**EXHIBIT 10.01**
**EMPLOYMENT AGREEMENT**
     Technology Solutions Company, a Delaware corporation doing business asTSC, 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 thisAgreement, TSC and Employee agree as follows:
     1. **Employment Duties:**TSC shall employ Employee as President, ChiefExecutive Officer, and Employee shall be elected by TSC’s Board of Directors asa Director. Employee shall perform all duties incident to the office of thePresident and such other duties as from time to time may be prescribed by theBoard of Directors. Employee shall perform faithfully these duties to the bestof his ability and shall devote his full and undivided business time andattention 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 thisAgreement and continue until terminated pursuant to Section 3 below.
     3. **Termination:**TSC may terminate Employee’s employment for any reasonupon giving Employee 90 days notice of the termination. TSC may make suchtermination 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 theeffective date of termination; and, continue to pay TSC’s share of Employee’shealth insurance benefits. Notwithstanding the aforementioned, if Employee isterminated after he has been employed by TSC for two years, TSC’s salarycontinuation obligation shall be reduced to 50% of Employee’s salary at theeffective date of termination for a period of two years. Employee shall beentitled to receive the salary and benefit payments without any mitigationobligations.
     TSC may terminate Employee’s employment and this Agreement immediatelywithout notice and with no salary and benefit continuation if Employee engagesin “Serious Misconduct.” For purposes of this Agreement, “Serious Misconduct”means embezzlement or misappropriation of corporate funds, other acts ofdishonesty, significant activities materially harmful to TSC’s reputation,willful refusal to perform or substantial disregard of Employee’s assignedduties (including, but not limited to, refusal to travel or work the requestedhours), or any significant violation of any statutory or common law duty ofloyalty to TSC. Employee may terminate his employment upon giving TSC 90 daysprior written notice. Upon receiving notice, TSC may waive its rights underthis paragraph and make Employee’s termination effective immediately or anytimebefore the 90 day notice period ends. Employee agrees that if and when his
 

 

termination of employment with TSC becomes effective, he shall tender hisresignation as a Director of TSC’s Board of Directors immediately thereafter,which tender may be accepted at the sole discretion of TSC’s Board ofDirectors.
     If following a Change in Control (which is defined as (i) the acquisitionby any individual, entity or group, of beneficial ownership (within the meaningof Rule 13 d-3 promulgated under the Securities Exchange Act of 1934) of 40% ormore of the outstanding shares of the common stock of TSC; (ii) the approval ofthe stockholders of TSC of a merger, where immediately after the merger,persons who were the holders of a majority of TSC’s outstanding common stockimmediately prior to the merger fail to own at least a majority of theoutstanding common stock of the surviving entity in substantially the sameproportions as their holdings of TSC common stock immediately prior to themerger; or, (iii) the sale of substantially all the assets of TSC other than toa corporation in which more that 60% of the outstanding shares are beneficiallyowned by the individuals and entities who are the beneficial owners of theCompany stock prior to the acquisition, Employee’s title, position, duties, orsalary is diminished and Employee provides notice of resignation within 90days after the diminishment becomes effective which is thereafter accepted, orif Employee is ordered to relocate permanently from his residence as of thetime of the Change in Control and Employee declines and is terminated, Employeeshall be entitled to receive within (5) days following the acceptance of hisresignation or his termination: Employee’s base salary as of the time of theChange in Control for one year; a bonus equal to the average annual bonusearned during the two years immediately preceding the Change in Control (whichin no event shall be less that $150,000); and health insurance benefits for oneyear. Notwithstanding anything to the contrary in any of Employee’s stockoption agreements, Employee’s unvested TSC shares at option shall vestautomatically upon a Change in Control.
     If it appears reasonably likely that any of the payments to Employeeprovided for in this Agreement, together with any other payments which Employeehas 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 toSection 1504(b) of the Internal Revenue Code) of which TSC is a member, couldconstitute a “parachute payment” (as defined in Section 280G(b)(2) of theInternal Revenue Code), TSC shall retain an independent expert appraiser whoshall determine the value of Employee’s non-compete which could be deductedwhen calculating the value of the parachute payment.
     4. **Salary:**As compensation for his services, TSC shall pay Employee abase salary in the amount listed in Exhibit A to this Agreement. Employee’sbase salary shall be subject to annual review by the Compensation Committee ofthe Board of Directors and may, at their discretion, be adjusted upward fromthat listed in Exhibit A.
     5. **Bonuses:**The Compensation Committee of the Board of Directors may, atits sole discretion, elect to pay Employee an annual bonus pursuant to a plansimilar to the plan covering TSC’s senior employees . If an annual bonus is tobe paid, Employee is to receive 50% of his salary if he achieves his targetobjectives and 100% of his salary if he achieves his “stretch” objectives. Theobjectives are to be set by the Compensation
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Committee of the Board. Notwithstanding the aforementioned, Employee shallbe guaranteed a bonus of at least $150 thousand for 2004, payable when bonusesa would normally be paid in 2005.
     6. **Employee Benefits:**During the Term of Employment, Employee shall beentitled to participate in such employee benefit plans, including grouppension, life and health insurance and other medical benefits, and shallreceive all other fringe benefits as TSC may make available generally to itsSenior Vice Presidents.
     7. **Business Expenses:**TSC shall reimburse Employee for all reasonable andnecessary business expenses incurred by Employee in performing his duties.Employee shall provide TSC with supporting documentation sufficient to satisfyreporting requirements of the Internal Revenue Service and TSC. TSC’sdetermination as to reasonableness and necessary shall be final.
     8. **Noncompetition and Nondisclosure:**Employee acknowledges that thesuccessful development and marketing of TSC’s professional services andproducts require substantial time and expense. Such efforts generate for TSCvaluable and proprietary information (“Confidential Information”) which givesTSC a business advantage over others who do not have such information.Confidential Information of TSC and its clients and prospects includes, but isnot 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 ofEmployment, he will obtain knowledge of such Confidential Information.Accordingly, Employee agrees to undertake the following obligations which heacknowledges to be reasonably designed to protect TSC’s legitimate businessinterests without unnecessarily or unreasonably restricting Employee’spost-employment opportunities:
     (a) Upon termination of the Term of Employment for any reason, Employeeshall return all TSC property, including but not limited to computer programs,files, notes, records, charts, or other documents or things containing in wholeor in part any of TSC’s Confidential Information;
     (b) During the Term of Employment and subsequent to termination, Employeeagrees to treat all such Confidential Information as confidential and to takeall necessary precautions against disclosure of such information to thirdparties during and after Employee’s employment with TSC. Employee shallrefrain from using or disclosing to any person, without the prior writtenapproval of TSC’s Chief Executive Officer any Confidential Information unlessat that time the information has become generally and lawfully known to TSC’scompetitors;
     (c) Without limiting the obligations of paragraph 8(b), Employee shallnot, for a period of one year following his termination of employment for anyreason, for himself or as an agent, partner or employee of any person, firm orcorporation, engage in the practice of consulting for any client of TSC forwhom Employee performed services, or
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prospective TSC client to whom Employee submitted, or assisted in thesubmission of a proposal during the one year period preceding his terminationof employment;
     (d) During a one year period immediately following Employee’s terminationof employment for any reason, Employee shall not induce or assist in theinducement of any TSC employee away from TSC’s employ or from the faithfuldischarge of such employee’s contractual and fiduciary obligations to serveTSC’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 ofeach business organization for which he acts as agent, partner, representativeor employee.
     9. **Remedies:**Employee recognizes and agrees that a breach of any or allof the provisions of paragraph 8 will constitute immediate and irreparable harmto TSC’s business advantage, including but not limited to TSC’s valuablebusiness relations, for which damages cannot be readily calculated and forwhich damages are an inadequate remedy. Accordingly, Employee acknowledgesthat TSC shall therefore be entitled to an order enjoining any further breachesby the Employee. In an action brought to enforce this Agreement, theprevailing party shall be entitled to recover all costs and expenses, includingreasonable attorneys’ fees incurred in connection with the enforcement of itsrights under any provision of this Agreement.
     10. **Intellectual Property:**During the Term of Employment, Employee shalldisclose to TSC all ideas, inventions and business plans which he developsduring the course of his employment with TSC which relate directly orindirectly to TSC’s business, including but not limited to any computerprograms, processes, products or procedures which may, upon application, beprotected by patent or copyright. Employee agrees that any such ideas,inventions or business plans shall be the property of TSC and that Employeeshall at TSC’s request and cost, provide TSC with such assurances as isnecessary to secure a patent or copyright.
     11. **Assignment:**Employee acknowledges that the services to be renderedpursuant to this Agreement are unique and personal. Accordingly, Employee maynot assign any of his rights or delegate any of his duties or obligations underthis Agreement. TSC’s rights, duties or obligations under this Agreement maybe assigned to a subsidiary or affiliated company of TSC and shall be bindingupon any purchaser or transferee of a majority of TSC’s outstanding capitalstock or a purchaser of all, or substantially all, of the assets of TSC.
     12. **Notices:**All notices shall be in writing, except for notice oftermination of employment, which may be oral if confirmed in writing within 14days. Notices intended for TSC shall be sent by registered or certified mailaddressed to it at 205 North Michigan Avenue, 15th Floor, Chicago, Illinois60601 or its current principal office, and notices intended for Employee shallbe either delivered personally to him or sent by registered or certified mailaddressed 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 agreementbetween TSC and Employee. Neither Employee nor TSC may modify this Agreementby oral agreements, promises or representations. The parties may modify thisAgreement only by a written instrument signed by the parties.
     14. **Applicable Law:**This Agreement shall be governed by and construed inaccordance with the laws of the State of Illinois.
     15. **Mediation of Disputes:**Neither party shall initiate arbitration orother legal proceedings (except for any claim under Paragraph 8 of thisAgreement for temporary injunctive relief), against the other party, or, in thecase of TSC, any of its directors, officers, employees, agents, orrepresentatives, relating in any way to this Agreement, to Employee’semployment with TSC, the termination of his employment or any or all otherclaims that one party might have against the other party until 30 days afterthe party against whom the claim[s] is made (“Respondent”) receives writtennotice from the claiming party of the specific nature of any purported claimand the amount of any purported damages. Employee and TSC further agree thatif Respondent submits the claiming party’s claim to the Center for PublicResources, 680 Fifth Avenue, New York, New York 10019, for nonbinding mediationprior to the expiration of such 30 day period, the claiming party may notinstitute arbitration or other legal proceedings against Respondent until theearlier of (i) the completion of nonbinding mediation efforts, or (ii) 90 daysafter the date on which the Respondent received written notice of theclaimant’s claim.
     16. **Binding Arbitration:**Employee and TSC agree that all claims ordisputes relating to his employment with TSC or the termination of suchemployment, and any and all other claims that Employee might have against TSC,any TSC director, officer, employee, agent, or representative, and any and allclaims or disputes that TSC might have against Employee (except for any claimsfor temporary injunctive relief under Paragraph 8 of this Agreement) shall beresolved under the Expedited Commercial Rules of the American ArbitrationAssociation. Any arbitration held pursuant to this paragraph shall beconducted at a mutually approved geographic location and all arbitration costsshall be shared equally by the parties. If either party pursues a claim andsuch claim results in an Arbitrator’s decision, both parties agree to acceptsuch decision as final and binding. TSC and Employee agree that any actionseeking temporary injunctive relief under Paragraph 8 of this Agreement shallbe brought in the Circuit Court for Cook County, Illinois.
     17. **Severability:**Whenever possible, each provision of this Agreementwill be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Agreement is held to be prohibitedby or invalid under applicable law, such provision will be ineffective only tothe extent of such prohibition or invalidity, without invalidating theremainder of such provision or the remaining provisions of this Agreement.
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     18. Employee acknowledges that he has read, understood and accepts theprovisions of this Agreement.     Technology Solutions Company Employee     By: /s/Timothy P. Dimond      /s/ Michael R. Gorsage         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   Michael R. Gorsage          May 6, 2004   Date          /s/ Timothy P. Dimond   Technology Solutions Company          May 6, 2004 Date
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