Exhibit 10.51
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of April 9, 2001 (the
"Effective Date"), is by and between Spherion Corporation, a Delaware
corporation (hereinafter referred to as the "Company"), and Xxxxx X. Xxxxxxx
(hereinafter the "Executive").
RECITALS
A. The Executive currently serves as a member of the Board of Directors of
the Company (the "Board").
B. The Company desires to employ the Executive and to enter into this
Agreement embodying the terms of such employment.
C. The Executive desires to be employed by the Company and to enter into
this Agreement embodying the terms of such employment.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive
agree as follows:
1. EMPLOYMENT.
a) TITLES AND DUTIES. During the Term (as defined in Section 2 hereof),
the Executive shall serve as President and Chief Executive Officer of the
Company. The Executive shall perform and assume all duties and responsibilities
customary to such position and shall devote all of her business time and
energies thereto. In carrying out such duties and responsibilities, the
Executive shall report to, and be subject to the direction of, the Board.
b) OTHER ACTIVITIES. Notwithstanding the foregoing, the Executive may,
with the prior written approval of the Board, (i) serve on the boards of
directors or equivalent bodies of nonprofit organizations and business entities
and (ii) undertake outside speaking and writing engagements, in each case
provided that the Board concludes in its sole discretion none of the foregoing
activities materially interferes with the performance of the Executive's duties
hereunder or creates a potential business conflict or the appearance thereof.
The Company hereby acknowledges that the Executive shall be entitled to continue
serving as a member of the United Way of America Board of Governors, as a
committee member of the National Academies, National Research Council, Division
of Earth and Life Studies, and as a member of the board of directors of Bowater
Incorporated, provided that such service does not, in the future, materially
interfere with the performance of the Executive's duties hereunder or
create a potential business conflict or the appearance thereof. The Executive
shall be entitled to retain any compensation received on account of services
rendered in accordance with this Section.
c) BOARD SERVICE. It is the intention of the parties that the Executive be
elected by the shareholders of the Company to serve as a member of the Board
during the Term. The Company shall recommend to the Nominating Committee of the
Board that the Executive be nominated as a director of the Company during the
Term, consistent with the Company's By-Laws, and the Company shall use its best
efforts to have the Executive so elected. In addition, the Company shall
recommend to the Board that the Executive be designated as a member of the
Executive Committee of the Board, consistent with the Company's By-Laws.
2. TERM.
a) IN GENERAL. The term of employment under this Agreement shall commence
as of the Effective Date and end on the third anniversary of the Effective Date,
unless further extended or sooner terminated as hereinafter provided (the
"Term").
b) EXTENSION. On the third anniversary of the Effective Date and each
succeeding anniversary, the Term shall automatically be extended for an
additional one (1) year period unless, not later than six (6) months prior to
such anniversary, either party shall have given written notice to the other that
the Term shall not be extended further.
c) CHANGE IN CONTROL. If a Change in Control (as defined in Appendix A
hereto) of the Company shall have occurred during the Term, the provisions of
Sections 2(a) and (b) shall no longer apply, and instead, this Agreement shall
continue in effect for a period of 24 months beyond the month in which such
Change in Control occurred; provided, that if the Company shall become obligated
to make any payments or provide any benefits pursuant to Section 11(e) hereof,
this Agreement shall continue for the period necessary to make such payments or
provide such benefits. Following the end of the 24-month period and on each
succeeding anniversary thereof, the Term shall automatically be extended for an
additional one (1) year period unless, not later than six (6) months prior to
such date, either party shall have given written notice to the other that the
Term shall not be extended further.
3. BASE SALARY.
The Company shall pay the Executive, in accordance with the Company's
regular payroll practices applicable to salaried employees, an annualized base
salary of not less than $775,000, as the same may from time to time be
increased, but not decreased, at the sole discretion of the Board or the
Compensation Committee of the Board (the "Compensation Committee").
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4. CASH BONUS.
As soon as administratively practical following the Effective Date, but in
no event later than 15 business days after the Effective Date, the Company shall
pay the Executive a one-time lump sum cash "sign-on" bonus in an amount equal to
$850,000 (the "Sign-On Bonus"). In the event the Executive's employment with the
Company terminates for any reason (other than a termination by the Company
without Cause (as defined in Section 11(b)), by the Executive for Good Reason
(as defined in Section 11(c)) or by the Executive pursuant to Section 11(e)(y))
at any time during the 12-month period commencing on the Effective Date, the
Executive shall be required to return the Sign-On Bonus to the Company no later
than 45 days following such termination date; provided, however, that if the
Executive's employment with the Company terminates on account of the Executive's
death or Disability (as defined in Section 11(a)), the Executive (or, in the
event of the Executive's death, the Executive's estate) shall be entitled to
retain an amount equal to the Sign-On Bonus multiplied by a fraction, the
numerator of which is the number of days the Executive was employed by the
Company between the Effective Date through the date of such termination of
employment and the denominator of which is 365 (the "Retained Amount") and shall
be required to return to the Company during the above-mentioned 45-day period,
the Sign-On Bonus less the Retained Amount. Notwithstanding the foregoing or
anything in this Agreement to the contrary, the Company shall have the right to
offset any payment provided for in this Agreement or any accrued obligation or
other payments (if any) by any outstanding portion of the Sign-On Bonus which is
required to be returned to the Company that has not otherwise been timely
returned.
5. STOCK OPTIONS AND DEFERRED STOCK UNITS.
a) STOCK OPTION GRANT. i) The Company shall recommend to the Compensation
Committee, which administers the Company's 2000 Stock Incentive Plan (the "2000
Stock Incentive Plan"), that, as of the Effective Date (the "Grant Date"), the
Company grant to the Executive an option (the "Option") with respect to 400,000
shares of the Company's common stock, par value $.01 (the "Common Stock") at an
exercise price equal to the fair market value of the Common Stock on the Grant
Date. The Option shall, to the maximum extent permitted by applicable law, be
designated as an incentive stock option ("ISO") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") and, to the
extent not allowable, the Option shall be a non-qualified stock option.
ii) VESTING. The Option shall vest and become exercisable in
installments as provided herein, which shall be cumulative. Subject
to the terms in Section 5(a) and Sections 11(a)(vi), (c)(iv) and
(e)(vi), one-third of the Option shall vest and become exercisable
on each anniversary of the Grant Date so that the Option becomes
fully vested and exercisable on the third anniversary of the Grant
Date, provided the Executive remains continuously employed by the
Company or any Subsidiary (as defined in the 2000 Stock Incentive
Plan) at all times through the applicable vesting date. Any
unexercised portion of the Option
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shall be forfeited in its entirety (whether vested or unvested) in
the event the Executive's employment with the Company is terminated
by the Company for Cause. Notwithstanding the foregoing, in the
event that (I) the Executive exercises all or any portion of the
Option on or after the date the Company serves written notice of its
intent to terminate her for Cause but prior to the Board's
(excluding the Executive) approval of such Cause termination (as
contemplated under the third paragraph of Section 11(b)) or (II) the
Executive exercises all or any portion the Option on or after the
date the Executive terminates her employment other than for Good
Reason but within 30 days of the discovery by the Board of the Cause
event, then the Company shall be entitled to recover from the
Executive, and the Executive shall pay over to the Company, an
amount equal to the after-tax gain realized as a result of such
exercise (whether at the time of exercise or thereafter).
iii) EXERCISABILITY. The Option shall, in all events, expire,
if not exercised, on the tenth (10th) anniversary of the Grant Date.
In the event of the Executive's termination of employment with the
Company or any Subsidiary (as defined in the 2000 Stock Incentive
Plan) for any reason (other than a termination by the Company
without Cause or by the Executive for Good Reason), the Option shall
remain exercisable until the earlier of (I) the expiration of the
Option term; or (II) the shortest of (x) the first anniversary of
the Executive's date of termination, (y) the customary period
currently provided to other senior-level executives or (z) such
period as may be required in order that any portion of the Option
that might otherwise qualify as an ISO should continue to be so
qualified. In the event of the Executive's termination of employment
with the Company or any Subsidiary (as defined in the 2000 Stock
Incentive Plan) by the Company without Cause or by the Executive for
Good Reason, the Option shall remain exercisable until the earliest
of (I) the expiration of the Option term; (II) the first anniversary
of the Executive's date of termination; or (III) such period as may
be required in order that any portion of the Option that might
otherwise qualify as an ISO should continue to be so qualified.
iv) RELOAD FEATURE. As an inducement to encourage the
Executive to exercise the Option and to acquire and hold shares of
Common Stock, the Option shall contain a reload feature (the "Reload
Feature"). Under the Reload Feature, if (I) the Executive exercises
all or any portion of the Option (x) at least six (6) months prior
to the expiration of the Option, (y) while employed by the Company,
and (z) prior to the expiration date of the 2000 Stock Incentive
Plan and (II) the Executive pays the exercise price for the portion
of the Option so exercised or pays applicable withholding taxes by
using Common Stock owned by the Executive for at least six (6)
months (or such other period necessary to avoid a charge, for
accounting purposes, against the Company's earnings as reported in
the Company's financial statements) prior to the date of exercise,
the Executive shall be granted a new stock option (the "Reload
Option") on the date all or any portion of the Option is exercised
to purchase the number of shares of Common Stock equal to the number
of shares of Common Stock exchanged by
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the Executive to exercise the Option or to pay withholding taxes
thereon. The Reload Option shall be exercisable on the same terms
and conditions as apply to the Option except that (I) the exercise
price shall be the fair market value (as defined in the 2000 Stock
Incentive Plan) of the Common Stock on the date the Reload Option is
granted and (II) the expiration of the Reload Option shall be the
date of expiration of the Option. The Executive shall not be
permitted to reload the Reload Option unless otherwise permitted by
the Committee in its sole discretion. In no event shall the
inclusion of the Reload Feature in the Option be construed to imply
or require that future grants of stock options to the Executive
shall contain a similar feature nor shall the grant of a Reload
Option in any year be construed to imply or require the exclusion of
the Executive from consideration of equity incentive award grants.
v) FORM OF OPTIONS. The Option shall be granted pursuant to
and, to the extent not contrary to the terms of this Agreement,
shall be subject to all of the terms and conditions imposed upon
stock options granted under the 2000 Stock Incentive Plan.
b) DEFERRED STOCK UNIT GRANT. i) The Company shall recommend to the
Compensation Committee that, as of the Grant Date, the Company grant to the
Executive 25,000 deferred stock units ("DSUs").
ii) VESTING. The DSUs shall vest and become exercisable in
installments as provided herein, which shall be cumulative. Subject to the
terms in Section 5(b) and Sections 11(a)(vi), (c)(iv) and (e)(vi),
one-third of the DSUs shall vest and become exercisable on each
anniversary of the Grant Date so that all of the DSUs become fully vested
on the third anniversary of the Grant Date, provided the Executive remains
continuously employed by the Company or, to the extent provided in the
plan, by any subsidiary or other affiliate of the Company, at all times
through the applicable vesting date. The DSUs shall be forfeited in their
entirety (whether vested or unvested) in the event the Executive's
employment with the Company or, to the extent provided in the plan, by any
subsidiary or other affiliate of the Company, is terminated by the Company
for Cause.
iii) FORM OF DSUS. The DSUs shall be granted pursuant to and, to the
extent not contrary to the terms of this Agreement, shall be subject to
all of the terms and conditions imposed upon deferred stock units granted
under the Company's Deferred Compensation Plan.
c) RESTRICTED STOCK. i) The Company shall recommend to the Compensation
Committee that, effective as of the Grant Date, the Company grant to the
Executive 62,500 restricted shares of Common Stock (the "Restricted Stock").
Shares of Common Stock to be issued pursuant to this Section 5(c) shall be made
available only from issued shares of Common Stock reacquired by the Company and
held in treasury.
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ii) VESTING. Subject to the terms in Section 5(c) and Sections
11(a)(vi), (c)(iv), and (e)(vi), the restrictions with respect to
one-third of the shares of Restricted Stock shall lapse on each of the
six-month, twelve-month and eighteen-month anniversaries of the Grant
Date, provided the Executive remains continuously employed by the Company
at all times through the applicable vesting date.
iii) FORM OF RESTRICTED STOCK. The Restricted Stock shall have, to
the extent not contrary to the terms of this Agreement, the same terms and
conditions imposed upon Restricted Stock granted under the 2000 Stock
Incentive Plan.
6. INCENTIVE AWARDS.
a) Except with respect to the 2001 calendar year, the Executive shall
participate in the Company's stockholder-approved annual incentive plan for
senior-level executives as in effect from time to time, subject to the
performance standards set by the Compensation Committee. Payment of any annual
incentive award shall be made at the same time that such awards are paid or
payable to other senior-level executives of the Company. The Executive hereby
expressly acknowledges that she shall not be entitled to any annual incentive
target bonus or any other bonus (other than the Sign-On Bonus) for the period
commencing on the Effective Date and ending on December 31, 2001, unless the
Compensation Committee determines otherwise in its sole discretion. Thereafter,
the Executive shall have the opportunity to earn a minimum annual target bonus
of at least 100% of her annual base salary contingent upon the attainment of one
or more pre-established performance goals established by the Board or the
Compensation Committee, subject to the terms and conditions of the 2000 Stock
Incentive Plan or another stockholder-approved plan of the Company.
b) In addition to the Option granted under Section 5(a) hereof, the
Executive shall be eligible to receive grants under the Company's long-term
incentive plan as in effect from time to time; provided, however, that the size,
type and other terms and conditions of any such grant to the Executive shall be
determined by the Compensation Committee in its sole discretion.
c) The Company agrees that the Compensation Committee, or such other
committee succeeding to such committee's responsibilities with respect to
executive compensation, may make such equitable adjustments to any performance
targets contained in any awards under the Company's current incentive
compensation plans, or any additional or successor plan in which the Executive
is a participant, as the Compensation Committee determines may be appropriate to
eliminate any negative effects from any transactions relating to a Change in
Control (such as costs or expenses associated with the transaction or any
related transaction, including any reorganizations, divestitures,
recapitalizations or borrowings, or changes in targets or measures to reflect
the disruption of the business, etc.), in order to preserve reward opportunities
and performance objectives.
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d) The Executive shall not be subject to the Company's stock ownership
guidelines.
7. BENEFITS, FRINGES AND PERQUISITES.
a) The Executive shall be entitled to participate in all employee pension
and welfare benefit, fringe benefit and perquisite plans and programs made
available to the Company's senior-level executives as in effect from time to
time, subject to the terms and conditions of the applicable plan and program,
including satisfaction of any eligibility requirements.
b) Without limiting the generality of Section 7(a), the Company shall pay
for or reimburse the Executive for the reasonable expenses incurred by the
Executive in connection with obtaining professional tax and financial planning
advice, up to a maximum of $15,000 for each 12-month period during the
Employment Term.
8. VACATION.
The Executive shall be entitled to vacation in accordance with the
Company's vacation policy applicable to its senior-level executives. Vacations
shall be arranged in order that they not materially interfere with the normal
functioning of the Company's business activities or the performance of the
Executive's duties hereunder.
9. BUSINESS EXPENSES.
The Company shall reimburse the Executive for any ordinary, necessary and
reasonable business expenses that the Executive incurs in connection with the
performance of her duties under this Agreement, including all reasonable
expenses of travel and living expenses while away from home or business and in
the service of the Company, in accordance with the Company's policy regarding
the reimbursement of business expenses for its chief executive officer.
10. RELOCATION; MOVING EXPENSES.
a) The Executive shall relocate to the vicinity of Company's current
headquarters (or such other location where the Company is engaged in significant
business activities agreed to in writing by the Company) within six (6) months
of the Effective Date (the "Relocation Period"). The Company agrees to pay for
or reimburse the Executive for the following expenses and costs actually
incurred by the Executive during the Relocation Period, except that the costs
and expenses described in clause (i) shall be paid or reimbursed when incurred,
whether or not during the Relocation Period, provided such costs or expenses are
incurred during the Term: (i) all reasonable expenses incurred by Executive in
moving any items of personal property owned by the Executive from Delaware to
the Company's current headquarters (or such other location where the Company is
engaged in significant business activities agreed to in writing by the
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Company); (ii) the reasonable cost of a reasonable number of house hunting trips
for the Executive; and (iii) the reasonable cost of up to three (3) one-person
round trip airfare trips per month (first class airfare) between Delaware and
the Company's current headquarters (or such other location where the Company is
engaged in significant business activities agreed to in writing by the Company)
which may be used by the Executive until the earlier of (x) the expiration of
the Relocation Period or (y) the date the Executive relocates to the Company's
current headquarters (or such other location where the Company is engaged in
significant business activities agreed to in writing by the Company). In
addition, during the period prior to her relocation (but in no event for more
than six (6) months after the Effective Date), the Company shall provide
suitable temporary housing and utility expenses for the Executive's use when she
is at the Company's current headquarters (or such other location where the
Company is engaged in significant business activities agreed to in writing by
the Company).
b) During the Term, the Company shall also reimburse Executive for the
following reasonable costs:
i) All reasonable transaction costs associated with the Executive's
purchasing her new residence in the area of the Company's current
headquarters (or such other location where the Company is engaged in
significant business activities agreed to in writing by the Company),
including closing costs, inspections, title insurance, reasonable legal
expenses (other than for any litigation or other dispute) and statutory
expenses; and
ii) All reasonable transaction costs associated with the Executive's
selling her current principal residence, including standard brokerage
commissions, closing costs, legal expenses (other than for any litigation
or other dispute) and statutory fees, but not any costs of repairing,
changing or decorating the residence prior to, or as a condition of,
selling or any costs to pay off or bond any liens or judgments. In
addition, subject to the conditions specified in this Section 10(b), the
Company will guarantee the sale of the Executive's current principal
residence at a price equal to the Appraised Value (as defined below) of
such residence. The Executive shall use her best efforts to sell such
residence for a price equal to or greater than the Appraised Value. If,
notwithstanding such efforts, the Executive concludes in good faith that
any offer therefor that is less than the Appraised Value is a reasonable
offer, she may accept such offer, provided that if the Appraised Value is
$500,000 or less, such offer is equals at least 80% of the Appraised Value
and if the Appraised Value is more than $500,000, such offer equals at
least 90% of the Appraised Value, and the Company will pay the Executive
the difference between the sale price of the home and the Appraised Value.
If, notwithstanding such efforts, the Executive does not sell the home
within one (1) year following the Effective Date, the Company will
purchase the home for the Appraised Value provided the Executive delivers
to the Company the title to such property free and clear of any and all
liens, judgments or other encumbrances.
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For purposes of this Agreement, the "Appraised Value" shall be the
average of the appraised values determined by two independent real estate
appraisal companies mutually acceptable to both the Company and the
Executive provided that the higher appraisal is not more than 5% higher
than the lower appraisal. If the difference between the two appraisals is
more than 5%, then the two mutually acceptable independent real estate
appraisal companies shall appoint a third independent real estate
appraisal company, and the average of the three appraisals shall be the
Appraised Value. All expenses of the appraisers shall be paid by the
Company.
c) The Company shall gross up for tax purposes any deemed income arising
pursuant to the payment or benefits provided under this Section 10, including
this Section 10(c), so that the economic benefit is the same to the Executive as
if such payment or benefits were provided on a non-taxable basis to the
Executive. All amounts payable under this Section 10 shall be subject to the
Executive's presentment to the Company of appropriate documentation.
11. TERMINATION OF EMPLOYMENT.
a) DEATH OR DISABILITY. The Executive's employment shall terminate upon
the Executive's death, and Company may terminate the Executive's employment due
to Disability. If, during the Term, the Executive's employment is terminated due
to death or Disability, the Executive (or Executive's estate or legal
representative, as the case may be) shall, subject to Section 20, be entitled to
receive:
i) Executive's base salary through the date of such termination of
employment at the rate in effect at the time thereof;
ii) an amount, payable at the same time that annual incentive awards
for the year in which the Executive's employment so terminates are paid to
senior-level executives of the Company, equal to the product of the
Executive's annual incentive award target for such year and a fraction,
the numerator of which is the number of days in such year through the date
of such termination of employment, and the denominator of which is 365;
provided, however, that no such amount shall be paid to the Executive (or
to Executive's estate or legal representative, as the case may be) if
annual incentive awards for such year are not paid to senior-level
executives of the Company generally;
iii) reimbursement for expenses incurred by the Executive in
accordance with the Company's policy but not reimbursed prior to the date
of such termination of employment;
iv) any vested deferred base salary and annual incentive awards
(including interest or other credits on such deferred amounts); and
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v) any other compensation or benefits that may be owed or provided
to the Executive in accordance with the terms and conditions of any
applicable plans and programs of the Company (the sum of amounts described
in clauses (i), (iii), (iv) and (v) shall be referred to in this Agreement
as the "Accrued Obligations").
vi) any vesting or service requirements with respect to any employee
stock options, restricted stock or deferred stock units previously granted
to the Executive and then outstanding shall be deemed satisfied to the
extent such requirements would have been satisfied had the Executive's
employment continued until the end of the 12-month period commencing on
the Executive's date of death or termination for Disability, as
applicable.
For purposes of this Agreement, "Disability" shall mean the Executive's
inability, by reason of illness or other physical or mental disability,
notwithstanding reasonable accommodation by the Company which does not have an
undue hardship on the Company, to perform the principal duties required by the
position held by the Executive at the inception of such illness or disability,
for any consecutive 180-day period. A determination of Disability shall be
subject to the certification of a qualified medical doctor agreed to by the
Company and the Executive or, in the Executive's incapacity to designate a
doctor, the Executive's legal representative. If the Company and the Executive
cannot agree on the designation of a doctor, then each party shall nominate a
qualified medical doctor, the two doctors shall select a third doctor, and the
third doctor shall make the determination as to Disability. The Company shall
pay the costs of any doctor(s) selected pursuant to this Section.
b) FOR CAUSE. The Company may terminate the Executive's employment for
Cause if the Board determines that Cause exists and serves written notice of
such termination to the Executive. If, during the Term, the Company terminates
the Executive's employment for Cause, all of the Executive's annual incentive
awards, long-term incentive awards, stock options and other stock or long-term
incentive grants whether or not then vested or exercisable (except to the extent
provided in Section 11(b)(ii)) shall be canceled as of the date of the Board's
written notice of termination (the "Cancelled Incentives"), and the Executive
shall, subject to Section 20, be entitled to receive:
i) the Accrued Obligations (other than the Cancelled Incentives);
and
ii) any vested deferred base salary and vested annual incentive
awards (including interest or other credits on such deferred amounts but
not including unvested bonuses or amounts payable for the year in which
the Board's written notice of termination for Cause is made, or unvested
bonuses or amounts payable after the Board's written notice of termination
for Cause is made).
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The Executive shall be entitled to receive no other compensation or
benefits, whether pursuant to this Agreement or otherwise, except as and to the
extent required by law.
For purposes of this Agreement, "Cause" shall mean one or more of the
following, provided, however, that (y) the Company provides written notice to
the Executive of its intent to so terminate her within 90 days after the
discovery by the Board of the Cause event, and (z) such termination has been
approved by the vote of two-thirds of the entire Board (excluding the Executive)
at or following a meeting at which the Executive and her counsel had the right
to appear and address such meeting after receiving at least 10 business days
written notice of the meeting and reasonable detail of the facts and
circumstances claimed to provide a basis for such termination:
(I) the material violation by the Executive of any of the terms and
conditions of this Agreement or any other written agreement between the
Executive and the Company (after 30 days following written notice from the
Board specifying such material violation and the Executive's failure to
cure or remedy such material violation within such 30-day period);
(II) the Executive's inattention to or failure to perform the
Executive's assigned duties and responsibilities competently, or her
failure to follow the legal written direction of the Board (after 30 days
following written notice from the Board specifying such failure, and the
Executive's failure to cure or remedy such failure within such 30-day
period) in either case other than as a result of a Disability;
(III) engaging in activities or conduct injurious to the reputation
of the Company or its affiliates including engaging in immoral acts which
become public information or repeatedly conveying to one person, or
conveying to an assembled public group, negative information concerning
the Company or its affiliates;
(IV) commission of an act of willful misrepresentation, fraud or
dishonesty (other than good faith expense account disputes), including
misappropriation of funds or any property of the Company;
(V) any willful misconduct by the Executive with regard to the
Company that has, or was intended to have, a material adverse impact on
the Company or its affiliates; or
(VI) the Executive's conviction of, or pleading nolo contendere or
guilty to, a felony (other than (A) a traffic infraction or (B) solely
resulting from vicarious liability solely by virtue of her position with
the Company provided that the Executive did not have actual knowledge that
the actions or omissions creating the liability was in violation of the
law and the Executive relied in good faith on the advice of counsel with
regard to the legality of such action or inaction
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(or the advice of other specifically qualified professionals as to the
appropriate or proper action or inaction to take with regard to matters
which are not matters of legal interpretation)).
c) WITHOUT CAUSE/FOR GOOD REASON. The Company may terminate the
Executive's employment without Cause and the Executive may terminate her
employment for Good Reason. The Company's written notice to the Executive that
the Term shall not be extended as provided in Sections 2(b) or (c) hereof shall
constitute a termination of the Executive's employment without Cause. If, during
the Term, the Company terminates the Executive's employment without Cause, other
than due to Disability, or the Executive terminates her employment for Good
Reason, then in lieu of any amount otherwise payable under this Agreement, or as
damages for termination of Executive's employment without Cause, the Executive
shall, subject to Section 20, be entitled to receive:
i) Accrued Obligations;
ii) A cash severance payment (reduced by any applicable payroll or
other taxes required to be withheld) equal to the product of three (3)
times the sum of the Executive's annual salary for the current year plus
her target annual incentive payment for the current year (provided that if
the notice of termination is given prior to the determination of the
Executive's salary or target annual incentive payment for the year in
which the notice of termination is given, then the amounts shall be the
annual salary for the prior year and the greater of the target annual
incentive payment for the prior year or the actual annual incentive
payment earned by the Executive for the prior year), payable in three
equal installments on the six-month, eighteen-month and thirty-month
anniversaries of the date of the Executive's termination of employment.
The current year shall be (A) for purposes of determining annual salary,
the year then generally used by the Company for setting salaries for
senior-level executives, and (B) for purposes of determining target annual
incentive payment, the year then generally used by the Company for setting
target annual incentive payments for senior-level executives, in which the
Board gives the Executive written notice of termination, and the prior
year shall be the 12-month period immediately preceding the current year.
iii) During the 36 months following the notice of termination (the
"Continuation Period"), the Company shall continue to keep in full force
and effect all programs of medical, dental, vision, accident, disability,
life insurance, including optional term life insurance, and other similar
health or welfare programs with respect to the Executive and her
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such programs shall have been in effect
with respect to the Executive immediately prior to the notice of
termination, and the Company and the Executive shall share the costs of
the continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the notice of termination or, if
the terms of such programs do not permit continued participation by the
Executive (or if the
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Company otherwise determines it advisable to amend, modify or discontinue
such programs for employees generally), the Company shall otherwise
provide benefits substantially similar to and no less favorable to the
Executive in terms of cost or benefits than she was entitled to receive at
the end of the period of coverage, for the duration of the Continuation
Period. All benefits which the Company is required by this Section
11(c)(iii) to provide, which will not be provided by the Company's
programs described herein, shall be provided through the purchase of
insurance unless the Executive is uninsurable. If the Executive is
uninsurable, the Company will provide the benefits out of its general
assets.
In the event the Executive obtains other employment during the
Continuation Period which provides health or welfare benefits of the type
described in this Section 11(c)(iii) hereof ("Other Coverage"), then
Executive shall notify the Company promptly of such other employment and
Other Coverage, and the Company shall thereafter not provide the Executive
and her dependents the benefits described in this Section 11(c)(iii)
hereof to the extent that such benefits are provided under the Other
Coverage. Under such circumstances, the Executive shall make all claims
first under the Other Coverage and then, only to the extent not paid or
reimbursed by the Other Coverage, under the plans and programs described
in this Section 11(c)(iii) hereof, provided, however, that if the
Executive is eligible for health plan benefits as part of such Other
Coverage, the Company shall no longer be obligated to provide any
continuing health plan benefits.
iv) Any vesting or service requirements with respect to any employee
stock options, restricted stock or deferred stock units previously granted
to the Executive and then outstanding shall be deemed fully satisfied.
The Executive shall be deemed to have terminated her employment for "Good
Reason" if she terminates employment during the Term within 90 days of the
occurrence of any of the following events without her express written consent
(which she may grant or deny in her sole discretion):
(I) the material violation by the Company of any of the terms and
conditions of this Agreement or any other written agreement between the
Executive and the Company (after 30 days following written notice from the
Executive specifying such material violation and the Company's failure to
cure or remedy such material violation within such 30-day period);
(II) the Executive's demotion, or the assignment to the Executive
(other than temporarily when the Executive is Disabled) of duties
materially inconsistent with the Executive's then position, authorities,
duties, responsibilities, and status (including offices, titles, and
reporting requirements) (after 30 days following written notice from the
Executive specifying such demotion or assignment and the Company's failure
to cure or remedy such demotion or assignment within such 30-day period);
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(III) a reduction in the Executive's base salary below its highest
prior level or of the Executive's minimum annual target bonus percentage
below 100% of her annual base salary, or any disproportionate reduction in
the availability to the Executive of plans, programs or benefits of the
Company as compared to those generally available to other senior
executives thereof (after 30 days following written notice from the
Executive specifying such reduction and the Company's failure to cure or
remedy such reduction within such 30-day period);
(IV) during the 24-month period following the date of a Change in
Control, relocation of the Executive (excluding reasonable travel on the
Company's business to an extent substantially consistent with the
Executive's business obligations) to a location that is at least fifty
(50) miles from the Company's headquarters immediately prior to the Change
in Control or the Executive's principal business location immediately
prior to the Change in Control;
(V) the failure of the Company to obtain and deliver to the
Executive a satisfactory written agreement from any successor thereto to
assume and agree to perform this Agreement; or
(VI) the failure to elect or re-elect the Executive to the Board.
Notwithstanding the foregoing, any failure to extend the Term pursuant to
Sections 2(b) or (c) shall not constitute Good Reason, provided, however, that
the foregoing is not intended to conflict with the second sentence of Section
11(c) hereof.
d) VOLUNTARY TERMINATION. If, during the Term, the Executive terminates
her employment other than for Good Reason or due to Retirement, the Executive
shall, subject to Section 20, be entitled to receive:
i) the Accrued Obligations (other than the Cancelled Incentives);
and
ii) no other compensation or benefits except as and to the extent
required by law.
e) CHANGE IN CONTROL. In the event (x) the Company terminates the
Executive's employment without Cause or the Executive terminates her employment
for Good Reason within two years following a Change in Control or (y) the
Executive voluntarily delivers a Notice of Termination (as defined in Section
11(g)) terminating her employment for any reason during the 30-day period
commencing on the 6-month anniversary of the date of the Change in Control, then
the Executive shall, subject to Section 20, be entitled to the benefits set
forth in this Section 11(e) in lieu of any other termination, separation,
severance or similar benefits under this Section 11:
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i) On the Termination Date (as defined in Section 11(g)), the
Company shall pay the Executive (reduced by any applicable payroll or
other taxes required to be withheld) a lump sum severance payment, in
cash, equal to the product of three (3) times the sum of the Executive's
annual salary for the current year plus her target annual incentive
payment for the current year (provided that if the Notice of Termination
is given prior to the determination of the Executive's salary or target
annual incentive payment for the year in which the Termination Date
occurs, the amounts shall be the annual salary for the prior year and the
greater of the target annual incentive payment for the prior year or the
actual annual incentive payment earned by the Executive for the prior
year). The current year shall be (A) for purposes of determining annual
salary, the year then generally used by the Company for setting salaries
for senior-level executives, and (B) for purposes of determining target
annual incentive payment, the year then generally used by the Company for
setting target annual incentive payments for senior-level executives, in
which the Termination Date occurs, and the prior year shall be the
12-month period immediately preceding the current year.
ii) Any compensation that has been earned by the Executive but is
unpaid as of the Termination Date, including any compensation that has
been earned but deferred pursuant to the Company's Deferred Compensation
Plan or otherwise, shall be paid in full to the Executive on the
Termination Date.
iii) During the 36 months following the Termination Date (the "CIC
Continuation Period"), the Company shall continue to keep in full force
and effect all programs of medical, dental, vision, accident, disability,
life insurance, including optional term life insurance, and other similar
health or welfare programs with respect to the Executive and her
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such programs shall have been in effect
with respect to the Executive immediately prior to the Termination Date
(or, if more favorable to the Executive, immediately prior to the Change
in Control), and the Company and the Executive shall share the costs of
the continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Termination Date (or, if more
favorable to the Executive, immediately prior to the Change in Control)
or, if the terms of such programs do not permit continued participation by
the Executive (or if the Company otherwise determines it advisable to
amend, modify or discontinue such programs for employees generally), the
Company shall otherwise provide benefits substantially similar to and no
less favorable to the Executive in terms of cost or benefits than she was
entitled to receive at the end of the period of coverage, for the duration
of the CIC Continuation Period. All benefits which the Company is required
by this Section 11(e)(iii) to provide, which will not be provided by the
Company's programs described herein, shall be provided through the
purchase of insurance unless the Executive is uninsurable. If the
Executive is uninsurable, the Company will provide the benefits out of its
general assets.
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In the event the Executive obtains other employment during the CIC
Continuation Period which provides health or welfare benefits of the type
described in Section 11(e)(iii) hereof ("Other CIC Coverage"), then
Executive shall notify the Company promptly of such other employment and
Other CIC Coverage and the Company shall thereafter not provide the
Executive and her dependents the benefits described in Section 11(e)(iii)
hereof to the extent that such benefits are provided under the Other CIC
Coverage. Under such circumstances, the Executive shall make all claims
first under the Other CIC Coverage and then, only to the extent not paid
or reimbursed by the Other CIC Coverage, under the plans and programs
described in Section 11(e)(iii) hereof, provided, however, that if the
Executive is eligible for health plan benefits as part of such Other
Coverage, the Company shall no longer be obligated to provide any
continuing health plan benefits.
iv) The Executive shall be deemed to be completely vested under the
Company's 401(k) Plan, Deferred Compensation Plan or other similar or
successor plans which are in effect as of the date of the Change in
Control (collectively, the "Plans"), regardless of the Executive's actual
vesting service credit thereunder. Any part of the foregoing retirement
benefits which are otherwise required to be paid by a tax-qualified Plan
but which cannot be paid through such Plan by reason of the laws and
regulations applicable to such Plan, shall be paid by one or more
supplemental non-qualified Plans or by the Company. The payments
calculated hereunder which are not actually paid by a Plan shall be paid
within 30 days following the Date of Termination in a single lump sum cash
payment (of equivalent actuarial value to the payment calculated hereunder
using the same actuarial assumptions as are used in calculating benefits
under the Plan but using the discount rate that would be used by the
Company on the Date of Termination to determine the actuarial present
value of projected benefit obligations).
v) During the CIC Continuation Period, unless the Executive shall
reach normal retirement age during the Continuation Period, the Executive
may request in writing and the Company shall at its expense engage within
a reasonable time following such written request and a reasonable cost an
outplacement counseling service selected by the Executive (subject to the
Company's consent which shall not be unreasonably withheld) to assist the
Executive in obtaining employment.
vi) Any vesting or service requirements with respect to any employee
stock options, restricted stock or deferred stock units previously granted
to the Executive and then outstanding shall be deemed fully satisfied.
f) INELIGIBILITY FOR SEVERANCE PLAN PAYMENTS. Anything in this Agreement
to the contrary notwithstanding, Executive shall not be entitled to any payment
under any of the Company's severance plans, programs or arrangements.
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g) NOTICE OF TERMINATION. Any termination of the Executive's employment
following a Change in Control pursuant to Section 11(e) shall be communicated by
written "Notice of Termination" by the party affecting the termination to the
other party hereto. Any "Notice of Termination" shall set forth (i) the
effective date of termination, which shall not be less than 15 or more than 30
days after the date the Notice of Termination is delivered (the "Termination
Date"); (ii) the specific provision in this Agreement relied upon; and (iii) in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination and the entitlement, or lack of entitlement, to the benefits
set forth in this Agreement.
12. EXCISE TAX.
In the event that the Executive becomes entitled to payments and/or
benefits which would constitute "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, the provisions of Appendix B hereto shall apply.
13. PAYMENT OF CERTAIN COSTS.
a) Except as otherwise provided in Section 28, if a dispute arises
regarding a termination of the Executive or the interpretation or enforcement of
this Agreement (a "Claim"), the Company shall pay for or reimburse the
Executive, upon presentment of proper documentation, all reasonable legal fees
and expenses incurred by the Executive and all arbitration costs in contesting
any such termination or obtaining, enforcing or defending all or part of any
right or benefit provided for in this Agreement, unless prohibited by law;
provided, however, the Company shall not pay the Executive such fees and
expenses as to any issue if (or, to the extent already paid by the Company, the
Company shall be reimbursed by the Executive if) (i) the Company substantially
prevails as to such issue, (ii) the Executive's Claim is in bad faith or
frivolous, as determined by the arbitrator or court, as applicable, or (iii) to
the extent that the arbitrator or court, as applicable, determines that such
legal fees and expenses are unreasonable or inappropriate. In no event, however,
shall the Executive at any time be liable to pay or reimburse the Company for
any of its legal fees or expenses or any costs of arbitration.
b) The Company shall reimburse the Executive for all reasonable legal fees
and expenses for the negotiation and execution of this Agreement, up to a
maximum of $20,000, subject to the Company's receipt of proper documentation
thereof.
14. MITIGATION.
The Executive is not required to seek other employment or otherwise
mitigate the amount of any payments to be made or benefits to be provided by the
Company pursuant to this Agreement, and employment (including self-employment)
by the Executive will not reduce or otherwise affect any amounts or benefits due
the Executive pursuant to this Agreement, except as otherwise provided in
Sections 4, 11(c)(iii) and 11(e)(iii).
-17-
15. COMPANY POLICIES.
The Executive shall strictly follow and adhere to all written policies of
the Company which are not inconsistent with this Agreement or applicable law
including securities laws compliance (including use or disclosure of material
nonpublic information, restrictions on sales of Company stock, and reporting
requirements), conflicts of interest (including doing business with the Company
or its affiliates without the prior approval of the Board), and employee
harassment.
16. INDEMNIFICATION.
The Company hereby covenants and agrees to indemnify and defend the
Executive and hold her harmless both during the Term and thereafter to the
fullest extent permitted by law and under the By-laws of the Company and the
Company's Certificate of Incorporation against and in respect to any and all
actions, suits, proceedings, claims, demands, judgments, settlements, costs,
expenses (including reasonable attorneys' and accountants' fees and
disbursements), losses, and damages resulting from the Executive's good faith
performance of her duties and obligations hereunder. The Company will also cover
the Executive under directors' and officers' liability insurance both during
and, while potential liability exists (for such reasonable period taking into
account the applicable statute of limitations but in no event for more than six
years), after the Executive's termination of employment in the same amount and
to the same extent as the Company covers its other senior-level executives, but
in no event at any lesser level or worse terms than those currently in effect as
of the Effective Date; provided, however, that the Company shall not be
obligated to maintain the same level or terms than those currently in effect as
of the Effective Date if the cost of such insurance would be more than 130% of
the cost of the insurance currently in effect as of the Effective Date.
17. CONFIDENTIALITY.
a) The Executive will not at any time (whether during or after Executive's
employment with the Company) disclose or use for Executive's own benefit or
purposes, or for the benefit or purpose of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise, any trade secrets, information, data, or other confidential
information relating to customers, employees, job applicants, services,
development programs, prices, costs, marketing, trading, investment, sales
activities, promotion, processes, systems, credit and financial data, financing
methods, plans, proprietary computer software, request for proposal documents,
or the business and affairs of the Company generally, or of any affiliate of the
Company; provided, however, that the foregoing shall not apply to information
which is generally known to the industry or the public other than as a result of
the Executive's breach of this covenant. The foregoing shall not prohibit (i)
compliance with legal process provided that the Executive gives the Company
prompt written notice thereof and cooperates with the Company (at the Company's
sole expense) in its efforts to obtain a protective order for the confidential
information or (ii) the Executive's use or disclosure of such confidential
information as may be necessary, in her reasonable good faith
-18-
judgment, to protect her legal rights. The Executive agrees that upon
termination of her employment with the Company for any reason, she will return
to the Company immediately all memoranda, books, papers, plans, information,
letters and other data, and all copies thereof or therefrom (whether in written,
printed or electronic form), in any way relating to the business of the Company
and its affiliates. This shall not limit the Executive from retaining her
personal phone directories and rolodexes as they exist as of the end of the Term
provided all confidential information contained therein is first purged.
b) The Executive acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of this Section
would be inadequate and, in recognition of this fact, the Executive agrees that,
in the event of such a breach or threatened breach, in addition to any remedies
at law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available.
18. COVENANT NOT TO COMPETE.
a) IN GENERAL. The Executive agrees that during Executive's employment
with the Company and for a period of one (1) year after the termination of such
employment for whatever reason, she shall not, anywhere in the world:
i) engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder (other than as a
stockholder of less than a 1% equity interest in any publicly held
company) or in any other corporate or representative capacity with any
other business, whether in corporate, proprietorship, or partnership form
or otherwise, where such business is engaged in any activity which
competes with the business of the Company or its affiliates as conducted
on the date the Executive's employment terminated or during the 180-day
period prior thereto, or which will compete with any proposed business
activity of the Company in the planning stage on such date or during such
period; provided, however, that this Section 18(a)(i) shall not prohibit
the Executive from providing services to a consulting, accounting or
similar service firm provided that a majority of such firm's clients are
not competitors of the Company or its affiliates and provided further that
the Executive does not so provide services, directly or indirectly, for
any company or other business entity which at any time during such period
is a competitor of the Company or its affiliates;
ii) solicit business from, or perform services for, or induce others
to perform services for, any company or other business entity which at any
time during the one (1) year period immediately preceding the Executive's
termination of employment with the Company was a client of the Company or
its affiliates; or
iii) offer, or cause to be offered, employment with any business,
whether in corporate, proprietorship, or partnership form or otherwise,
either on a
-19-
full-time, part-time or consulting basis, to any person who was employed
by the Company or its affiliates or for whom the Company or its affiliates
performed outplacement services, in either case at any time during the one
(1) year period immediately preceding the date the Executive's termination
of employment with the Company.
For purposes of this Agreement, affiliates of the Company include
subsidiaries 50% or more owned by the Company and the Company's franchisees and
licensees.
b) CONSIDERATION. The consideration for the foregoing covenant not to
compete, the sufficiency of which is hereby acknowledged, is the Company's
agreement to employ the Executive and provide compensation and benefits pursuant
to this Agreement.
c) EQUITABLE RELIEF AND OTHER REMEDIES. The Executive acknowledges and
agrees that the Company's remedies at law for a breach or threatened breach of
any of the provisions of this Section would be inadequate and, in recognition of
this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
d) REFORMATION. If the foregoing covenant no to compete would otherwise be
determined invalid or unenforceable by a court of competent jurisdiction, such
court shall exercise its discretion in reforming the provisions of this Section
to the end that the Executive be subject to a covenant not to compete,
reasonable under the circumstances, enforceable by the Company.
19. NON-DISPARAGEMENT.
a) During the Term and thereafter, Executive shall not act to damage the
Company or its affiliates or the Company's or its affiliates' reputations or
disparage the Company or its affiliates or their respective past or present
officers, directors or employees (the "Protected Group"), provided that the
foregoing shall not apply to truthful statements made in compliance with legal
process or governmental inquiry or to defend the Executive's legal rights.
b) During the Term and thereafter, neither the Company nor any of its
affiliates, nor any then senior-level executive of the Company or any
affiliates, shall act to damage the Executive or the Executive's reputation or
disparage the Executive, provided the foregoing shall not apply to truthful
statements made in compliance with legal process, governmental inquiry or as
required by legal filing or disclosure requirements or to defend the legal
rights of any member of the Protected Group.
-20-
c) Each party acknowledges and agrees that the remedies of the other at
law for a breach or threatened breach of any of the provisions of this Section
would be inadequate and, in recognition of this fact, each party agrees that, in
the event of such a breach or threatened breach, in addition to any remedies at
law, the other party, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available.
20. RELEASE.
a) Any amounts payable and benefits or additional rights provided pursuant
to this Agreement beyond Accrued Obligations shall only be payable if the
Executive delivers to the Company a release of all claims of the Executive
(except with regard to claims for payments or benefits specifically payable or
providable hereunder which are not yet paid as of the effective date of the
release, claims under tax-qualified Plans, claims under COBRA, or claims
relating to any rights of indemnification by the Company) occurring up to the
release date with regard to the Protected Group in such form as reasonably
requested by the Company.
b) In the event that the Executive is required to provide the release
provided in Section 20(a), the Company shall simultaneously provide to the
Executive a release of all claims of the Company (except with regard to claims
arising as a result of acts or omissions of the Executive which would constitute
fraud or criminal activity) occurring up to the release date.
21. COMPANY POLICIES, PLANS AND PROGRAMS.
Whenever any rights under this Agreement depend on the terms of a policy,
plan or program established or maintained by the Company, any determination of
these rights shall be made on the basis of the policy, plan or program in effect
at the time as of which the determination is made. No reference in this
Agreement to any policy, plan or program established or maintained by the
Company shall preclude the Company from prospectively or retroactively changing
or amending or terminating that policy, plan or program or adopting a new
policy, plan or program in lieu of the then-existing policy, plan or program.
22. BINDING AGREEMENT; SUCCESSORS.
a) This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. For purposes of this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid.
-21-
b) This Agreement shall be binding up and shall inure to the benefit of
the Executive and the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, beneficiaries, devises and
legatees. If the Executive should die while any amounts are payable to her
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
beneficiary or other designee or, if there be no such designee, to the
Executive's estate.
23. NOTICES.
For the purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given (i) on the date of delivery if delivered by hand, (ii) on the date of
transmission, if delivered by confirmed facsimile, (iii) on the first business
day following the date of deposit if delivered by guaranteed overnight delivery
service, or (iv) on the fourth business day following the date delivered or
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxx X. Xxxxxxx
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a copy (not itself constituting notice) to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 00xx Xx., X.X.
Xxxxxxxxxx, XX 00000
Facsimile: 000 000-0000
If to the Company:
Spherion Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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24. GOVERNING LAW.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Florida, without regard
to principles of conflicts of laws.
25. ENTIRE AGREEMENT; AMENDMENT.
This Agreement contains the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the parties with respect to the subject matter hereof. No
provisions of this Agreement may be amended, modified, waived or discharged
unless such amendment, waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
26. COUNTERPARTS.
This Agreement may be executed in one or more counterparts (including by
facsimile) each of which shall be deemed to be an original but all of which will
constitute one and the same instrument.
27. NON-ASSIGNABILITY.
This Agreement is personal in nature and neither of the parties hereto
shall assign, or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 22. Without limiting the foregoing, the
Executive's right to receive payments hereunder shall not be assignable or
transferable, whether by pledge, creation of a security interest or otherwise,
other than a transfer by her will or trust or by the laws of descent or
distribution, and in the event of any attempted assignment or transfer contrary
to this paragraph the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
28. RESOLUTION OF DISPUTES.
a) Except as set forth in Section 28(b), the parties shall submit any
claim, demand, dispute, charge or cause of action (in any such case, a "Claim")
arising out of, in connection with, or relating to this Agreement (other than
any determination of Disability) to binding arbitration in conformance with the
J*A*M*S/ENDISPUTE Streamlined Arbitration Rules and Procedures or the
J*A*M*S/ENDISPUTE Comprehensive Arbitration Rules and Procedures, as applicable,
but expressly excluding Rule 28 of the J*A*M*S/ ENDISPUTE Streamlined Rules and
Rule 31 of the J*A*M*S/ENDISPUTE Comprehensive Rules, as the case may be. All
arbitration
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procedures shall be held in Fort Lauderdale, Florida and shall be subject to the
choice of law provisions set forth in Section 24 of this Agreement.
b) In the event of any dispute arising out of or relating to this
Agreement for which any party is seeking injunctive relief, specific performance
or other equitable relief, such matter may be resolved by litigation.
Accordingly, the parties shall submit such matter to the exclusive jurisdiction
of the United States District Court for the Southern District of Florida or, if
jurisdiction is not available therein, any other court located in Broward
County, Florida, and hereby waive any and all objections to such jurisdiction or
venue that they may have. Each party agrees that process may be served upon such
party in any manner authorized under the laws of the United States or Florida,
and waives any objections that such party may otherwise have to such process.
29. NO SETOFF.
Except as specifically provided herein, the Company shall have no right of
setoff or counterclaim in respect of any claim, debt or obligation against any
payment provided for in this Agreement.
30. NON-EXCLUSIVITY OF RIGHTS.
Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its subsidiaries or successors
and for which the Executive may qualify, nor shall anything herein limit or
reduce such rights as the Executive may have under any other agreements with the
Company or any of its subsidiaries or successors. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company or any of its subsidiaries shall be payable in
accordance with such plan or program, except as explicitly modified by this
Agreement.
31. WITHHOLDING.
The Company may withhold from any amounts payable under this Agreement
such federal, state and local taxes as are required to be withheld (with respect
to amounts payable hereunder or under any benefit plan or arrangement maintained
by the Company) pursuant to any applicable law or regulation.
32. INVALIDITY OF PROVISIONS.
In the event that any provision of this Agreement is adjudicated to be
invalid or unenforceable under applicable law in any jurisdiction, the validity
or enforceability of the remaining provisions thereof shall be unaffected as to
such jurisdiction and such adjudication shall not affect the validity or
enforceability of such provision in any other jurisdiction. To the extent that
any provision of this Agreement is adjudicated to be invalid or unenforceable
because it is overbroad, that provision shall not be void but
-24-
rather shall be limited to the extent required by applicable law and enforced as
so limited. The parties expressly acknowledge and agree that Sections 17, 18, 19
and 32 are reasonable in view of the parties' respective interests.
33. NON-WAIVER OF RIGHTS.
The failure by the Company or the Executive to enforce at any time any of
the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of the Company or the Executive thereafter to
enforce each and every provision in accordance with the terms of this Agreement.
34. REPRESENTATIONS AND WARRANTIES.
a) The Company represents and warrants that it has the full power and
authority necessary to execute and deliver this Agreement and to perform its
obligations hereunder, and that all necessary corporate action has been taken to
authorize the Company to take such actions. This Agreement has been duly
executed by an authorized representative of the Company and constitutes the
valid and legally binding obligation of the Company, enforceable in accordance
with its terms.
b) The Executive represents and warrants that this Agreement constitutes a
valid and legally binding obligation of the Executive, enforceable in accordance
with its terms and that she has the legal right to enter into this Agreement and
to perform all of the obligations on her part to be performed hereunder in
accordance with its terms and that she is not a party to any agreement or
understanding, written or oral, which could prevent her from entering into this
Agreement or performing all of her obligations hereunder. In the event of a
breach of such representation or warranty or if there is any other legal
impediment that prevents the Executive from entering into this Agreement or
performing all of her obligations hereunder, the Company shall have the right to
terminate this Agreement immediately and shall have no further obligation to the
Executive hereunder.
35. CONSTRUCTION.
No provision of this Agreement shall be interpreted or construed against
any party because that party or its legal representative drafted that provision.
The captions and headings of the Sections of this Agreement are for convenience
of reference only and are not to be considered in construing this Agreement.
Unless the context of this Agreement clearly requires otherwise: (a) references
to the plural include the singular, the singular the plural, and the part the
whole, (b) references to one gender include all genders, (c) "or" has the
inclusive meaning frequently identified with the phrase "and/or," (d)
"including" has the inclusive meaning frequently identified with the phrase
"including but not limited to" or "including without limitation," (e) references
to "hereunder," "herein" or "hereof" relate to this Agreement as a whole, and
(f) the terms "dollars" and
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"$" refer to United States dollars. Any accounting term used herein without
specific definition shall have the meaning ascribed thereto by U.S. generally
accepted accounting practices. Any reference herein to any statute, rule,
regulation or agreement, including this Agreement, shall be deemed to include
such statute, rule, regulation or agreement as it may be modified, varied,
amended or supplemented from time to time. Any reference herein to any person
shall be deemed to include the heirs, personal representatives, successors and
permitted assigns of such person, subject to Section 27.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY CERTIFYING THAT
THE EXECUTIVE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY
BEFORE EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT;
(C) HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY
QUESTIONS THE EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY
ANSWERS TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS THE EXECUTIVE'S RIGHTS AND
OBLIGATIONS UNDER THE AGREEMENT.
THIS AGREEMENT IN SECTION 28 CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
SPHERION CORPORATION
/s/ Xxxx X. Xxxxxxxx
--------------------
By: Xxxx X. Xxxxxxxx
Title: General Counsel, Vice President and Secretary
EXECUTIVE
/s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
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APPENDIX A
Change in Control
(a) A "Change in Control" of the Company shall be deemed to have occurred
if:
(i) the acquisition at any time by a "person" or "group" (as that term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (excluding, for this purpose, the Company or any
of its subsidiaries, any employee benefit plan of the Company or any of its
subsidiaries, an underwriter temporarily holding securities pursuant to such
securities, or a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company) of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly, of securities representing 25% or more of
the combined voting power in the election of directors of the then-outstanding
securities of the Company or any successor of the Company;
(ii) the termination of service as directors, for any reason other than
death, disability or retirement from the Board, during any period of two (2)
consecutive years or less, of individuals who at the beginning of such period
constituted a majority of the Board, unless the election of or nomination for
election of each new director during such period was approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of the period;
(iii) approval by the stockholders of the Company of liquidation of the
Company;
(iv) approval by the stockholders of the Company and consummation of any
sale or disposition, or series of related sales or dispositions, of 50% or more
of the assets or earning power of the Company; or
(v) approval by the stockholders of the Company and consummation of any
merger or consolidation or statutory share exchange to which the Company is a
party as a result of which the persons who were stockholders of the Company
immediately prior to the effective date of the merger or consolidation or
statutory share exchange shall have beneficial ownership of less than 50% of the
combined voting power in the election of directors of the surviving corporation
following the effective date of such merger or consolidation or statutory share
exchange.
(b) Notwithstanding anything herein, no acquisition of beneficial
ownership of securities of the Company, merger, sale of assets or other
transaction shall be deemed to constitute a Change in Control for purposes of
this Agreement if such transaction constitutes a "Management Approved
Transaction." For purposes of this Agreement, a "Management Approved
Transaction" shall be any transaction, which would otherwise result in a Change
in Control for purposes of this Agreement, in which the acquiring
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"person", "group" or other entity is either beneficially owned by, or comprised
of, in whole or in part, three or more members of the Company's executive
management, as such was constituted twelve months prior to such transaction, or
is majority owned by, or comprised of, any employee benefit plan of the Company.
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XXXXXXXX X
Golden Parachute Provisions
(a) In the event that any payment or benefit (within the meaning of
Section 280G(b)(2) of the Code), or distribution to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement (or any other plan, arrangement or agreement with
the Company, any person whose actions result in a change of ownership or
effective control covered by Section 280G(b)(2) of the Code or any person
affiliated with the Company or such person) or otherwise in connection with, or
arising out of, her employment with the Company (a "Payment" or "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by the Executive with respect to such excise
tax (or any similar tax that may hereafter be imposed by any taxing authority)
(such excise tax, similar tax, interest and penalties collectively referred to
as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after (y)
payment by the Executive of all such taxes (including any interest or penalties
imposed with respect to such taxes and including any Excise Tax and any U.S.
federal, state, and local income or payroll tax imposed upon the Gross-Up
Payment), and (z) taking into account the amount of deductions disallowed for
federal, state or local income tax purposes because of the inclusion of the
Gross-Up Payment in the Executive's adjusted gross income (such amount to be
determined by multiplying the amount of such deductions by the highest
applicable marginal rate of federal, state or local taxation, respectively, for
the calendar year in which the Gross-Up Payment is to be made), the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments; provided, however, that the Executive shall not be entitled to
receive any additional payments relating to any interest or penalties
attributable to any action or omission by the Executive in bad faith.
(b) An initial determination shall be made by an accounting firm mutually
agreeable to the Company and the Executive and, if not agreed to within three
days after the Date of Termination, a national independent accounting firm
selected by the Executive (the "Accounting Firm"), as to whether a Gross-Up
Payment is required pursuant to this Appendix B and the amount of such Gross-Up
Payment. For purposes of determining whether any of the Payments and Gross-Up
Payments (collectively, the "Total Payments") will be subject to the Excise Tax
and the amount of such Excise Tax, (y) the Total Payments shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
all "parachute payments" in excess of the "base amount" (as defined under
Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax,
unless and except to the extent that, in the opinion of the Accounting Firm,
such Total Payments (in whole or in part) either do not constitute "parachute
payments," represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess of the "base
amount" or are otherwise not subject to the Excise Tax, and (z) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Accounting Firm in accordance with the principles of Section 280G of the Code.
For purposes of determining the amount
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of the Gross-Up Payment, the Executive shall be deemed to pay U.S. federal
income taxes at the highest marginal rate of U.S. federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive's residence for the calendar year in which the Payment is to be
made, net of the maximum reduction in U.S. federal income taxes which could be
obtained from deduction of such state and local taxes if paid in such year.
(c) To permit the Accounting Firm to make the initial determination, the
Company shall furnish the Accounting Firm with all information reasonably
required for such firm to complete such determination as soon as practicable
after the Date of Termination, but in no event more than 15 days thereafter. All
fees, costs and expenses (including the cost of retaining experts) of the
Accounting Firm shall be borne by the Company, and the Company shall pay such
fees, costs and expenses as they become due. The Accounting Firm shall provide
detailed supporting calculations, reasonably acceptable both to the Company and
the Executive within 30 days of the Date of Termination, if applicable, or such
other time as requested by the Company or by the Executive (provided the
Executive reasonably believes that any of the Payments may be subject to the
Excise Tax). The Gross-Up Payment, if any, as determined pursuant to paragraphs
(b) and (c) of this Appendix B shall be paid by the Company to the Executive
within five (5) business days of the receipt of the Accounting Firm's
determination. If the amount of such Gross-Up Payment or portion thereof cannot
be finally determined on or before the thirty-fifth day after the Date of
Termination, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Accounting Firm, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can reasonably be determined, but in no event later than the ninetieth
day after the occurrence of the event subjecting the Executive to the Excise
Tax. In the event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by
the Company to the Executive, payable on the fifth day after demand by the
Company (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code). If the Accounting Firm determines that no Excise Tax is payable by
the Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably satisfactory to the Executive that no
Excise Tax will be imposed with respect to any Payment or Payments. Any such
initial determination by the Accounting Firm of the Gross-Up Payment shall be
binding upon the Company and the Executive subject to paragraph (d) below.
(d) As a result of the uncertainty in the application of Sections 4999 and
280G of the Code, it is possible that a Gross-Up Payment (or a portion thereof)
will be paid which should not have been paid (an "Overpayment") or a Gross-Up
Payment (or a portion thereof) which should have been paid will not have been
paid (an "Underpayment"). An Underpayment shall be deemed to have occurred upon
a "Final Determination" (as hereinafter defined) that the tax liability of the
Executive (whether in respect of the then current taxable year of the Executive
or in respect of any prior taxable year of the Executive) will be increased by
reason of the imposition of the Excise Tax on
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a Payment or Payments with respect to which the Company has failed to make a
sufficient Gross-Up Payment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment). An
Overpayment shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed (or shall be
reduced) upon a Payment or Payments with respect to which the Executive had
previously received a Gross-Up Payment. A Final Determination shall be deemed to
have occurred when (i) in the case of an Overpayment, the Executive has received
from the applicable governmental taxing authority a refund of taxes or other
reduction in her tax liability imposed as a result of a Payment or, in the case
of an Underpayment, the Executive receives notice from a competent governmental
authority that her tax liability imposed as a result of a Payment will be
increased, and (ii) in the case of an Overpayment or an Underpayment, upon
either (y) the date a determination is made by, or an agreement is entered into
with, the applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority, or in the event that
a claim is brought before a court of competent jurisdiction, the date upon which
a final determination has been made by such court and either all appeals have
been taken and finally resolved or the time for all appeals has expired or (z)
the statute of limitations with respect to the Executive's applicable tax return
has expired. If an Underpayment occurs, the Executive shall promptly notify the
Company, and the Company shall promptly pay to the Executive an additional
Gross-Up Payment equal to the amount of the Underpayment plus any interest and
penalties imposed on the Underpayment (other than interest and penalties
attributable to any action or omission by the Executive in bad faith). If an
Overpayment occurs, the amount of the Overpayment shall be treated as a loan by
the Company to the Executive, and the Executive shall, within 10 business days
of the occurrence of such Overpayment, pay the Company the amount of the
Overpayment, with interest computed in the same manner as for an Underpayment.
Notwithstanding the foregoing, in the event of an Overpayment, any portion of
the Overpayment to be refunded to the Company shall not be required to be
refunded by the Executive until actual refund or credit of such portion has been
made to the Executive, and interest payable to the Company shall not exceed the
interest received or credited to the Executive by the U.S. federal, state or
local tax authority for the period it held such portion.
(e) Notwithstanding anything contained in this Agreement to the contrary,
in the event it is determined that an Excise Tax will be imposed on any Payment
or Payments, the Company shall pay to the applicable governmental taxing
authorities as Excise Tax withholding, the amount of the Excise Tax that the
Company has actually withheld from the Payment or Payments.
(f) The Company and the Executive shall promptly deliver to each other
copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Appendix B. In the event of any controversy with the Internal Revenue
Service (or other taxing authority) with regard to the Excise Tax, the Executive
shall permit the Company to control issues related to the Excise Tax (at the
Company's expense). In the event of any conference
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with any taxing authority as to the Excise Tax or associated income taxes, the
Executive shall permit the representative of the Company to accompany the
Executive, and the Executive and the Executive's representative shall cooperate
with the Company and its representative.
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