EMPLOYEE SOLUTIONS, INC.
EXHIBIT 10.18
TO REPORT ON FORM 10-K
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is made this 31st day of
July, 1997 by and between EMPLOYEE SOLUTIONS, INC., an Arizona corporation (the
"Company"), and XXXX X. XXXXXX ("Employee").
In consideration of the mutual promises and covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. TERMINATION. Employee's employment with the Company may be
terminated with or without cause by either party at any time.
2. DEFINITION OF CAUSE; EFFECT OF TERMINATION FOR CAUSE. In the event
of a termination for cause, the Company shall be obligated to pay the Employee
only the base salary due him through the date of termination. Cause shall
include willful and persistent failure to abide by instructions or policies from
or set by the Board of Directors, willful and persistent failure to attend to
material duties or obligations imposed under this Agreement, or commission of a
felony or serious misdemeanor offense or pleading guilty or NOLO CONTENDERE to
same.
3. EFFECT OF TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. The Company
may terminate Employee's employment by the Company at any time, without cause,
by giving 30 days written notice to the Employee. If the Company terminates
under Section 3, it shall pay to Employee an amount equal to 12 months base
salary, payable monthly, less applicable withholdings; and shall continue
coverage of Employee and Employee's dependents under its medical plans an other
benefit arrangements for 12 months or until Employee secures other employment
(unless continuation of coverage under such plans is unfeasible, in which event
the Company will provide substantially similar benefits). If Employee resigns
for Good Reason (as defined in Section 4.c below), Employee shall be entitled to
the same severance benefits as described in the preceding sentence; provided,
however, that Employee shall be entitled to the severance benefits set forth in
Section 4.e if Employee resigns for Good Reason within 12 months after a Change
in Control (as defined in Section 4.b below).
4. CHANGE IN CONTROL.
x. XXXXXXXXX BENEFITS. If Employee's employment with the Company
terminates within 12 months after a Change in Control (as defined in Section 4.b
below), Employee shall be entitled to the severance benefits provided in Section
4.e, unless such termination is for cause and defined in Section 2 above or is
due to Employee's death, disability or resignation without Good Reason (as
defined below).
b. "CHANGE IN CONTROL" shall be deemed to have occurred if (i)
any "person" (as such term is used in Paragraphs 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended [the "Exchange Act"]), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company 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, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the Company's
then outstanding Voting Securities, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company's; stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions)
all or substantially all the Company's assets.
c. "GOOD REASON" shall mean, for purposes of the Agreement, (i)
without Employee's express written consent, a reduction of Employee's
compensation or the assignment to Employee of duties inconsistent with
Employee's positions, duties, responsibilities and status with the Company
immediately prior to the Change in Control, or demotion or a change in titles or
offices as in effect immediately prior to a Change in Control (except in
connection with termination of Employee's employment in compliance with Section
2 or upon death or disability); (ii) a material breach by the Company of any of
its obligations hereunder which (if curable) is not cured by the Company within
twenty (20) days after written notice thereof; or (iii) without Employee's
express written consent, relocation of the site of Employee's duties to a
location outside the Phoenix, Arizona metropolitan area, or a requirement that
Employee average more than 10 business days outside of the Phoenix, Arizona
metropolitan area per month.
d. "VOTING SECURITIES" shall mean any securities of the Company
which vote generally in the election of the directors.
e. AMOUNT OF BENEFIT. If Employee is entitled to severance
benefits under Section 4.a, the amount of such benefit shall equal (i) a
lump-sum payment equal to 24 months base pay; (ii) a continuation of medical
coverage and other benefits in the manner contemplated in Section 3 above for 24
months; and (iii) such other benefits to which the Employee is entitled under
the Company's benefits plans and policies as in effect immediately prior to the
Change in Control with respect to terminated Employees.
5. NOTICES. All notices, demands and communications required by this
Agreement shall be in writing and shall be deemed to have been given for all
purposes when sent to the respective addresses set forth below, (i) upon
personal delivery, (ii) one day after being sent, when sent by overnight courier
service to and from locations within the continental United States, (iii) three
days after posting when sent by registered, certified, or regular United States
mail, with postage prepaid and return receipt requested, or (iv) on the date of
transmission when sent by confirmed facsimile.
If to the Company: Employee Solutions, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Chief Executive Officer
If to Employee: Xxxx X. Xxxxxx
0000 X. Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(Or when sent to such other address as any party shall specify by written notice
so given.)
6. ENTIRE AGREEMENT. This Agreement constitutes the final written
expression of all of the agreements between the parties, and is a complete and
exclusive statement of those terms. It supersedes all understandings and
negotiations concerning the matters specified herein. Any representations,
promises, warranties or statements made by either party that differ in any way
from the terms of this written Agreement shall be given no force or effect. No
addition to or modification of any provision of this Agreement shall be binding
upon any party unless made in writing and signed by all parties.
7. INVALIDITY OF ANY PROVISION. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
8. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Arizona exclusive of the
conflict of law provisions thereof. The parties agree that in the event of
litigation, venue shall lie exclusively in Maricopa County, Arizona.
9. HEADINGS; CONSTRUCTION. Headings in this Agreement are for
informational purposes only and shall not be used to construe the intent of this
Agreement. The language in all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for nor
against any party.
10. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
11. BINDING EFFECT ON MARITAL COMMUNITY. Employee represents and
warrants to the Company that he has the power to bind his marital community (if
any) to all terms and provisions of this Agreement by his execution hereof.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Severance Agreement and caused the same to be duly delivered on its behalf as of
the date first above written.
"COMPANY"
EMPLOYEE SOLUTIONS, INC.
an Arizona corporation
By /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Chief Executive Officer
"EMPLOYEE"
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
