Exhibit 10.23
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated as of the 18th day of November, 1998, is by and
between INTERIM SERVICES INC., a Delaware corporation (hereinafter referred
to as the "Company"), and XXXXXX X. XXXXXXXX (hereinafter the "Executive").
RECITALS
A. The Board of Directors of the Company (the "Board") considers it
essential to the best interests of the Company and its stockholders that its
key management personnel be encouraged to remain with the Company and its
subsidiaries and to continue to devote full attention to the Company's
business in the event that any third person expresses its intention to
complete a possible business combination with the Company, or in taking any
other action which could result in a "Change in Control" (as defined herein)
of the Company. In this connection, the Board recognizes that the possibility
of a Change in Control and the uncertainty and questions which it may raise
among management may result in the departure or distraction of key management
personnel to the detriment of the Company and its stockholders. The Board
has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of key members of the
Company's management to their assigned duties without distraction in the face
of the potentially disturbing circumstances arising from the possibility of a
Change in Control of the Company.
B. The Executive currently serves as the Company's Executive Vice
President and Chief Operating Officer, and his services and knowledge are
valuable to the Company in connection with the management of its business.
C. The Board believes the Executive has made and is expected to
continue to make valuable contributions to the productivity and profitability
of the Company and its subsidiaries. Should the Company receive a proposal
from a third person concerning a possible business combination or any other
action which could result in a Change in Control, in addition to the
Executive's regular duties, the Executive may be called upon to assist in the
assessment of such proposal, advise management and the Board as to whether
such proposal would be in the best interests of the Company and its
stockholders, and to take such other actions as the Board might determine to
be necessary or appropriate.
D. Should the Company receive any proposal from a third person
concerning a possible business combination or any other action which could
result in a change in control of the Company, the Board believes it
imperative that the Company and the Board be able to rely upon the Executive
to continue in his position, and that the Company and the Board be able to
receive and rely upon his advice, if so requested, as to the best interests
of the Company and its stockholders without concern that he might be
distracted by the personal uncertainties and risks created by such a
proposal, and to encourage Executive's full attention and dedication to the
Company.
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TERMS AND CONDITIONS
NOW, THEREFORE, to assure the Company and its subsidiaries that it will
have the continued, undivided attention, dedication and services of the
Executive and the availability of the Executive's advice and counsel
notwithstanding the possibility, threat or occurrence of a Change in Control
of the Company, and to induce the Executive to remain in the employ of the
Company and its subsidiaries, and for other good and valuable consideration,
the adequacy and sufficiency of which are hereby acknowledged, the Company
and the Executive agree as follows.
1. CHANGE IN CONTROL
(a) The definition of a "Change in Control" of the Company
for purposes of this Agreement shall be as determined, prospectively,
from time to time, by the Board, pursuant to the affirmative vote of at
least two-thirds of those members of the Board (i) who have served on
the Board for at least two years prior to such determination, and
(ii) whose election, or nomination for election, during such two-year
period was approved by a vote of at least two-thirds of the directors
then in office who were directors at the beginning of such two-year
period. Written notice of any such determination, or modification of a
previous determination, shall be provided promptly to the Executive.
(b) In the event that at any time during the term of this
Agreement the Board has not established a definition of "Change of
Control" pursuant to Section 1(a), for purposes of this Agreement, a
"Change in Control" of the Company shall be deemed to have occurred upon
(i) the acquisition at any time by a "person" or "group" (as that term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (excluding, for this purpose, the
Company or any of its subsidiaries, any employee benefit plan of the
Company or any of its subsidiaries, an underwriter temporarily holding
securities pursuant to such securities, or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company) of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities representing 25% or more of the
combined voting power in the election of directors of the
then-outstanding securities of the Company or any successor of the
Company; (ii) the termination of service as directors, for any reason
other than death, disability or retirement from the Board, during any
period of two consecutive years or less, of individuals who at the
beginning of such period constituted a majority of the Board, unless the
election of or nomination for election of each new director during such
period was approved by a vote of at least two-thirds of the directors
still in office who were directors at the beginning of the period;
(iii) approval by the stockholders of the Company of liquidation of the
Company; (iv) approval by the stockholders of the Company and
consummation of any sale or disposition, or series of related sales or
dispositions, of 50% or more of the assets or earning power of the
Company; or (v) approval by the stockholders of the Company and
consummation of any merger or consolidation or statutory share exchange
to which the Company is a party as a result of which the persons who
were stockholders of the Company immediately prior to the effective date
of the merger or consolidation or statutory share exchange shall have
beneficial ownership of less than 50% of the combined voting power in
the election of
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directors of the surviving corporation following the effective date of
such merger or consolidation or statutory share exchange.
(c) Notwithstanding anything herein, no acquisition of
beneficial ownership of securities of the Company, merger, sale of
assets or other transaction shall be deemed to constitute a Change in
Control for purposes of this Agreement if such transaction constitutes a
"Management Approved Transaction." For purposes of this Agreement, a
"Management Approved Transaction" shall be any transaction, which would
otherwise result in a Change in Control for purposes of this Agreement
in which the acquiring "person", "group" or other entity is either
beneficially owned by, or comprised of, in whole or in part, three or
more members of the Company's executive management, as such was
constituted twelve months prior to such transaction, or is majority
owned by, or comprised of, any employee benefit plan of the Company.
(d) Notwithstanding anything herein, no acquisition of
beneficial ownership of securities of the Company, merger, sale of
assets or other transaction shall be deemed to constitute a Change in
Control for purposes of this Agreement if such transaction is approved
by the affirmative vote of at least two-thirds of those members of the
Board (i) who have served on the Board for at least two years prior to
such approval, and (ii) whose election, or nomination for election,
during such two-year period was approved by a vote of at least
two-thirds of the directors then in office who were directors at the
beginning of such two-year period.
2. ADJUSTMENT OF BENEFITS UPON CHANGE IN CONTROL
(a) The Company agrees that the Compensation Committee of the
Board, or such other committee succeeding to such committee's
responsibilities with respect to executive compensation (collectively,
the "Compensation Committee") may make such equitable adjustments to any
performance targets contained in any awards under the Company's current
incentive compensation plans, or any additional or successor plan in
which the Executive is a participant (collectively, the "Incentive
Plans"), as the Compensation Committee determines may be appropriate to
eliminate any negative effects from any transactions relating to a
Change in Control (such as costs or expenses associated with the
transaction or any related transaction, including, without limitation,
any reorganizations, divestitures, recapitalizations or borrowings, or
changes in targets or measures to reflect the disruption of the
business, etc.), in order to preserve reward opportunities and
performance objectives.
(b) In the case of a Change in Control, all restrictions and
conditions applicable to any awards of restricted stock or the vesting
of stock options or other awards granted to the Executive under the
Company's 1998 Incentive Stock Plan, 1997 Long-Term Executive
Compensation and Outside Director Stock Option Plan, any similar or
successor plan, or otherwise shall be deemed to have been satisfied as
of the date the Change in Control occurs, and this Agreement shall be
deemed to amend any agreements evidencing such awards to reflect this
provision.
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3. TERMINATION FOLLOWING CHANGE IN CONTROL
(a) The Executive's employment may be terminated for any
reason by the Company within two years following a Change in Control of
the Company. If the Executive's employment is terminated for any reason
other than the reasons set forth below, then the Executive shall be
entitled to the benefits set forth in this Agreement in lieu of any
termination, separation, severance or similar benefits under the
Executive's Employment Agreement, if any, or under the Company's
termination, separation, severance or similar plans or policies, if any.
If the Executive's employment is terminated for any of the reasons set
forth below, then the Executive shall not be entitled to any
termination, separation, severance or similar benefits under this
Agreement, and the Executive shall be entitled to benefits under the
Executive's Employment Agreement, if any, or under the Company's
termination, separation, severance or similar plans or policies, if any,
only in accordance with the terms of such Employment Agreement, or such
plans or policies.
(i) termination by reason of the Executive's death, PROVIDED
the Executive has not previously given a "Notice of Termination"
pursuant to Section 4;
(ii) termination by reason of the Executive's "disability,"
PROVIDED the Executive has not previously given a "Notice of
Termination" pursuant to Section 4;
(iii) termination by reason of "retirement" at or after age
65, PROVIDED the Executive has not previously given "Notice of
Termination" pursuant to Section 4; or
(iv) termination by the Company for "Cause."
For the purposes of this Agreement, "disability" shall be
defined as the Executive's inability by reason of illness or other
physical or mental disability to perform the principal duties required
by the position held by the Executive at the inception of such illness
or disability for any consecutive 180-day period. A determination of
disability shall be subject to the certification of a qualified medical
doctor agreed to by the Company and the Executive or, in the Executive's
incapacity to designate a doctor, the Executive's legal representative.
If the Company and the Executive cannot agree on the designation of a
doctor, each party shall nominate a qualified medical doctor and the two
doctors shall select a third doctor and the third doctor shall make the
determination as to disability.
For purposes of this Agreement, "retirement" shall mean the
Company's termination of the Executive's employment at or after the
date on which the Executive attains age 65.
For purposes of this Agreement, "Cause" shall mean one or more
of the following:
(I) the material violation of any of the terms and conditions
of this Agreement or any written agreements the Executive may from time
to time have with the Company (after 30 days following written notice
from the Board specifying such material violation and Executive's
failure to cure or remedy such material violation within such 30-day
period);
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(II) inattention to or failure to perform Executive's assigned
duties and responsibilities competently for any reason other than due to
Disability (after 30 days following written notice from the Board
specifying such inattention or failure, and Executive's failure to cure
or remedy such inattention or failure within such 30-day period);
(III) engaging in activities or conduct injurious to the
reputation of the Company or its affiliates including, without
limitation, engaging in immoral acts which become public information or
repeatedly conveying to one person, or conveying to an assembled public
group, negative information concerning the Company or its affiliates;
(IV) commission of an act of dishonesty, including, but not
limited to, misappropriation of funds or any property of the Company;
(V) commission by the Executive of an act which constitutes a
misdemeanor (involving an act of moral turpitude) or a felony;
(VI) the material violation of any of the written Policies of
the Company which are not inconsistent with this Agreement or applicable
law (after 30 days following written notice from the Board specifying
such failure, and the Executive's failure to cure or remedy such
inattention or failure within such 30-day period);
(VII) refusal to perform the Executive's assigned duties and
responsibilities or other insubordination (after 30 days following
written notice from the Board specifying such refusal or
insubordination, and the Executive's failure to cure or remedy such
refusal or insubordination within such 30-day period); or
(VIII) unsatisfactory performance of duties by the Executive as
a result of alcohol or drug use by the Executive.
(b) The Executive may terminate his employment with the Company
following a Change in Control of the Company (i) for any reason
by giving Notice of Termination during either of the "Termination
Periods" or (ii) for "Good Reason" by giving Notice of Termination at
any time within two years after the Change in Control. Any failure by
the Executive to give such immediate notice of termination for Good
Reason shall not be deemed to constitute a waiver or otherwise to affect
adversely the rights of the Executive hereunder, PROVIDED the Executive
gives notice to receive such benefits prior to the expiration of such
two year period. If the Executive terminates his employment as provided
in this Section 3(b), then the Executive shall be entitled to the
benefits set forth in this Agreement in lieu of any termination,
separation, severance or similar benefits under the Executive's
Employment Agreement, if any, or under the Company's termination,
separation, severance or similar plans or policies, if any.
For purposes of this Agreement, there shall be two "Termination
Periods" during which the Executive may give Notice of Termination and
receive the benefits set forth in this Agreement:
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(i) the first of which shall be the sixty (60) day
period commencing on the date of the Change of Control, and;
(ii) the second of which shall be the thirty (30) day
period commencing on the first anniversary of the date of the Change of
Control
For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any one or more of the following events:
(I) The assignment to the Executive of any duties
inconsistent in any material adverse respect with his position,
authority or responsibilities with the Company and its subsidiaries
immediately prior to the Change in Control, or any other material
adverse change in such position, including titles, authority, or
responsibilities, as compared with the Executive's position immediately
prior to the Change in Control;
(II) A reduction by the Company in the amount of the
Executive's base salary or annual or long term incentive compensation
paid or payable as compared to that which was paid or made available to
Executive immediately prior to the Change in Control; or the failure of
the Company to increase Executive's compensation each year by an amount
which is substantially the same, on a percentage basis, as the average
annual percentage increase in the base salaries of other executives of
comparable status with the Company;
(III) The failure by the Company to continue to provide
the Executive with substantially similar perquisites or benefits the
Executive in the aggregate enjoyed under the Company's benefit programs,
such as any of the Company's pension, savings, vacation, life insurance,
medical, health and accident, or disability plans in which he was
participating at the time of the Change in Control (or, alternatively,
if such plans are amended, modified or discontinued, substantially
similar equivalent benefits thereto, when considered in the aggregate),
or the taking of any action by the Company which would directly or
indirectly cause such benefits to be no longer substantially equivalent,
when considered in the aggregate, to the benefits in effect at the time
of the Change in Control;
(IV) The Company's requiring the Executive to be based
at any office or location more than 50 miles from that location at which
he performed his services immediately prior to the Change in Control,
except for a relocation consented to in writing by the Executive, or
travel reasonably required in the performance of the Executive's
responsibilities to the extent substantially consistent with the
Executive's business travel obligations prior to the Change in Control;
(V) Any failure of the Company to obtain the
assumption of the obligation to perform this Agreement by any successor
as contemplated in Section 11 herein; or
(VI) Any breach by the Company of any of the material
provisions of this Agreement or any failure by the Company to carry out
any of its obligations hereunder, in either case, for a period of thirty
business days after receipt of written notice from the Executive and the
failure by the Company to cure such breach or failure during such thirty
business day period.
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4. NOTICE OF TERMINATION
Any termination of the Executive's employment following a Change in
Control, other than a termination as contemplated by Sections 3(a)(i) or
3(a)(iii) shall be communicated by written "Notice of Termination" by the
party affecting the termination to the other party hereto. Any "Notice of
Termination" shall set forth (a) the effective date of termination, which
shall not be less than 15 or more than 30 days after the date the Notice of
Termination is delivered (the "Termination Date"); (b) the specific provision
in this Agreement relied upon; and (c) in reasonable detail the facts and
circumstances claimed to provide a basis for such termination and the
entitlement, or lack of entitlement, to the benefits set forth in this
Agreement. Notwithstanding the foregoing, if within fifteen (15) days after
any Notice of Termination is given, the party receiving such Notice of
Termination notifies the other party that a good faith dispute exists
concerning the termination, the actual Termination Date shall be the date on
which the dispute is finally determined in accordance with the provisions of
Section 18 hereof. In the case of any good faith dispute as to the
Executive's entitlement to benefits under this Agreement resulting from any
termination by the Company for which the Company does not deliver a Notice of
Termination, the actual Termination Date shall be the date on which the
dispute is finally determined in accordance with the provisions of Section 18
hereof. Notwithstanding the pendency of any such dispute referred to in the
two preceding sentences, the Company shall continue to pay the Executive his
full compensation then in effect and continue the Executive as a participant
in all compensation, benefits and perquisites in which he was then
participating, until the dispute is finally resolved, PROVIDED the Executive
is willing to continue to provide full time services to the Company and its
subsidiaries in substantially the same position, if so requested by the
Company. Amounts paid under this Section 4 shall be in addition to all other
amounts due under this Agreement and shall not be offset against or reduce
any other amounts due under this Agreement. If a final determination is
made, pursuant to Section 18, that Good Reason did not exist in the case of a
Notice of Termination by the Executive, the Executive shall have the sole
right to nullify and void his Notice of Termination by delivering written
notice of same to the Company within three (3) business days of the date of
such final determination. If the parties do not dispute the Executive's
entitlement to benefits hereunder, the Termination Date shall be as set forth
in the Notice of Termination.
5. TERMINATION BENEFITS
(a) SEVERANCE PAYMENT. Subject to the conditions set forth
in this Agreement, on the Termination Date the Company shall pay the
Executive (reduced by any applicable payroll or other taxes required to
be withheld) a lump sum severance payment, in cash, equal to the product
of two (2) times the sum of the Executive's annual salary for the
current year plus his target bonus for the current year (provided that
if the Notice of Termination is given prior to the determination of the
Executive's salary or target bonus for the year in which the Termination
Date occurs, the amounts shall be the annual salary for the prior year
and the greater of the target bonus for the prior year or the actual
bonus earned by the Executive for the prior year). The current year
shall be (A) for the purposes of determining annual salary, the year
then generally used by the Company for setting salaries for senior-level
executives (currently April 1 through the following March 31), and (B)
for
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purposes of determining target bonus, the fiscal year then generally
used by the Company for setting target bonuses for senior-level
executives, in which the Termination Date occurs, and the prior year
shall be the twelve-month period immediately preceding the current year.
(b) PAYMENT OF DEFERRED COMPENSATION. Any compensation that
has been earned by the Executive but is unpaid as of the Termination
Date, including any compensation that has been earned but deferred
pursuant to the Company's Deferred Compensation Plan or otherwise,
shall be paid in full to the Executive on the Termination Date.
6. OTHER BENEFITS
Subject to the conditions set forth in this Agreement hereof, the
following benefits (subject to any applicable payroll or other taxes required
to be withheld) shall be paid or provided to the Executive:
(a) HEALTH/WELFARE BENEFITS
(i) During the twenty-four (24) months following the
Termination Date (the "Continuation Period"), the Company shall continue
to keep in full force and effect all programs of medical, dental,
vision, accident, disability, life insurance, including optional term
life insurance, and other similar health or welfare programs with
respect to the Executive and his dependents with the same level of
coverage, upon the same terms and otherwise to the same extent as such
programs shall have been in effect immediately prior to the Termination
Date (or, if more favorable to the Executive, immediately prior to the
Change in Control), and the Company and the Executive shall share the
costs of the continuation of such insurance coverage in the same
proportion as such costs were shared immediately prior to the
Termination Date (or, if more favorable to the Executive, immediately
prior to the Change in Control) or, if the terms of such programs do not
permit continued participation by the Executive (or if the Company
otherwise determines it advisable to amend, modify or discontinue such
programs for employees generally), the Company shall otherwise provide
benefits substantially similar to and no less favorable to the Executive
in terms of cost or benefits ("Equivalent Benefits") than he was
entitled to receive at the end of the period of coverage, for the
duration of the Continuation Period.
(ii) All benefits which the Company is required by this
Section 6(a) to provide, which will not be provided by the Company's
programs described herein, shall be provided through the purchase of
insurance unless the Executive is uninsurable. If the Executive is
uninsurable, the Company will provide the benefits out of its general
assets.
(iii) If the Executive obtains other employment during
the Continuation Period which provides health or welfare benefits of the
type described in Section 6(a)(i) hereof ("Other Coverage"), then
Executive shall notify the Company promptly of such other employment and
Other Coverage and the Company shall thereafter not provide the
Executive and his dependents the benefits described in Section 6(a)(i)
hereof to the extent that such benefits are provided under the Other
Coverage. Under such circumstances, the
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Executive shall make all claims first under the Other Coverage and
then, only to the extent not paid or reimbursed by the Other Coverage,
under the plans and programs described in Section 6(a)(i) hereof.
(b) RETIREMENT BENEFITS
(i) For purposes of this Agreement, "Retirement" shall mean
the Company's termination of the Executive's employment within two years
following a Change in Control of the Company and at or after the date on
which the Executive attains age 65; provided, however, that any
termination for Cause or due to Death or Disability shall not constitute
Retirement.
(ii) Subject to Section 6(b)(ii), the Executive shall be
deemed to be completely vested under the Company's 401(k) Plan, Deferred
Compensation Plan or other similar or successor plans which are in
effect as of the date of the Change in Control (collectively, the
"Plans"), regardless of the Executive's actual vesting service credit
thereunder.
(iii) Any part of the foregoing retirement benefits which are
otherwise required to be paid by a tax-qualified Plan but which cannot
be paid through such Plan by reason of the laws and regulations
applicable to such Plan, shall be paid by one or more supplemental
non-qualified Plans or by the Company.
(iv) The payments calculated hereunder which are not actually
paid by a Plan shall be paid thirty (30) days following the Date of
Termination in a single lump sum cash payment (of equivalent actuarial
value to the payment calculated hereunder using the same actuarial
assumptions as are used in calculating benefits under the Plan but using
the discount rate that would be used by the Company on the Date of
Termination to determine the actuarial present value of projected
benefit obligations).
(c) EXECUTIVE OUTPLACEMENT COUNSELING. During the
Continuation Period, unless the Executive shall reach normal retirement
age during the Continuation Period, the Executive may request in writing
and the Company shall at its expense engage within a reasonable time
following such written request an outplacement counseling service to
assist the Executive in obtaining employment.
7. PAYMENT OF CERTAIN COSTS
Except as otherwise provided in Section 18, if a dispute arises
regarding a termination of the Executive or the interpretation or enforcement
of this Agreement, subsequent to a Change in Control, all of the reasonable
legal fees and expenses incurred by the Executive and all Arbitration Costs
(as hereafter defined) in contesting any such termination or obtaining or
enforcing all or part of any right or benefit provided for in this Agreement
or in otherwise pursuing all or part of his claim will be paid by the
Company, unless prohibited by law. The Company further agrees to pay
pre-judgment interest on any money judgment obtained by the Executive
calculated at the prime interest rate reported in THE WALL STREET JOURNAL in
effect from time to time from the date that payment to him should have been
made under this Agreement.
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8. EXCISE TAX PAYMENTS
(a) Notwithstanding anything contained in this Agreement to
the contrary, in the event that any payment (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended or
replaced (the "Code")), or distribution to or for the benefit of the
Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection with,
or arising out of, his employment with the Company (a "Payment" or
"Payments"), would be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, interest and penalties
collectively referred to as the "Excise Tax"), then the Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all such taxes
(including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments; PROVIDED, that the Executive shall not be
entitled to receive any additional payment relating to any interest or
penalties attributable to any action or omission by the Executive in bad
faith.
(b) An initial determination shall be made by an accounting
firm mutually agreeable to the Company and the Executive and, if not
agreed to within three days after the Date of Termination, a national
independent accounting firm selected by the Executive (the "Accounting
Firm"), as to whether a Gross-Up Payment is required pursuant to this
Section 8 and the amount of such Gross-Up Payment. To permit the
Accounting Firm to make the initial determination, the Company shall
furnish the Accounting Firm with all information reasonably required for
such firm to complete such determination as soon as practicable after
the Date of Termination, but in no event more than fifteen (15) days
thereafter. All fees, costs and expenses (including, but not limited
to, the cost of retaining experts) of the Accounting Firm shall be borne
by the Company and the Company shall pay such fees, costs and expenses
as they become due. The Accounting Firm shall provide detailed
supporting calculations, reasonably acceptable both to the Company and
the Executive within thirty (30) days of the Date of Termination, if
applicable, or such other time as requested by the Company or by the
Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax). The Gross-Up Payment, if
any, as determined pursuant to this Section 8(b) shall be paid by the
Company to the Executive within five (5) business days of the receipt of
the Accounting Firm's determination. If the Accounting Firm determines
that no Excise Tax is payable by the Executive with respect to a Payment
or Payments, it shall furnish the Executive with an opinion reasonably
satisfactory to the Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. Any such initial determination
by the Accounting Firm of the Gross-Up Payment shall be binding upon the
Company and the Executive subject to the application of Section 8(c).
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Overpayment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an "Underpayment").
An
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Underpayment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the tax liability of the
Executive (whether in respect of the then current taxable year of the
Executive or in respect of any prior taxable year of the Executive) will
be increased by reason of the imposition of the Excise Tax on a Payment
or Payments with respect to which the Company has failed to make a
sufficient Gross-Up Payment. An Overpayment shall be deemed to have
occurred upon a "Final Determination" (as hereinafter defined) that the
Excise Tax shall not be imposed (or shall be reduced) upon a Payment or
Payments with respect to which the Executive had previously received a
Gross-Up Payment. A Final Determination shall be deemed to have
occurred when (i) in the case of an Overpayment, the Executive has
received from the applicable governmental taxing authority a refund of
taxes or other reduction in his tax liability imposed as a result of a
Payment or, in the case of an Underpayment, the Executive receives
notice from a competent governmental authority that his tax liability
imposed as a result of a Payment will be increased, and (ii) in the case
of an Overpayment or an Underpayment, upon either (x) the date a
determination is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or in the event that a
claim is brought before a court of competent jurisdiction, the date upon
which a final determination has been made by such court and either all
appeals have been taken and finally resolved or the time for all appeals
has expired or (y) the statute of limitations with respect to the
Executive's applicable tax return has expired. If an Underpayment
occurs, the Executive shall promptly notify the Company and the Company
shall promptly pay to the Executive an additional Gross-Up Payment equal
to the amount of the Underpayment plus any interest and penalties
imposed on the Underpayment (other than interest and penalties
attributable to any action or omission by the Executive in bad faith).
If an Overpayment occurs, the amount of the Overpayment shall be treated
as a loan by the Company to the Executive and the Executive shall,
within ten (10) business days of the occurrence of such Overpayment, pay
the Company the amount of the Overpayment, with interest computed in the
same manner as for an Underpayment.
(d) Notwithstanding anything contained in this Agreement to
the contrary, in the event it is determined that an Excise Tax will be
imposed on any Payment or Payments, the Company shall pay to the
applicable governmental taxing authorities as Excise Tax withholding,
the amount of the Excise Tax that the Company has actually withheld from
the Payment or Payments.
9. MITIGATION
The Executive is not required to seek other employment or otherwise
mitigate the amount of any payments to be made by the Company pursuant to
this Agreement, and employment by the Executive will not reduce or otherwise
affect any amounts or benefits due the Executive pursuant to this Agreement,
except as otherwise provided in Section 6(a)(iii).
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10. CONTINUING OBLIGATIONS REGARDING CONFIDENTIAL INFORMATION
(a) ACKNOWLEDGMENTS BY THE EXECUTIVE. The Executive hereby
recognizes and acknowledges the following:
(i) In connection with the Business, the Company has
expended a great deal of time, money and effort to develop and maintain
the secrecy and confidentiality of substantial proprietary trade secret
information and other confidential business information which, if
misused or disclosed, could be very harmful to the Company's business.
(ii) The Executive desires to become entitled to receive
the benefits contemplated by this Agreement but which the Company
would not make available to the Executive but for the Executive's
signing and agreeing to abide by the terms of this Section 10.
(iii) The Executive's position with the Company provides
the Executive with access to certain of the Company's confidential and
proprietary trade secret information and other confidential business
information.
(iv) The Company compensates its employees to, among other
things, develop and preserve business information for the Company's
ownership and use.
(v) If the Executive were to leave the Company, the Company
in all fairness would need certain protection in order to ensure
that the Executive does not appropriate and misuse any confidential
information entrusted to the Executive during the course of the
Executive's employment with the Company.
(b) CONFIDENTIAL INFORMATION
(i) The Executive agrees to keep secret and confidential,
and not to use or disclose to any third parties, except as directly
required for the Executive to perform the Executive's employment
responsibilities for the Company, or except as required by law,
any of the Company's confidential and proprietary trade secret
information or other confidential business information concerning the
Company's business acquired by the Executive during the course of, or in
connection with, the Executive's employment with the Company (and which
was not known by the Executive prior to the Executive's being hired by
the Company). Confidential information means information which would
constitute material, nonpublic information under the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder, regardless of whether the Executive's use or disclosure of
such information is in connection with or related to a securities
transaction.
(ii) The Executive acknowledges that any and all notes,
records, reports, written information or documents of any kind, computer
files or diskettes and other documents obtained by or provided to the
Executive, or otherwise made, produced or compiled during the course of
the Executive's employment with the Company, regardless of the type of
medium in which it is preserved, are the sole and exclusive property of
the Company and shall be surrendered to the Company upon the Executive's
termination of employment and on demand at any time by the Company.
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(c) ACKNOWLEDGMENT REGARDING RESTRICTIONS. The Executive
recognizes and agrees that the provisions of this Section 10 are
reasonable and enforceable because, among other things, (i) the
Executive is receiving compensation under this Agreement and (ii) this
Section 10 therefore does not impose any undue hardship on the
Executive. The Executive further recognizes and agrees that the
provisions of this Section 10 are reasonable and enforceable in view of
the Company's legitimate interests in protecting its confidential
information.
(d) BREACH. In the event of a breach of Section 10(b), the
Company's sole remedy shall be the discontinuation of the payment,
allocation, accrual or provision of any amounts or benefits as provided
in Sections 5 or 6. The Executive recognizes and agrees, however, that
it is the intent of the parties that neither this Agreement nor any of
its provisions shall be construed to adversely affect any rights or
remedies that Company would have had, including, without limitation, the
amount of any damages for which it could have sought recovery, had this
Agreement not been entered into. Accordingly, the parties hereby agree
that nothing stated in this Section 10 shall limit or otherwise affect
the Company's right to seek legal or equitable remedies it may otherwise
have, or the amount of damages for which it may seek recovery, in
connection with matters covered by this Section 10 but which are not
based on breach or violation of this Section 10 (including, without
limitation, claims based on the breach of fiduciary or other duties of
the Executive or any obligations of the Executive arising under any
other contracts, agreements or understandings). Without limiting the
generality of the foregoing, nothing in this Section 10 or any other
provision of this Agreement shall limit or otherwise affect the
Company's right to seek legal or equitable remedies it may otherwise
have, or the amount of damages for which it may seek recovery, resulting
from or arising out of statutory or common law or any Company policies
relating to fiduciary duties, confidential information or trade secrets.
Further, the Executive acknowledges and agrees that the fact that
Section 10(c) is limited to the Continuation Period, and that the sole
remedy of the Company hereunder is the discontinuation of benefits,
shall not reduce or otherwise alter any other contractual or other legal
obligations of the Executive during any period or circumstance, and
shall not be construed as establishing a maximum limit on damages for
which the Company may seek recovery.
11. BINDING AGREEMENT; SUCCESSORS
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns. The Company
shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement to assume expressly
and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. For purposes of this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the Executive and the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, beneficiaries, devises and legatees. If the Executive
should
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die while any amounts are payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee,
beneficiary or other designee or, if there be no such designee, to the
Executive's estate.
12. NOTICES
For the purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given (i) on the date of delivery if delivered by hand, (ii)
on the date of transmission, if delivered by confirmed facsimile, (iii) on
the first business day following the date of deposit if delivered by
guaranteed overnight delivery service, or (iv) on the third business day
following the date delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
If to the Company:
Interim Services Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
13. GOVERNING LAW
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Florida, without
regard to principles of conflicts of laws.
14. MISCELLANEOUS
No provisions of this Agreement may be amended, modified, waived or
discharged unless such amendment, waiver, modification or discharge is agreed
to in writing signed by the Executive and the Company. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. Section headings contained herein are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which will constitute one
and the same instrument.
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16. NON-ASSIGNABILITY
This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, or transfer this
Agreement or any rights or obligations hereunder, except as provided in
Section 11. Without limiting the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer
by his will or trust or by the laws of descent or distribution, and in the
event of any attempted assignment or transfer contrary to this paragraph the
Company shall have no liability to pay any amount so attempted to be assigned
or transferred.
17. TERM OF AGREEMENT
This Agreement shall commence on the date hereof and shall continue
in effect through May 7, 2001; PROVIDED, however, if a Change in Control of
the Company shall have occurred during the original or any extended term of
this Agreement, this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the month in which such Change in Control
occurred; and, PROVIDED FURTHER, that if the Company shall become obligated
to make any payments or provide any benefits pursuant to Section 5 or 6
hereof, this Agreement shall continue for the period necessary to make such
payments or provide such benefits.
18. RESOLUTION OF DISPUTES
(a) The parties hereby agree to submit any claim, demand, dispute,
charge or cause of action (in any such case, a "Claim") arising out of,
in connection with, or relating to this Stock Option Agreement to
binding arbitration in conformance with the J*A*M*S/ENDISPUTE
Streamlined Arbitration Rules and Procedures or the J*A*M*S/ ENDISPUTE
Comprehensive Arbitration Rules and Procedures, as applicable, but
expressly excluding Rule 28 of the J*A*M*S/ENDISPUTE Streamlined Rules
and Rule 32 of the J*A*M*S/ENDISPUTE Comprehensive Rules, as the case
may be. All arbitration procedures shall be held in Fort Lauderdale,
Florida and shall be subject to the choice of law provisions set forth
in Section 13 of this Agreement.
(b) In the event of any dispute arising out of or relating to
this Agreement for which any party is seeking injunctive relief,
specific performance or other equitable relief, such matter may be
resolved by litigation. Accordingly, the parties shall submit such
matter to the exclusive jurisdiction of the United States District Court
for the Southern District of Florida or, if jurisdiction is not
available therein, any other court located in Broward County, Florida,
and hereby waive any and all objections to such jurisdiction or venue
that they may have. Each party agrees that process may be served upon
such party in any manner authorized under the laws of the United States
or Florida, and waives any objections that such party may otherwise have
to such process.
19. NO SETOFF
The Company shall have no right of setoff or counterclaim in
respect of any claim, debt or obligation against any payment provided for in
this Agreement.
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20. NON-EXCLUSIVITY OF RIGHTS
Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its subsidiaries or
successors and for which the Executive may qualify, nor shall anything herein
limit or reduce such rights as the Executive may have under any other
agreements with the Company or any of its subsidiaries or successors, except
to the extent payments are made pursuant to Section 5, they shall be in lieu
of any termination, separation, severance or similar payments pursuant to the
Executive's Employment Agreement, if any, and the Company's then existing
termination, separation, severance or similar plans or policies, if any.
Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan or program of the Company or any of its
subsidiaries shall be payable in accordance with such plan or program, except
as explicitly modified by this Agreement.
21. NO GUARANTEED EMPLOYMENT
The Executive and the Company acknowledge that this Agreement shall
not confer upon the Executive any right to continued employment and shall not
interfere with the right of the Company to terminate the employment of the
Executive at any time.
22. INVALIDITY OF PROVISIONS
In the event that any provision of this Agreement is adjudicated to
be invalid or unenforceable under applicable law in any jurisdiction, the
validity or enforceability of the remaining provisions thereof shall be
unaffected as to such jurisdiction and such adjudication shall not affect the
validity or enforceability of such provision in any other jurisdiction. To
the extent that any provision of this Agreement, including, without
limitation, Section 10 hereof, is adjudicated to be invalid or unenforceable
because it is overbroad, that provision shall not be void but rather shall be
limited to the extent required by applicable law and enforced as so limited.
The parties expressly acknowledge and agree that this Section 22 is
reasonable in view of the parties' respective interests.
23. NON-WAIVER OF RIGHTS
The failure by the Company or the Executive to enforce at any time
any of the provisions of this Agreement or to require at any time performance
by the other party of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect either the validity
of this Agreement, or any part hereof, or the right of the Company or the
Executive thereafter to enforce each and every provision in accordance with
the terms of this Agreement.
24. EMPLOYMENT AGREEMENT.
Simultaneously with the execution and delivery to this Agreement,
the Company and the Executive have executed and delivered an Employment
Agreement. If circumstances arise which cause both the Employment Agreement
and this Agreement to apply to the Company and the Executive, then, to the
extent of any inconsistency between the provisions of this Agreement and the
Employment Agreement, the terms of this Agreement alone shall apply.
However, if this
16
Agreement does not apply, then the provisions of the Employment Agreement
shall control and be unaffected by this Agreement.
25. UNFUNDED PLAN.
The Company's obligations under this Agreement shall be entirely
unfunded until payments are made hereunder from the general assets of the
Company, and no provision shall be made to segregate assets of the Company
for payments to be made under this Agreement. The Executive shall have no
interest in any particular assets of the Company but rather shall have only
the rights of a general unsecured creditor of the Company.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY CERTIFYING
THAT THE EXECUTIVE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND
STUDY BEFORE EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE
SIGNING IT; (C) HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT
TO ASK ANY QUESTIONS THE EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED
SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS THE
EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.
THIS AGREEMENT IN SECTION 18 CONTAINS A BINDING ARBITRATION
PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
INTERIM SERVICES INC.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Senior Vice President and Secretary
EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
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