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EXHIBIT 10.33
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This first amendment (the "Amendment") to the employment agreement
dated as of October 1, 1996 (the "Agreement") among StaffMark, Inc.
("StaffMark"), Brewer Personnel Services, Inc. ("Brewer") and Clete T. Brewer
("Employee"), is made and entered as of September 17, 1999 by and between
StaffMark and Employee.
WHEREAS, the terms of Employee's overall executive compensation package
and the terms of this Amendment have been the subject of deliberation by the
Compensation Committee of the Board of Directors of StaffMark (the "Compensation
Committee") at meetings held on March 11, 1999, May 7, 1999, June 17, 1999,
August 2, 1999, August 12, 1999, September 15, 1999, and September 17, 1999.
WHEREAS, the Compensation Committee has been delegated authority, by
the Board of Directors of StaffMark at its meeting on August 12, 1999, to
determine the terms of, and approve, the Amendment;
WHEREAS, StaffMark believes that its interests would best be served by
securing Employee's continued employment; and
WHEREAS, StaffMark believes that, to achieve this goal, it is necessary
to extend the term of the Agreement, to revise the Agreement to reflect certain
modifications to the terms of the Employee's employment, to provide severance
benefits in additional specified circumstances, and to provide certain benefits
in the event of a change in control of StaffMark; and
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WHEREAS, the Compensation Committee has determined that the Amendment
is in the best interests of StaffMark and has approved the Amendment on
September 17, 1999.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Section 1 of the Agreement is amended by deleting "September 30,
2001" in the second line thereof and replacing it with "April 1, 2002."
2. Effective January 1, 1999, the second sentence of Section 1 of the
Agreement is deleted and replaced with the following provision:
"During the term of this Agreement, the calendar year shall be
referred to herein as a "Compensation Year.""
3. Effective April 1, 1999, Section 3 of the Agreement is deleted and
replaced with the following provision:
"3. BASE SALARY. StaffMark shall pay to Employee a base salary at
the rate of $215,000 per annum through September 30, 1999 and
thereafter at the rate of $350,000 per annum, in each case
payable on a regular basis in accordance with StaffMark's
standard payroll procedures, but not less than bi-monthly. On at
least an annual basis, the Board of Directors of StaffMark or a
duly-constituted committee thereof will review Employee's
performance and increase Employee's base salary if and to the
extent it determines, in its discretion, that any such increase
is warranted."
4. Section 5(b) of the Agreement is amended by inserting "Except as
provided in Section 6 hereof" (as renumbered) at the beginning of the initial
clause thereof.
5. Section 5(b)(i) of the Agreement is amended by adding "(excluding
circumstances involving Good Reason, as defined below)" immediately following
the word "Employee" in the second line thereof.
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6. Section 5(b)(iii) of the Agreement is amended
(a) by inserting "or by Employee for Good Reason (as defined
below)," immediately following the comma in the second line thereof,
and
(b) by deleting the words "continue to" on the third line thereof
and inserting after the word "pay" on the third line thereof the
phrase ", in such amount as is determined by reference to clauses
(A) and (B) below and on such payment terms set forth in the last
sentence of this paragraph (iii)," and by deleting the word "to" on
the fifth line thereof, and
(c) by inserting "the lesser of three (3) years or" at the beginning
of clause 5(b)(iii)(B), and
(d) by adding the following provision to the end thereof:
""Good Reason" shall mean any of the following circumstances
unless remedied by StaffMark within thirty (30) days after
receipt of written notification by Employee that such
circumstances exist or have occurred: (A) assignment to Employee
of any duties inconsistent with Employee's position, authority,
duties or responsibilities as contemplated by Section 2 of the
Agreement, or any other action by StaffMark that results in
diminution of such position, authority, duties or
responsibilities; or (B) any material failure by StaffMark to
comply with any of the material provisions of the Agreement. The
continuation of health insurance benefits referenced above in
this Section 5(b)(iii) shall extend to (i) Employee and his
eligible dependants under the terms of the applicable StaffMark
sponsored health care plan by which he was covered at the time
of such termination of employment, as such plan may be in effect
or may be modified from time to time, in consideration for
Employee's payment of such premiums as may be required to be
paid by active employees of StaffMark from time to time
("Required Premium Payments") or (ii) if such StaffMark
sponsored health care plan does
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not by its terms allow Employee's participation or continued
participation, StaffMark shall obtain (in return for Required
Premium Payments) insurance coverage on behalf of Employee
and/or Employee's eligible dependents that provides all benefits
otherwise provided under such StaffMark sponsored health care
plan or, at StaffMark's election (in return for Required Premium
Payments) shall provide such benefits from its own assets
(collectively, "Continued Health Care Coverage"). The payment of
Employee's base salary amount under the circumstances set forth
in the first sentence of this paragraph shall be made in two
equal payments (equal to one-half of such aggregate amount) on
each of the effective date of termination and ninety days after
the effective date of termination."
7. The following new Section 6 is inserted immediately following
Section 5 of the Agreement, and subsequent Sections of the Agreement and all
references thereto are renumbered accordingly:
"6. CHANGE IN CONTROL
(a) If Employee's employment with StaffMark is terminated
within two years following a Change in Control, either by
StaffMark for any reason or no reason or by the Employee for
Good Reason only, StaffMark shall pay Employee a lump sum in
the amount of two (2) times the sum of (i) Employee's base
salary then in effect and (ii) the greater of $125,000.00 or
his bonus for the year immediately preceding the year in
which the termination of his employment occurs. Such lump
sum payment shall be due on the effective date of the
termination of Employee's employment. In addition, in the
case of any such termination, Employee shall be permitted to
receive Continued Health Care Coverage for a period of three
(3) years.
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(b) ""Change in Control" shall be deemed to have occurred
if: (i) any person, other than StaffMark or an employee
benefit plan of StaffMark, acquires directly or indirectly
the "beneficial ownership" (as defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended, "Beneficial
Ownership") of any voting security of StaffMark and
immediately after such acquisition such person is, directly
or indirectly, the Beneficial Owner of voting securities
representing 50% or more of the total voting power of all of
the then-outstanding voting securities of StaffMark; (ii)
the individuals (A) who, as of the effective date of
StaffMark's registration statement with respect to its
initial public offering, constitute the Board of Directors
of StaffMark (the "Original Directors") or (B) who
thereafter are elected to the Board of Directors of
StaffMark and whose election, or nomination for election to
the Board of Directors of StaffMark was approved by vote of
at least two-thirds (2/3) of the Original Directors then
still in office (such directors becoming "Additional
Original Directors" immediately following their election) or
(C) who are elected to the Board of Directors of StaffMark
and whose election, or nomination for election, to the Board
of Directors of StaffMark was approved by a vote of at least
two-thirds (2/3) of the Original Directors and Additional
Original Directors then still in office (such directors also
becoming Additional Original Directors immediately following
their election), cease for any reason to constitute a
majority of the members of the Board of Directors of
StaffMark; (iii) the stockholders of StaffMark shall approve
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a merger or merger agreement involving StaffMark, a
consolidation transaction involving StaffMark, a
recapitalization or reorganization of StaffMark, a reverse
stock split of outstanding StaffMark voting securities, or
the consummation of any such transaction if stockholder
approval is not sought nor obtained, provided, however, that
the foregoing referenced transactions or events in this
clause (iii) shall not constitute a "Change of Control" if
such transaction or event would result in at least 75% of
the total voting power represented by outstanding securities
of the surviving or resulting entity outstanding
(immediately after such transaction after giving effect to
the consideration issued or transferred in such transaction
or event on an as converted or fully diluted basis) being
Beneficially Owned by at least 75% of the holders of
outstanding voting securities of StaffMark immediately prior
to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders
not substantially altered in the transaction in any material
way; or (iv) the stockholders of StaffMark shall approve a
plan of complete liquidation of StaffMark or an agreement
for the sale or disposition by StaffMark of all or a
substantial portion of StaffMark's assets (i.e., 50% or more
of the total assets of StaffMark).
(c) (i) Anything in this Agreement to the contrary
notwithstanding, in the event that it shall be determined that
any payment or distribution by StaffMark to or for the benefit of
Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a
"Payment"), would constitute an "excess parachute payment" within
the meaning of section 280G of
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the Internal Revenue Code of 1986, as amended (the "Code"),
amounts payable or distributable to or for the benefit of
Employee pursuant to this Agreement that are determined to be
"parachute payments" within the meaning of section 280G(b)(2) of
the Code (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments")
shall not be paid or distributed in the amounts or at the times
otherwise required by this Agreement, but shall instead be paid
or distributed annually, beginning as of the effective date of
the termination of Employee's employment and thereafter on each
anniversary thereof, in the maximum substantially equal amounts
and over the minimum number of years that are determined to be
required to reduce the aggregate present value of Agreement
Payments to an amount that will not cause any Payment to be
non-deductible under section 280G of the Code. For purposes of
this Section 6, present value shall be determined in accordance
with section 280G(d)(4) of the Code.
(ii) All determinations to be made under this
Section 6 shall be made by StaffMark's independent public
accountant immediately prior to the Change of Control (the
"Accounting Firm"), which firm shall provide its determinations
and any supporting calculations both to StaffMark and Employee
within 10 days of the effective date of the termination of
Employee's employment. Any such determination by the Accounting
Firm shall be binding upon StaffMark and Employee.
(iii) Within two years after the effective date of
the termination of Employee's employment, the Accounting Firm
shall review the determinations made by it pursuant to paragraph
(i), above. If at that time, as a result of the uncertainty in
the application of section 280G of the Code at the time of the
initial determination by the Accounting Firm hereunder, the
annual amounts of Agreement Payments or the period over which
Agreement Payments are paid or distributed, as determined
pursuant to paragraph (i), above, are determined not to satisfy
the requirements of paragraph (i), then the annual amounts of
future Agreement Payments and/or the period over which future
Agreement Payments are paid or distributed shall be redetermined
to satisfy the requirements of paragraph (i), and all future
Agreement
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Payments shall be paid or distributed in accordance with such
redetermination.
(iv) All of the fees and expenses of the
Accounting Firm in performing the determinations referred to in
paragraphs (ii) and (iii) above shall be borne solely by
StaffMark. StaffMark agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations
pursuant to paragraphs (ii) and (iii) above, except for claims,
damages or expenses resulting from the negligence or misconduct
of the Accounting Firm."
8. The provisions of Section 10 (formerly Section 9) of the Agreement
shall be effective as of the date hereof.
9. Except as otherwise set forth herein, the Agreement shall remain in
full force and effect in accordance with its terms from and after the date
hereof. All references to the Agreement from and after the date hereof shall be
deemed to include the Agreement as amended by the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
EMPLOYEE: STAFFMARK, INC.:
/s/ CLETE T. BREWER By: /s/ TERRY C. BELLORA
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Clete T. Brewer Title: Chief Financial Officer
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WITNESS: /s/ GORDON Y. ALLISON
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