EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT is made effective as of
the 1st day of November, 2000, by and between MODIS PROFESSIONAL SERVICES, INC.
a Florida corporation, and its successors ("Employer"), and TIMOTHY D. PAYNE, a
resident of the State of Florida ("Executive") and amends and restates in its
entirety that certain employment agreement between the parties dated January 1,
1999.
WHEREAS, the Employer and the Executive entered into an employment agreement on
January 1, 1999; 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 effective immediately as its
President, and effective March 1, 2001, as its Chief Executive Officer, 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 until March 1, 2001, and
shall thereafter report directly to the Board of Directors of Employer. The
Executive shall also be proposed for election to the Board of Directors of
Employer on or before November 30, 2000.
2. Duties and Authority. As President and Chief Executive Officer of Employer,
Executive shall be in charge of the operations of Employer and shall have full
authority and responsibility, subject to the general direction and control of
the Board, for formulating policies and administering the affairs of Employer in
all respects, and otherwise performing such duties as are customarily performed
by the President and Chief Executive Officer of a company of similar size and
structure to 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
assist in the strategic direction, operations and affairs of corporate
affiliates or 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 October 31, 2000 (the 'Term of this Agreement').
The Term of this Agreement shall extend until December 31, 2000 and 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 $500,000.00, 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 100% under Employer's Senior Executive 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 pay the initiation and
membership dues for the Executive for a membership in a private club not to
exceed $10,000.00 per annum. 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
Employer (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 Employer. 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. If
Executive dies during the Employment Period, his estate shall receive all
compensation and expenses due as of the date of his death, and for the
remainder of the calendar year of his death. 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 three (3)
times the sum of (i) Executive's Base Salary as of the Date of Termination and
(ii) the Executive's target bonus opportunity under the Incentive Plan based on
the target 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 or 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 sue
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
1 Independent Drive
Jacksonville, Florida 32202
If to Executive:
Timothy D. Payne
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. Duval 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 March, 2001.
EXECUTIVE
/s/ Tyra H. Tutor /s/ Timothy D. Payne
Timothy D. Payne
/s/ Marc M. Mayo
Witnesses
EMPLOYER
/s/ Tyra H. Tutor By: Derek E. Dewan
Its: Chairman
/s/ Marc M. Mayo
Witnesses