EXHIBIT 10.7
SEVERANCE AGREEMENT
THIS AGREEMENT is entered as of October 1, 1991, by and between Xxxxxx
Half International Inc., a Delaware corporation (the "Company") and Xxxx X.
Xxxxxxxx (the "Employee").
WHEREAS, the Employee currently serves as Director of Field Operations,
Eastern Region; and
WHEREAS, the Company believes that it is in the best interest of the
Company and its shareholders to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions set forth herein, the Company and the Employee hereby agree as
follows:
1. DEFINITIONS
1.1. BOARD means the Board of Directors of the Company.
1.2. CHANGE OF CONTROL means any one of the following
events:
1.2.1. SCHEDULE 13D OR 13G FILING. A Schedule 13D or
13G is filed pursuant to the Securities Exchange Act of 1934 ("Exchange
Act")indicating that any person or group (as such terms are defined in Section
13(d)(3) of the Exchange Act) has become the holder of more than forty percent
(40%) of the outstanding Voting Shares. For purposes of calculating the
percentage of Voting Shares, such person or group shall be deemed the owner of
any Voting Shares which such person or group may acquire upon conversion of
securities or upon the exercise of options, warrants or rights.
1.2.2. CERTAIN CHANGES IN DIRECTS. As a result of or
in connection with any cash tender offer, merger, or other business combination,
sale of assets or contested election, or combination of the foregoing, the
persons who were directors of the Company just prior to such event shall cease
within one year to constitute a majority of the Board.
1.2.3. CERTAIN CORPORATE TRANSACTIONS. The
stockholders of the Company approve a definitive agreement (i) to merge or
consolidate the Company with or into another corporation in which the holders of
Voting Shares immediately before such merger or reorganization will not,
immediately following such merger or reorganization, hold as a group on a
fully-diluted basis both the ability to elect at least a majority of the
directors of the surviving corporation and at least a majority in value of
the surviving corporation's outstanding equity securities, or (ii) to sell or
otherwise dispose of all or substantially all of the assets of the Company.
1.2.4. TENDER OR EXCHANGE OFFER. An Offer is made by
a person or group (as such terms are defined in Section 13(d)(3) of the Exchange
Act) and such Offer has resulted in such person or group holding an aggregate of
forty percent (40%) or more of the outstanding Voting Shares. For purposes of
this Section 1.2.4, Voting Shares held by such person or group shall be
calculated in accordance with the last sentence of Section 1.2.1 hereof.
1.3. OFFER means a tender offer or an exchange offer for
shares of the Company's Stock.
1.4. STOCK means the Common Stock, $1.00 par value, of the
Company.
1.5. TERMINATION DATE means the date on which Employee's
employment with the Company is terminated.
1.6. TERMINATION FOR CAUSE means termination by the
Company of Employee's employment by the Company and its subsidiaries by reason
of (i) the commission of any criminal act by Employee (other than minor traffic
violations), (ii) gross misconduct or gross negligence by the Employee in the
performance of his duties, or (iii) material willful violation by Employee of
any of the policies of Employer.
1.7. TERMINATION WITHOUT CAUSE means termination of
Employee's employment by the Company other than pursuant to a Termination For
Cause.
1.8. VOTING SHARES means the outstanding shares of the
Company entitled to vote for the election of directors.
2. PAYMENTS AND BENEFITS UPON TERMINATION WITHOUT CAUSE. In the
event of a Termination Without Cause within twelve months following a Change
of Control, the Employee shall be entitled to receive the following:
2.1. CONTINUATION OF BASE SALARY. For a period of twelve
(12) months following the Termination Date, Employee shall receive monthly
payments ("Severance Payments") at a rate equal to 150% of the highest monthly
base salary (exclusive of bonus, fringe benefits and other non-cash
compensation) paid to Employee within the six (6) months preceding the
Termination Date. The foregoing Severance 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 year in which the termination occurs or to any
subsequent year. At the option of the Company, all or part of such Severance
Payments may be paid in a lump sum.
2.2. BENEFITS. So long as Employee would be entitled to
receive Severance Payments pursuant to Section 2.1 (whether or not the Company
has elected to pay the entire amount in a lump sum) or until Employee is
reemployed, whichever first occurs, Employee also shall be entitled to all
employee benefits, including medical and life insurance, pension, retirement and
other benefits to which Employee was entitled on the Termination Date.
2.3. VESTING. If, on the Termination Date, Employee holds
any Stock or options or other rights to acquire Stock which are subject to
restrictions or vesting based on continued employment with the Company, such
restrictions shall lapse and such vesting shall occur effective as of the
Termination Date. In addition, if Employee is a participant in the Company's
Deferred Compensation Plan, all amounts credited under such plan to Employee
shall become fully vested and nonforfeitable.
2.4. MULTIPLE BENEFITS. To the extent that any other
agreement ("Other Agreement") between the Employee and the Company 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 to Section 2.1
hereof, then Employee shall not receive such benefits under both the Other
Agreement and Section 2.1, but shall instead receive the greater of the cash
benefit payable under either Section 2.1 or 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 plan, program or agreement.
3. EMPLOYMENT. The sole purpose of this Agreement is to provide
Employee with severance benefits in the event Employee is Terminated Without
Cause within twelve months following a Change of Control. This Agreement is not
an employment agreement.
4. HEADINGS. The headings used in this Agreement are for
convenience only, and shall not be used to construe the terms and conditions of
the Agreement.
5. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of California. The terms of this
Agreement shall bind and shall inure to the benefit of the successors and
assigns of the parties hereto.
6. ENTIRE AGREEMENT. This agreement constitutes the entire
agreement between the parties with respect to the matters covered hereby and
supersedes all prior agreements, arrangements or understandings, whether written
or verbal, with respect to such matters.
7. COUNTERPARTS. This agreement may be executed in counterparts,
all of which shall constitute only one agreement.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first set forth above.
XXXXXX HALF INTERNATIONAL INC.
XXXXXX X. XXXXXXX, XX.
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Xxxxxx X. Xxxxxxx, Xx.
Chairman and Chief
Executive Officer
XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Director of Field Operations
Eastern Region
