Kforce Inc.
Exhibit 10.2
December 10, 2003
0000 Xxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
| Re: | Termination of Employment Agreement |
Dear Xxxx:
The purpose of this letter is to confirm certain matters set forth in my Employment Agreement, dated January 1, 2001 (the “Employment Agreement”), and document our arrangements following the merger of Kforce and Xxxx Xxxxxx (the “Merger”) pursuant to an Agreement and Plan of Merger, dated as of December 2, 2003 (the “Merger Agreement”). At the closing of the Merger, I will resign as an officer, director and chairman, including Chairman Emeritus of Xxxx Xxxxxx and its subsidiaries. Under my agreement, I am entitled to the following benefits: (i) salary through the closing date; (ii) within three days of the closing, a lump sum payment in the amount of $2,100,000; (iii) forgiveness of the remaining principal and interest on my note, including the release of the pledge of 433,030 shares of HK stock currently pledged as security for the loan; and (iv) title to my Mercedes S500V automobile, without any further payments by me. My options accelerate on the closing and the in-the-money options will be converted into Kforce stock in accordance with the Merger Agreement, and all out-of-the-money options will be automatically cancelled. At the closing of the Merger, I will execute a mutual release in the form attached to this letter as Annex A, and my Employment Agreement shall terminate and be of no further force and effect and all other arrangements with Xxxx Xxxxxx (other than those contained in this letter and my vested benefits under Hall Xxxxxx’x 401(k) Plan and the Deferred Compensation Plan) will also terminate.
Following the closing, I will be entitled to a gross-up payment in the event that my compensation in connection with the Merger exceeds the IRC Section 280G limits in accordance with Section 12.8 of the Employment Agreement, which will be calculated by Deloitte & Touche. I also agree to cooperate with Kforce and Xxxx Xxxxxx to minimize the negative tax effect of IRC Section 280G, including, without limitation, if necessary, by accelerating income into 2003, provided that such acceleration does not result in phantom income.
For a period of three years I will not directly or indirectly (i) solicit for employment, or advise or recommend to any other person that they solicit for employment, any employee of Xxxx Xxxxxx, and (ii) engage in any business or activity competitive with the business activities of Xxxx Xxxxxx (excluding passive investments of up to 5% of the outstanding stock of any publicly traded company, regardless of whether such company competes with Xxxx Xxxxxx). I acknowledge and agree that my failure to comply with the foregoing sentence will cause irreparable injury to Kforce, for which damages, even if available, will not be an adequate
remedy. Accordingly, I consent to the issuance of injunctive relief by any court of competent jurisdiction to compel my compliance with such covenant and to the granting by any court of the remedy of specific performance.
For so long as I am in compliance with the noncompetition and nonsolicitation covenants set forth in the preceding paragraph, (i) my spouse, my children (so long as they are minors and thereafter, to the extent such children are eligible) and I will be entitled to participate in liability insurance, life insurance, disability insurance, dental insurance, hospitalization insurance, medical, accident, and health-related employee plans applicable to the employees of Kforce or Xxxx Xxxxxx, (ii) I will also be entitled to continue my office at 000 Xxxxx Xxxxxx in Novato California for the duration of the lease as well as administrative support, and (iii) I will also be entitled to an all inclusive payment of $50,000 for unused vacation, sick leave, and outplacement service. Kforce shall have the right to change insurance carriers and benefit plans as may be appropriate in light of future market conditions and shall have the right to purchase individual policies covering me if necessary, provided such policies provide comparable benefits.
I agree to comply with the lock-up restrictions set forth in Section 5.2(h) of the Merger Agreement.
Please sign a copy of this letter to confirm these agreements.
| Very truly yours, |
| /s/ Xxxxxx X. Xxxxxx |
| Xxxxxx X. Xxxxxx |
| Acknowledged and agreed:
|
| /s/ Xxxxx X. Xxxxxx |
| By: Xxxxx X. Xxxxxx Title: Chief Executive Officer |
2
ANNEX A
FORM OF MUTUAL GENERAL RELEASE
THIS MUTUAL GENERAL RELEASE (the “Release”) is effective as of , 2004, by and between Xxxx, Xxxxxx & Associates, Inc., a Delaware corporation (“HAKI”), Kforce Inc., a Florida corporation (“Kforce”), and Xxxxxx X. Xxxxxx (the “Executive”). HAKI, Kforce and the Executive are collectively referred to in this Release as the “Parties.”
BACKGROUND
HAKI and Kforce are parties to an Agreement and Plan of Merger, dated as of December 2, 2003, pursuant to which a wholly-owned subsidiary of Kforce will be merged with and into HAKI with HAKI surviving the merger and becoming a wholly-owned subsidiary of Kforce (the “Merger”). Simultaneously with the closing of the Merger, the Executive’s Employment Agreement, dated January 1, 2001 (the “Employment Agreement”), has been terminated pursuant to a Letter Agreement dated as of December 10, 2003 (the “Letter Agreement”). The Parties are executing this Release pursuant to the terms of the Letter Agreement.
Accordingly, in consideration of the mutual agreements set forth below, the Parties hereby agree as follows:
TERMS
1. Mutual Release.
(a) HAKI and Kforce unconditionally and irrevocably release and forever discharge the Executive from any claims, demands, suits, debts, contracts, agreements, promises, damages, and causes of action and judgments of any kind or nature whatsoever, known or unknown, complete or incomplete, absolute or contingent, and whether arising out of the Employment Agreement, common law, equity, statute, or otherwise, arising under, relating to and in connection with the employer/employee relationship of HAKI and the Executive prior to the date of this Release (“Released Claims”).
(b) The Executive unconditionally and irrevocably releases and forever discharges HAKI and Kforce from any Released Claims. The laws under which the Released Claims may arise include, but are not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, the California Labor Code, the California Business and Professions Code, California wage Orders and/or the laws prohibiting discrimination, harassment and/or retaliation in any state in which you are employed, and any and all federal, state and local employment laws, as well as any and all common law tort or contract theories. However, the Released Claims do not include claims which by law may not be released.
(c) Notwithstanding the foregoing provisions to the contrary:
(i) The Executive does not release HAKI and Kforce from any obligations contained in this Release or for any payments owed under the Letter Agreement; and
(ii) HAKI and Kforce do not release the Executive from any obligations under this Release or the Letter Agreement or for any Released Claims involving fraud or criminal acts against HAKI and Kforce.
2. Unknown Claims. Each of the Parties acknowledges that there is a risk that subsequent to the execution of this Release, the Parties will discover, incur or suffer Released Claims which were unknown or unanticipated at the effective time of this Release, including, without limitation, unknown or unanticipated Released Claims, which if known by it on the date this Release is being executed may have materially affected the Parties’ decision to execute this Release. The Parties acknowledge and agree that by reason of the release contained in Section 1 of this Release, each of the Parties is assuming the risk of such unknown and unanticipated Released Claims and agrees that its respective release contained in this Release applies to such unknown and unanticipated Released Claims. The Parties therefore waive the effect of California Civil Code section 1542 and any other analogous provision of applicable law of any jurisdiction. Section 1542 states:
“A GENERAL RELEASE DOES NOT EXTEND TO RELEASED CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
3. Ownership of Claims. Each of the Parties represents and warrants to the other that it has not previously assigned or transferred, or purported to assign or transfer, to any person or entity any Released Claim, or portion of or interest in any Released Claim, and agrees to indemnify, defend, and hold the other harmless from and against any and all Released Claims, based on or arising out of any such assignment or transfer, or purported assignment or transfer, of any Released Claims, or any portion of or interest in any Released Claim.
4. Notice. HAKI is required by law to give the Executive up to 21 days in which to consider this Release. The Executive has up to and including to sign and return this Release as set forth below. The Executive is advised to consult an attorney regarding signing this Release. The Executive acknowledges that by signing this Release prior to the expiration of the 21 day waiting period, the Executive waives the remaining waiting period. The Executive will have an additional seven days after signing this Release to revoke an acceptance by submitting a written statement of revocation to [name address] . (“Revocation Period”) If the Executive does not timely revoke acceptance, then this Release will become final and effective upon the expiration of the Revocation Period. If the Executive submits a signed revocation of acceptance by mail, the mailing envelope must be postmarked no later than the submission deadline.
5. Miscellaneous.
(a) Entire Agreement. This Release and the Letter Agreement constitute all of the agreements between the Parties and supersede any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter of this Release or the Letter Agreement.
(b) Succession and Assignment. This Release shall be binding upon and inure to the benefit of the Parties named in this Release and their respective successors and permitted assigns.
Annex A-2
(c) Counterparts. This Release may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
(d) Governing Law. This Release shall be governed by and construed in accordance with the domestic laws of Delaware without giving effect to any choice or conflict of law provision or rule (whether of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than Delaware.
(e) Severability. Any term or provision of this Release that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.
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Annex A-3
IN WITNESS WHEREOF, the Parties have executed this Release effective as of the date first above written.
| XXXX, XXXXXX & ASSOCIATES, Inc., a Delaware corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
| KFORCE INC., a Florida corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
| EXECUTIVE: | ||
| By: | ||
| Xxxxxx X. Xxxxxx | ||
Annex A - 4
