EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of January, 1999, by and
between MODIS PROFESSIONAL SERVICES, INC., a Florida corporation, and its
successors ("Employer"), and XXXXXXX X. XXXXX, a resident of the State of
Florida ("Executive").
WHEREAS, the Employer and the Executive entered into an employment agreement
effective January 1, 1996; and
WHEREAS, the Employer and the Executive desire to enter into an amended and
restated employment agreement (the "Agreement"), which Agreement shall replace
and thereby supersede all prior employment agreements and any amendments thereto
previously executed between the Employer and the Executive;
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants, and subject to the terms and conditions contained in this Agreement,
the Employer and Executive, intending to be legally bound, hereby agree as
follows:
1. Employment. Employer hereby employs Executive as Senior Vice President
and Chief Financial Officer, and Executive hereby accepts employment by
Employer, in accordance with and subject to the terms and conditions of
this Agreement.
2. Duties and Authority. During the Employment Period (as hereinafter
defined), Executive will occupy the position of Senior Vice President and
Chief Financial Officer of the Employer. As Senior Vice President and Chief
Financial Officer, Executive shall have the responsibility of administering
the affairs of the Employer to the extent, and otherwise performing such
duties as are, customarily performed by the Senior Vice President and Chief
Financial Officer of a company of similar size and structure to the
Employer. Executive agrees to devote his full time, attention and best
efforts to the performance of his duties hereunder; provided, however, it
shall not be considered a violation of the foregoing for the Executive to
serve on corporate, industry, civic, or charitable boards or committees, so
long as such activities do not materially interfere with the performance of
the Executive's responsibilities as an employee of the Employer in
accordance with this Agreement.
3. Initial Term; Employment Period. The initial term of employment shall
begin on January 1, 1999, and end on December 31, 1999 (the "Term of this
Agreement"). For purposes of this Agreement, the period beginning on
January 1, 1999, and ending on the Date of Termination (as hereinafter
defined) shall be referred to herein as the "Employment Period."
4. Compensation. During the Employment Period which is in the Term of this
Agreement, Executive shall receive the following compensation:
a) Base Salary. A base annual salary of $250,000, payable in
accordance with the Employer's standard practice for other comparable
executives. Executive's base salary shall be subject to annual review
by the Board of Directors of the Employer (the 'Board') for
discretionary periodic increases in accordance with the Employer's
compensation policies. References to 'base salary' in this Agreement
shall be to the base salary set forth in this Paragraph 4.a and shall
include any increases to such base salary made hereby.
b) Incentive Compensation. The Executive shall be entitled to a target
incentive compensation opportunity expressed as a percentage of Base
Salary of not less than 100% under the Modis Annual Incentive Plan
('Incentive Plan').
5. Stock Options.
a) Grant of Options. Employer shall grant to Executive stock options
from time to time in a manner consistent with that to which it grants
to other senior executive officers of the Employer pursuant to the
Modis Professional Services, Inc., Amended and Restated, 1995 Stock
Option Plan, as amended from time to time, or pursuant to a newly
established or successor plan.
b) Exercise. Any existing stock option(s) and any stock options
granted after the effective date of this Agreement shall provide for:
(i) exercisability of vested options (including those vested
under paragraph 5.b.(ii) below) for at least two years (two
months if for Cause (as hereafter defined) following the
Executive's termination of employment with the Employer (or if
sooner, 10 years from date of grant of the option);
(ii) full vesting of options upon a Change in Control (as
hereafter defined) or termination of the Executive's employment
with the Employer for reasons other than (i) by the Employer for
Cause, or (ii) by the Executive without Good Reason (as hereafter
defined), and
(iii) exercisability only to the extent vested on the date of the
Executive's termination of employment with the Employer, in the
event of termination (i) by the Employer for Cause, or (ii) by
the Executive without Good Reason.
c) Change in Control.
(i) the acquisition by any person or persons (as such term is
used in Section 13(d) of the Securities Exchange Act of 1934) not
a shareholder of Employer on June 1, 1998, of legal or beneficial
ownership of 35% or more of either (A) the then outstanding
shares of common stock of the Employer, or (B) the combined
voting power of the then outstanding voting securities of the
Employer entitled to vote generally in the election of directors;
(ii) individuals who, as of the date hereof, constitute the Board
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Employer's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Board
shall be considered as though such individual were a member of
the Board as of the date hereof;
(iii) approval by the shareholders of the Employer of a
reorganization, merger, or consolidation, in each case unless the
shareholders of the Employer immediately before such
reorganization, merger, or consolidation own, directly or
indirectly, immediately following such reorganization, merger, or
consolidation at least a majority of the combined voting power of
the outstanding voting securities of the corporation resulting
from such reorganization, merger, or consolidation in
substantially the same proportion as their ownership of the
voting securities immediately before such reorganization, merger
or consolidation; or
(iv) approval by the shareholders of the Employer of (A) a
complete liquidation or dissolution of the Employer or (B) the
sale or other disposition of more than 50% of the assets of the
Employer within a twelve month period.
6. Benefits. To the extent not otherwise provided herein (it being the
intent not to duplicate benefits), during the Term of this Agreement,
Employer shall provide the Executive with all retirement, welfare, deferred
compensation, disability and other benefits generally provided to all of
the Employer's other senior executive officers. Executive shall be entitled
to four (4) weeks of paid vacation per calendar year. Unused vacation shall
be paid out at calendar year end. The Employer shall reimburse the
Executive for all reasonable and necessary expenses incurred while
conducting business in accordance with policies adopted by the Employer
from time to time. Furthermore, the Employer shall pay the Executive or a
leasing company, at the Executive's option, $750 per month for an
automobile used by the Executive for business purposes. The Executive
acknowledges that pursuant to the Internal Revenue Code and the regulations
promulgated thereunder, the Employer may be required to report for tax
purposes all or a portion of certain of the benefits and reimbursements
provided in this Agreement as income in respect of the Executive.
7. Non-Compete; Confidentiality. In consideration of the employment of
Executive by Employer, Executive agrees as follows:
a) Non-Compete and Non-Solicitation. During the Employment Period and
for a period of two years after the Date of Termination, Executive
will not, directly or indirectly, within a fifty mile radius of any
office of Employer (or a consolidated subsidiary) in existence on the
Date of Termination, own, manage, be employed by, work for, consult
for, be an officer or director of, advise, represent, engage in or
carry on any business which competes with the business of the Employer
at that time. Nothing herein shall be construed to prohibit Executive
from rendering professional services subsequent to the Date of
Termination as an independent certified public accountant to a
business that competes with Employer. During the Employment Period and
for a period of two years after the Date of Termination, Executive
will not, directly or indirectly, solicit or induce, or attempt to
solicit or induce, any employee of the Employer (or a consolidated
subsidiary) to leave the Employer (or a consolidated subsidiary) for
any reason whatsoever, or solicit the services of any employee of the
Employer (or a consolidated subsidiary).
b) Non-Disclosure of Information. Executive will not at any time,
during or after the term of this Agreement, in any fashion, form, or
manner, either directly or indirectly, divulge, disclose, or
communicate to any person, firm, or corporation, in any manner
whatsoever, any information of any kind, nature, or description
concerning any matters affecting or relating to the business of the
Employer, including, but not limited to, the names of any of its
customers or prospective customers or any other information concerning
the business of the Employer, its manner of operation, its plans, its
vendors, its suppliers, its advertising, its marketing, its methods,
its practices, or any other information of any kind, nature, or
description, without regard to whether any or all of the foregoing
matters would otherwise be deemed confidential material, or important;
provided, however, that this provision shall not prevent disclosures
by Executive to the extent such disclosures are (i) believed by the
Executive, in good faith and acting reasonably, to be in the best
interest of the Employer, (ii) of information that is public at the
time of the disclosure (other than as a result of the Executive's
violation of this Paragraph 7(b), or (iii) as required by law or legal
process (and, if the Executive is so required to disclose, Executive
shall provide the Employer notice of such to allow the Company the
opportunity to contest such disclosure).
8. Termination of Employment.
a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
Additionally, if the Employer determines in good faith that the
Executive has incurred a Disability, it may give the Executive written
notice of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Employer shall
terminate effective on the later of (i) the date in the notice, (ii)
the day after receipt of such notice by the Executive, (iii) or the
date the Disability has been considered to occur (the 'Disability
Effective Date'), provided that, prior to such date, the Executive
shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall have the
meaning set forth in the Employee's long term disability plan or
policy covering the Executive and shall not be considered to have
occurred until after the waiting period as required by such plan or
policy.
b) Cause. The Employer may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean (i) a breach by the Executive of the Executive's
obligations under paragraph 2 above (other than as a result of
temporary incapacity due to physical or mental illness, or Disability)
which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such
breach is in the best interests of the Employer and which is not
remedied in a reasonable period of time after receipt of written
notice from the Employer specifying such breach or (ii) the conviction
of the Executive of a felony; or (iii) a breach of the Executive's
fiduciary duty to the Employer or willful violation in the course of
performing his duties for the Employer of any law, rule or regulation
(other than traffic violation or other minor offenses). No act or
failure to act on the Executive's part shall be considered willful
unless done or omitted in bad faith and without reasonable belief that
the action or omission was in the best interest of the Employer.
c) Good Reason. The Executive's employment may be terminated by the
Executive at any time for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status,
offices, titles and reporting requirement), authority, duties or
responsibilities as contemplated by Paragraph 2 or any other
action by the Employer which results in a diminution in such
position, authority, duties or responsibilities;
(ii) a reduction in the Executive's Base Salary or target bonus
opportunity which is more than de minimis;
(iii) a reduction which is more than de minimis (except if such
reduction is a part of a reduction for all executive officers of
the Employer) in the level of incentive compensation (including
stock options, restricted stock awards, stock appreciation
rights, retirement plan accruals and/or welfare plan benefits
(within the meaning of Section 3(1) of ERISA) accruing or
provided to the Executive;
(iv) any failure by the Employer to comply with any of the
provisions of this Agreement; or
(v) the Employer's requiring the Executive to be based at any
office or location other than Jacksonville, Florida.
For purposes of this subparagraph c, any good faith determination
of "Good Reason" made by the Executive shall be conclusive.
However, no such event described hereunder shall constitute Good
Reason unless the Executive has given written notice to the
Employer specifying the event relied upon for such termination
within one year after the occurrence of such event and the
Employer has not remedied such within 30 days of receipt of such
notice. The Employer and the Executive, upon mutual written
agreement, may waive any of the foregoing provisions which would
otherwise constitute Good Reason.
d) Without Cause or Good Reason. Either Employer or Executive may
terminate this Agreement without Cause or Good Reason upon not less
than 30 days written notice to the other, setting forth the effective
date of employment termination.
e) Notice of Termination. Any termination by the Employer for Cause,
or by the Executive for Good Reason, shall be communicated to the
other party by Notice of Termination. For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment and (iii) specifies the Date of Termination (as
defined below). Notice of intent to terminate employment for Good
Reason must be provided pursuant to Paragraph 8.c of this Agreement.
The failure by the Executive or the Employer to set forth in the
Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or the Employer hereunder or preclude the Executive or the
Employer from asserting such fact or circumstance in enforcing the
Executive's or the Employer's rights hereunder.
f) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Employer for Cause, or by
the Executive for Good Reason, the date specified in the Notice of
Termination as the Date of Termination; (ii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be; and (iii) if the
Executive's employment is terminated by either party other than for
death, Disability, Cause or Good Reason, the date set forth in the
notice required under subparagraph d above as the date the termination
is to be effective.
9. Obligations of the Employer upon Termination. Upon termination of the
Executive's employment for any reason during the Term of this Agreement,
Executive shall be entitled to Base Salary and all benefits through the Date of
Termination, and to exercise then vested stock options in accordance with
Paragraph 5.b)(i) above. Upon the termination of the Executive's employment
during the term of this Agreement by the Executive for Good Reason, or upon
retirement at or after age 58, or by the Employer for any reason other than
Cause, the Executive shall in addition be entitled to exercise the option(s)
with accelerated vesting pursuant to Paragraph 5.b)(ii) above. In addition, upon
termination of the Executive's employment prior to December 31, 1999 by the
Executive for Good Reason or by the Employer for any reason other than Cause,
Disability or death, the Executive shall receive a lump sum payment equal to the
sum of the Executive's Base Salary as of the Date of Termination and the
Executive's threshold bonus opportunity under the Incentive Plan based on the
threshold bonus opportunity for the year of termination. The lump sum payment
shall be paid no later than thirty days after the Date of Termination in
immediately available United States funds. Notwithstanding the preceding
provisions, at the Employer's sole discretion, the Employer may pay the amount
determined as a lump sum in this Paragraph 9 in 24 equal monthly payments
beginning on the first day of the month first following the Date of Termination.
10. Mitigation of Damages. Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise. The amount of any payment provided for under this
Agreement shall not be reduced by any compensation earned or benefits received
by the Executive as the result of self-employment or employment by another
employer or otherwise.
11. Tax Effect. If Independent Tax Counsel shall determine that the aggregate
payments made and benefits provided to the Executive pursuant to this Agreement
and any other payments and benefits provided to the Executive from the Employer,
its affiliates and plans which constitute "parachute payments" as defined in
Section 280G of the Code (or any successor provision thereto) ("Parachute
Payments") would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount (determined by
Independent Tax Counsel) such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment and any interest or
penalties imposed with respect to such taxes, the Executive retains from the
Gross-Up Payment an amount equal to the Excise Tax imposed upon the payments.
For purposes of this Paragraph, "Independent Tax Counsel" shall mean a lawyer, a
certified public accountant with a nationally recognized accounting firm, or a
compensation consultant with a nationally recognized actuarial and benefits
consulting firm with expertise in the area of executive compensation tax law,
who shall be selected by the Employer and shall be reasonably acceptable to the
Executive, and whose fees and disbursements shall be paid by the Employer.
a) If Independent Tax Counsel shall determine that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion
that the Executive has substantial authority not to report any Excise Tax
on the Executive's Federal income tax return. If the Executive is
subsequently required to make a payment of any Excise Tax, then the
Independent Tax Counsel shall determine the amount of such additional
payment ('Gross-Up Underpayment'), and any such Gross-Up Underpayment shall
be promptly paid by the Employer to or for the benefit of the Executive.
The fees and disbursements of the Independent Tax Counsel shall be paid by
the Employer.
b) The Executive shall notify the Employer in writing within 15 days of any
claim by the Internal Revenue Service that, if successful, would require
the payment by the Employer of a Gross-Up Payment. If the Employer notifies
the Executive in writing that it desires to contest such claim and that it
will bear the costs and provide the indemnification as required by this
sentence, the Executive shall:
(i) give the Employer any information reasonably requested by the
Employer relating to such claim;
(ii) take such action in connection with contesting such claim as the
Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Employer;
(iii) cooperate with the Employer in good faith in order to
effectively contest such claim; and
(iv) permit the Employer to participate in any proceedings relating to
such claim; provided, however, that the Employer shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. The Employer shall control all
proceedings taken in connection with such contest; provided, however,
that if the Employer directs the Executive to pay such claim and xxx
for a refund, the Employer shall advance the amount of such payment to
the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed
income with respect to such advance.
c) If, after the receipt by the Executive of an amount advanced by the
Employer pursuant to this Paragraph 11, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall, within
10 days, pay to the Employer the amount of such refund, together with any
interest paid or credited thereon after taxes applicable thereto.
12. Notices. Any notice provided for in this Agreement shall be given in
writing. Notices shall be effective from the date of receipt if delivered
personally to the party to whom notice is to be given, or on the second day
after mailing if mailed by first class mail, postage prepaid. Notices shall be
properly addressed to the parties at their respective addresses set forth below
or to such other address as either party may later specify by notice to the
other:
If to Employer:
Modis Professional Services, Inc.
Attn: Corporate Secretary
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
If to Executive:
Xxxxxxx X. Xxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
13. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof, including, but not limited to, any and all
prior employment agreements and related amendments entered into between the
Employer and the Executive. This Agreement may be changed only by an agreement
in writing signed by the party against whom any waiver, change, amendment or
modification is sought.
14. Waiver. The waiver by one party of a breach of any of the provisions of this
Agreement by the other shall not be construed as a waiver of any subsequent
breach.
15. Attorney's Fees. In the event of litigation or other dispute resolution
proceeding involving the interpretation or enforcement of this Agreement, the
prevailing party shall be entitled to recover from the other all fees, costs and
expenses incurred in connection therewith, including attorney's fees through
appeal.
16. Tax Withholding. The Employer shall have the right to deduct from all
benefits and/or payments under the Agreement any taxes required by law to be
paid or withheld with respect to such benefits or payments.
17. Governing Law; Venue. The Agreement shall be construed and enforced in
accordance with the laws of the State of Florida. Xxxxx County, Florida, shall
be proper venue for any litigation arising out of this Agreement.
18. Paragraph Headings. Paragraph headings are for convenience only and are not
intended to expand or restrict the scope or substance of the provisions of this
Agreement.
19. Assignability. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Employer. This Agreement is a personal employment agreement
and the rights, obligations and interests of the Executive hereunder may not be
sold, assigned, transferred, pledged or hypothecated.
20. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement shall remain in full force and shall in no way be impaired.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement to account for more than one such counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 30th day
of July, 1999.
EXECUTIVE
/s/ Tyra Tutor /s/ Xxxxxxx X. Xxxxx
__________________________ ___________________________
Witness Xxxxxxx X. Xxxxx
EMPLOYER
/s/ Xxxx Xxxx
___________________________ /s/ Xxxxx X. Xxxxx
Witness By:___________________________
President, Chairman of the Board
and Chief Executive Officer
