EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 1999 by and between
RIGHT MANAGEMENT CONSULTANTS, INC., a Pennsylvania corporation (hereinafter
called "Company"), and XXXX X. XXXXX, an individual (hereinafter called
"Employee").
WITNESSETH:
Company desires to employ Employee, and employee desires to be employed
by Company, on the terms and conditions hereinafter stated.
NOW THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Employee agree as follows:
1. Employment. Company hereby employs Employee and employee hereby
accepts employment by Company for the period and upon the terms and conditions
contained in this Agreement.
2. Office and Duties.
(a) Employee shall serve Company as its President and Chief
Operating Officer ("COO"), and, subject to continued election thereto by the
Company's shareholders, as a member of Company's Board of Directors (the
"Board"). The powers, authority and duties of the offices of President and COO
of Company shall be those customary to such offices with corporations comparable
to Company.
(b) Throughout the term of this Agreement, Employee shall
devote Employee's entire working time, energy, skill and best efforts to the
performance of Employee's duties hereunder in a manner which will faithfully and
diligently further the business and interests of Company.
3. Term.
(a) The initial term of Employee's employment with Company
under this Agreement shall be as of January 1, 1999 and continuing up to and
through December 31, 2001.
(b) Unless either party gives written notice of its intention
to terminate Employee's employment under this Agreement at the end of the
initial or any renewal term by giving the other party such notice, at least one
hundred twenty (120) days prior to the expiration of the then current term,
employee's employment under this Agreement shall be deemed to have been renewed
for an additional term of one (1) year commencing on the day after the
expiration of the then current term. Notwithstanding the foregoing, employee's
employment with Company will not be renewed under this Agreement on or after
December 31 of the calendar year in which Employee reaches sixty-five (65) years
of age.
(c) Notwithstanding the provisions of Sections 3(a) and 3(b)
hereof, in the event that: (i) a "controlling interest" in the capital stock of
Company is sold in a single transaction or a group of related transactions to
one or more buyers acting in concert; (ii) Company sells all or substantially
all of its assets; or (iii) Company is a party to any corporate merger or
consolidation in which one or more parties acting in concert who did not
previously hold a "controlling interest" in the capital stock of Company
acquires or acquire such a "controlling interest" in the capital stock of
Company or its successor entity (each such a event to constitute a "Change in
Control"), Employee may, upon written notice to Company within sixty (60) days
of such Change in Control, elect to: (A) continue Employee's employment with
Company for the greater of the then current term or a period that expires two
years from the date of the Change in Control; or (B) voluntarily terminate
Employee's employment with Company and receive severance compensation as if this
were a "Compensated Termination" pursuant to Section 6 hereof for a "Section 6
Period" that expires upon the later of the date the then current term would have
expired but for the earlier termination described herein or two years from the
date of the Change in Control. In the event that Employee elects to remain
employed by Company pursuant to (A) above, the total amounts payable annually to
employee for the period described in (A) shall be not less than the greater of:
(I) the total amount of the Base Salary and Incentive Payments paid under
Sections 4(a) and 4(b) during the 12-month period for the calendar year
immediately preceding the Change in Control; or (II) Three Hundred Fifty
Thousand Dollars ($350,000). For the purposes of this Section 3(c), a
"controlling interest" in the capital stock will constitute that number of
shares which, as a practical matter, permits the holder or holders to elect a
majority of the members of the Board. It is agreed that shares of capital stock
possessing the right to cast a majority or more of the votes entitled to be cast
for the election of directors of Company shall conclusively constitute a
"controlling interest", but that a block of shares possessing the right to cast
less than a majority of the number of votes entitled to be voted may, under the
circumstances then pertaining, constitute a "controlling interest".
4. Compensation and Benefits.
(a) Base Salary. For all of the service rendered by Employee
to Company, Employee shall receive a base salary (the "Base Salary") payable at
an annual rate equal to Three Hundred Fifty Thousand Dollars ($350,000). Such
Base Salary shall be payable in reasonable periodic installments in accordance
with Company's regular payroll practices in effect from time to time. Employee's
Base Salary is subject to annual review and adjustment at the discretion of
Company, but in no event shall Company reduce the Base Salary to less than the
amounts specified above during the periods referred to without the consent of
employee.
(b) Incentive Payments. In addition to the Base Salary,
throughout the term of Employee's employment with Company hereunder, Company
shall pay to Employee annually, a cash bonus as incentive compensation based
upon Company's financial performance for that year ("Incentive Payments") in
such amounts as are decided upon by the Board or its Compensation Committee. Any
and all bonuses shall be determined based upon target and comparison that are
consistent with those to be used by the Board in determining the amounts payable
under Company's Incentive Compensation Plan for Senior Corporate Staff. In the
event that the employment of Employee terminates otherwise than pursuant to
Section 6 hereof, on a day other than the last day of a fiscal year of Company,
in addition to Base Salary and other payments accrued through the effective date
of the termination, Company shall pay to Employee the "pro rata portion" (as
hereafter defined) of the Incentive Payments which would have been due to
Employee if he had remained in the employ of Company for the full fiscal year in
which Employee's employment terminated. For purposes of the immediately
preceding sentence, the "pro rata portion" shall be obtained by dividing the
number of days (including intervening weekend days and holidays) in the fiscal
year that Employee was employed by Company by the number 365.
(c) Fringe Benefits. Throughout the term of this Agreement and
as long as they are kept in force by Company, employee shall be entitled to
participate in and receive the benefits of any profit sharing or retirement
plans and any health, life, accident or disability insurance plans or programs
made available to other similarly situated employees of Company and shall be
entitled to participate in the Supplemental Deferred Compensation Program
attached hereto as Exhibit "A", but the participation of employee, if any, in
Company's stock option, stock appreciation, "phantom" stock plans or similar
plans, will be wholly within the discretion of the Board. With respect to the
term of Employee's employment with Company under this Agreement, the Board has
not made any determination with regard to Employee's participation in any stock
option, stock appreciation, "phantom" stock plans or similar plans. However, the
Company shall consider each year whether or not Employee shall be awarded any
stock options. Company may, at its sole discretion add, delete or change any
stock option, stock appreciation, or phantom stock plans that Employee may
participate in upon notice to Employee. If this Agreement is not renewed by
Company after the expiration of the then current term, Company shall provide to
Employee outplacement consulting services then generally being made available by
Company to executive candidates.
(d) Vacation. Employee shall be entitled to vacation in
accordance with Company's general policies with respect thereto from time to
time.
(e) Automobile. During the term of Employee's employment with
Company under this Agreement, Company shall furnish Employee with the use of a
luxury automobile, insurance thereon, and the costs of fuel, maintenance and
necessary repairs as incurred. Employee shall be permitted unrestricted use of
such automobile without the obligation to account or reimburse Company for any
personal use thereof. During the same period, Company shall provide Employee, at
no cost to Employee, one private-reserved covered parking space located in or
close to the building in which Employee's office is located.
(f) Accounting Services. At an appropriate time each year
during the term of Employee's employment with Company under this Agreement,
Company shall make available to Employee, at no cost to Employee, the services
of the certified public accounting firm which audits Company's financial
statements for the purpose of preparing all of Employee's federal, state and
local income tax and estimated income tax returns for such year and counselling
Employee with respect thereto. Employee hereby acknowledges that Company shall
bear no responsibility for the accuracy, quality or completeness of any such tax
returns prepared by such certified public accounting firm.
(g) Financial Planning Services. During the term of Employee's
employment with Company under this Agreement, Company shall furnish Employee, at
no cost to Employee, ten (10) hours per year of financial counselling services.
The services shall be rendered by any national accounting firm or firms with
which Company from time to time has an ongoing relationship for the purpose of
providing financial counselling in conjunction with Company's outplacement
services, providing that such firm has a Philadelphia, Pennsylvania office, or
if and for as long as there is no such firm, by a financial counsellor or
financial counselling firm selected by Employee and approved by Company.
(h) Withholding Taxes. The Base Salary, Incentive Payments and
all other cash and non-cash payments to Employee hereunder shall be subject to,
and paid net of all applicable withholding requirements of federal, state and
local law.
5. Expenses. Company will reimburse Employee for all reasonable
expenses incurred by Employee in connection with the performance of Employee's
duties upon receipt of vouchers therefore and in accordance with Company's
regular reimbursement procedures and practices in effect from time to time.
6. Severance Compensation.
(a) In the event of a "Compensated Termination" (as that term
is defined below), Company shall pay Employee as severance compensation, payable
in equal monthly installments (with properly pro rated payments for periods of
less than a full month) during the "Section 6 Period" (as that term is hereafter
as defined), an amount equal to the greater of: (i) the Base Salary plus
Incentive Payments paid to Employee during the 12 month period immediately
preceding such Compensated Termination; or (ii) Three Hundred Fifty Thousand
Dollars ($350,000). As used herein the term "Compensated Termination" shall mean
any one of the following events:
I. Company elects to terminate Employee's employment
under this Agreement pursuant to the provisions of Section 3(b) hereof at the
end of the initial term or any renewal term hereof;
II. Company at any time other than the end of initial
term or any renewal term hereof terminates the employment of Employee under the
Agreement, otherwise than as provided in Section 10 ("Discharge for Cause")
hereof; or
III. Employee terminates employment with Company
pursuant to Section 11 hereof.
As used herein, the term "Section 6 Period" shall mean the longer of: (i) one
year from the date a Compensated Termination occurs; or (ii) the period
beginning on the date a Compensated Termination occurs and ending on the date
upon which the then current term of Employee's employment with Company, as such
term may have been extended pursuant to Section 3(c) hereof, would have ended
but for the occurrence of the Compensated Termination.
(b) In the event of a Compensated Termination, for the entire
Section 6 Period, Company shall continue to provide, at no cost to Employee,
life, medical and dental insurance to Employee providing coverages equal to the
coverages made available to Employee and his dependents on the date of the
termination of his employment.
(c) In the event that any part of any payment or benefit to
Employee under Sections 6(a) and 6(b) of the Agreement or under this Section
6(c) or any other payment made or benefit conferred by Company to Employee
constitutes an "excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and any regulations
or other authorities relating thereto, but excluding payments which are
described in Section 280G(b)(2)(B) of the Code, Company will pay to Employee as
additional compensation (i) the amount of all taxes due from Employee under
Section 4999 of the Code and (ii) the amount equal to all federal, state and
local income taxes and business privilege taxes based upon net income
(collectively, the "Taxes") due from Employee upon all payments made by Company
to Employee under this Section 6(c). It is the intention of the parties that
Employee receive all payments and benefits from Company net of the tax under
Section 4999 of the Code and net of all taxes due upon all payments under this
Section 6(c), and the terms of this Section 6(c) shall be construed and
implemented by the parties to effectuate this intent.
(d) Notwithstanding anything to the contrary contained above
in this Section 6 or any other portion of this Agreement, the Company shall not
be required to make any of the payments or provide any of the other benefits set
forth above in this Section 6 or otherwise on account of any Compensated
Termination unless and until Employee has, if the Company so requests after
Employee's termination, resigned from the Boards of Directors (and/or any
committees thereof) of the Company and any affiliates of the Company, all as
requested by the Company.
7. Disability.
(a) If Employee becomes unable to perform Employee'ss duties
hereunder due to partial or total disability or incapacity resulting from a
mental or physical illness, injury or any similar cause, Company will continue
the payment of Employee's total compensation at its then current rate for a
period of three (3) months following the date Employee is first unable to
perform the duties due to such disability or incapacity. Thereafter, Company
shall have no obligation for the Base Salary or other compensation payments to
Employee during the continuance of such disability or incapacity, except that
Company shall pay to Employee, based upon the portion of the calendar year that
Employee was able to perform the duties prior to the disability, the pro rata
portion of the Incentive Payments that Employee would have earned if he had
remained in the employ of the Company for the full calendar year (payable at
such time that Employee would have received such Incentive Payment). Employee
shall receive such benefits, if any, as are then provided under Company's
standard disability coverage provided to employees generally, if and only if the
same is then in effect.
(b) If Employee is unable to perform Employee's duties
hereunder due to partial or total disability or incapacity resulting from a
mental or physical illness, injury or any similar cause for a period of six (6)
consecutive months, Company shall have the right to terminate this Agreement at
any time thereafter, in which event Company shall have no further obligations or
liabilities hereunder after the date of such termination.
8. Death. If Employee dies, all payments hereunder shall continue for a
period of three (3) months after the end of the week in which Employee's death
shall occur, at which point such payments shall cease and Company shall have no
further obligations or liabilities' hereunder to Employee's estate or legal
representative or otherwise, except that Company shall pay to Employee's estate
or legal representative, based upon the portion of the calendar year that
Employee was employed by Company prior to Employee's death, the prorated portion
of the Incentive Payments Employee would have earned if he had remained in the
employ of Company for the full calendar year (payable at such time that Employee
would have received such Incentive Payment).
9. Non-Competition, Trade Secrets, etc.
(a) During the term of this Agreement and for a period of two
(2) years after the termination of such Agreement, Employee shall not directly
or indirectly induce or attempt to influence any employee of Company to
terminate employment with Company and shall not engage in (as a principal,
partner, director, officer, agent, employee, consultant or otherwise) or be
financially interested in any business operating within the continental United
States, which business is involved in the business activities which are the same
as, similar to or in competition with business activities carried on by Company,
or being definitely planned by Company, at the time of such termination. For
purposes of this Section 9, Company's business activities shall include, without
limitation, the following: corporate outplacement, human resource consulting,
and career consulting for employees, including spouse placement, career
assessment, second career planning, and career options planning, career
development, and consulting on the subjects of termination, severance policies,
and retirement planning, reporting, evaluation, advisory, and communications
services, and other human resources consulting and personnel services to client
organizations; and any other such products, programs, and services as Company
may hereafter commence marketing in the area of human resource consulting.
(b) For a similar period of two (2) years after termination of
this Agreement, Employee shall not contact directly or indirectly or cause to be
contacted directly or indirectly any clients or customers of Company for the
purpose of competitively soliciting business in competition with Company.
Without limiting the foregoing, for a period of two (2) years after termination
of this Agreement, Employee shall not competitively solicit business from
clients, customers or competitors of Company within the continental United
States through the means or use of property in which Company has an ownership
interest or a license pursuant to Section 9(d) hereof.
(c) During the term of this Agreement and at all times
thereafter, Employee shall not use for Employee's personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company other than Company, any information
regarding the business methods, business policies, procedures, techniques,
research or development projects or results, trade secrets, or other knowledge
or processes used or developed by Company or any name or addresses of customers
or clients or any data on or relating to past, present or prospective customers
or clients or any other confidential information relating to or dealing with the
business operations or activities of Company, made known or learned or acquired
by Employee while in the employ of Company.
(d) Any and all writings, inventions, improvements, computer
programs, processes, procedures or techniques (hereinafter "Inventions") which
Employee may make, discover or develop either solely or jointly with any other
person or persons (hereinafter "Co-Inventor(s)") at any time during the term of
and as part of Employee's employment with Company which relate to any business
being conducted or carried on by Company at the time of invention shall be the
sole and exclusive property of Company, subject to the rights of the
Co-Inventor(s) in the Inventions. Any and all Inventions which Employee may
make, discover or develop either solely or jointly with any Co-Inventor(s) other
than a part of Employee's employment with Company which are useful in connection
with any business being conducted, carried on or definitely planned by Company
at the time of invention shall be subject to a perpetual license to Company,
subject to any rights of Co-Inventor (s). The amount of the royalty shall be
agreed upon by Company and Employee. In the event that they cannot agree, such
royalty shall be determined by arbitration by three arbitrators, one selected by
Company, one selected by Employee and the third selected by the first two
arbitrators. During the term of this Agreement, Employee shall make full
disclosure to Company of all such Inventions. It shall be presumed that any
Inventions which Employee shall make, discover or develop either solely or
jointly with any Co-Inventor(s) during the two-year period after termination of
employment with Company shall have been developed in part during the term of
employment, and Employee shall have the burden of proof in demonstrating that no
such development occurred during such term of employment. With respect to those
Inventions as to which Company is to acquire title hereunder, Employee shall do
everything necessary or desirable to vest such title in Company, and Employee
shall write and prepare all specifications and procedures regarding such
Inventions and otherwise aid and assist Company so that Company can prepare and
present applications for copyrights or patents therefor and can secure such
copyrights or patents wherever possible, as well as reissues, renewals and
extensions thereof, and can obtain record title to such copyright or patents in
all countries in which it may desire to have copyright or patent protection.
Employee shall not be entitled to any additional or special compensation for
rights to Inventions which Company acquires hereunder.
(e) Employee also agrees, during the term of this Agreement
and thereafter, not to disparage or deprecate, directly or indirectly, the
reputation, professionalism, character, competence, integrity or motives of the
Company, any subsidiary or any affiliate thereof, or any of their officers,
trustees, directors, employees, attorneys, agents or family members.
(f) Employee acknowledges that the restrictions contained in
this Section 9, in view of the nature of the business in which Company is
engaged, are reasonable and necessary in order to protect the legitimate
interests of Company, and that any violation thereof would result in irreparable
injuries to Company, and Employee therefore acknowledges that, in the event of
Employee's violation of any of these restrictions, Company shall be entitled to
obtain from any court of competent jurisdiction preliminary and permanent
injunctive relief a well as damages and an equitable accounting of all earnings,
profits and other benefits arising from such violation, which rights will be
cumulative and in addition to any other rights or remedies to which Company may
be entitled.
(g) If the period of time or the area specified in this
Section 9 should be adjudged unreasonable in any proceeding, then the period of
time shall be reduced by such number of months or the area shall be reduced by
the elimination of such portion thereof or both so that such restrictions may be
enforced in such area and for such time as is adjudged to be reasonable. If
Employee violates any of the restrictions contained in the foregoing
subparagraph (a), the restrictive period shall not run in favor of Employee from
the time of the commencement of any such violation until such time as such
violation shall be cured by Employee to the satisfaction of Company.
10. Discharge for Cause. Company may discharge Employee at any time for
criminal conduct (whether or not related to Employee's employment), gross
negligence, any violation of any express direction or any reasonable rule or
regulation established by Company's Board from time to time regarding the
conduct of its business, or any violation by Employee of the terms and
conditions of this Agreement, in which event Company shall have no further
obligations or liabilities hereunder after the date of such discharge.
11. Compensated Termination by Employee. The occurrence of any of the
following events shall give Employee grounds to effect a Compensated Termination
under Section 6 hereof:
(a) Employee is not elected or reelected, as the case may be,
to the executive offices of Company when and as specified in Section 1 hereof or
Employee's responsibilities as an executive officer, employee and Board member
of Company are materially changed by Company without Employee's prior written
consent;
(b) At any time during the term of Employee's employment with
Company, the removal of Employee from membership on the Board or the failure of
the shareholders of Company to reelect Employee to the Board;
(c) Company, without the consent of Employee, relocates its
corporate headquarters offices outside of the Philadelphia Metropolitan
Statistical Area, as such term is defined by the Office of Management and
Budget, or bases Employee elsewhere than in its corporate headquarters offices;
(d) Any material reduction in the facilities, staff and
support services made available to Employee by Company at any time provided that
such reduction was made without the consent of Employee.
Employee may effect a Compensated Termination only if Employee shall
terminate employment with Company for any of the reasons set forth within thirty
(30) days of the date Employee discovers the existence of the event which gives
rise to a right of termination, by giving notice of termination to Company.
12. Indemnification. At all times during and after Employee's
employment with Company, Company shall indemnify Employee against expenses
(including legal fees), judgments, fines and amounts paid in settlement,
actually and reasonably incurred by Employee, to the extent now or hereafter
permitted by law and Company's By-Laws, in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, brought or threatened to be brought against
Employee, including actions or suits by or in the right of Company, by reason of
the fact that Employee is or was a director, officer, employee or agent of
Company, its parent or any of its subsidiaries, or acted as a director, officer,
employee or agent or in any other capacity on behalf of Company, its parent or
any of its subsidiaries or is or was serving at the request of Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, provided that Employee acted in good faith
and in a manner reasonably believed to be in, or not opposed to, the best
interests of Company and, with respect to any criminal proceeding, Employee had
no reasonable cause to believe Employee's conduct was unlawful. Company shall
pay expenses incurred by Employee in defending such a civil or criminal action,
suit or proceeding in advance of the final disposition of such suit or
proceeding upon receipt of an undertaking by or on behalf of Employee to repay
such amount if it is ultimately determined that he is not entitled to be
indemnified by Company as authorized by Company's By-Laws or by law.
13. Company Property.
(a) All counseling, advertising, sales, and other materials or
articles of information, including without limitation data processing reports,
customer sales analyses, invoices, price lists or information, samples or any
other materials or data of any kind furnished to Employee by Company or
developed by Employee on,behalf of Company or at Company's direction or for
Company s use or otherwise in connection with Employee's employment hereunder,
are and shall remain the sole and confidential property of Company; if Company
requests the return of such materials at any time during or at or after the
termination of Employee's employment, Employee shall immediately deliver the
same to Company.
(b) Upon the termination of employment for any reason other
than for cause or the death of Employee, Employed shall have the option,
exercisable only by written notice given to Company within twenty (20) days
after termination of employment (i) to acquire any automobile then being used by
Employee and owned by Company for a purchase price equal to the then book value
of such automobile, as determined by Company or (ii) to acquire Company's
leasehold rights to any such automobile leased by Company (if, and only if, the
lessor agrees to such acquisition without requiring any payment or guarantee or
any other concessions by Company) by assuming, and agreeing to hold Company
harmless against, all of Company's obligations with respect thereto accruing
from and after the date that the transfer of title takes place. Employee shall
pay all sales and use taxes relating to any such sale or acquisition. Closing of
any such acquisition by Employee shall take place at such time as shall be
mutually agreeable to the parties, but in no event more than twenty (20) days
after the exercise of this option, at such place as Company shall specify.
14. Prior Agreements. Employee represents to Company (a) that there are
no restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful Employee's execution of this
Agreement or Employee's employment hereunder, (b) that Employee's execution of
this Agreement and employment hereunder shall not constitute a breach of any
contract, agreement or understanding, oral or written, to which Employee is a
party or by which Employee is bound and (c) that Employee is free and able to
execute this Agreement and to enter into employment by Company.
15. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor the delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as.a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(b) Controlling Law. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
(c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received two days
following the day when deposited with an overnight courier service such as
Federal Express, for delivery to the intended addressee or two days following
the day when deposited in the United States mails, registered mail return
receipt requested, addressed as set forth below:
If to Employee: Xx. Xxxx X. Xxxxx
0000 Xxxxxxx Xxx
Xxxxx Xxxxx, XX 00000
If to Company: Right Management Consultants, Inc.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chairman of the Board
In addition, notice by mail shall be by air mail if posted
outside of the continental United States.
Any party may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity
with the provisions of this paragraph for the giving of notice.
(a) Binding Nature of Agreement. This Agreement shall be
binding and inure to the benefit of Company and its successors and assigns and
shall be binding upon Employee, Employee's heirs and legal representatives.
(b) Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photographic or xerox copy of this Agreement, with all
signatures reproduced on one or more sets of signature pages, shall be
considered for all purposes as if it were an executed counterpart of this
Agreement.
(c) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(d) Entire Agreement. This Agreement constitutes the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or condition, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(e) Paragraph Headings. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(f) Gender, Etc. Words used herein, regardless of the number
of gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
(g) Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or holiday.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
RIGHT MANAGEMENT CONSULTANTS, INC.
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
/S/ XXXX X. XXXXX (SEAL)
--------------------------------------
Xxxx X. Xxxxx, Employee
EXHIBIT "A"
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
Supplemental Deferred Compensation Plan ("Plan") for Xxxx X. Xxxxx
("Employee") pursuant to Section 4(c) of the Employment Agreement dated as of
January 1, 1999 (the "Employment Agreement") between Employee and Right
Management Consultants, Inc. ("Company"). Except as otherwise specified herein,
all terms used herein shall have the same meaning as such terms have in the
Employment Agreement.
1. Definitions.
A. "Age" shall mean the age of Employee as of Employee's last
birthdate.
B. Compensation. "Compensation" shall mean Employee's cash
compensation, which includes Base Salary and Incentive Payments only, earned by
Employee in Employee's capacity as an employee of Company with respect to a Plan
Year.
C. Deferred Benefit Account. "Deferred Benefit Account" shall
mean the account maintained on the books of Company for Employee pursuant to
Paragraph 2 hereof.
D. Determination Date. "Determination Date" shall mean the
last day of each Plan Year or such other dates as may be established by the
Committee.
E. Disability. "Disability" shall mean that Employee is unable
to perform Employee's duties hereunder due to partial or total disability or
incapacity resulting from a mental or physical illness, injury or any similar
cause for a period of six (6) consecutive months. If there is any dispute as to
Employee's physical or mental disability, the question shall be settled by the
opinion of a duly licensed medical or osteopathic physician selected by the
mutual consent of Employee and Company or their representatives. Certification
of that physician as to the matter in dispute shall be final and binding upon
the parties.
F. Interest Yield. "Interest Yield" shall mean an effective
annual yield which, with respect to any calendar year, is a rate equal to the
annual interest rate of the two year guaranteed investment contract index as
published in the Wall Street Journal on the November 30 of that calendar year.
Company may, in its discretion and with notice to Employee no later than
November 15 of such calendar year, base the Interest Yield instead on a rate
that is consistent with annual interest rates used by Company in connection with
Company's other non-qualified deferred compensation plans for other senior
executives of Company.
G. Plan Year. "Plan Year" shall mean the calendar year.
H. Normal Retirement Date. "Normal Retirement Date" shall mean
the first date of the month following Employee's sixty-fifth (65th) birthday.
I. Termination of Service. "Termination of Service" shall mean
Employee's ceasing to be an employee of the Company for any reason other than
death or discharge for cause pursuant to Section 10 of the Employment Agreement.
2. Deferred Benefit Account.
A. Establishment of Account. Company shall establish a
Deferred Benefit Account on its books for Employee. The balance of Employee's
Deferred Benefit Account shall consist of the sum of all amounts credited to the
account pursuant to Paragraph 2B, less the sum of all distributions and benefit
payments made to Employee. Employee's Deferred Benefit Account shall be utilized
solely as a device for the measurement and determination of the amounts to be
paid to Employee pursuant to the plan.
B. Credits to Account. Company shall credit Employee's
Deferred BenefIt Account with the following amounts at the times specified:
(1) Five percent (5%) of Compensation credited as of
the Determination Date, provided, however, that (i) the amount credited may be
reduced, at the discretion of Company, by the amount Company is required to
withhold under any federal, state or local law for taxes or other charges.
(2) As of the Determination Date, an amount equal to
the interest earned since the last preceding Determination Date. For purposes of
the foregoing, interest earned shall be calculated by applying the Interest
Yield, reduced to a nominal monthly rate, to the average daily balance of the
Deferred Benefit Account since the last preceding Determination Date.
3. Vesting of Deferred Benefit Account Balance.
Employee shall be vested in the Deferred Benefit Account
balance according to the following schedule.
Age % Vested
61 20%
62 40%
63 60%
64 80%
65 100%
Notwithstanding the above schedule, Employee shall become fully-vested
upon Employee's Death, Disability or Termination of Service. The Board may elect
to accelerate the Age or time in which Employee can become fully vested in the
Deferred Benefit Account balance.
4. Benefits.
A. Retirement Benefits. Upon Employee's Termination of Service
on or after his Normal Retirement Date, provided that Employee continuously
served Company as an employee to that time, Employee shall receive, as deferred
compensation for services rendered prior to such date, a benefit equal to the
amount of Employee's Deferred Benefit Account balance (determined in accordance
with Paragraph 2B(2)), payable as a life annuity in equal monthly installments
with interest on the unpaid balance at a rate equal to the Interest Yield. Such
annuity payments shall be based upon the 1983 Group Annuity Mortality tables.
B. Benefits Upon Early Termination of Service. Upon Employee's
Termination of Service prior to Employee's Normal Retirement Date, Employee
shall receive, as deferred compensation for services rendered prior to such
date, a benefit equal to the amount of Employee's Deferred Benefit Account
balance (determined in accordance with Paragraph 2B(2)), payable in a lump sum
within one (1) month of such Termination of Service; provided however, that
Company may, at Company's sole option, elect to retain in the Deferred Benefit
Account that amount of the Deferred Benefit Account Balance in excess of
$100,000 to be payable to Employee as a life annuity in equal monthly
installments with interest on the unpaid balance at a rate equal to the Interest
Yield , beginning on the first day of the month after the date that would have
been Employee's Normal Retirement Date had such Termination of Service not
earlier occurred. Company shall notify Employee of such an election prior to the
date the lump sum payment is due. The annuity payments shall be based upon the
1983 Group Annuity Mortality tables.
C. Disability.
If Employee suffers a Disability prior to Termination
of Service and before receiving any benefits under Paragraph 4A, Employee's
beneficiary shall receive payment equal to the amount of Employee's Deferred
Benefit Account balance (determined in accordance with Paragraph 2B(2)), in a
lump sum within one (1) month of the date of Employee's Disability. Payment of
such benefit shall relieve Company of the obligation to pay any other benefit
which Employee would have otherwise received under this plan.
D. Survivorship Benefits.
(1) Prior to Commencement of Retirement Benefits. If
Employee dies prior to Termination of Service and before receiving any benefits
under Paragraph 4A, Employee's beneficiary shall receive payment equal to the
amount of Employee's Deferred Benefit Account balance (determined in accordance
with Paragraph 2B(2)), in a lump sum within one (1) month of the date of
Employee's death. Payment of such benefit shall relieve Company of the
obligation to pay any other benefit which Employee would have otherwise received
under this plan.
(2) After Commencement of Benefits. If Employee dies
after benefit payments under Paragraphs 4A or 4B have commenced, Company shall
continue to pay the remaining payments to Employee's beneficiary in accordance
with the payment terms and schedule in effect at the time of death until the
full balance of the Deferred Benefit Account are paid.
E. Commencement of Payments. Benefit payments required under
Paragraphs 4A, 4B, 4C or 4D shall commence on the first day of the month
following the Employee's Termination of Service, Disability or death, as the
case may be.
F. Special Distributions. The foregoing provisions of this
Paragraph 4 notwithstanding, Company may, in its sole discretion, make
distributions to Employee or beneficiaries in a lump sum or in such other
payment forms not provided for in Xxxxxxxxxx 0X, 0X, 0X xx 0X. Any such
distribution shall reduce the Deferred Benefit Account balance of Employee or
beneficiary by the amount of the distribution.
5. Beneficiaries.
A. Designation. Employee shall designate a beneficiary or
beneficiaries to receive any benefits payable on Employee's behalf after
Employee's death by delivering a written notice of such designation to Company
in such form as Company shall prescribe. Employee may revoke or modify the
designation at any time by a further written designation. Employee's beneficiary
designation shall be deemed automatically revoked in the event the designated
beneficiary predeceases Employee. If no designation shall be in effect at the
time when any benefits payable to a beneficiary under this plan shall become
due, the beneficiary shall be the spouse of Employee, or if no spouse is then
living, the beneficiaries shall be the Employee's children, per stirpes, or, if
none, all payments under this plan shall be made to Employee's estate.
B. Payments to Minors and Incompetents. In the event Employee
is an incompetent, or a benefit is payable to a beneficiary who is a minor or
person declared incompetent, or who is a person incapable of handling the
disposition of Employee's property, Company may pay such benefit to the guardian
or legal representative, or if none, to any other person having the care or
custody of the Employee or beneficiary. Company may require such proof of
incompetency, minority, legal custody, guardianship, etc. as it deems
appropriate prior to distribution of the benefit. Such distribution shall
completely discharge Company and its officers and directors from all liability
with respect to such benefit.
6. Benefits Subject to Company's Creditors. Any amounts subject to this
plan, shall be subject to claims of general creditors of Company. The right of
Employee or Employee's beneficiary to receive payment of plan benefits from
Company assets shall be solely that of a general, unsecured creditor of Company.
7. Change of Control. Notwithstanding the provisions of Paragraph 6, in
the event that: (i) a "controlling interest" in the capital stock of Company is
sold in a single transaction or a group of related transactions to one or more
buyers acting in concert, (ii) Company sells all or substantially all of its
assets, or (iii) Company is a party to any corporate merger or consolidation in
which one or more parties acting in concert who did not previously hold a
"controlling interest" in the capital stock of Company acquires or acquire such
a "controlling interest" in the capital stock of Company or its successor entity
(individually and collectively a "Change in Control"), Company shall establish a
trust agreement and shall from time to time transfer into the trust sufficient
assets to meet Company's obligation to pay Plan benefits to Employee and
Employee's beneficiaries. The Agreement under which the trust is created shall
provide that the trustee shall hold the trust assets separate and apart from the
other assets of Company; the trust shall not terminate until all benefits
payable under this Plan are actually paid to trust beneficiaries or Company is
no longer obligated to pay benefits to Employee under this Plan pursuant to
Section 9 hereof; and that the trust shall be structured so that Employee shall
not be charged with income, for Federal and state income tax purposes, at the
time the trust is funded or upon the lapse of the noncompetition forfeiture
provision of Section 9 hereof (so as to be structured as what is commonly
referred to as a "Rabbi Trust"). At the termination of the trust, trust assets
not needed to pay benefits under the Plan shall be returned to Company. In
addition, if there shall be a Termination of Service within two (2) years of a
Change in Control, Employee shall be entitled to begin receiving retirement
benefits under this Plan as if Employee had reached the Normal Retirement Date
at or prior to such termination. For the purposes of this Paragraph 7, a
"controlling interest" in the capital stock will constitute that number of
shares which, as a practical matter, permits the holder or holders to elect a
majority of the members of the Board. It is agreed that shares of capital stock
possessing the right to cast a majority or more of the votes entitled to be cast
for the election of directors of Company shall conclusively constitute a
"controlling interest", but that a block of shares possessing the right to cast
less than a majority of the number of votes entitled to be voted may, under the
circumstances then pertaining, constitute a "controlling interest".
8 Amendment and Termination.
A0 The Company may at any time amend or terminate the Plan;
provided, however, that the Deferred Benefit Account balance may not be reduced
or terminated thereby.
B0 Notwithstanding any other provision of this Plan to the
contrary, upon the termination of this Plan for any reason, the Deferred Benefit
Account Balance at the time of such termination shall be determined in
accordance with Paragraph 2B(2) hereof.
9 Non-Competition, Trade Secrets, etc.
If Employee shall act in such a manner as to, in Company's
judgment; violate the provisions of Section 9 of the Employment Agreement
("Non-Competition, Trade Secrets, etc."), Employee shall forfeit all benefits
accrued under this Plan and Company shall have no further obligations to
Employee hereunder.
10 Miscellaneous.
A0 Assignment of Benefits. Neither Employee nor any
beneficiary under this plan shall have any right to assign, transfer, pledge or
otherwise encumber the right to receive any benefits hereunder, and any
attempted assignment, transfer, pledge or other encumbrance shall be void and
have no effect.
B0 Employment Not Guaranteed by Plan. Neither this plan nor
any action taken hereunder shall be construed as giving Employee the right to
remain as an employee of Company for any period.
C0 Tax Deduction. Company shall deduct from all benefit
payments all applicable federal, state or local taxes required by law to be
withheld from such payments.
D0 Construction. This Plan shall be construed according
to the laws of the Commonwealth of Pennsylvania.
E0 Form of Communication. Any election, claim, notice or other
communication required or permitted to be made by a Employee or beneficiary
under this plan shall be made in writing and in such form as shall be prescribed
by Company. Such communication shall be effective upon mailing if sent first
class mail, postage pre-paid, return receipt requested.
F0 Captions. The captions at the head of a paragraph of this
plan are designed for convenience of reference only and are not to be resorted
to for the purpose of interpreting any provision of this Plan.
G0 Entire Agreement. This plan constitutes the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings inducements or conditions, express or implied, oral or written,
except as herein contained.
ADOPTED as of this 1st day of January, 1999, pursuant to authority
vested in the undersigned officer.
RIGHT MANAGEMENT CONSULTANTS, INC.
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
