SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
LOUIS W. HOLLIDAY, JR. (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will 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 to expressly
assume 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. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Louis W. Holliday, Jr.
662 Scotland Court
Santa Rosa, California 95409
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. 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 expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less than
fifty percent (50%) of the outstanding common shares and fifty percent
(50%) of the voting power of the outstanding shares of the surviving or
resulting corporation are owned, immediately after such consolidation or
merger, by the owners of the Company's common shares immediately prior to
such consolidation or merger; or (y) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended and as in effect on the date of this Agreement (the "Exchange
Act")) shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act, as in effect on the date of this Agreement) of
twenty-five percent (25%) or more of the surviving or resulting
corporation's outstanding common shares, or of twenty-five percent (25%) or
more of the voting power of the outstanding shares of the surviving or
resulting corporation, and (z) in each such case, within two (2) years
after the consummation of such consolidation or merger, individuals who
were directors of the Company immediately prior to the public announcement
of such consolidation or merger cease to constitute a majority of the Board
of Directors of the Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition (in
one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated; or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act, as in effect on the date of this Agreement) shall
become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act, as in effect on the date of this Agreement) of twenty-five
percent (25%) or more of the Company's outstanding common shares, or of
twenty-five percent (25%) or more of the voting power of the Company's
outstanding shares, and within two (2) years after such person become such
beneficial owner, individuals who were directors of the Company immediately
prior to the public announcement of the transaction pursuant to which such
person became such beneficial owner cease to constitute a majority of the
Board of Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the entire Board of Directors shall
cease for any reason to constitute a majority thereof unless the election
or the nomination for election by the Company's shareholders of each new
director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of three (3) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within sixty (60) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first paragraph of
this Agreement.
(11) "Good Reason" shall mean any of the following (without the Executive's
express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities and
status with the Company immediately prior to a Change in Control of the
Company, or a change in the Executive's titles or offices as in effect
immediately prior to a Change in Control of the Company, or any removal of
the Executive from, or any failure to reelect the Executive to, any of such
positions, except in connection with the termination of his employment for
Disability, Retirement or Cause or as a result of the Executive's death or
by the Executive other than for Good Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the Annual
Bonus Guidelines, as in effect at the time of a Change in Control of the
Company;
(iii) any failure by the Company to continue in effect any benefit
plan or arrangement (including, without limitation, the Company's
retirement plan, group life insurance plan, and medical, dental, accident
and disability plans) in which the Executive is participating at the time
of a Change in Control of the Company without substituting other plans
providing the Executive with substantially similar benefits (hereinafter
referred to as "Benefit Plans"), or the taking of any action by the Company
which would adversely affect the Executive's participation in, or
materially reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if any)
in which the Executive is participating at the time of a Change in Control
of the Company without substituting other plans or arrangements providing
him with substantially similar benefits (hereinafter referred to as
"Incentive Plans") or the taking of any action by the Company which would
significantly reduce the Executive's opportunity to earn incentive
compensation which is related to performance results as compared to
performance expectations periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to a
location more than fifty (50) miles from 11260 Chester Road, Cincinnati
(Sharonville), Ohio, or the Executive's relocation to any place other than
the location at which the Executive performed the Executive's duties
immediately prior to a Change in Control of the Company, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations
at the time of a Change in Control of the Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the time
of a Change in Control of the Company;
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section 6.1
hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however,
a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportion as their ownership of
stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have bee
satisfied:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to take
or to consider taking actions which, if consummated, would constitute a
Change in Control;
(iii) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(15) "Severance Payments" shall mean those payments described in Section
5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at the
annual April meeting of the Board's Compensation Committee.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Louis W. Holliday, Jr.
-------------------------------------
LOUIS W. HOLLIDAY, JR.