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EXHIBIT 10.6
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") is entered into effective
as of June 1, 1999 (the "Effective Date") by and between RemedyTemp, Inc., a
California corporation ("Remedy"), and Xxxx X. Xxxxx, an individual person
("Employee").
WHEREAS, Remedy desires to retain the services of Employee on an
at-will basis, and Employee desires to remain an at-will employee of Remedy.
WHEREAS, Remedy and Employee desire to enter into this Agreement
providing for certain severance arrangements for the benefit of Employee.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS.
(a) Cause. For purposes hereof, the term "Cause" has the meaning set
forth in Schedule 1 attached hereto. Any termination by Remedy of Employee's
employment within 30 days after Remedy becoming aware of the occurrence of an
event or circumstance constituting "Cause" will constitute termination for
Cause; provided however, that such event constituting Cause must have occurred
following a Change in Control (defined below).
2. SEVERANCE PAYMENTS.
(a) Termination Upon a Change in Control.
(i) If, within two (2) years of a Change in Control (as defined
below), Employee's employment with Remedy is terminated by Remedy for any reason
except for Cause, Employee shall receive a cash, lump-sum payment from Remedy,
on the tenth (10th) business day following the date of termination of Employee's
employment with Remedy, in an amount equal to two (2) times the then current
annual total compensation (including salary and maximum bonus) of Employee (the
"Severance Payment"). In such case of a Change in Control, provisions herein
applicable to Remedy will apply to Remedy's successor.
(ii) Notwithstanding anything in this Section 2 to the contrary,
if the Severance Payment under Section 2(a)(i), either alone or together with
other cash payments which Employee has the right to receive from Remedy, would
constitute a "parachute payment" (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code")), such Severance Payment shall be
reduced to the maximum amount as will result in no portion of Severance Payment
being a parachute payment (as defined in Section 280G of the Code).
(iii) For purposes of this Agreement, a "Change in Control"
shall be deemed to occur if any person, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (excluding for this purpose Remedy or its subsidiaries, or
any employee benefit plan of Remedy or its subsidiaries that
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acquires beneficial ownership of voting securities of Remedy, or any underwriter
or underwriting syndicate acquiring shares of Remedy' stock in connection with a
public offering thereof) becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
either the then outstanding shares of Class A Common Stock of Remedy (the
"COMMON STOCK") or the combined voting power of Remedy's then outstanding
securities entitled to vote generally in the election of directors.
(b) No Other Benefits. Except as set forth in Section 2, or as may
be required by applicable law or separate written agreement between Remedy and
Employee, Remedy shall have no obligations to pay any salary, bonus, accrued
vacation or other amounts in connection with any termination of Employee's
employment or attributable to the period after termination of Employee's
employment.
(c) In consideration for the agreements set forth herein and the
Severance Payment, Employee shall, upon receiving the Severance Payment (if such
event shall occur), execute a release of Remedy, its Board of Directors, and all
officers, employees and agents of Remedy from any and all claims, liabilities,
actions, causes of action, obligations, costs, damages, losses and demands of
every kind and nature whatsoever known or unknown, which arise out of, relate to
or are in any manner whatsoever connected with any action, transaction,
occurrence or event which has occurred prior to the date of the release and
those which may arise out of or are in any manner whatsoever connected with or
related to the termination of Employee's employment with Remedy. Such release
shall include a waiver of all rights granted under Section 1542 of the
California Civil Code which reads as follows: A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which, if known by him must have materially
affected his settlement with the debtor. Cal. Civ. Code Section 1542.
3. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be interpreted under and
governed by the laws of the State of California, excluding its rules on
conflicts of law.
(b) Arbitration. Any dispute regarding the application,
interpretation or breach of this Agreement shall be resolved by final and
binding arbitration before the American Arbitration Association ("AAA") in
accordance with AAA's National Rules for the Resolution of Employment Disputes.
Attorney's fees, costs and damages (where appropriate) shall be awarded to the
prevailing party in any dispute, and any resolution, opinion or order of AAA may
be entered as a judgment in a court of competent jurisdiction.
(c) Modification and Waiver. No waiver or modification of this
Agreement or any term hereof shall be binding unless it is in writing signed by
the parties hereto. No failure to insist upon compliance with any term,
provision or condition to this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be or construed as a waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
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(d) Entire Agreement. This Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede and
replace all prior severance and/or employment agreements, if any, between the
parties. No oral statements or prior written agreements with respect to the
subject matter hereof which are not specifically incorporated herein shall be of
any force or effect.
(e) Severability. If any provisions hereof shall be held or
construed to be illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions of this Agreement, but the same shall
be construed and enforced just as though the illegal or invalid provisions had
not been included herein.
(f) Notices. Any notice, demand or other communication required,
permitted or desired to be given hereunder shall be in writing and shall be
deemed effectively given upon personal delivery, facsimile transmission (with
confirmation of receipt), delivery by reputable overnight delivery service or
five (5) days following deposit in the United States mail (if sent by certified
or registered mail, postage prepaid, return receipt requested), in each case
duly addressed to Remedy at its headquarters or to Employee at his or her
address of record listed with Remedy.
(g) Assignment. Employee's rights, duties and obligations under this
Agreement may not be assigned by Employee. Remedy may assign its rights, duties
and obligations under this Agreement to any affiliate of Remedy.
(h) Headings. The section headings herein are intended for reference
and shall not affect in any way the construction or interpretation of this
Agreement.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date set forth above.
"EMPLOYEE"
Signature: ____________________________________________
Xxxx X. Xxxxx
"REMEDY"
RemedyTemp, Inc.
By: _________________________________
Name: _______________________________
Title: ________________________________
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SCHEDULE 1 TO
SEVERANCE AGREEMENT
For purposes of this Agreement, termination for Cause shall mean
termination for one of the following reasons: willful misconduct that the Board
of Directors of Remedy (the "Board") determines has a material adverse effect on
Remedy; breach of fiduciary duty involving self-dealing or personal profit;
intentional material failure to perform duties or abide by Remedy policies, in
each case to the extent such duties or policies have been communicated to
Employee in writing or their existence is otherwise known to Employee and
Employee has not cured such failure within a reasonable time after written
notice of such failure is given; conviction, entry of a plea of guilty or nolo
contendere in connection with any alleged violation, or any actual violation, of
any law, rule, regulation (other than traffic violations or similar offenses) or
any cease-and-desist or other court order that the Board determines has a
material adverse effect on Remedy; involvement in any legal proceeding which, in
the opinion of legal counsel to Remedy, would be required to be disclosed
pursuant to rules and regulations of the Securities and Exchange Commission,
other than proceedings under federal bankruptcy laws or state insolvency laws
involving entities in which you have less than a fifty percent (50%) interest;
non-prescription use of any controlled substance or the use of alcohol or any
other non-controlled substance which Remedy's Board reasonably determines
renders Employee unfit to serve in Employee's capacity as an officer of Remedy;
or any intentional act or omission which the Board reasonably determines has a
material adverse effect on the public image, reputation or integrity of Remedy.
Termination for cause shall not include termination on account of job
performance failing to meet criteria or expectations of the Board.
