fp0001187_10-1.htm


     

    
      EMPLOYMENT
AGREEMENT

      


      


      THIS AGREEMENT is made as of
the 4th day of December, 2009

      


      


      BETWEEN:

      Jerome P. Kelliher

      of the City of  Naples,
Florida 34104-5808

      (hereinafter referred to as the
"Employee")

      


      AND:

      


      WORKSTREAM INC.,

       a corporation incorporated under
the laws of  Canada

      (hereinafter referred to as the
"Employer")

      


      WHEREAS:

      


      The
Employer wishes to employ the Employee and the Employee wishes to serve the
Employer upon the terms and subject to the conditions herein
contained.

      


      NOW THEREFORE in consideration
of the premises and the mutual covenants herein and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged by
each of the parties, the parties hereto covenant and agree as
follows:

       

      
        	
                1.

              	
                DEFINITIONS

              


      

      In this
agreement, unless the context otherwise specifies or requires, the following
terms shall have the following meanings:

      


      
        	
                 
      

              	
                1.1

              	
                "Agreement," "hereto,"
      "herein," "hereof," "hereunder" and similar expressions refer to
      this Agreement and not to any particular section or any particular portion
      of this Agreement and includes all schedules attached to this
      Agreement;

              


      

      


      
        	
                 
      

              	
                1.2

              	
                “Chief Financial
      Officer” shall mean the Chief Financial Officer for the
      Employer;

              


      

      


      
        	
                 
      

              	
                1.3

              	
                "Court" shall mean a
      Court of competent jurisdiction;

              


      

      


      
        	
                 
      

              	
                1.4

              	
                "Parties" shall mean the
      Parties to this Agreement and "Party" shall mean one of the Parties to
      this Agreement.

              


      

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      
        	
                2.

              	
                EMPLOYMENT

              


      

      


      
        	
                 
      

              	
                2.1

              	
                The
      Employer agrees to employ the Employee and the Employee agrees to act as
      Chief Financial Officer or in such other employment as the Employer and
      the Employee may from time to time agree and the Employee agrees to serve
      the Employer upon the terms and subject to the conditions set out in this
      Agreement.

              


      

      


      
        	
                 
      

              	
                2.2

              	
                The
      Employee specifically undertakes and agrees with the Employer that he
      shall be responsible for the
following:

              


      

      


      
        	
                 
      

              	
                2.2.1

              	
                for
      fulfilling the title and role of the Chief Finanical Officer of the
      Employer; and

              


      

      


      
        	
                 
      

              	
                2.2.2

              	
                such
      other duties as may be reasonably
required.

              


      

      


      
        	
                 
      

              	
                2.2.3

              	
                the
      starting date of Employee would be no later than December 7,
      2009.

              


      

      


      
        	
                3.

              	
                TERM

              


      

      
        	
                 
      

              	
                3.1

              	
                The
      Initial Term of this Agreement shall be a period of one (1) year from the
      date hereof.  Unless written notice is given by either party at
      least ninety (90) days before the end of the Initial Term or any one (1)
      year extension thereof (each, a “Renewal Term”), that they wish this
      Agreement to terminate at the end of the Initial or respective Renewal
      Term, whichever may apply, this Agreement will be automatically extended
      by successive one year Renewal Terms.  Any references herein to
      the “Term” shall include both the Initial Term and any and all Renewal
      Terms.

              


      

      


      
        	
                4.

              	
                REMUNERATION

              


      

      
        	
                 
      

              	
                4.1

              	
                In
      consideration of the Employee’s undertaking and the performance of the
      obligations contained in this Agreement, the Employer shall, unless
      otherwise agreed upon by all parties to this Agreement, pay and grant the
      following remuneration to the
Employee:

              


      

      


      
        	
                 
      

              	
                4.1.1

              	
                Base
      Salary.  The Employee shall be entitled to receive a
      salary, not less than $160,000.00 (U.S.) per
      year.

              


      

      


      
        	
                 
      

              	
                4.1.2

              	
                Bonus.  In
      addition to the base salary specified in section 4.1.1 the Employee shall
      be entitled to an aggregate annual bonus of up to $40,000.00 (U.S.) based
      on certain targets being achieved.  The Parties will mutually
      agree to these targets.  Achievement of targets will be assessed
      on a quarterly basis, and any bonus earned for a particular quarter, as
      reasonably determined by the Employer, will be paid to the Employee within
      30 days after the close of the quarter.  Such targets will be
      established within two weeks from the starting date of the
      Employee.

              


      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                4.1.3

              	
                Stock
      Options.  In addition to the base salary outlined in
      section 4.1.1 on the first date of employment as an incentive, the
      Employee shall be granted incentive stock options to purchase 160,000 shares of common
      stock of the Employer (the “Incentive Stock Options”) at a price that is
      the closing price where Workstream has listed securities, on the date of
      the option grant.  These Incentive Stock Options shall vest one
      third annually over a three (3) year period, beginning on the first
      anniversary of the date of the option grant.  Within 60 days of
      separation for any reason, Employee will be entitled to exercise any stock
      options then vested.

              


      

      


      
        	
                 
      

              	
                4.1.4

              	
                Restricted Stock
      Units:  In addition to the base salary outlined in
      section 4.1.1 on the first date of employment, the Employee shall be
      granted 50,000
      Restricted Stock Units (the “RSU’s”).  These RSU’s shall vest
      one-third over a three (3) year period, beginning on the first anniversary
      of the date of the grant.  Upon separation for any reason,
      Employee will be entitled to any Restricted Stock then
    vested.

              


      

      


      
        	
                5.

              	
                BENEFITS

              


      

      
        	
                 
      

              	
                5.1

              	
                In
      consideration of the Employee’s undertaking and the performance of the
      obligations contained in this Agreement, the Employer shall, unless
      otherwise agreed upon by all parties to this Agreement, pay and grant the
      following benefits to the Employee:

              


      

      


      
        	
                 
      

              	
                5.1.1

              	
                Vacation.  The
      Employee shall be entitled to vacation time of three (3) weeks
      each calendar year.  Such vacation time shall be used at times
      mutually agreeable to the Employee and the Employer.  Beginning
      in December 2009, an additional 4 hours per month of Flex Time will be
      added for every month that Workstream achieves its financial
      goals.

              


      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                5.1.2

              	
                Other
      Benefits.  The Employee shall be entitled to participate
      in all benefit programs provided by Employer to its executives effective
      upon the Employee’s start date.  The Employer shall pay for
      family coverage premiums for the Employee for health and dental (if any)
      insurance offered by the Employer. The Employer shall pay for the
      Employee’s STD/LTD premiums.

              


      

      


      
        	
                 
      

              	
                5.1.3

              	
                Expenses.  Employer
      shall reimburse the Employee for all reasonable and necessary business
      expenses, including but not limited to cellular phone expenses, upon the
      presentation to the Employer of appropriate written documentation and
      receipts.

              


      

      


      
        	
                6.

              	
                ATTENTION TO
      DUTIES

              


      

      The
Employee shall devote his whole working time and attention to the Employer
during the Term of this Agreement and will not engage in any other capacity or
activity which, in the sole opinion of the Employer acting reasonably, would
hinder or interfere with the performance of the duties of the
Employee.

      


      
        	
                7.

              	
                CONFIDENTIALITY

              


      

      The
parties acknowledge that in carrying out his duties under this Agreement, the
Employee will have access to and become entrusted with confidential information
regarding the business plans and operations of the Employer, computer systems
and technology, unique methodology and other proprietary
information.  The Employee acknowledges that the right to maintain
such detailed confidential information constitutes a proprietary right, which
the Employer is entitled to protect.  Accordingly, the Employee shall
not, during the Term of this Agreement, or at any time thereafter, disclose any
of such detailed confidential information or trade secrets of the Employer to
any person or persons, firm, association or corporation, nor shall the Employee
use the same for any purpose, in either case, except on behalf of the
Employer.  Notwithstanding the foregoing, the obligations of the
Employee in this Section 7 shall not apply to confidential information
(i) which at the date hereof or thereafter becomes a matter of public
knowledge without breach by the Employee of this Agreement; or (ii) which
is obtained by the Employee from a person, firm, or entity (other than the
Employer or an affiliate of the Employer) under circumstances permitting its use
or disclosure to others.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      
        	
                8.

              	
                OWNERSHIP OF
      INVENTIONS

              


      

      
        	
                 
      

              	
                8.1

              	
                The
      Employee shall promptly communicate and disclose to the Employer all
      inventions, improvements, modifications, discoveries, designs, formulae,
      methods and processes made, discovered or conceived by the Employee either
      alone or jointly with others, during the period of his employment with the
      Employer, providing the same relate to or are capable of being used by the
      corporation or any affiliate thereof in the normal course of their
      businesses.

              


      

      


      
        	
                 
      

              	
                8.2

              	
                The
      Employee acknowledges and declares that all inventions, improvements,
      modifications, discoveries, designs, formulae, methods, processes, as are
      described in section 8.1 hereof, and all patents and patent applications
      relating thereto are the property of the Employer and hereby assigns to
      the Employer all of the right, title and interest of the Employee in any
      such inventions, improvements, modifications, discoveries, designs,
      formulae, methods and processes, and in any patents or patent applications
      relating thereto.  The Employee shall, at the Employer’s
      expense, execute all instruments and documents and do all such further
      acts and things as may be necessary or desirable, in the Employer's
      opinion to carry out the provisions of this
  section.

              


      

      


      
        	
                9.

              	
                NON-COMPETITION

              


      

      The
Employee shall not, without prior written consent of the Employer for the period
of his employment hereunder or for a period of one (1) year following the
termination of this Agreement or any renewal hereof, for any reason be it for
cause or not, either alone or in conjunction with any individual, firm,
corporation, association or any entity, except for the Employer, whether as
principal, agent, shareholder, employee or in any other capacity whatsoever,
perform the duties of or provide the services as are described in section 2.2
hereof in a business which competes with the Employer, within any geographical
location where the Employer has carried on business or expended time and
personnel and financial resources.  Should the agreement terminate
prior to six (6) months, the non-compete period of six (6) months following
termination of the agreement will take effect.  Furthermore, the
Employee also agrees that upon the termination of his employment he will not
attempt to hire or encourage to leave their employ, any of the Employer's other
employees.  Notwithstanding the foregoing, the Employee shall not be
precluded from competing with the business of the Employer in the event his
employment is terminated by the Employee for good reason or by the Employer
other than for cause, unless the Employer provides the applicable compensation
and benefits set out in section 10.1.3 hereof, in which case, the Employee shall
be precluded from competing as described in this section 9 until such time as
such compensation and benefits are terminated.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      
        	
                10.

              	
                TERMINATION

              


      

      
        	
                 
      

              	
                10.1

              	
                The
      parties understand and agree that employment pursuant to this Agreement
      may be terminated during the Term in the following manner in the specified
      circumstances:

              


      

      


      
        	
                 
      

              	
                10.1.1

              	
                by
      the Employee without good reason (as defined below), on the giving of not
      less than one (1) month prior written notice to the Employer, which the
      Employer may waive, in whole or in
part;

              


      

      


      
        	
                 
      

              	
                10.1.2

              	
                by
      the Employee for good reason on the giving of not less than one (1) month
      prior written notice to the Employer, if the Employer has not cured the
      event giving rise to good reason by the end of such notice
      period.  For purposes of this Agreement good reason shall mean,
      absent the Employee’s prior written consent: (i) the Employer’s failure to
      timely provide the Employee with the salary, bonus and equity as set forth
      in section 4.1 hereof or to provide benefits to the Employee in accordance
      with section 5.1 hereof; (ii) a material breach by the Employer of this
      Agreement or any other agreement with the Employee; (iii) a material
      diminution by the Employer in the Employee’s title, responsibilities,
      authority or reporting structure; (iv) failure of the Employer to ensure
      that any successor or assign of the Employer agrees in writing to be bound
      by the terms of this Agreement.   If the Employee
      terminates his employment for good reason, he shall be entitled to the
      payments set forth in section 10.1.3 hereof, to be provided within thirty
      (30) days after his termination;

              


      

      


      
        	
              	
                10.1.3 

              	
                by
      the Employer in its absolute discretion without cause upon not less than
      one (1) month prior written notice to the Employee, on giving the Employee
      a payment equal to (i) if the employment is terminated during the first
      six months of full time employment then a payment equal to  (3)
      months base salary at the rate in effect on the Employee’s termination
      date; or (ii) if the employment is terminated after six months of full
      time employment then a payment equal to six (6) months base salary at the
      rate in effect on the Employee’s termination date. The payment
      representing this aggregate amount shall be paid within thirty (30) days
      from notice provided herein;

              


      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                10.1.4

              	
                by
      the Employer for cause.  The parties agree that for the purposes
      of this Agreement, “cause” shall mean the following, as reasonably
      determined by the Employer in good faith, and that the Employee shall be
      terminated immediately upon written notice for such
  cause:

              


      

      


      
        	
                 
      

              	
                10.1.4.1

              	
                any
      material breach of the provisions of this Agreement or of  an
      established written policy of the Employer after Employer provided written
      notice to Employee and 10 day opportunity to cure during which time
      Employee failed to cure;

              


      

      


      
        	
                 
      

              	
                10.1.4.2

              	
                any
      intentional or grossly negligent disclosure of any confidential
      information as described in section 7 hereof, by the
    Employee;

              


      

      


      
        	
                 
      

              	
                10.1.4.3

              	
                in
      carrying out his duties hereunder, the Employee; (i) has been grossly
      negligent, or (ii) has committed willful gross
  misconduct;

              


      

      


      
        	
                 
      

              	
                10.1.4.4

              	
                personal
      conduct on the Employee’s part which is of such a serious and substantial
      nature that, as reasonably determined in good faith in the sole discretion
      of the Employer, it would materially injure the reputation of the Employer
      if the Employee is retained as an Employee;
or

              


      

      


      
        	
                 
      

              	
                10.1.4.5

              	
                any
      and all omissions, commissions or other conduct, which would constitute
      cause under applicable law.

              


      

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      
 

      
        	
                 
      

              	
                10.2

              	
                The
      Parties understand and agree that the giving of notice or the payment of
      termination pay, and severance pay, as required by the Employer to the
      Employee on termination shall not prevent the Employer from alleging cause
      for the termination.

              


      

      


      
        	
                 
      

              	
                10.3

              	
                The
      Employee authorizes the Employer to deduct from any payment, any amounts
      properly owed to the Employer by the Employee by reason of advances, loans
      or in recommence for damages to or loss of the Employer's property and
      equipment, save only that this provision shall be applied so as not to
      conflict with any applicable law or
legislation.

              


      

      


      
        	
                11.

              	
                RESULTS OF
      TERMINATION

              


      

      
        	
                 
      

              	
                11.1

              	
                If
      this Agreement is terminated for cause, as described in section 10.1.4
      hereof, the Employee shall be entitled to receive his remuneration to the
      date of such termination for cause, including any and all vacation pay and
      bonuses earned to date.

              


      

      


      
        	
                 
      

              	
                11.2

              	
                If
      this Agreement is terminated upon written notice as described in
      paragraphs 10.1.1, 10.1.2, and 10.1.3 hereof, the Employer shall pay to
      the Employee to the end of the notice period his salary and at the end of
      the date terminating the notice provision, the Employer shall pay to the
      Employee vacation pay equivalent and any other monies due under applicable
      United States federal or state law, as well as any and all amounts to
      which he may be entitled pursuant to sections 10.1.2 or
      10.1.3.

              


      

      


      
        	
                12.

              	
                MEDIATION/ARBITRATION

              


      

      
        	
                 
      

              	
                12.1

              	
                Should
      any dispute or disagreement of any kind arise at any time; (i) regarding
      the rights and liabilities of the Parties hereof or with respect to the
      interpretation, validity, construction, meaning, performance, effect or
      application of this Agreement, as amended from time to time; or (ii)
      between the Employer and the Employee, the Parties agree that good faith
      negotiations shall take place between the Employer and the
      Employee.  If such good faith negotiations have not resolved the
      dispute or disagreement within a reasonable period of time, either Party
      may request mediation between the Parties, or either Party may refer the
      dispute or disagreement directly to arbitration without going to
      mediation.

              


      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                12.2

              	
                The
      mediator shall be agreed upon by the both Parties.  In the event
      that the Parties are unable to agree upon the mediator, the dispute or
      disagreement shall be referred to arbitration in accordance with this
      section.

              


      

      


      
        	
                 
      

              	
                12.3

              	
                All
      discussions before the mediator shall be non-binding, confidential and
      without prejudice to the position of either Party.  The Parties
      agree that if the mediation process does not result in a satisfactory
      solution of the dispute or disagreement after the lesser of either; (a)
      ten (10) hours of mediation, or (b) thirty (30) days from the commencement
      of the mediation, then either Party may refer the dispute or disagreement
      to arbitration pursuant to the provisions of the American Arbitration
      Association's National Rules for the Resolution of Employment Disputes in
      effect at the time of the arbitration demand, in accordance with the
      following:

              


      

      


      
        	
                 
      

              	
                12.3.1

              	
                the
      reference to arbitration shall be to one (1)
  arbitrator.

              


      

      


      
        	
                 
      

              	
                12.3.2

              	
                any
      such arbitration shall be held in the city of Orlando,
      Florida.  The arbitration shall be completely
      private.  The arbitrator shall fix the appropriate procedures
      which may include discovery, an oral hearing(s) and any other procedures
      the arbitrator deems appropriate.  The issue or issues to be
      decided by the arbitrator shall be defined in an arbitration agreement
      filed on consent by the aggrieved party.  In the event the
      Parties to the arbitration shall be unable to agree upon the issue or
      issues to be decided by the arbitrator in any arbitration pursuant to this
      paragraph, the arbitrator shall have jurisdiction to determine the issue
      or issues to be so decided.  The Parties shall do all such acts
      and things as are necessary to enable the arbitrator to make a proper
      finding respecting the matters in issue.  The arbitrator may
      order interest on any award and the arbitrator may award costs, including
      attorneys’ fees, to either Party, provided that such award is permitted by
      the applicable law governing the underlying claim.  In the
      absence of any award of costs, each of the Parties shall bear their own
      costs, including attorneys’ fees, of any arbitration pursuant to this
      paragraph and one-half of the cost of the arbitrator.  The
      arbitrator shall be strictly bound by applicable legal principles and the
      general nature of this Agreement in rendering his/her/its
      decision.

              


      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                12.3.3

              	
                The
      Parties agree that good faith negotiations, mediation and arbitration
      shall all be without recourse to the Courts.  The award of the
      arbitrator shall be final and binding, except that either Party may appeal
      an arbitration award to the Courts on a question of
      law.  Judgment upon the award rendered by the arbitrator may be
      entered in any Court having
jurisdiction.

              


      

      


      
        	
                13.

              	
                RIGHT TO INJUNCTIVE
      RELIEF

              


      

      As a
violation by the Employee of the provisions of paragraphs 7 and 9 hereof could
cause irreparable injury to the Employer and there is no adequate remedy at law
for such violation, the Employer shall have the right, in addition to any other
remedies available to it at law or in equity, to enjoin the Employee in a court
of equity from violating such provisions.  The provisions of
paragraphs 7 and 9 hereof shall survive the termination of this
Agreement.

      


      
        	
                14.

              	
                ASSIGNMENT OF
      RIGHTS

              


      

      The
rights and obligations which accrue to the Employer under this Agreement shall
automatically inure to the benefit of and be binding on  its
successors and assigns, whether by operation of law or otherwise. The rights of
the Employee under this Agreement are not assignable or transferable in any
manner, except that any accrued salary or bonus, vested options or other
benefits shall be provided to the Employee’s heirs, beneficiaries or estate, or
trustee under any trust set up by and for Employee.

      


      
        	
                15. 

              	
                CHANGE OF
      CONTROL

              


      

      The
Employer agrees that should there be a change in control of the Employer during
the Employee’s employment with the Employer, all stock options, RSU’s and
restricted stock held by the Employee shall become immediately vested and
exercisable in full. The Employer further agrees that should there be a change
in control of the Employer and the Employee’s employment is terminated for any
reason save and except for cause, the Employee shall receive, any payments or
benefits to which he is entitled pursuant to section 10.1.3 hereof or the
remaining salary for the Term whichever amount is greater.  For the
purposes of this section, “change in control” shall be defined as such term is
defined the Employer’s 2002 Amended and Restated Stock Option Plan.

      


      
        	
                16. 

              	
                RESIDENCE

              


      

      (This space intentionally left
blank.)

      


      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      


      
        	
                17.

              	
                INDEMNIFICATION

              


      

      The
Employer agrees to fully indemnify and defend the Employee against all claims,
liabilities, costs, attorneys’ fees, settlement payments and damages against the
employee arising from the Employee’s good faith actions taken in the performance
of the Employee’s duties.

      


      
        	
                18.

              	
                CURRENCY

              


      

      All dollar amounts referred to in this
Agreement are in United States funds.

      


      
        	
                19.

              	
                AMENDMENT OF
      AGREEMENT

              


      

      This
Agreement may be altered or amended at any time by the mutual consent in writing
of the parties hereto.

      


      
        	
                20.

              	
                TIME OF
      ESSENCE

              


      

      Time shall be of the essence
hereof.

      


      
        	
                21.

              	
                GOVERNING
      LAW

              


      

      This
Agreement shall be governed by and construed in accordance with the laws of
Maitland, Florida.

      


      
        	
                22.

              	
                HEADINGS

              


      

      The
headings appearing throughout this Agreement are inserted for convenience only
and form no part of the Agreement.

      


      
        	
                23.

              	
                SEVERABILITY

              


      

      The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision hereof and any such
invalid or unenforceable provision will be deemed to be severable.

      


      
        	
                24.

              	
                ENTIRE
      AGREEMENT

              


      

      This
Agreement constitutes the entire agreement between the parties and supersedes
all prior and contemporaneous agreements, understandings and discussions,
whether oral or written, and there are no other warranties, agreements or
representations between the parties except as expressly set forth
herein.

      


      
        	
                25.

              	
                AGREEMENT
      BINDING

              


      

      This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective personal representatives, executors, administrators,
successors and assigns.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      
        	
                26.

              	
                INDEPENDENT LEGAL
      ADVICE

              


      

      The
Employee acknowledges that he has read and understands the Agreement and
acknowledges that he has had the opportunity to obtain independent legal advice
regarding the terms of the Agreement and their legal consequences.

      


      
        	
                27.

              	
                SURVIVAL

              


      

      In the
event this Agreement terminates for any reason, sections 7, 9, 10.1.2, 10.1.3,
11, 15 and 17 hereof shall survive to the extent necessary to give full effect
to their terms.

      


      IN WITNESS WHEREOF this
Agreement has been executed by the parties hereto as of the date first set forth
above.

      


      
        	
                SIGNED, SEALED &
    DELIVERED

              	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	
                Witness

              	 	
                Jerome
      P. Kelliher

              
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	
                WORKSTREAM
      INC.

              
	 
      	 	 
      
	 
      	 	
                Per:

              	 
      
	 
      	 	 
      	
                Ginger
      L. Simpson

              
	
                 

              	 	      
                Title:

              	
                Vice
      President, Corporate

                Operations

              


      

       

       

      12