EXHIBIT 10.6
AGREEMENT
This Agreement is entered into as of July 31, 1995, by and between
Xxxxxx Half International Inc. ("RHI") and Xxxx X. Xxxxxxxx ("Employee").
WHEREAS, RHI is an international staffing services organization, which
conducts its operations in the United States and selected foreign countries
either directly or through direct or indirect wholly owned subsidiaries.
WHEREAS, Employee serves as Director of Operations, in which capacity
he manages certain specified operations of RHI.
WHEREAS, RHI wishes to grant certain additional benefits to Employee.
WHEREAS, in consideration thereof, RHI wishes to obtain certain
covenants from Employee.
Now, therefore, the parties hereto agree as follows, effective as of
the date hereof:
1. Unless the context clearly indicates otherwise, the following terms,
when used in this Agreement, shall have the meanings set forth below:
"Administrator" means the Administrator of the 1991 Stock Option Plan
for Field Employees, as such term is defined in such plan, and the Administrator
of the 1991 Restricted Stock Plan for Field Employees, as such term is defined
in such plan.
"Applicable Office" means any office of any of the RHI Companies in
which Employee has worked, or over which Employee has exercised any form of
direct or indirect supervisorial authority, during the one year period preceding
the Termination Date.
"Competitor" means any executive recruiting firm, employment agency,
temporary personnel service business or other staffing services business engaged
in whole or in part in any business conducted by the RHI Companies, regardless
of whether such entity conducts its business as a sole proprietorship,
partnership, corporation or in other form.
"Customer" means any person, firm, entity, business or organization for
whom any of the Applicable Offices performs or has performed services in the
course of its business within the twelve months preceding the Termination Date.
"Disability" shall mean (i) a physical or mental condition which, in
the judgment of the Administrator based on competent medical evidence
satisfactory to the Administrator (including, if required by the Administrator,
medical evidence obtained by
an examination conducted by a physician selected by the Administrator), renders
Employee unable to engage in any substantial gainful activity for the RHI
Companies and which condition is likely to result in death or to be of long,
continued and indefinite duration, or (ii) a judicial declaration of
incompetence.
"Option" means an option granted to Employee under the 1991 Stock
Option Plan for Field Employees.
"Other Agreement" means any agreement, contract, plan or arrangement
between any of the RHI Companies and the Employee (other than this Agreement)
including, but not limited to, any agreement, contract, plan or arrangement that
is applicable to one or more individuals in addition to the Employee.
"Other Employee" means any individual (other than Employee) who is
employed by an Applicable Office or was employed by an Applicable Office within
the prior six months, whether as a regular employee, temporary employee or
independent contractor.
"Restricted Stock" means a share of restricted stock granted to
Employee under the 1991 Restricted Stock Plan for Field Employees.
"RHI Companies" means RHI and any subsidiary or affiliate of RHI.
"Solicit" means soliciting, inducing, attempting to induce or assisting
any other person, firm, entity, business or organization in any such
solicitation, inducement or attempted inducement, in all cases regardless of
whether the initial contact was by Employee, the Other Employee, or any other
person, firm, entity, business or organization.
"Termination For Cause" means termination by RHI of Employee's
employment by reason of (a) Employee's willful dishonesty towards, fraud upon,
or deliberate injury or attempted injury to any of the RHI Companies, (b) the
commission of any criminal act by Employee (other than minor traffic violations)
or (c) misconduct or gross negligence by Employee in the performance of his
duties.
"Termination Date" means the date on which Employee's employment with
RHI is terminated.
"Termination Without Cause" means termination by RHI of Employee's
employment other than pursuant to a Termination For Cause.
"Termination Year" means the fiscal year in which the Termination
Date occurs.
2. In the event of a Termination Without Cause, the Employee shall be
entitled to receive the following:
(a) Employee shall receive Monthly Payments, as specified
herein, at a rate equal to 100% of the highest monthly base salary (excluding
bonuses, income from stock options and stock plans, fringe benefits and similar
items) paid to Employee with respect to any of the six calendar months
immediately preceding the Termination Date. The first such payment shall be made
on the last day of the first full month following the Termination Date, and
subsequent payments shall be made on the last day of each subsequent month,
until the number of Monthly Payments specified in Section 2(b) has been made.
The foregoing Monthly Payments are in lieu of any salary, bonus or compensation
that would otherwise have been paid with respect to services subsequent to the
Termination Date, including, but not limited to, any bonus payments relating to
the Termination Year or any subsequent year. At the option of RHI, all or part
of such Monthly Payments may be paid in a lump sum.
(b) The number of Monthly Payments to be made under the
circumstances described herein is (i) twelve, if the Termination Date is prior
to the fifth anniversary of this Agreement, (ii) eighteen, if the Termination
Date is on or after the fifth anniversary of this Agreement but prior to the
tenth anniversary of this Agreement and (iii) twenty-four, if the Termination
Date is on or after the tenth anniversary of this Agreement.
(c) So long as Employee would be entitled to receive Monthly
Payments pursuant to the terms of Sections 2(a) and 2(b) of this Agreement
(whether or not RHI has elected to pay all or a portion of the amount in a lump
sum) or until Employee obtains other employment, whichever first occurs, RHI
shall pay all costs and fees relating to the continuation of Employee's medical
benefits pursuant to COBRA.
(d) To the extent that any Other Agreement (including, but not
limited to the Severance Agreement dated October 1, 1991 between Employee and
RHI) would provide for cash payments, including but not limited to salary
continuation (or a lump sum payment in lieu of salary continuation) or bonus
payments, under the same or similar circumstances as such benefits would be
provided pursuant hereto, then Employee shall not receive such benefits under
both the Other Agreement and hereunder, but shall instead receive the greater of
the cash benefit payable under either (i) Sections 2(a) and 2(b) hereof or (ii)
the Other Agreement. Except as provided by the foregoing sentence, the benefits
payable under this Agreement shall be in addition to, and not in lieu of, any
other benefits that may be provided under any Other Agreement.
3. (a) In the event of the termination of Employee's employment
by reason of his death or Disability, each Option held by the Employee on the
date of such event shall (unless such Option shall have theretofore expired in
accordance with its terms) immediately become exercisable in full and shall
remain exercisable for the initial term of the Option and all restrictions on
Restricted Stock held by Employee on such date shall lapse, with the result that
the Restricted Stock shall not be forfeited by reason of such termination.
(b) As the date hereof, the unvested Options held by Employee
under the 1991 Stock Option Plan for Field Employees have an aggregate market
value of $897,175. At the discretion of RHI, additional Options may be granted
subsequent to the date hereof. The terms of the 1991 Stock Option Plan for Field
Employees provide that
any unvested Options are forfeited on the termination of Employee's employment.
Accordingly, while the actual value, if any, of the unvested Options that may be
held by Employee on the Termination Date if his employment terminates by reason
of his death or Disability will vary from the foregoing amount (and there is no
assurance that the foregoing amount, which is dependent, upon other things, on
the public trading price of RHI's Common Stock, will ever be realized), Employee
acknowledges that there is significant value to Employee and his estate arising
from the covenant of RHI contained in Section 3(a) hereof.
4. Employee shall not, at any time during his employment by any of the
RHI Companies or thereafter, directly or indirectly, disclose, furnish or make
accessible to any person, firm, entity, business or organization, or make use
of, any confidential information obtained while he was in the employ of any of
the RHI Companies, including, without limitation, information with respect to
the name, address, contact persons or requirements of any customer, client,
applicant or employee of any of the RHI Companies (whether having to do with
temporary or permanent employment) and information with respect to the
procedures, advertising, finances, organization, personnel, plans, objectives or
strategies of the RHI Companies. Employee acknowledges that such information is
safeguarded by the RHI Companies as trade secrets. Upon termination of his
employment, Employee shall deliver to RHI all copies of all records, manuals,
training kits, and other property belonging to any of the RHI Companies or used
in connection with their business which may be in Employee's possession. The
provisions of this Section 4 shall survive termination of either Employee's
employment or this Agreement for any reason.
5. (a) In consideration of Employee's position with the RHI Companies
and in view of the valuable consideration furnished to the Employee by RHI
entering into this agreement, for a period of twelve (12) months after the
Termination Date (regardless of the reason for termination or whether such
termination was by RHI or by the Employee), Employee agrees that he shall not,
directly or indirectly, own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation or control of, any Competitor in any part of the area encompassed
within a radius of fifty (50) miles from any Applicable Office.
(b) In consideration of Employee's position with the RHI Companies and
in view of the valuable consideration furnished to the Employee by RHI entering
into this agreement, for a period of twelve (12) months after the Termination
Date (regardless of the reason for termination or whether such termination was
by RHI or by the Employee), Employee agrees that he shall not, directly or
indirectly, on behalf of any Competitor, Solicit or perform services for any
Customer. Such restriction on Soliciting or performing services for Customers
shall apply regardless of whether or not any such Customer was previously a
customer of Employee or whether or not such Customer was previously, or is at
the time of Solicitation or the performance of services, a customer of any
Competitor.
(c) In consideration of Employee's position with the RHI Companies and
in view of the valuable consideration furnished to the Employee by RHI entering
into this agreement, for a period of twelve (12) months after the Termination
Date (regardless of the reason for termination or whether such termination was
by RHI or by the Employee), Employee agrees that he shall not directly or
indirectly, Solicit any Other Employee to either leave the employ of the RHI
Companies or to become connected in any way with any Competitor.
(d) The provisions of this Section 5 shall survive termination of
either Employee's employment or this Agreement for any reason.
6. After termination of Employee's employment with the RHI Companies,
Employee shall not indicate on any stationery, business card or advertising,
solicitation or other business materials that he is or was formerly an employee
of any of the RHI Companies, or any division thereof, except in the bona fide
submission of resumes and the filling out of applications in the course of
seeking employment. The provisions of this Section 6 shall survive termination
of either Employee's employment or this Agreement for any reason.
7. In view of Employee's access to confidential information and trade
secrets and in consideration of the value of such property to the RHI Companies,
Employee expressly acknowledges that the covenants not to compete and the
related restrictive covenants set forth herein are reasonable and necessary in
order to protect and maintain the proprietary and other legitimate business
interests of the RHI Companies, and that the enforcement thereof would not
prevent Employee from earning a livelihood. Employee further represents and
acknowledges that Employee views the entry by RHI into this Agreement as
valuable consideration given to the Employee in return for the Employee's
covenants contained herein. Employee further agrees that in the event of an
actual or threatened breach by Employee of such covenants, RHI and the other RHI
Companies would be irreparably harmed and the full extent of injury resulting
therefrom would be impossible to calculate and RHI and the other RHI Companies
therefore will not have an adequate remedy at law. Accordingly, Employee agrees
that temporary and permanent injunctive relief would be appropriate remedies
against such breach, without bond or security; provided, that nothing herein
shall be construed as limiting any other legal or equitable remedies RHI or the
other RHI Companies might have. Enforcement of the covenants contained herein
may be effected individually or in the aggregate by any one or more of RHI or
the other RHI Companies.
8. Failure of any party to insist upon strict compliance with any of
the terms, covenants and conditions hereof shall not be deemed a waiver or
relinquishment of the right to subsequently insist upon strict compliance with
such term, covenant or condition or a waiver or relinquishment of any similar
right or power hereunder at any subsequent time.
9. The provisions of this Agreement are severable. If any provision is
found by any court of competent jurisdiction to be unreasonable and invalid,
that determination
shall not affect the enforceability of the other provisions. Furthermore, if any
of the restrictions against various post-employment activities is found to be
unreasonable and invalid, the court before which the matter is pending shall
enforce the restriction to the maximum extent it deems to be valid. Such
restrictions shall be considered divisible both as to time and as to
geographical area, with each month being deemed a separate period of time and
each one mile radius from any of the Applicable Offices being deemed a separate
geographical area. The restriction shall remain effective so long as the same is
not unreasonable, arbitrary or against public policy.
10. The provisions of Xxxxxxxx 0, 0, 0, xxx 0 xxxxx xx governed by the
laws of the state in which an activity occurred or threatens to occur and with
respect to which legal and equitable relief is sought. In no event shall the
choice of law be predicated upon the fact that any of the RHI Companies is
incorporated or has its corporate headquarters in a certain state.
11. This agreement constitutes the entire agreement between the parties
with respect to the matters covered hereby and, except as provided in the next
sentence, supersedes all prior agreements (other than the Severance Agreement
dated October 1, 1991 between RHI and Employee, which is superseded only to the
extent described herein and therein), arrangements or understandings, whether
written or verbal, with respect to such matters. Notwithstanding the foregoing,
RHI and Employee acknowledge that the obligations contained in sections 4, 5, 6,
and 7 hereof are in addition to, and not in lieu of, the obligations of Employee
and the rights of the RHI Companies (a) contained in the Employment Agreement
dated as of March 24, 1986 between Xxxxxx Half of Minnesota, Inc. (to which RHI
is successor in interest by merger) and Employee, (b) contained in any other
agreement between Employee and the RHI Companies or (c) imposed by law.
12. This Agreement shall be binding upon and shall inure to the benefit
of the successors and assigns of the parties hereto.
13. This Agreement is not an employment agreement, and nothing herein
shall be construed as giving employee any rights to, or expectation of,
continued employment or employment at any particular position or salary. This
Agreement shall not affect any right of either the RHI or Employee to terminate
Employee's employment at any time and for any reason.
14. This Agreement may be executed in counterparts, all of which shall
constitute only one agreement.
IN WITNESS WHEREOF, the parties have set their hands hereto as of
the date first above written.
XXXXXX HALF INTERNATIONAL INC.
By XXXXXX X. XXXXXXX, XX.
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Xxxxxx X. Xxxxxxx, Xx.
Chairman & Chief Executive Officer
XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
