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EXHIBIT 10.34
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This first amendment (the "Amendment") to the employment agreement
dated as of August 20, 1996 (the "Agreement") by and between StaffMark, Inc.
(the "Company"), and Terry Bellora ("Employee"), is made and entered as of
September 17, 1999 between the Company 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 of the Board of Directors of
StaffMark 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, the Company believes that its interests would best be served
by securing Employee's continued employment; and
WHEREAS, the Company 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 the Company; 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. Effective April 1, 1999, paragraph 2(a) of the Agreement is amended
by deleting "$150,000 per year" in the first line thereof and replacing it with
"$200,000 per year through September 30, 1999 and thereafter $250,000 per year,
in each case."
2. Paragraph 4(a) of the Agreement is deleted and is replaced with the
following provisions:
"(a) Employee agrees to provide services hereunder at the
Company's corporate headquarters in Fayetteville, Arkansas as
required or as requested by the Company's Chief Executive
Officer, and to travel as necessary to provide such services;
provided, however, that the Company will provide office space
and necessary clerical and technical support at its
Jacksonville and Orlando, Florida offices, and will provide
necessary office equipment and technical support at Employee's
Palm Coast, Florida residence, for the convenience of Employee
when he is neither traveling on Company business nor required
to be at corporate headquarters."
3. Paragraph 5 of the Agreement is amended by
(a) deleting "for five (5) years" in the first line thereof and
replacing it with "until April 1, 2002."
(b) inserting (i) the phrase "or Resignation without Good Reason"
following the caption "Good Cause" in subparagraph (c) and (ii) the phrase "or
termination by Employee for circumstances other than Good Reason (as defined
herein)," before the word "Employee" on the last line of subparagraph (c).
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(c) deleting subparagraphs (d) - (f) (excluding the final unlettered
paragraph of paragraph 5) and replacing them with the following provisions:
"(d) Without Cause or for Good Reason.
Except under circumstances described in paragraph 9 of
this Agreement, at any time after the commencement of
employment, the Company may, without cause, terminate
this Agreement and Employee's employment, or Employee
may terminate this Agreement and his employment for Good
Reason (as defined below), effective thirty (30) days
after written notice is provided to the other party by
the party terminating this Agreement. In either case,
Employee shall receive from the Company two payments,
each equal to one-half of the following: the amount of
Employee's base salary (without offset for any
compensation received by Employee from any subsequent
employment by any person other than by any affiliate of
the Company or in violation of Section 3 of this
Agreement) for a period which is the greater of (A)
sixty (60) days from the date of such termination or (B)
the lesser of two years or the remaining term of this
Agreement. The first payment shall be due on the
effective date of termination and the second payment
shall be due ninety days after the effective date of
termination. Upon the effective date of termination in
either case, all Options granted to Employee in
paragraph 2(c)(viii) shall become immediately
exercisable. Further, any such termination shall operate
to shorten the period set forth in paragraph 3(b) and
during which the terms of paragraph (3) apply to one (1)
year from the date of
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termination of employment. In addition, in the case of
any such termination, Employee shall be permitted to
continue health care coverage for himself and his
eligible dependents until he reaches age 65, (i) under
the terms of the applicable Company 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 the Company
from time to time ("Required Premium Payments") or (ii)
if such Company sponsored health care plan does not by
its terms allow Employee's participation or continued
participation, the Company 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
Company sponsored health care plan or, at the Company's
election (in return for Required Premium Payments),
shall provide such benefits from its own assets
(collectively, "Continued Health Care Coverage"). "Good
Reason" shall mean any of the following circumstances
unless remedied by the Company 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 paragraph 1 of the
Agreement, or any other action by the Company that
results in diminution of such position, authority,
duties or
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responsibilities; (B) any material failure by the
Company to comply with any of the material provisions of
the Agreement; or (C) without Employee's consent, a
requirement that Employee perform services hereunder at
a location or locations other than the locations
contemplated by paragraph 4 of the Agreement."
(d) deleting "(e)" in the first line of the final paragraph thereof and
replacing it with "(d)," and inserting "Except as otherwise provided in clauses
(a) through (d) above," at the beginning of the second sentence of such final
paragraph.
4. Paragraph 9 of the Agreement is amended by deleting the comma and
the words preceding the comma on the first line of subparagraph (a), and by
deleting subparagraphs (b) and (c) thereof and replacing them with the following
new subparagraphs (b) and (c):
"(b) If Employee's employment with the Company is terminated
within two years following a Change in Control, either by the
Company for any reason or no reason or by the Employee for
Good Reason only, (i) the Company shall pay Employee a lump
sum in the amount of two (2) times the sum of (A) Employee's
base salary then in effect and (B) the greater of $100,000.00
or his bonus for the year immediately preceding the year in
which the termination of his employment occurs, such lump sum
payment to be due and payable on the effective date of the
termination of Employee's employment; (ii) the provisions of
paragraph 5(d) relating to exercisability of Options and
Continued Health Care Coverage shall apply; and (iii) the
non-competition provisions of paragraph 3 shall apply for a
period of one (1) year from the effective date of termination
if employment is terminated by Employee, and shall not apply
at all if employment is terminated by the Company.
(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
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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 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 paragraph 9, present value shall be
determined in accordance with section 280G(d)(4) of the Code.
(ii) All determinations to be made under this
paragraph 9 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 clause
(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 clause (i), above, are determined not to satisfy
the requirements of clause (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 clause (i), and
all future Agreement Payments shall be paid or distributed in
accordance with such redetermination.
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(iv) All of the fees and expenses of the Accounting
Firm in performing the determinations referred to in clauses
(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
clauses (ii) and (iii) above, except for claims, damages or
expenses resulting from the negligence or misconduct of the
Accounting Firm."
5. Paragraph 9(d) is amended by inserting "and paragraph 9(b)"
immediately following "paragraph 5" in the first line thereof and by deleting
"and (c)" in the first line thereof.
6. Paragraph 9(e) shall be deleted and replaced in its entirety by the
following:
(e) ""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
StaffMark 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 a merger or merger agreement involving
StaffMark, a consolidation transaction involving StaffMark, a
recapitalization or reorganization of
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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 (immediately after such
transaction or event 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 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)."
7. The provisions of paragraph 10 of the Agreement shall be effective
as of the date hereof.
8. 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/ TERRY C. BELLORA By: /s/ CLETE T. BREWER
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Terry C. Bellora Title: Chief Executive Officer
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