EXHIBIT 10.01

EMPLOYMENT AGREEMENT

     Technology Solutions Company, a Delaware corporation doing business as TSC,
and Michael R. Gorsage (“Employee”) enter into this Employment Agreement
(“Agreement”) as of May 6, 2004.

     In consideration of the agreements and covenants contained in this
Agreement, TSC and Employee agree as follows:

     1. Employment Duties: TSC shall employ Employee as President, Chief
Executive Officer, and Employee shall be elected by TSC’s Board of Directors as
a Director. Employee shall perform all duties incident to the office of the
President and such other duties as from time to time may be prescribed by the
Board of Directors. Employee shall perform faithfully these duties to the best
of his ability and shall devote his full and undivided business time and
attention to the transaction of TSC’s business.

     2. Term of Employment: The term of employment (“Term of Employment”)
covered by this Agreement shall commence as of the effective date of this
Agreement and continue until terminated pursuant to Section 3 below.

     3. Termination: TSC may terminate Employee’s employment for any reason upon
giving Employee 90 days notice of the termination. TSC may make such termination
effective at any time within such 90 day notice period. TSC must, however, for
two years following the effective date of his termination: continue to pay a
salary to Employee, equal to 60% of his salary at the effective date of
termination; and, continue to pay TSC’s share of Employee’s health insurance
benefits. Notwithstanding the aforementioned, if Employee is terminated after he
has been employed by TSC for two years, TSC’s salary continuation obligation
shall be reduced to 50% of Employee’s salary at the effective date of
termination for a period of two years. Employee shall be entitled to receive the
salary and benefit payments without any mitigation obligations.

     TSC may terminate Employee’s employment and this Agreement immediately
without notice and with no salary and benefit continuation if Employee engages
in “Serious Misconduct.” For purposes of this Agreement, “Serious Misconduct”
means embezzlement or misappropriation of corporate funds, other acts of
dishonesty, significant activities materially harmful to TSC’s reputation,
willful refusal to perform or substantial disregard of Employee’s assigned
duties (including, but not limited to, refusal to travel or work the requested
hours), or any significant violation of any statutory or common law duty of
loyalty to TSC. Employee may terminate his employment upon giving TSC 90 days
prior written notice. Upon receiving notice, TSC may waive its rights under this
paragraph and make Employee’s termination effective immediately or anytime
before the 90 day notice period ends. Employee agrees that if and when his

 

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termination of employment with TSC becomes effective, he shall tender his
resignation as a Director of TSC’s Board of Directors immediately thereafter,
which tender may be accepted at the sole discretion of TSC’s Board of Directors.

     If following a Change in Control (which is defined as (i) the acquisition
by any individual, entity or group, of beneficial ownership (within the meaning
of Rule 13 d-3 promulgated under the Securities Exchange Act of 1934) of 40% or
more of the outstanding shares of the common stock of TSC; (ii) the approval of
the stockholders of TSC of a merger, where immediately after the merger, persons
who were the holders of a majority of TSC’s outstanding common stock immediately
prior to the merger fail to own at least a majority of the outstanding common
stock of the surviving entity in substantially the same proportions as their
holdings of TSC common stock immediately prior to the merger; or, (iii) the sale
of substantially all the assets of TSC other than to a corporation in which more
that 60% of the outstanding shares are beneficially owned by the individuals and
entities who are the beneficial owners of the Company stock prior to the
acquisition, Employee’s title, position, duties, or salary is diminished and
Employee provides notice of resignation within 90 days after the diminishment
becomes effective which is thereafter accepted, or if Employee is ordered to
relocate permanently from his residence as of the time of the Change in Control
and Employee declines and is terminated, Employee shall be entitled to receive
within (5) days following the acceptance of his resignation or his termination:
Employee’s base salary as of the time of the Change in Control for one year; a
bonus equal to the average annual bonus earned during the two years immediately
preceding the Change in Control (which in no event shall be less that $150,000);
and health insurance benefits for one year. Notwithstanding anything to the
contrary in any of Employee’s stock option agreements, Employee’s unvested TSC
shares at option shall vest automatically upon a Change in Control.

     If it appears reasonably likely that any of the payments to Employee
provided for in this Agreement, together with any other payments which Employee
has the right to receive from TSC or any corporation which is a member of an
“affiliated group” (as defined in Section 1504(a) of the Code without regard to
Section 1504(b) of the Internal Revenue Code) of which TSC is a member, could
constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
Internal Revenue Code), TSC shall retain an independent expert appraiser who
shall determine the value of Employee’s non-compete which could be deducted when
calculating the value of the parachute payment.

     4. Salary: As compensation for his services, TSC shall pay Employee a base
salary in the amount listed in Exhibit A to this Agreement. Employee’s base
salary shall be subject to annual review by the Compensation Committee of the
Board of Directors and may, at their discretion, be adjusted upward from that
listed in Exhibit A.

     5. Bonuses: The Compensation Committee of the Board of Directors may, at
its sole discretion, elect to pay Employee an annual bonus pursuant to a plan
similar to the plan covering TSC’s senior employees . If an annual bonus is to
be paid, Employee is to receive 50% of his salary if he achieves his target
objectives and 100% of his salary if he achieves his “stretch” objectives. The
objectives are to be set by the Compensation

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Committee of the Board. Notwithstanding the aforementioned, Employee shall be
guaranteed a bonus of at least $150 thousand for 2004, payable when bonuses a
would normally be paid in 2005.

     6. Employee Benefits: During the Term of Employment, Employee shall be
entitled to participate in such employee benefit plans, including group pension,
life and health insurance and other medical benefits, and shall receive all
other fringe benefits as TSC may make available generally to its Senior Vice
Presidents.

     7. Business Expenses: TSC shall reimburse Employee for all reasonable and
necessary business expenses incurred by Employee in performing his duties.
Employee shall provide TSC with supporting documentation sufficient to satisfy
reporting requirements of the Internal Revenue Service and TSC. TSC’s
determination as to reasonableness and necessary shall be final.

     8. Noncompetition and Nondisclosure: Employee acknowledges that the
successful development and marketing of TSC’s professional services and products
require substantial time and expense. Such efforts generate for TSC valuable and
proprietary information (“Confidential Information”) which gives TSC a business
advantage over others who do not have such information. Confidential Information
of TSC and its clients and prospects includes, but is not limited to, the
following: business strategies and plans; proposals; deliverables; prospects and
customer lists; methodologies; training materials; and computer software.
Employee acknowledges that during the Term of Employment, he will obtain
knowledge of such Confidential Information. Accordingly, Employee agrees to
undertake the following obligations which he acknowledges to be reasonably
designed to protect TSC’s legitimate business interests without unnecessarily or
unreasonably restricting Employee’s post-employment opportunities:

     (a) Upon termination of the Term of Employment for any reason, Employee
shall return all TSC property, including but not limited to computer programs,
files, notes, records, charts, or other documents or things containing in whole
or in part any of TSC’s Confidential Information;

     (b) During the Term of Employment and subsequent to termination, Employee
agrees to treat all such Confidential Information as confidential and to take
all necessary precautions against disclosure of such information to third
parties during and after Employee’s employment with TSC. Employee shall refrain
from using or disclosing to any person, without the prior written approval of
TSC’s Chief Executive Officer any Confidential Information unless at that time
the information has become generally and lawfully known to TSC’s competitors;

     (c) Without limiting the obligations of paragraph 8(b), Employee shall not,
for a period of one year following his termination of employment for any reason,
for himself or as an agent, partner or employee of any person, firm or
corporation, engage in the practice of consulting for any client of TSC for whom
Employee performed services, or

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prospective TSC client to whom Employee submitted, or assisted in the submission
of a proposal during the one year period preceding his termination of
employment;

     (d) During a one year period immediately following Employee’s termination
of employment for any reason, Employee shall not induce or assist in the
inducement of any TSC employee away from TSC’s employ or from the faithful
discharge of such employee’s contractual and fiduciary obligations to serve
TSC’s interests with undivided loyalty;

     (e) For one year following his termination of employment for any reason,
Employee shall keep TSC currently advised in writing of the name and address of
each business organization for which he acts as agent, partner, representative
or employee.

     9. Remedies: Employee recognizes and agrees that a breach of any or all of
the provisions of paragraph 8 will constitute immediate and irreparable harm to
TSC’s business advantage, including but not limited to TSC’s valuable business
relations, for which damages cannot be readily calculated and for which damages
are an inadequate remedy. Accordingly, Employee acknowledges that TSC shall
therefore be entitled to an order enjoining any further breaches by the
Employee. In an action brought to enforce this Agreement, the prevailing party
shall be entitled to recover all costs and expenses, including reasonable
attorneys’ fees incurred in connection with the enforcement of its rights under
any provision of this Agreement.

     10. Intellectual Property: During the Term of Employment, Employee shall
disclose to TSC all ideas, inventions and business plans which he develops
during the course of his employment with TSC which relate directly or indirectly
to TSC’s business, including but not limited to any computer programs,
processes, products or procedures which may, upon application, be protected by
patent or copyright. Employee agrees that any such ideas, inventions or business
plans shall be the property of TSC and that Employee shall at TSC’s request and
cost, provide TSC with such assurances as is necessary to secure a patent or
copyright.

     11. Assignment: Employee acknowledges that the services to be rendered
pursuant to this Agreement are unique and personal. Accordingly, Employee may
not assign any of his rights or delegate any of his duties or obligations under
this Agreement. TSC’s rights, duties or obligations under this Agreement may be
assigned to a subsidiary or affiliated company of TSC and shall be binding upon
any purchaser or transferee of a majority of TSC’s outstanding capital stock or
a purchaser of all, or substantially all, of the assets of TSC.

     12. Notices: All notices shall be in writing, except for notice of
termination of employment, which may be oral if confirmed in writing within 14
days. Notices intended for TSC shall be sent by registered or certified mail
addressed to it at 205 North Michigan Avenue, 15th Floor, Chicago, Illinois
60601 or its current principal office, and notices intended for Employee shall
be either delivered personally to him or sent by registered or certified mail
addressed to his last known address.

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     13. Entire Agreement: With the exception of TSC’s Stock Option Agreement,
this Agreement and Exhibit A attached hereto constitute the entire agreement
between TSC and Employee. Neither Employee nor TSC may modify this Agreement by
oral agreements, promises or representations. The parties may modify this
Agreement only by a written instrument signed by the parties.

     14. Applicable Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.

     15. Mediation of Disputes: Neither party shall initiate arbitration or
other legal proceedings (except for any claim under Paragraph 8 of this
Agreement for temporary injunctive relief), against the other party, or, in the
case of TSC, any of its directors, officers, employees, agents, or
representatives, relating in any way to this Agreement, to Employee’s employment
with TSC, the termination of his employment or any or all other claims that one
party might have against the other party until 30 days after the party against
whom the claim[s] is made (“Respondent”) receives written notice from the
claiming party of the specific nature of any purported claim and the amount of
any purported damages. Employee and TSC further agree that if Respondent submits
the claiming party’s claim to the Center for Public Resources, 680 Fifth Avenue,
New York, New York 10019, for nonbinding mediation prior to the expiration of
such 30 day period, the claiming party may not institute arbitration or other
legal proceedings against Respondent until the earlier of (i) the completion of
nonbinding mediation efforts, or (ii) 90 days after the date on which the
Respondent received written notice of the claimant’s claim.

     16. Binding Arbitration: Employee and TSC agree that all claims or disputes
relating to his employment with TSC or the termination of such employment, and
any and all other claims that Employee might have against TSC, any TSC director,
officer, employee, agent, or representative, and any and all claims or disputes
that TSC might have against Employee (except for any claims for temporary
injunctive relief under Paragraph 8 of this Agreement) shall be resolved under
the Expedited Commercial Rules of the American Arbitration Association. Any
arbitration held pursuant to this paragraph shall be conducted at a mutually
approved geographic location and all arbitration costs shall be shared equally
by the parties. If either party pursues a claim and such claim results in an
Arbitrator’s decision, both parties agree to accept such decision as final and
binding. TSC and Employee agree that any action seeking temporary injunctive
relief under Paragraph 8 of this Agreement shall be brought in the Circuit Court
for Cook County, Illinois.

     17. Severability: Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

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     18. Employee acknowledges that he has read, understood and accepts the
provisions of this Agreement.

          Technology Solutions Company   Employee
 
       
By:
  /s/Timothy P. Dimond        /s/ Michael R. Gorsage

 

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        Position: Sr. Vice President and CFO    
 
        Date: May 6, 2004   Date: May 6, 2004

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EXHIBIT A

EMPLOYEE: Michael R. Gorsage

POSITION: President, Chief Executive Officer, and Director

BASE SALARY: $350 Thousand Per Annum

EFFECTIVE DATE: May 6, 2004

     

        /s/ Michael R. Gorsage

 

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  Michael R. Gorsage
 
   

        May 6, 2004

 

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  Date
 
   

        /s/ Timothy P. Dimond

 

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  Technology Solutions Company
 
   

        May 6, 2004

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  Date

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