EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of January, 1999, by and
between MODIS PROFESSIONAL SERVICES, INC. a Florida corporation, and its
successors ("Employer"), and XXXXXXX X. XXXXX, a resident of the State of
Florida ("Executive").
WHEREAS, the Employer and the Executive entered into an employment agreement on
April 1, 1997; and
WHEREAS, the Employer and the Executive desire to enter into an amended and
restated employment agreement, which agreement shall replace and thereby
supersede all prior employment agreements and any amendments thereto previously
executed between the Employer and the Executive;
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants, and subject to the terms and conditions contained in this Agreement,
the Employer and Executive, intending to be legally bound, hereby agree as
follows:
1. Employment. Employer hereby employs Executive as President and Chief
Operating Officer of modis, Inc. ('modis'), a wholly owned subsidiary of
Employer, and Executive hereby accepts employment by Employer, in
accordance with and subject to the terms and conditions of this Agreement.
The Executive will report directly to the Chief Executive Officer of
Employer.
2. Duties and Authority. As President and Chief Operating Officer of modis,
Executive shall be responsible for management , fiscal responsibilities,
and strategic planning of modis and shall perform such other duties as are
assigned to the Executive by the Chief Executive Officer of the Employer.
Executive agrees to devote his full time, attention and best efforts to the
performance of his duties hereunder, provided, however, it shall not be
considered a violation of the foregoing for the Executive to serve on
corporate, industry, civic or charitable boards or committees, so long as
such activities do not materially interfere with the performance of the
Executive's responsibility as an employee of the Employer in accordance
with this Agreement.
3. Initial Term; Employment Period. The initial term of employment shall
begin on January 1, 1999 and end on December 31, 2000 (the 'Term of this
Agreement'). The Term of this Agreement shall be extended automatically for
one year on December 31, 2000, and each annual anniversary thereof (the
'Extension Date') unless, and until, at least 90 days prior to the
applicable Extension Date either the Employer or the Executive provides
written notice to the other party that this Agreement is not to be extended
(the later of December 31, 2000 or the last date shall be the 'End of
Term'). For purposes of this Agreement, the period beginning on January 1,
1999, and ending on the Date of Termination (as hereafter defined) shall be
referred to herein as the "Employment Period."
4. Compensation. During the Employment Period which is in the Term of this
Agreement, Executive shall receive the following compensation:
A. Base Salary. A base annual salary of $400,000.00, payable in
accordance with the Employer's standard practice for other comparable
executives. Executive's base salary shall be subject to annual review
by the Board of Directors of the Employer (the 'Board') for
discretionary periodic increases in accordance with the Employer's
compensation policies. References to 'Base Salary' in this Agreement
shall be to the base salary set forth in this Section 4.A. and shall
include any increases to such base salary made hereby.
B. Incentive Compensation. The Executive shall be entitled to a target
incentive compensation opportunity expressed as a percentage of Base
Salary of not less than 80% under the Modis Annual Incentive Plan
('Incentive Plan').
5. Stock Options. Employer shall continue to grant to Executive stock
options from time to time in a manner consistent with that to which it
grants to other senior executive officers of the Employer to purchase
shares of the common stock of the Employer pursuant to the Modis
Professional Services, Inc. Amended and Restated 1995 Stock Option Plan, as
amended from time to time, or pursuant to a newly established or successor
plan.
A. Exercise. Any existing stock option(s) and any stock options
granted after the effective date of this Agreement shall provide for:
(i) exercisability of vested options (including those vested
under paragraph 5.A.(ii) below) for at least two years following
the Executive's termination of employment with the Employer (or
if sooner, 10 years from date of grant of the option);
(ii) full vesting of options upon a Change in Control (as
hereafter defined) or termination of the Executive's employment
with the Employer for reasons other than (i) by the Employer for
Cause (as hereafter defined), or (ii) by the Executive without
Good Reason (as hereafter defined); and
(iii) exercisability only to the extent vested on the date of the
Executive's termination of employment with the Employer, in the
event of termination (i) by the Employer for Cause, or (ii) by
the Executive without Good Reason.
B. For purposes of this Agreement, 'Change in Control' shall mean:
(i) the acquisition by any person or persons (as such term is
used in Section 13(d) of the Securities Exchange Act of 1934) not
a shareholder of Employer on June 1, 1998, of legal or beneficial
ownership of 35% or more of either (a) the then outstanding
shares of common stock of the Employer or (b) the combined voting
power of the then outstanding voting securities of the Employer
entitled to vote generally in the election of directors;
(ii) individuals who, as of the date hereof, constitute the Board
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Employer's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Board
shall be considered as though such individual were a member of
the Board as of the date hereof;
(iii) approval by the shareholders of the Employer of a
reorganization, merger, or consolidation, in each case unless the
shareholders of the Employer immediately before such
reorganization, merger, or consolidation own, directly or
indirectly, immediately following such reorganization, merger, or
consolidation at least a majority of the combined voting power of
the outstanding voting securities of the corporation resulting
from such reorganization, merger, or consolidation in
substantially the same proportion as their ownership of the
voting securities immediately before such reorganization, merger
or consolidation; or
(iv) approval by the shareholders of the Employer of (a) a
complete liquidation or dissolution of the Employer or (b) the
sale or other disposition of more than 50% of the assets of the
Employer within a twelve month period.
6. Benefits. To the extent not otherwise provided herein (it being the
intent not to duplicate benefits) during the term of this Agreement,
Employer shall provide the Executive with all retirement, welfare, deferred
compensation, disability and other benefits generally provided to all of
the Employer's other senior executive officers. Executive shall be entitled
to four (4) weeks of paid vacation per calendar year. Unused vacation shall
be paid out at calendar year end. The Employer shall reimburse the
Executive for all reasonable and necessary expenses incurred while
conducting business in accordance with policies adopted by the Employer
from time to time. The Employer shall reimburse the Executive for all
reasonable and necessary expenses incurred while conducting the Employer's
business in accordance with policies adopted by the Employer from time to
time. The Employer shall pay the membership dues for the Executive for the
River Club. Furthermore, the Employer shall pay the Executive or a leasing
company, at the Executive's option, $750 per month for an automobile used
by the Executive for business purposes. The Executive acknowledges that
pursuant to the Internal Revenue Code, and the regulations promulgated
thereunder, the Employer may be required to report for tax purposes all or
a portion of certain of the benefits and reimbursements provided in this
Agreement as income in respect of the Executive.
7. Non-Compete; Confidentiality. In consideration of the employment of
Executive by Employer, Executive agrees as follows:
A. Non-Compete and Non-Solicitation. During the Employment Period and
for a period of two years after the Date of Termination, Executive
will not, directly or indirectly, within a fifty mile radius of any
office of modis (or a consolidated subsidiary) in existence on the
Date of Termination, own, manage, be employed by, work for, consult
for, be an officer or director of, advise, represent, engage in or
carry on any business which competes with the business of modis.
During the Employment Period and for a period of two years after the
Date of Termination, Executive will not, directly or indirectly,
solicit or induce, or attempt to solicit or induce, any employee of
the Employer (or a consolidated subsidiary) to leave the Employer (or
a consolidated subsidiary) for any reason whatsoever, or solicit the
services of any employee of the Employer (or a consolidated
subsidiary).
B. Non-Disclosure of Information. Executive will not at any time,
during or after the term of this Agreement in any fashion, form, or
manner, either directly or indirectly, divulge, disclose, or
communicate to any person, firm, or corporation, in any manner
whatsoever, any information of any kind, nature, or description
concerning any matters affecting or relating to the business of the
Employer, including, but not limited to, the names of any of its
customers or prospective customers or any other information concerning
the business of the Employer, its manner of operation, its plans, its
vendors, its suppliers, its advertising, its marketing, its methods,
its practices, or any other information of any kind, nature, or
description, without regard to whether any or all of the foregoing
matters would otherwise be deemed confidential, material, or
important; provided, however that this provision shall not prevent
disclosures by Executive to the extent such disclosures are (i)
believed by the Executive, in good faith and acting reasonably, to be
in the best interest of the Employer, (ii) of information that is
public at the time of the disclosure (other than as a result of the
Executive's violation of this Paragraph 7(b)), or (iii) as required by
law or legal process (and, if the Executive is so required to
disclose, Executive shall provide the Employer notice of such to allow
the Company the opportunity to contest such disclosure).
8. Termination of Employment.
A. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
Additionally, if the Employer determines in good faith that the
Executive has incurred a Disability, it may give the Executive written
notice of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Employer shall
terminate effective on the later of (i) the date in the notice, (ii)
the day after receipt of such notice by the Executive, or (iii) the
date the Disability has been considered to occur (the 'Disability
Effective Date'), provided that, prior to such date, the Executive
shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, 'Disability' shall have the
meaning set forth in the Employee's long term disability plan or
policy covering the Executive and shall not be considered to have
occurred until after the waiting period as required by such plan or
policy.
B. Cause. The Employer may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean (i) a breach by the Executive of the Executive's
obligations under paragraph 2 above (other than as a result of
temporary incapacity due to physical or mental illness, or Disability)
which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such
breach is in the best interests of the Employer and which is not
remedied in a reasonable period of time (to be not less than 15 days)
after receipt of written notice from the Employer specifying such
breach or (ii) the conviction of the Executive of a felony; or (iii) a
breach of the Executive's fiduciary duty. No act or failure to act on
the Executive's part shall be considered willful unless done or
omitted in bad faith and without reasonable belief that the action or
omission was in the best interest of the Employer.
C. Good Reason. The Executive's employment may be terminated by the
Executive at any time for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment of the Executive of any duties inconsistent in
any respect with the Executive's position (including status,
offices, titles and reporting requirement), authority, duties or
responsibilities as contemplated by paragraph 2 or any other
action by the Employer which results in a diminution in such
position, authority, duties or responsibilities;
(ii) a reduction in the Executive's Base Salary or maximum bonus
opportunity which is more than de minimis (except if such
reduction is a part of a reduction for all executive officers of
the Employer);
(iii) a reduction which is more than de minimis (except if such
reduction is a part of a reduction for all executive officers of
the Employer) in the level of incentive compensation (including
stock options, restricted stock awards, stock appreciation
rights, retirement plan accruals and/or welfare plan benefits
(within the meaning of Section 3(1) of ERISA) accruing or
provided to the Executive;
(iv) any failure by the Employer to comply with any of the
provisions of this Agreement;
(v) Employer's requiring the Executive to be based at any office
or location other than Jacksonville, Florida; or
(vi) the Employer's providing notice to the Executive pursuant to
Paragraph 3 that the Agreement will not be extended unless the
purpose of such notice is to negotiate the terms of a new
agreement between the Employer and the Executive and the notice
provides that the Agreement continues in effect until such new
agreement is entered into.
For purposes of this subparagraph C, any good faith determination
of "Good Reason" made by the Executive shall be conclusive.
However, no such event described hereunder shall constitute Good
Reason unless the Executive has given written notice to the
Employer specifying the event relied upon for such termination
within one year after the occurrence of such event and the
Employer has not remedied such within 60 days of receipt of such
notice. The Employer and the Executive, upon mutual written
agreement, may waive any of the foregoing provisions which would
otherwise constitute Good Reason.
D Notice of Termination. Any termination by the Employer for Cause, or
by the Executive for Good Reason, shall be communicated to the other
party by Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon; (ii) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment; and (iii) specifies the Date of Termination
(as defined below). Notice of intent to terminate employment for Good
Reason must be provided pursuant to Section 8.C. of this Agreement.
The failure by the Executive or the Employer to set forth in the
Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or the Employer hereunder or preclude the Executive or the
Employer from asserting such fact or circumstance in enforcing the
Executive's or the Employer's rights hereunder.
E. Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Employer for Cause, or by
the Executive for Good Reason, the date specified in the Notice of
Termination as the Date of Termination; (ii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be; and (iii) if
Executive's employment is terminated by either party other than for
death, Disability, Cause or Good Reason, the date set forth in the
notice required under subparagraph D. above as the Date of Termination
is to be effective.
9. Obligations of the Employer upon Termination. Upon termination of the
Executive's employment for any reason during the Term of this Agreement,
Executive shall be entitled to Base Salary and all benefits through the
Date of Termination, and to exercise then vested stock options in
accordance with Paragraph 5.A.(i) above. Upon the termination of the
Executive's employment during the Term of this Agreement by the Executive
for Good Reason, or by the Employer for any reason other than Cause,
Executive shall in addition be entitled to exercise the option(s) with
accelerated vesting pursuant to Paragraph 5.A.(ii) above. In addition, upon
the termination of the Executive's employment during the Term of this
Agreement by the Executive for Good Reason, or by the Employer for any
reason other the Cause, Disability or death, the Executive shall be
entitled to receive a lump sum payment equal to two (2) times the sum of
(i) Executive's Base Salary as of the Date of Termination and (ii) the
Executive's threshold bonus opportunity under the Incentive Plan based on
the threshold bonus opportunity for the year of termination. The lump sum
payment shall be paid no later than thirty days after the Date of
Termination in immediately available United States funds. Notwithstanding
the preceding provisions, at the Employer's sole discretion, the Employer
may pay the amount determined as a lump sum in this Paragraph 9 in 24 equal
monthly payments beginning on the first day of the month first following
the Date of Termination.
10. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise. The amounts provided for under this
Agreement shall not be reduced by any compensation earned or benefits
received by the Executive as the result of self-employment or employment by
another employer or otherwise.
11. Tax Effect. If Independent Tax Counsel shall determine that the
aggregate payments made, and benefits provided, to the Executive pursuant
to this Agreement and any other payments, and benefits provided, to the
Executive from the Employer, its affiliates and plans, which constitute
"parachute payments" as defined in Section 280G of the Code (or any
successor provision thereto) ("Parachute Payments") would be subject to the
excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount (determined by Independent Tax Counsel) such that
after payment by the Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment and any interest or penalties imposed
with respect to such taxes, the Executive retains from the Gross-Up Payment
an amount equal to the Excise Tax imposed upon the payments. For purposes
of this Paragraph, "Independent Tax Counsel" shall mean a lawyer, a
certified public accountant with a nationally recognized accounting firm,
or a compensation consultant with a nationally recognized actuarial and
benefits consulting firm with expertise in the area of executive
compensation tax law, who shall be selected by the Employer and shall be
reasonably acceptable to the Executive, and whose fees and disbursements
shall be paid by the Employer.
A. If Independent Tax Counsel shall determine that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a
written opinion that the Executive has substantial authority not to
report any Excise Tax on the Executive's Federal income tax return. If
the Executive is subsequently required to make a payment of any Excise
Tax, then the Independent Tax Counsel shall determine the amount of
such additional payment ('Gross-Up Underpayment'), and any such
Gross-Up Underpayment shall be promptly paid by the Employer to or for
the benefit of the Executive. The fees and disbursements of the
Independent Tax Counsel shall be paid by the Employer.
B. The Executive shall notify the Employer in writing within 15 days
of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Employer of a Gross-Up Payment. If
the Employer notifies the Executive in writing that it desires to
contest such claim and that it will bear the costs and provide the
indemnification as required by this sentence, the Executive shall:
(i) give the Employer any information reasonably requested by the
Employer relating to such claim;
(ii) take such action in connection with contesting such claim as
the Employer shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Employer;
(iii) cooperate with the Employer in good faith in order to
effectively contest such claim; and
(iv) permit the Employer to participate in any proceedings
relating to such claim; provided, however, that the Employer
shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs and
expenses. The Employer shall control all proceedings taken in
connection with such contest; provided, however, that if the
Employer directs the Executive to pay such claim and xxx for a
refund, the Employer shall advance the amount of such payment to
the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest or penalties with
respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance.
C. If, after the receipt by the Executive of an amount advanced by the
Employer pursuant to this Paragraph 11, the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall,
within 10 days, pay to the Employer the amount of such refund,
together with any interest paid or credited thereon after taxes
applicable thereto.
12. Mandatory Deductions. Any amounts to which Executive is entitled as
compensation, bonus, merit bonus, or any other form of compensation subject
to withholding, shall be subject to usual deduction for appropriate
federal, state, and local income and employment tax obligations of
Executive.
13. Notices. Any notice provided for in this Agreement shall be given in
writing. Notices shall be effective from the date of receipt, if delivered
personally to the party to whom notice is to be given, or on the second day
after mailing, if mailed by first class mail, postage prepaid. Notices
shall be properly addressed to the parties at their respective addresses
set forth below or to such other address as either party may later specify
by notice to the other:
If to Employer:
Modis Professional Services, Inc.
Attn: Chief Executive Officer
0 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
If to Executive:
Xxxxxxx X. Xxxxx
at the then current address of the Executive
appearing in the corporate records of Employer
14. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof, including, but not limited to, any
and all prior employment agreements and related amendments entered into
between the Employer and the Executive. This Agreement may be changed only
by an agreement in writing signed by the party against whom any waiver,
change, amendment or modification is sought.
15. Waiver. The waiver by one party of a breach of any of the provisions of
this Agreement by the other shall not be construed as a waiver of any
subsequent breach.
16. Attorney's Fees. In the event of litigation or other dispute resolution
proceeding involving the interpretation or enforcement of this Agreement,
the prevailing party shall be entitled to recover from the other all fees,
costs and expenses incurred in connection therewith, including attorney's
fees through appeal.
17. Tax Withholding. The Employer shall have the right to deduct from all
benefits and/or payments under the Agreement any taxes required by law to
be paid or withheld with respect to such benefits or payments.
18. Governing Law; Venue. The Agreement shall be construed and enforced in
accordance with the laws of the State of Florida. Xxxxx County, Florida,
shall be proper venue for any litigation arising out of this Agreement.
19. Paragraph Headings. Paragraph headings are for convenience only and are
not intended to expand or restrict the scope or substance of the provisions
of this Agreement.
20. Assignability. The rights and obligations of the Employer under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. This Agreement is a personal
employment agreement and the rights, obligations and interests of the
Executive hereunder may not be sold, assigned, transferred, pledged or
hypothecated.
21. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement shall remain in full force and shall in no way be impaired.
22. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to account for more than one
such counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 30th
day of July, 1999.
EXECUTIVE
/s/ Tyra Tutor /s/ Xxxxxxx X. Xxxxx
__________________________ ___________________________
Witness Xxxxxxx X. Xxxxx
EMPLOYER
/s/ Xxxx Xxxx
___________________________ /s/ Xxxxx X. Xxxxx
Witness By:___________________________
President, Chairman of the Board
and Chief Executive Officer
