requested or required (by oral questions,
interrogatories, requests for information or document subpoenas, civil
investigative demands, or similar process) to disclose any Proprietary
Information, Employee shall, unless prohibited by law, promptly notify the
Company of such request(s) so that the Company may seek an appropriate
protective order.

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ARTICLE VII
RESTRICTIVE COVENANT
     7.1 In the event of the voluntary termination of employment with the
Company prior to the expiration of the term hereof, or Employee’s discharge in
accordance with Article IX, or the expiration of the term hereof without
renewal, Employee agrees that he will not, for a period of one (1) year
following such termination, directly or indirectly, enter into or become
associated with or engage in any other business (whether as a partner, officer,
director, shareholder, employee, consultant, or otherwise), which is involved in
the business of providing (i) temporary and/or permanent staffing of
governmental employees, travel health professionals and travel nurses,
(ii) medical and office administration/technical professionals through Federal
Supply Schedule (“FSS”) contracts with both the United States General Services
Administration (“GSA”), United States Department of Veterans Affairs (“DVA”),
United States Department of Defense (“DOD”) and other federal, state and local
entities, and (iii) or is otherwise engaged in the same or similar business as
the Company in direct competition with the Company, or which the Company was in
the process of developing, during the tenure of Employee’s employment by the
Company. Notwithstanding the foregoing, the ownership by Employee of less than
five percent of the shares of any publicly held corporation shall not violate
the provisions of this Article VII. In furtherance of the foregoing, Employee
shall not during the aforesaid period of non-competition, directly or
indirectly, in connection with any temporary or permanent employee placement or
other business of the Company and its subsidiaries, including information
relating to any customer of the Company or pool of temporary employees, or any
other nonpublic business information , or any business similar to the business
in which the Company was engaged, or in the process of developing during
Employee’s tenure with the Company, solicit any customer or

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employee of the Company who was a customer or employee of the Company during the
tenure of his employment.
     7.2 If any court shall hold that the duration of non-competition or any
other restriction contained in this Article VII is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable or, in the alternative, such judicially substituted term may be
substituted therefor.
ARTICLE VIII
TERM
     8.1 This Agreement shall be for a term (the “Initial Term”) commencing on
October 1, 2008 (the “Commencement Date”) and terminating on September 30, 2010
(the “Expiration Date”), unless sooner terminated upon the death of the
Employee, or as otherwise provided herein.
ARTICLE IX
TERMINATION
     9.1 The Company may terminate this Agreement by giving a Notice of
Termination to the Employee in accordance with this Agreement:

  (i)   for Cause;     (ii)   without Cause;     (iii)   for Disability.

     9.2 Employee may terminate this Agreement by giving a Notice of Termination
to the Company in accordance with this Agreement, at any time, with or without
good reason.
     9.3 If the Employee’s employment with the Company shall be terminated, the

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Company shall pay and/or provide to the Employee the following compensation and
benefits in lieu of any other compensation or benefits arising under this
Agreement or otherwise:
          (i) if the Employee was terminated by the Company for Cause, or the
Employee terminates without Good Reason, the Accrued Compensation;
          (ii) if the Employee was terminated by the Company for Disability,

  (a)   the Continuation Benefits;     (b)   the Accrued Compensation;     (c)  
the Pro-Rata Bonus; and     (d)   the Severance Payment; or

          (iii) if termination was due to the Employee’s death,

  (a)   the Accrued Compensation;     (b)   the Continuation Benefits;     (c)  
and the Pro Rata Bonus; or

          (iv) if the Employee was terminated by the Company without cause, or
the Employee terminates this Agreement for Good Reason,

  (a)   the Accrued Compensation;     (b)   the Severance Payment; and     (c)  
the Continuation Benefits.

     9.4 The amounts payable under this Section 9, shall be paid as follows:
          (i) Accrued Compensation shall be paid within five (5) business days
after the Employee’s Termination Date (or earlier, if required by applicable
law).
          (ii) If the Continuation Benefits are paid in cash, the payments shall
be made on the first day of each month during the Continuation Period (or
earlier, if required by applicable

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law).
          (iii) The Base Salary through the Expiration Date shall be paid in
accordance with the Company’s regular pay periods (or earlier, if required by
applicable law).
     9.5 The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise
and no such payment shall be offset or reduced by the amount of any compensation
or benefits provided to the Employee in any subsequent employment except as
provided in Sections 1.4.
ARTICLE X
TERMINATION OF PRIOR AGREEMENTS
     10.1 This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements, letters and understandings between the parties,
whether oral or written prior to the effective date of this Agreement except for
the terms of employee stock option plans, restricted stock grants and option
certificates.
ARTICLE XI
RESTRICTED STOCK GRANTS
     11.1 The Company hereby grants to Employee 30,000 restricted shares of the
Company’s Common Stock, $.001 par value subject to the provisions of the
Company’s 2006 Long Term Incentive Plan (the “Plan”).
     11.2 One-third of such shares shall vest upon the execution of this
agreement. One-third shall vest on September 30, 2009, upon satisfaction of the
performance targets and other key objectives established by the Chief Executive
Officer for 2009 for Employee’s Targeted Bonus; and one-third of such shares
shall vest on September 30, 2010 upon the satisfaction of the performance
targets for the Targeted Bonus for 2010. If Employee renders continuous service
to

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the Company from the date hereof to a vesting date, on each such vesting date
the Company shall deliver to Employee such number of shares of Common Stock as
shall vest on such date.
     11.3 In the event of a Change of Control, as defined in Section 1.3, the
conditions to the vesting of any outstanding Restricted Stock Awards granted to
the Employee under this Article XI shall be deemed void and all such Shares
shall be immediately and fully vested and delivered to the Employee.
ARTICLE XII
EXTRAORDINARY TRANSACTIONS
     12.1 The Company’s Board of Directors has determined that it is appropriate
to reinforce and encourage the continued attention and dedication of members of
the Company’s management, including the Employee, to their assigned duties
without distraction in potentially disturbing circumstances arising from the
possibility of a change in control of the Company.
     In the event that within ninety days (90) days of a Change of Control,
(i) Employee is terminated, or (ii) Employee’s status, title, position or
responsibilities are materially reduced and Employee terminates his Employment,
the Company shall pay and/or provide to the Employee, the following compensation
and benefits:

  a.   The Company shall pay the Employee, in lieu of any other payments due
hereunder, (i) the Accrued Compensation; (ii) the Continuation Benefits; and
(iii) as severance, Base Salary for a period of six (6) months payable in equal
installments on each of the Company’s regular pay dates for executives during
the six months commencing on the first regular executive pay date following the
termination Date; and

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  b.   The conditions to the vesting of any outstanding incentive awards
(including restricted stock, stock options and granted performance shares or
units) granted to the Employee under any of the Company’s plans, or under any
other incentive plan or arrangement, shall be deemed void and all such incentive
awards shall be immediately and fully vested and exercisable.

     12.4 In the event the Company serves a Notice of Retention, and Employee
diligently performs Employee’s duties during the Retention Period, the Company
shall pay Employee, in one lump sum on the first day of the month immediately
following the month in which the Retention Period ends, an amount equal to 50%
of Employee’s then current Base Salary. In the event the Company fails to serve
a Notice of Retention, the Company shall pay Employee, in one lump sum on the
first day of the month immediately following the Change of Control, an amount
equal to 50% of Employee’s then current Base Salary.
     12.5 Notwithstanding the foregoing, if the payment under this Article XII,
either alone or together with other payments which the Employee has the right to
receive from the Company, would constitute an “excess parachute payment” as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), the aggregate of such credits or payments under this Agreement and
other agreements shall be reduced to the largest amount as will result in no
portion of such aggregate payments being subject to the excise tax imposed by
Section 4999 of the Code. The priority of the reduction of excess parachute
payments shall be in the discretion of the Employee. The Company shall give
notice to the Employee as soon as practicable after its determination that
Change of Control payments and benefits are subject to the excise tax, but no
later than ten (10) days in advance of the due date of such Change of Control
payments and benefits, specifying the proposed date of payment and the Change of
Control benefits and

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payments subject to the excise tax. Employee shall exercise his option under
this paragraph 12.4 by written notice to the Company within five (5) days in
advance of the due date of the Change of Control payments and benefits
specifying the priority of reduction of the excess parachute payments.
ARTICLE XIII
ARBITRATION AND INDEMNIFICATION
     13.1 Any dispute arising out of the interpretation, application, and/or
performance of this Agreement with the sole exception of any claim, breach, or
violation arising under Articles VI or VII hereof shall be settled through final
and binding arbitration before a single arbitrator in the State of New Jersey in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the Association and shall be an attorney-at-law
experienced in the field of corporate law. Any judgment upon any arbitration
award may be entered in any court, federal or state, having competent
jurisdiction of the parties.
     13.2 The Company hereby agrees to indemnify, defend, and hold harmless the
Employee for any and all claims arising from or related to his employment by the
Company at any time asserted, at any place asserted, to the fullest extent
permitted by law, except for claims based on Employee’s fraud, deceit or
willfulness. The Company shall maintain such insurance as is necessary and
reasonable to protect the Employee from any and all claims arising from or in
connection with his employment by the Company during the term of Employee’s
employment with the Company and for a period of six (6) years after the date of
termination of employment for any reason. The provisions of this Section 13.2
are in addition to and not in lieu of any indemnification, defense or other
benefit to which Employee may be entitled by statute, regulation, common law or
otherwise.

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ARTICLE XIV
SEVERABILITY
     If any provision of this Agreement shall be held invalid and unenforceable,
the remainder of this Agreement shall remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.
ARTICLE XV
NOTICE
     For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when (a) personally delivered or (b) sent by (i) a nationally
recognized overnight courier service or (ii) certified mail, return receipt
requested, postage prepaid and in each case addressed to the respective
addresses as set forth below or to any such other address as the party to
receive the notice shall advise by due notice given in accordance with this
paragraph. All notices and communications shall be deemed to have been received
on (A) if delivered by personal service, the date of delivery thereof; (B) if
delivered by a nationally recognized overnight courier service, on the first
business day following deposit with such courier service; or (C) on the third
business day after the mailing thereof via certified mail. Notwithstanding the
foregoing, any notice of change of address shall be effective only upon receipt.
     The current addresses of the parties are as follows:

         
 
  IF TO THE COMPANY:   TeamStaff, Inc.
 
      1 Executive Drive
 
      Somerset, NJ 08873

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  WITH A COPY TO:   Victor J. DiGioia
 
      Becker & Poliakoff, LLP
 
      45 Broadway
 
      New York, NY 10006
 
       
 
  IF TO THE EMPLOYEE:    

ARTICLE XVI
BENEFIT
     This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Employee.
ARTICLE XVII
WAIVER
     The waiver by either party of any breach or violation of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of construction and validity.
ARTICLE XVIII
GOVERNING LAW
     This Agreement has been negotiated and executed in the State of New Jersey
which shall govern its construction and validity.

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ARTICLE XIX
JURISDICTION
     Any or all actions or proceedings which may be brought by the Company or
Employee under this Agreement shall be brought in courts having a situs within
the State of New Jersey, and Employee and the Company each hereby consent to the
jurisdiction of any local, state, or federal court located within the State of
New Jersey.
ARTICLE XX
ENTIRE AGREEMENT
     This Agreement contains the entire agreement between the parties hereto. No
change, addition, or amendment shall be made hereto, except by written agreement
signed by the parties hereto.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.

            TEAMSTAFF, INC.

      By:   /s/ Rick Filippelli         Rick Filippelli        Chief Executive
Officer              /s/ Kevin Wilson       Kevin Wilson      Employee     

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