Staffing 360 Solutions, Inc.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into as of
December 31, 2013 by and between Staffing 360 Solutions, Inc., a Nevada
corporation (“S360” or the “Company”), and Allan Hartley (“HARTLEY”).

 

1) Engagement and Responsibilities

 

a) Upon the terms and subject to the conditions set forth in this Agreement, the
Company hereby employs HARTLEY as the co-Chief Executive Officer of the Company.
HARTLEY hereby accepts such employment. HARTLEY shall have such title or titles
as the Board of Directors may from time to time determine.

 

b) HARTLEY’s duties and responsibilities shall be those incident to the
positions described in Section 1(a) as set forth in the Bylaws of the Company
and those which are normally and customarily vested in such offices of a
corporation. In addition, HARTLEY’s duties shall include those duties and
services for the Company and its affiliates as the Board shall, in its sole and
absolute discretion, from time to time reasonably direct which are not
inconsistent with HARTLEY’s position described in Section 1(a).

 

c) HARTLEY agrees to devote, on an exclusive basis, the necessary time, energy
and efforts to the business of the Company and will use his best efforts and
abilities faithfully and diligently to promote the Company’s business interests.
It is understood between the Company and HARTLEY that he will devote no less
than 40 hours per week in the execution of his duties. For as long as HARTLEY is
employed by the Company, HARTLEY shall not, directly or indirectly, either as an
employee, employer, consultant, agent, investor, principal, partner, stockholder
(except as the holder of less than 1% of the issued and outstanding stock of a
publicly held corporation), corporate officer or director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of the
Company, as such businesses are now or hereafter conducted, or any business
which the Company contemplates conducting or intends to conduct.

 

2) Definitions

 

“Board” shall mean the Board of Directors of the Company.

 

“Disability,” with respect to HARTLEY, shall mean that, for physical or mental
reasons, HARTLEY is unable to perform the essential functions of HARTLEY’S
duties under this Agreement for 30 consecutive days, or 60 days during any one
six month period. HARTLEY agrees to submit to a reasonable number of
examinations by a medical doctor advising the Company as to whether HARTLEY
shall have suffered a disability and HARTLEY hereby authorizes the disclosure
and release to the Company and its agents and representatives all supporting
medical records. If HARTLEY is not legally competent, HARTLEY’S legal guardian
or duly authorized attorney-in-fact will act in HARTLEY’S stead for the purposes
of submitting HARTLEY to the examinations, and providing the authorization of
disclosure.

  

“Effective Date” shall mean on completion of the acquisition of Initio
International Holdings Limited by S360.

 

“For Cause” shall mean, in the context of a basis for termination of HARTLEY’S
employment with the Company, that:

 

a) HARTLEY breaches any obligation, duty or agreement under this Agreement,
which breach is not cured or corrected within 15 days of written notice thereof
from the Company (except for breaches of Sections 1(c), 6 or 7 of this
Agreement, which cannot be cured and for which the Company need not give any
opportunity to cure); or

 

 

 

 

b) HARTLEY is grossly negligent in the performance of services to the Company,
or commits any act of personal dishonesty, fraud, embezzlement, breach of
fiduciary duty or trust against the Company; or

 

c) HARTLEY is indicted for, or convicted of, or pleads guilty or nolo contendere
with respect to, theft, fraud, a crime involving moral turpitude, or a felony
under federal or applicable state law; or

 

d) HARTLEY commits continued and repeated substantive violations of specific
written directions of the Board, which directions are consistent with this
Agreement and HARTLEY’S position as an executive officer, or continued and
repeated substantive failure to perform duties assigned by or pursuant to this
Agreement; or

 

e) HARTLEY continues to neglect his duties after receipt of notice thereof from
the Company (and the Company need give such notice only once).

 

“Person” shall mean an individual or a partnership, corporation, trust,
association, Limited Liability Company, governmental authority or other entity.

 

“Portfolio Company” shall mean any person which has engaged the Company for the
provision of services.

 

“Term” shall mean the period commencing on the Effective Date and ending at the
close of business on December 31, 2013.

 

3) Compensation and Benefits

 

For as long as HARTLEY shall be employed by the Company, HARTLEY shall receive
the compensation and benefits set forth in this Section 3.

 

 

(a) Salary. The Compensation will commence at an annualized salary of $250,000
beginning upon the Effective Date. The base salary shall be payable twice
monthly on the same basis as other executives of the Company. HARTLEY’s base
salary shall be increased by the increase in the Consumer Price Index as
released by the United States Bureau of Labor Statistics.

 

(b) Expense Reimbursement. HARTLEY shall be entitled to reimbursement from the
Company for the reasonable out-of-pocket costs and expenses which HARTLEY incurs
in connection with the performance of HARTLEY’s duties and obligations under
this Agreement in a manner consistent with the Company’s practices and policies
therefore.

 

(c) Vacation. HARTLEY shall be entitled to three weeks paid vacation per year
(based on the Effective Date).

 

(d) Disability. In the event of any Disability HARTLEY shall receive the
compensation and benefits specified herein for 30 days. Such compensation and
benefits shall be received at the end of the disability.

 

(e) Withholding. At HARTLEY’s election, the Company may deduct from any
compensation payable to HARTLEY (including payments made pursuant to Section 5
of this Agreement in connection with or following termination of employment)
amounts it believes are required to be withheld under federal and state law,
including applicable federal, state and/or local income tax withholding, old-age
and survivors’ and other social security payments, state disability and other
insurance premiums and payments.

 

(f) Key Man Insurance. The Company may, at its own expense, purchase a key man
life insurance policy at an amount to be determined naming the Company as a
beneficiary. At the time that HARTLEY is no longer employed by the Company,
HARTLEY will have the right to retain the policy. It is expressly understood
between the Company and HARTLEY that the Company will not have any further
obligation with respect to the policy following HARTLEY’s employment by the
Company.

 

 

 

 

(g) Performance Bonus. HARTLEY shall be entitled to certain performance based
compensation in the event that the Company achieves certain milestones as
follows:

 

  (i) In the event the Company closes the proposed acquisition of Initio
International Holdings Limited, then HARTLEY shall be entitled to a one-time
issuance of non-qualified stock options purchase up to 250,000 shares of the
Company’s common stock, with an exercise price of $2.00 per share for a period
of five (5) years;

 

  (ii)

In the event the Company closes one or more acquisitions of a target company
(which shall exclude the acquisition of International Holdings Limited) whereby
such acquisition or acquisitions, as the case may be, is valued at an aggregate
of $10 million or more, then HARTLEY shall also be entitled to a one-time
issuance of non-qualified stock options to purchase up to 200,000 shares of the
Company’s common stock, with an exercise price of $2.00 per share for a period
of five (5) years;

 

  (iii) In the event the Company closes the proposed acquisition of Initio
International Holdings Limited, then HARTLEY shall be entitled to a one-time
cash bonus of $25,000;

 

  (iv)

In addition, in the event the Company’s revenue based on the Company’s filing of
its Quarterly Report on Form 10-Q or Annual Report on Form 10-K during the term
of this Agreement for the four quarters proceeding such filing is in excess of
$150 million, then HARTLEY shall be entitled to a one-time cash bonus of $50,000
within 30 days of such filing;

 

  (v)

In addition, in the event the Company’s revenue based on the Company’s filing of
its Quarterly Report on Form 10-Q or Annual Report on Form 10-K during the term
of this Agreement for the four quarters proceeding such filing is in excess of
$200 million, then HARTLEY shall be entitled to a one-time cash bonus of $50,000
within 30 days of such filing; and

 

  (vi) In addition, in the event the Company’s annualized revenue based on the
Company’s filing of its Quarterly Report on Form 10-Q or Annual Report on Form
10-K during the term of this Agreement for the four quarters proceeding such
filing is in excess of $250 million, then HARTLEY shall be entitled to a
one-time cash bonus of $50,000 within 30 days of such filing.

   

4) Term of Employment

 

HARTLEY’S employment pursuant to this Agreement shall commence on the Effective
Date, as defined in Section 2 and shall terminate on the earliest to occur of
the following:

 

a) upon the date set forth in a written notice of termination from HARTLEY to
the Company (which date shall be at least four months after the effective date
and at least 30 days after the delivery of that notice); provided, however, that
in the event HARTLEY delivers such notice to the Company, the Company shall have
the right to accelerate such termination by written notice thereof to HARTLEY
(and such termination by the Company shall be deemed to be a termination of
employment pursuant to this Section 4(a), and not a termination pursuant to
Section 4(d) or 4(e) hereof);

 

b) upon the death of HARTLEY;

 

c) upon delivery to HARTLEY of written notice of termination by the Company if
HARTLEY shall suffer a Disability;

 

d) upon delivery to HARTLEY of written notice of termination by the Company For
Cause;

 

 

 

 

e) upon delivery to HARTLEY of written notice of termination by the Company
Without Cause; or

 

f) December 31, 2016.

 

5) Confidentiality.

 

HARTLEY agrees not to disclose or use at any time (whether during or after
HARTLEY’s employment with the Company) for HARTLEY’s own benefit or purposes or
the benefit or purposes of any other Person any databases, trade secrets,
proprietary data, or other confidential information, development programs,
costs, marketing, trading, investment, sales activities, promotion, credit and
financial data, financial methods, plans, or the business and affairs of the
Company generally, provided that the foregoing shall not apply to information
which is not unique to the Company or which is generally known to the industry
or the public other than as a result of HARTLEY’s employment with the company.
HARTLEY agrees that upon termination of his employment with the Company for any
reason, he will return to the Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or therefrom,
in any way relating to the business of the Company and/or any Portfolio Company,
except that he may retain personal notes, notebooks, diaries and addresses and
phone numbers. HARTLEY further agrees that he will not retain or use for his
account at any time any trade names, trademark or other proprietary business
designation used or owned in connection with the business of the Company.

  

6) Miscellaneous

 

a) Notices.  All notices, requests, demands and other communications
(collectively, “Notices”) given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:

 

If to the Company, to:

 

Staffing 360 Solutions, Inc.

Alfonso J. Cervantes, President

641 Lexington Avenue, Suite 1526

New York, NY 10022

 

If to HARTLEY, to:

 

Allan Hartley

71 Alba Road

Wellesley, MA 02481

 

Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails. Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.

 

b) Entire Agreement.  This Agreement contains the sole and entire agreement and
understanding of the parties with respect to the entire subject matter of this
Agreement, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Agreement are hereby merged herein.  Without limiting the foregoing, this
Agreement supersedes those certain term sheets and/or agreements dated prior to
date hereof. No representations, oral or otherwise, express or implied, other
than those contained in this Agreement have been relied upon by any party to
this Agreement.

 

c) Severability. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.

 

 

 

 

d) Governing Law.  This Agreement has been made and entered into in the State of
New York and shall be construed in accordance with the laws of the State of New
York.

 

e) Captions.  The various captions of this Agreement are for reference only and
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.

 

f) Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

 

g) Attorneys’ Fees.  If any action or proceeding is brought to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys’ fees, costs and expenses.  The prevailing party is the
party who is entitled to recover its costs in the action or proceeding.  A party
not entitled to recover its costs may not recover attorneys’ fees.  No sum for
attorneys’ fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys’ fees.

 

In Witness Whereof, the parties have executed this Agreement as of the date
first above written.

 

  Staffing 360 Solutions, Inc.       By:         Its: President           Allan
Hartley