7
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of April 1, 1997 (the "Effective
Date"), by and between AccuStaff Incorporated, a Florida corporation (the
"Employer") and Tim Payne, a resident of the State of Florida (the "Executive").
In consideration of the mutual promises, agreements and covenants, and
subject to the terms and conditions contained in this Agreement, the Employer
and the Executive, intending to be legally bound, hereby agree as follows:
1. Employment. The Employer hereby employs the Executive as Chief Operating
Officer of AccuStaff's Information Technology Division ("IT Division"), and the
Executive hereby accepts such employment by the 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 Chief Operating Officer of the IT Division, the
Executive shall be responsible for management, fiscal responsibilities, and
strategic planning of the IT Division and shall perform such other duties as are
assigned to the Executive by the Chief Executive Officer of the Employer. For
purposes of this Agreement, the IT Division shall be defined as including all
the subsidiaries and affiliates of the Employer performing IT consulting,
staffing or outplacement services, regardless of whether the Division shall at
some time take on another name or corporate form. The Executive agrees to devote
his full time, attention and best efforts to the performance of his duties
hereunder.
3. Term, Employment Period. The term of employment shall begin on the
Effective Date and shah terminate on March 31, 2000, unless Otherwise renewed or
terminated as provided herein. For purposes of this Agreement, the period
beginning on the Effective Date and ending on the Date of Termination (as
defined in paragraph 8.F. below) shah be referred to herein as the "Employment
Period."
4. Compensation. During the Employment Period, the Executive will receive
the following compensation:
A. Base Salary. A base annual salary of $200,000 until October 1, 1997,
then increased to $250,000 for the next pay period thereafter (the "Base
Salary"), payable in accordance with the Employer's standard practice for other
comparable executives.
B. Incentive Compensation. Additional compensation (the "Incentive
Compensation") shall be paid to the Executive in an amount as determined by the
Chief Executive Officer. The Incentive Compensation payment shall be made on or
before March 31 of the year following the fiscal year to which such Incentive
Compensation relates.
The Incentive Compensation payment shall be made on or before March 31 of the
year following the fiscal year to which such Incentive Compensation relates.
5. Stock Options. On the Effective Date, AccuStaff shall grant to the
Executive 200,000 non-incentive stock options (the "Options") under the
AccuStaff 1995 Stock Option Plan. The Options shall have an exercise price equal
to the fair market value of the Employer's common stock on the date of grant.
The Options shall be exercisable 33.33% per year beginning one year from the
Effective Date. A form of Stock Option Agreement relating to the Options is
attached hereto as Exhibit A.
6. Benefits. During the term of this Agreement, the Employer shall provide
the Executive with all retirement, welfare, deferred compensation, disability,
life insurance and other benefits generally provided to all of the Employer's
other senior executive officers. The Executive shall receive 20 days of paid
vacation per year. 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 Executive $500 per month for an automobile used by the Executive
for business purposes. The Executive acknowledges that pursuant to the Internal
Revenue Code of 1986, as amended, 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-Competition; Non-Solicitation, Non-Disclosure. In consideration of
the employment of the Executive by the Employer, the Executive agrees as
follows:
A. Non-Competition. During the Employment Period and for a period of two
(2) years after the Date of Termination, the Executive will not, directly or
indirectly, 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 IT staffing, consulting or outplacement business of the
Employer as it exists at that time, provided, however, that the Executive may
engage in providing consulting services which do not compete with Employer's IT
Division.
B. Non-Solicitation. During the Employment Period and for a period of two
(2) years after the Date of Termination, the Executive will not solicit or
accept any IT staffing, consulting or outsourcing business from any of the
clients of Employer's IT Division. During this period, Executive shall not hire,
recruit or attempt to recruit, for any business which competes with Employer's
IT Division, any person employed or contracted with Employer's IT Division or
employed or contracted with Employer's IT Division at any time during the
previous twelve (12) months.
C. Non-Disclosure of Information. The 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 confidential, proprietary,
or trade secrete information of any kind, nature, or description concerning any
matters affecting or relating to the business of the Employer, including, but
not limited to, matters of a technical nature, such as formulae, "know how",
schematics, technical drawings, secret processes or machines, inventions,
computer software, product sources, product research and designs, and matters of
a business nature, such as its client lists, client contact information,
consultant or contractor information, on-site program(s) and support materials,
candidate and recruit lists and information, placement information, pricing
lists, contracts, sales reports, sales, financial and marketing data, systems,
forms, methods, procedures, and analyses, and any other proprietary information,
whether communicated orally or in documentary or other tangible form, concerning
how Employer's IT Division operates its business. The parties to this Agreement
recognize that Employer has invested considerable amount of time and money in
attaining and developing all of the information described above and any
unauthorized disclosure or release of such Confidential Information in any form
would irreparably harm Employer.
9. 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 a Total Disability
of the Executive has occurred, 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 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date") if, within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Total Disability" shall mean the physical or mental condition
rendering the Executive unable, for a total of six (6) months during any twelve
month period, to perform the duties and bear the responsibilities referred to in
paragraph No. 2 herein which is determined to be total and permanent by a
physician selected by the Employer or its insurers and acceptable to the
Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably).
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 material 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 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; (ii) the
conviction of the Executive for a felony, or (iii) a breach of the Executive's
fiduciary duty to the Employer or willful violation in the course of performing
his duties for the Employer of any law, rule or regulation (other than traffic
violation or other minor offenses). No act or failure to act on the Executive's
part shall be considered willful unless done or omitted to be done 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 by the Employer 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, excluding for this
purpose an isolated, insubstantial, and inadvertent action not taken in bad
faith and which is remedied by the Employer promptly after receipt of' notice
thereof given by the Executive;
(ii) any failure by the Employer to comply with any of the provisions of
this Agreement, other than an isolated, insubstantial, and inadvertent failure
not occurring in bad faith and which is remedied by the Employer promptly after
receipt of notice thereof given by the Executive;
(iii) a Change in Control. For the purposes of this Agreement, 'Change
in Control' shall mean:
(i) an acquisition of any voting securities of the Employer by any
"Person" (as the term person is used for purposes of Section 3(d) or
14(d) of the Securities Exchange Act of 1934 (the "1934 Act")),
immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-d promulgated under the 1934 Act) of 25% 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 Effective Date, constitute the Board
of Directors of Employer cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the Effective Date 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 of Directors shall be considered as though such individual were
a member of the Board of Directors of Employer as of the Effective
Date;
(iii) approval by the shareholders of Employer of a reorganization,
merger, or consolidation, in each case unless the shareholders of
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. Employer of (a) a complete
liquidation or dissolution of the Employer or (b) the sale or other
disposition of all or substantially all of the assets of the Employer,
D. Without Cause. Either the Employer or the Executive may terminate this
Agreement without Cause or reason upon not less than 30 days written notice to
the other, setting forth the effective date of termination.
E. 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 (i) a written notice which 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. 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.
F. Date of Termination. "Date of Termination" means (i) the end of the term
of the Agreement specified in paragraph 3 (as such term may be extended from
time to time by written agreement of both parties) if Employer has given any
combination of a total of six (6) months of notice or severance pay (such pay to
consist of the applicable prorated Base Salary and Incentive Compensation); (ii)
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; (iii) if the Executive's employment is terminated by
reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be; and (iv) if the 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.
10. Obligations of the Employer upon Termination. Upon the termination of
the Executive's employment for any reason, the Executive shall be entitled to
Base Salary and all benefits (including accrued vacation) through the Date of
Termination. Upon the termination of the Executive's employment other than by
(i) the expiration of the Employment Period (or any extension of such term),
(ii) the Executive without Good Reason, or (iii) the Employer with Cause, the
Executive shall in addition be entitled to receive (i) a lump sum payment equal
to the present value of the Executive's annual Base Salary as of the Date of
Termination (ii) a lump sum payment of the present value of the pro rata
Incentive Compensation payment as determined through the Date of Termination;
and (iii) all unvested options to acquire the Employer's common stock granted to
the Executive pursuant to the Stock Option Agreement between the Executive and
the Employer of even date herewith shall immediately vest and become
exercisable. For purposes of this Agreement, "present value" shall be determined
by using the "Applicable Federal Rate" for the period corresponding with that
period over which the present value is being determined. The lump sum payment
shall be paid no later than thirty days after the Date of Termination in
immediately available United States funds.
11. Mitigation of Damages. The 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, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by the
Executive as the result of self-employment or employment by another employer or
otherwise.
12. Mandatory Deductions. Any amounts to which the 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 tax obligations of the 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 the Employer:
AccuStaff Incorporated
6440 Atlantic Boulevard
Jacksonville, Florida 32211
Attn: Chief Executive Officer
or Its Then Current Address
If to the Executive:
To the then current address of the Executive appearing in the
corporate records of the Company
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. 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. Governing Law, Venue. The Agreement shall be construed and enforced in
accordance with the laws of the State of Florida. Duval County, Florida, shall
be the proper venue for any litigation arising out of this Agreement.
17. 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.
18. 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.
19. 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.
20. 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
date first above written.
ACCUSTAFF INCORPORATED
By: /s/ Derek E. Dewan________
Derek E. Dewan
Chairman, President and Chief Executive Officer
THE EXECUTIVE
By: /s/ Timothy D. Payne______
Tim Payne