CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit 10.4
THIS AGREEMENT is entered into as of this 3rd day of August, 2007, by and between Gevity HR,
Inc., a Florida corporation (the “Company”), and Xxxxx Xxxxx (“Executive”).
WITNESSETH
WHEREAS, the Company considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of the Company and its
stockholders; and
WHEREAS, the Company recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may arise and that such possibility may result in the departure
or distraction of management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board (as defined in Section 1) has determined that it is in the best interests
of the Company and its stockholders to secure Executive’s continued services and to ensure
Executive’s continued dedication to his duties in the event of any threat or occurrence of a Change
in Control (as defined in Section 1) of the Company; and
WHEREAS, the Board has authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
respective meanings set forth below:
(a) “Board” means the Board of Directors of the Company.
(b) “Bonus Amount” means the greater of (i) the average annual incentive bonus earned by
Executive from the Company (or its affiliates) during the last three (3) completed fiscal years of
the Company immediately preceding Executive’s Date of Termination (annualized in the event
Executive was not employed by the Company (or its affiliates) for the whole of any such fiscal
year), and (ii) the Executive’s target annual incentive bonus for the year in which the Date of
Termination occurs.
(c) “Cause” means (i) the willful and continued failure of Executive to perform substantially
his duties with the Company (other than any such failure resulting from Executive’s incapacity due
to physical or mental illness or any such failure subsequent to Executive being delivered a Notice
of Termination without Cause by the Company or delivering a Notice of Termination for Good Reason
to the Company) after a written demand for substantial performance is delivered to Executive by the
Board which specifically identifies the manner in
which the Board believes that Executive has not substantially performed Executive’s duties, or
(ii) the willful engaging by Executive in illegal conduct or gross misconduct which is demonstrably
and materially injurious to the Company or its affiliates. For purpose of this paragraph (c), no
act or failure to act by Executive shall be considered “willful”, unless done or omitted to be done
by Executive in bad faith and without reasonable belief that Executive’s action or omission was in
the best interests of the Company or its affiliates. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board, based upon the advice of
counsel for the Company or upon the instructions of the Company’s chief executive officer or
another senior officer of the Company shall be conclusively presumed to be done, or omitted to be
done, by Executive in good faith and in the best interests of the Company. Cause shall not exist
unless and until the Company has delivered to Executive a copy of a resolution duly adopted by
three-quarters (3/4) of the entire Board (excluding Executive if Executive is a Board member) at a
meeting of the Board called and held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board an event set forth in clauses (i) or (ii) has occurred and
specifying the particulars thereof in detail.
(d) “Change in Control” means the occurrence of any one of the following events:
(i) individuals who, on the date hereof, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof, whose election or
nomination for election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to directors or as a result of any other
actual or threatened solicitation of proxies or consents by or on behalf of any person other
than the Board shall be deemed to be an Incumbent Director;
(ii) any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company’s then outstanding securities eligible to vote
for the election of the Board (the “Company Voting Securities”); provided, however, that the
event described in this paragraph (ii) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (A) by the Company or any Subsidiary, (B) by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, (C) by any underwriter temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying Transaction (as defined in paragraph
(iii)), or (E) unless otherwise
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approved by the Board, pursuant to any acquisition by Executive or any group of persons
including Executive (or any entity controlled by Executive or any group of persons including
Executive);
(iii) the consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its Subsidiaries that requires
the approval of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately following such
Business Combination: (A) more than 50% of the total voting power of (x) the corporation
resulting from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 25% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or
(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the Company’s assets.
Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of the Company Voting
Securities as a result of the acquisition of Company Voting Securities by the Company which reduces
the number of Company Voting Securities outstanding; provided that, if after such acquisition by
the Company such person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.
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(e) “Date of Termination” means (1) the effective date on which Executive’s employment by the
Company terminates as specified in a prior written notice by the Company or Executive, as the case
may be, to the other, delivered pursuant to Section 10 or (2) if Executive’s employment by the
Company terminates by reason of death, the date of death of Executive.
(f) “Disability” means termination of Executive’s employment by the Company due to Executive’s
absence from Executive’s duties with the Company on a full-time basis for at least one hundred
eighty (180) consecutive days as a result of Executive’s incapacity due to physical or mental
illness.
(g) “Good Reason” means, without Executive’s express written consent, the occurrence of any of
the following events after a Change in Control:
(i) (A) any change in the duties or responsibilities (including reporting
responsibilities) of Executive that is inconsistent in any material and adverse respect with
Executive’s position(s), duties, responsibilities or status with the Company immediately
prior to such Change in Control (including any material and adverse diminution of such
duties or responsibilities) or (B) a material and adverse change in Executive’s titles or
offices (including, if applicable, membership on the Board) with the Company as in effect
immediately prior to such Change in Control;
(ii) a reduction by the Company in Executive’s rate of annual base salary or annual
target bonus opportunity (including any material and adverse change in the formula for such
annual bonus target) as in effect immediately prior to such Change in Control or as the same
may be increased from time to time thereafter;
(iii) any requirement of the Company that Executive (A) be based anywhere more than
fifty (50) miles from the office where Executive is located at the time of the Change in
Control or (B) travel on Company business to an extent substantially greater than the travel
obligations of Executive immediately prior to such Change in Control;
(iv) the failure of the Company to (A) continue in effect any employee benefit plan,
compensation plan, welfare benefit plan or material fringe benefit plan in which Executive
is participating immediately prior to such Change in Control or the taking of any action by
the Company which would adversely affect Executive’s participation in or reduce Executive’s
benefits under any such plan, unless Executive is permitted to participate in other plans
providing Executive with substantially equivalent benefits in the aggregate (at
substantially equivalent cost with respect to welfare benefit plans), or (B) provide
Executive with paid vacation in accordance with the most favorable vacation policies of the
Company (and its affiliated companies) as in effect for Executive immediately prior to such
Change in Control, including the crediting of all service for which Executive had been
credited under such vacation policies prior to the Change in Control;
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(v) any purported termination of Executive’s employment which is not effectuated
pursuant to Section 10(b) (and which will not constitute a termination hereunder); or
(vi) the failure of the Company to obtain the assumption agreement from any successor
as contemplated in Section 9(b).
An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by
the Company within ten (10) days after receipt of notice thereof given by Executive shall not
constitute Good Reason. Executive’s right to terminate employment for Good Reason shall not be
affected by Executive’s incapacities due to mental or physical illness and Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect to, any event or
condition constituting Good Reason; provided, however, that Executive must provide notice of
termination of employment within ninety (90) days following Executive’s knowledge of an event
constituting Good Reason or such event shall not constitute Good Reason under this Agreement.
(h) “Qualifying Termination” means a termination of Executive’s employment (i) by the Company
other than for Cause or (ii) by Executive for Good Reason. Termination of Executive’s employment
on account of death, Disability or Retirement shall not be treated as a Qualifying Termination.
(i) “Retirement” means Executive’s mandatory retirement (not including any mandatory early
retirement) in accordance with the Company’s retirement policy generally applicable to its salaried
employees, as in effect immediately prior to the Change in Control, or in accordance with any
retirement arrangement established with respect to Executive with Executive’s written consent.
(j) “Subsidiary” means any corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity entitled to vote generally
in the election of directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets or liquidation or dissolution.
(k) “Termination Period” means the period of time beginning with a Change in Control and
ending two (2) years following such Change in Control. Notwithstanding anything in this Agreement
to the contrary, if (i) Executive’s employment is terminated prior to a Change in Control for
reasons that would have constituted a Qualifying Termination if they had occurred following a
Change in Control; (ii) Executive reasonably demonstrates that such termination (or Good Reason
event) was at the request of a third party who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control; and (iii) a Change in Control involving such third party
(or a party competing with such third party to effectuate a Change in Control) does occur, then for
purposes of this Agreement, the date immediately prior to the date of such termination of
employment or event constituting Good Reason shall be treated as a Change in
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Control. For purposes of determining the timing of payments and benefits to Executive under
Section 4, the date of the actual Change in Control shall be treated as Executive’s Date of
Termination under Section 1(e).
2. Obligation of Executive. In the event of a tender or exchange offer, proxy
contest, or the execution of any agreement which, if consummated, would constitute a Change in
Control, Executive agrees not to voluntarily leave the employ of the Company, other than as a
result of Disability or an event which would constitute Good Reason if a Change in Control had
occurred, until the Change in Control occurs or, if earlier, such tender or exchange offer, proxy
contest, or agreement is terminated or abandoned.
3. Term of Agreement. This Agreement shall be effective on the date hereof and shall
continue in effect until the Company shall have given three (3) years’ written notice of
cancellation; provided that, notwithstanding the delivery of any such notice, this Agreement shall
continue in effect for a period of two (2) years after a Change in Control, if such Change in
Control shall have occurred during the term of this Agreement. Notwithstanding anything in this
Section to the contrary, this Agreement shall terminate if Executive or the Company terminates
Executive’s employment prior to a Change in Control except as provided in Section l(k).
4. Payments Upon Termination of Employment.
(a) Qualifying Termination. If during the Termination Period the employment of
Executive shall terminate pursuant to a Qualifying Termination, then the Company shall provide to
Executive:
(i) within five (5) days following the Date of Termination, a lump-sum cash amount
equal to the sum of (A) Executive’s base salary through the Date of Termination and any
bonus amounts which have become payable, to the extent no theretofore paid or deferred, and
(B) any accrued vacation pay, to the extent not theretofore paid; plus
(ii) on the first business day which is six (6) months and one (1) day after Executive
separates from service (within the meaning of Section 409A of the Internal Revenue Code
(“Code”)), a lump sum cash amount equal to a pro rata portion of Executive’s annual bonus
for the fiscal year in which Executive’s Date of Termination occurs, which portion shall at
least be equal to (A) Executive’s Bonus Amount, multiplied by (B) a fraction, the numerator
of which is the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred sixty-five
(365), and reduced by (C) any amounts paid from the Company’s annual incentive plan for the
fiscal year in which Executive’s Date of Termination occurs; plus
(iii) on the first business day which is six (6) months and one (1) day after Executive
separates from service (within the meaning of Section 409A of the Code, a lump-sum cash
amount equal to (A) two (2) times Executive’s highest annual rate of base
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salary during the 12-month period immediately prior to Executive’s Date of Termination,
plus (B) two (2) times Executive’s Bonus Amount.
(iv) in addition to the payments set forth in Sections 4 (a)(i), (ii) and (iii) as well
as Section 5, any stock incentives (as defined in the stock incentive plans maintained by
the Company) that have been awarded to Executive under the terms of the stock incentive
plans maintained by the Company shall fully vest upon the occurrence of a Change in Control,
as such term is defined in Section 1(d) with 50% substituted for 25% in Section 1(d)(ii)
(whether or not a Qualifying Termination has occurred) and all other terms and conditions of
any such stock incentive award shall remain in effect to the extent not inconsistent with
the provisions of this Section 4(a)(iv).
(b) If during the Termination Period the employment of Executive shall terminate pursuant to a
Qualifying Termination, the Company shall continue to provide, for a period of one (1) year
following Executive’s Date of Termination, Executive (and Executive’s dependents, if applicable)
with the same level of medical, dental, accident, disability and term life insurance benefits upon
substantially the same terms and conditions (including contributions required by Executive for such
benefits) as existed immediately prior to Executive’s Date of Termination (or, if more favorable to
Executive, as such benefits and terms and conditions existed immediately prior to the Change in
Control); provided that, if Executive cannot continue to participate in the Company plans providing
such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if
continued participation had been permitted. Notwithstanding the foregoing, in the event Executive
becomes reemployed with another employer and becomes eligible to receive welfare benefits from such
employer, the welfare benefits described herein shall be secondary to such benefits during the
period of Executive’s eligibility, but only to the extent that the Company reimburses Executive for
any increased cost and provides any additional benefits necessary to give Executive the benefits
provided hereunder. Any medical or dental coverage provided under this Section 4(b) shall be in
addition to any rights Executive has under Part 6 of Title 1 of ERISA.
(c) If during the Termination Period the employment of Executive shall terminate other than by
reason of a Qualifying Termination, then the Company shall pay to Executive within thirty (30) days
following the Date of Termination, a lump-sum cash amount equal to the sum of (1) Executive’s base
salary through the Date of Termination and any bonus amounts which have become payable, to the
extent not theretofore paid or deferred, and (2) any accrued vacation pay, in each case to the
extent not theretofore paid. The Company may make such additional payments, and provide such
additional benefits, to Executive as the Company and Executive may agree in writing.
5. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated entities) or any
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entity which effectuates a Change in Control (or any of its affiliated entities) to or for the
benefit of Executive (whether pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 5) (the “Payments”) would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”), or any interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Company shall pay to Executive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 5(a), all determinations required to be made under
this Section 5, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, shall be
made by the public accounting firm that is retained by the Company as of the date immediately prior
to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within fifteen (15) business days of the receipt of
notice from the Company or the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the “Determination”). In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group effecting the Change
in Control, Executive may appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by
the Company and the Company shall enter into any agreement requested by the Accounting Firm in
connection with the performance of the services hereunder. The Gross-up Payment under this Section
5 with respect to any Payments shall be made no later than thirty (30) days following such Payment;
provided, however, in no event shall such payment be made earlier than six (6) months and one (1)
day after Executive separates from service (within the meaning of Section 409A of the Code). If
the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that failure to report the
Excise Tax, if any, on Executive’s applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. The Determination by the Accounting Firm shall be
binding upon the Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the Determination, it is possible that Gross-up Payments
which will not have been made by the Company should have been made (“Underpayment”) or Gross-up
Payments are made by the Company which should not have been made (“Overpayment”), consistent with
the calculations required to be made hereunder. In the event that the Executive thereafter is
required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the
Company to or for the benefit of Executive. In the event the amount of the Gross-up Payment
exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm
shall determine
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the amount of the Overpayment that has been made and any such Overpayment (together with
interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by
Executive (to the extent he has received a refund if the applicable Excise Tax has been paid to the
Internal Revenue Service) to or for the benefit of the Company. Executive shall cooperate, to the
extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in
connection with any contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.
6. Withholding Taxes. The Company may withhold from all payments due to Executive (or
his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other
law, the Company is required to withhold therefrom.
7. Reimbursement of Expenses. If any contest or dispute shall arise under this
Agreement involving termination of Executive’s employment with the Company or involving the failure
or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall
pay directly or reimburse Executive, on a current basis, for all reasonable legal fees and
expenses, if any, incurred by Executive in connection with such contest or dispute (regardless of
the result thereof), together with interest in an amount equal to the prime rate of the Chase
Manhattan Bank, N.A., from time to time in effect, but in no event higher than the maximum legal
rate permissible under applicable law, such interest to accrue from the date the Company receives
Executive’s statement for such fees and expenses through the date of payment thereof, regardless of
whether or not Executive’s claim is upheld by a court of competent jurisdiction/arbitration panel.
Any payments or reimbursement under this Section 7 shall be paid on the first business day which is
six (6) months and one (1) day after Executive has a “separation from service” under Section 409A
of the Code. To the extent fees, expenses or interest are incurred after such date, the Company
shall pay or reimburse such fees, expenses and interest pursuant to this Section 7 (to the extent
not previously paid or reimbursed) on the first business day of each month following such date.
However, no payments or reimbursements shall be made under this Section 7 after the third
anniversary of the date the last applicable statute of limitations has run with respect to the
claims which are the subject of the contest or dispute.
8. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle Executive
to continued employment with the Company or its Subsidiaries, and if Executive’s employment with
the Company shall terminate prior to a Change in Control, Executive shall have no further rights
under this Agreement (except as otherwise provided hereunder); provided, however, that any
termination of Executive’s employment during the Termination Period shall be subject to all of the
provisions of this Agreement.
9. Successors: Binding Agreement.
(a) This Agreement shall not be terminated by any Business Combination. In the event of any
Business Combination, the provisions of this Agreement shall be binding upon the Surviving
Corporation, and such Surviving Corporation shall be treated as the Company hereunder.
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(b) The Company will 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 unconditionally to assume expressly and agree to perform this Agreements in the same manner
and to the same extent that the Company would be required to perform if no such succession had
taken place. As used in this Agreement, “Company” means the Company has hereinbefore defined, and
any successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise. Failure of the Company to obtain such assumption
prior to the effectiveness of any such succession that constitutes a Change in Control, shall be a
breach of this Agreement and shall constitute Good Reason hereunder and shall entitle Executive to
compensation and other benefits from the Company in the same amount and on the same terms as
Executive would be entitled hereunder if Executive’s employment were terminated following a Change
in Control by reason of a Qualifying Termination. For purposes of implementing the foregoing, the
date on which any such Business Combination becomes effective shall be deemed the date Good Reason
occurs, and shall be the Date of Termination if requested by Executive.
(c) This Agreement is personal to the Executive and without the express prior written consent
of the Company shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution, and any such purported assignment shall be void. This Agreement shall
inure to the benefit of and be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive
shall die while any amounts would be payable to Executive hereunder had Executive continued to
live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in writing by Executive to receive such
amounts or, if no person is so appointed, to Executive’s estate.
10. Notice.
(a) For purposes of this Agreement, all notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given when delivered or five
(5) days after deposit in the United States mail, certified and return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xxxxx Xxxxx
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxx
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Company:
Gevity HR, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Administrative Officer
Gevity HR, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Administrative Officer
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herewith, except that notices of change of address shall be effective only upon receipt.
(b) A written notice of Executive’s Date of Termination by the Company or Executive, as the
case may be, to the other, shall (i) indicate the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the
provision so indicated and (iii) specify the termination date (which date shall be not less than
fifteen (15) (thirty (30), if termination is by the Company for Disability) nor more than sixty
(60) days after the giving of such notice). The failure by Executive or the Company to set forth
in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude Executive or the
Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights
hereunder.
11. Full Settlement; Resolution of Disputes. The Company’s obligation to make any
payments provided for in this Agreement and otherwise to perform its obligations hereunder shall be
in lieu and in full settlement of all other severance payments to Executive under any other
severance or employment agreement between Executive and the Company, and any severance plan of the
Company. The Company’s obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other employment or take other action by
way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b), such amounts shall not be reduced whether or not Executive
obtains other employment.
12. Employment with Subsidiaries. Employment with the Company for purposes of this
Agreement shall include employment with any Subsidiary.
13. Survival. The respective obligations and benefits afforded to the Company and
Executive as provided in Sections 4 (to the extent that payments or benefits are owed as a result
of a termination of employment that occurs during the term of this Agreement), 5 (to the extent
that Payments are made to Executive as a result of a Change in Control that occurs during the term
of this Agreement), 6, 7, 9(c) and 11 shall survive the termination of this Agreement.
14. GOVERNING LAW. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF FLORIDA WITHOUT REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS.
15. Severability. The invalidity, illegality or unenforceability of any provision of
this Agreement shall not affect the validity, legality or enforceability of any other provision of
this Agreement, which other provisions shall remain in full force and effect. If the effect of a
final
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and unappealable holding or finding that any such provision is either invalid, illegal or
unenforceable is to modify to the Executive’s detriment, reduce or eliminate any compensation,
reimbursement, payment, allowance or other benefit to the Executive intended by the Company and
Executive in entering into this Agreement, the Company shall promptly negotiate and enter into an
agreement with the Executive containing alternative provisions (reasonably acceptable to the
Executive) that will restore to the Executive (to the extent legally permissible) substantially the
same economic, substantive and income tax benefits the Executive would have enjoyed had any such
provision of this Agreement been upheld as valid, legal and enforceable.
16. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one and the same instrument.
17. Miscellaneous.
(a) No provision of this Agreement may be modified or waived unless such modification or
waiver is agreed to in writing and signed by Executive and by a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.
(b) Failure by Executive or the Company to insist upon strict compliance with any provision of
this Agreement or to assert any right Executive or the Company may have hereunder, including
without limitation, the right of Executive to terminate employment for Good Reason, shall not be
deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
(c) Except as otherwise specifically provided herein, the rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights
of, or benefits payable to, Executive, his estate or his beneficiaries under any other employee
benefit plan or compensation program of the Company.
(d) If any amounts which are required or determined to be paid or payable or reimbursed or
reimbursable to the Executive under this Agreement (or, following a Change in Control, under any
other plan, agreement, policy or arrangement with the Company) are not so paid promptly at the
times provided hereon or therein, such amounts shall accrue interest at an annual percentage rate
of ten percent (10%) from the date such amounts were required or determined to have been paid or
payable or reimbursed or reimbursable to the Executive until such amounts and any interest accrued
thereon are finally and fully paid; provided, however, that in no event shall the amount of
interest contracted for, charged or received hereunder exceed the maximum non-usurious amount of
interest allowed by applicable law.
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(e) The Executive acknowledges receipt of a copy of this Agreement (together with any
attachments hereto), which has been executed in duplicate and agrees that, with respect to the
subject matter hereof, this is the entire agreement with the Company. This Agreement replaces and
supercedes the Change in Control Severance Agreement between the parties dated the 16th day of
February 2001. Any other oral or any written representations, understandings or agreements with the
Company or any of its officers or representatives covering the same subject matter which are in
conflict with this Agreement hereby are merged into and superseded by the provisions of this
Agreement. Notwithstanding anything to the contrary in this Agreement, any payments made or
benefits provided under this Agreement shall be an offset to the payments and/or benefits otherwise
payable under any other agreement between Executive and the Company.
(f) To the extent this Agreement is subject to Section 409A of the Code, Executive and the
Company intend all payments under this Agreement to comply with the requirements of such section,
and this Agreement shall, to the extent practical, be operated and administered to effectuate such
intent. To the extent necessary to avoid adverse tax consequences under Section 409A of the Code,
the timing of any payment under this Agreement shall be delayed by six months and one day in a
manner consistent with § 409A(a)(2)(B)(i) of the Code.
(g) If the Company engages in a sale of substantially all its assets and Executive is offered
comparable employment with the buyer of such assets, the Company and the buyer shall specify in
writing at the time of the sale whether Executive has a termination of employment in connection
with the sale; provided, however, (i) the buyer must accept assignment of this Agreement in order
for the Company to agree that no termination of employment has occurred, (ii) if the buyer and the
Company fail to specify whether a termination of employment has occurred, Executive shall be
treated as having terminated employment and (iii) any determination of whether a termination of
employment has occurred shall be made in accordance with Treas. Reg. 1.409A-1(h)(4).
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized
officer of the Company and Executive has executed this Agreement as of the day and year first above
written.
| GEVITY HR, Inc. |
||||
| /s/ Xxxxx X. Xxxxxxxxx, Xx. | ||||
| Name: | Xxxxx X. Xxxxxxxxx, Xx. | |||
| Title: | Vice President and General Counsel | |||
| EXECUTIVE: |
||||
| /s/ Xxxxx Xxxxx | ||||
| Xxxxx Xxxxx | ||||
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