Exhibit 10.22
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated as of the 18th day of November, 1998, is
by and between INTERIM SERVICES INC., a Delaware corporation (hereinafter
referred to as the "Company"), and RAYMOND MARCY (hereinafter the
"Executive").
RECITALS
A. The Board of Directors of the Company (the "Board")
considers it essential to the best interests of the Company and its
stockholders that its key management personnel be encouraged to remain with
the Company and its subsidiaries and to continue to devote full attention to
the Company's business in the event that any third person expresses its
intention to complete a possible business combination with the Company, or in
taking any other action which could result in a "Change in Control" (as
defined herein) of the Company. In this connection, the Board recognizes that
the possibility of a Change in Control and the uncertainty and questions
which it may raise among management may result in the departure or
distraction of key management personnel to the detriment of the Company and
its stockholders. The Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
key members of the Company's management to their assigned duties without
distraction in the face of the potentially disturbing circumstances arising
from the possibility of a Change in Control of the Company.
B. The Executive currently serves as the Company's
Chairman of the Board, President and Chief Executive Officer and his services
and knowledge are valuable to the Company in connection with the management
of its business.
C. The Board believes the Executive has made and is
expected to continue to make valuable contributions to the productivity and
profitability of the Company and its subsidiaries. Should the Company
receive a proposal from a third person concerning a possible business
combination or any other action which could result in a Change in Control, in
addition to the Executive's regular duties, the Executive may be called upon
to assist in the assessment of such proposal, advise management and the Board
as to whether such proposal would be in the best interests of the Company and
its stockholders, and to take such other actions as the Board might determine
to be necessary or appropriate.
D. Should the Company receive any proposal from a third
person concerning a possible business combination or any other action which
could result in a change in control of the Company, the Board believes it
imperative that the Company and the Board be able to rely upon the Executive
to continue in his position, and that the Company and the Board be able to
receive and rely upon his advice, if so requested, as to the best interests
of the Company and its stockholders without concern that he might be
distracted by the personal uncertainties and risks created by such a
proposal, and to encourage Executive's full attention and dedication to the
Company.
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TERMS AND CONDITIONS
NOW, THEREFORE, to assure the Company and its subsidiaries
that it will have the continued, undivided attention, dedication and services
of the Executive and the availability of the Executive's advice and counsel
notwithstanding the possibility, threat or occurrence of a Change in Control
of the Company, and to induce the Executive to remain in the employ of the
Company and its subsidiaries, and for other good and valuable consideration,
the adequacy and sufficiency of which are hereby acknowledged, the Company
and the Executive agree as follows.
1. CHANGE IN CONTROL
(a) The definition of a "Change in Control" of the Company
for purposes of this Agreement shall be as determined, prospectively,
from time to time, by the Board, pursuant to the affirmative vote of
at least two-thirds of those members of the Board (i) who have served
on the Board for at least two years prior to such determination, and
(ii) whose election, or nomination for election, during such two-year
period was approved by a vote of at least two-thirds of the directors
then in office who were directors at the beginning of such two-year
period. Written notice of any such determination, or modification of
a previous determination, shall be provided promptly to the Executive.
(b) In the event that at any time during the term of this
Agreement the Board has not established a definition of "Change of
Control" pursuant to Section 1(a), for purposes of this Agreement, a
"Change in Control" of the Company shall be deemed to have occurred
upon (i) the acquisition at any time by a "person" or "group" (as that
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (excluding, for this
purpose, the Company or any of its subsidiaries, any employee benefit
plan of the Company or any of its subsidiaries, an underwriter
temporarily holding securities pursuant to such securities, or a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company) of beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 25% or more of the combined voting power in the election
of directors of the then-outstanding securities of the Company or any
successor of the Company; (ii) the termination of service as
directors, for any reason other than death, disability or retirement
from the Board, during any period of two consecutive years or less, of
individuals who at the beginning of such period constituted a majority
of the Board, unless the election of or nomination for election of
each new director during such period was approved by a vote of at
least two-thirds of the directors still in office who were directors
at the beginning of the period; (iii) approval by the stockholders of
the Company of liquidation of the Company; (iv) approval by the
stockholders of the Company and consummation of any sale or
disposition, or series of related sales or dispositions, of 50% or
more of the assets or earning power of the Company; or (v) approval by
the stockholders of the Company and consummation of any merger or
consolidation or statutory share exchange to which the Company is a
party as a result of which the persons who were stockholders of the
Company immediately prior to the effective date of the merger or
consolidation or statutory share exchange shall have beneficial
ownership of less than 50% of the combined voting power in the
election of
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directors of the surviving corporation following the effective date of
such merger or consolidation or statutory share exchange.
(c) Notwithstanding anything herein, no acquisition of
beneficial ownership of securities of the Company, merger, sale of
assets or other transaction shall be deemed to constitute a Change in
Control for purposes of this Agreement if such transaction constitutes
a "Management Approved Transaction." For purposes of this Agreement,
a "Management Approved Transaction" shall be any transaction, which
would otherwise result in a Change in Control for purposes of this
Agreement in which the acquiring "person", "group" or other entity is
either beneficially owned by, or comprised of, in whole or in part,
three or more members of the Company's executive management, as such
was constituted twelve months prior to such transaction, or is
majority owned by, or comprised of, any employee benefit plan of the
Company.
(d) Notwithstanding anything herein, no acquisition of
beneficial ownership of securities of the Company, merger, sale of
assets or other transaction shall be deemed to constitute a Change in
Control for purposes of this Agreement if such transaction is approved
by the affirmative vote of at least two-thirds of those members of the
Board (i) who have served on the Board for at least two years prior to
such approval, and (ii) whose election, or nomination for election,
during such two-year period was approved by a vote of at least
two-thirds of the directors then in office who were directors at the
beginning of such two-year period.
2. ADJUSTMENT OF BENEFITS UPON CHANGE IN CONTROL
(a) The Company agrees that the Compensation Committee of
the Board, or such other committee succeeding to such committee's
responsibilities with respect to executive compensation (collectively,
the "Compensation Committee") may make such equitable adjustments to
any performance targets contained in any awards under the Company's
current incentive compensation plans, or any additional or successor
plan in which the Executive is a participant (collectively, the
"Incentive Plans"), as the Compensation Committee determines may be
appropriate to eliminate any negative effects from any transactions
relating to a Change in Control (such as costs or expenses associated
with the transaction or any related transaction, including, without
limitation, any reorganizations, divestitures, recapitalizations or
borrowings, or changes in targets or measures to reflect the
disruption of the business, etc.), in order to preserve reward
opportunities and performance objectives.
(b) In the case of a Change in Control, all restrictions
and conditions applicable to any awards of restricted stock or the
vesting of stock options or other awards granted to the Executive
under the Company's 1998 Incentive Stock Plan, 1997 Long-Term
Executive Compensation and Outside Director Stock Option Plan, any
similar or successor plan, or otherwise shall be deemed to have been
satisfied as of the date the Change in Control occurs, and this
Agreement shall be deemed to amend any agreements evidencing such
awards to reflect this provision.
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3. TERMINATION FOLLOWING CHANGE IN CONTROL
(a) The Executive's employment may be terminated for any
reason by the Company within two years following a Change in Control
of the Company. If the Executive's employment is terminated for any
reason other than the reasons set forth below, then the Executive
shall be entitled to the benefits set forth in this Agreement in lieu
of any termination, separation, severance or similar benefits under
the Executive's Employment Agreement, if any, or under the Company's
termination, separation, severance or similar plans or policies, if
any. If the Executive's employment is terminated for any of the
reasons set forth below, then the Executive shall not be entitled to
any termination, separation, severance or similar benefits under this
Agreement, and the Executive shall be entitled to benefits under the
Executive's Employment Agreement, if any, or under the Company's
termination, separation, severance or similar plans or policies, if
any, only in accordance with the terms of such Employment Agreement,
or such plans or policies.
(i) termination by reason of the Executive's death,
PROVIDED the Executive has not previously given a "Notice of
Termination" pursuant to Section 4;
(ii) termination by reason of the Executive's
"disability," PROVIDED the Executive has not previously given a
"Notice of Termination" pursuant to Section 4;
(iii) termination by reason of "retirement" at or
after age 65, PROVIDED the Executive has not previously given "Notice
of Termination" pursuant to Section 4; or
(iv) termination by the Company for "Cause."
For the purposes of this Agreement, "disability" shall
be defined as the Executive's inability by reason of illness or other
physical or mental disability to perform the principal duties required
by the position held by the Executive at the inception of such illness
or disability for any consecutive 180-day period. A determination of
disability shall be subject to the certification of a qualified
medical doctor agreed to by the Company and the Executive or, in the
Executive's incapacity to designate a doctor, the Executive's legal
representative. If the Company and the Executive cannot agree on the
designation of a doctor, each party shall nominate a qualified medical
doctor and the two doctors shall select a third doctor and the third
doctor shall make the determination as to disability.
For purposes of this Agreement, "retirement" shall mean
the Company's termination of the Executive's employment at or after
the date on which the Executive attains age 65.
For purposes of this Agreement, "Cause" shall mean one
ore more of the following:
(I) the material violation of any of the terms and
conditions of this Agreement or any written agreements the Executive
may from time to time have with the Company (after 30 days following
written notice from the Board specifying such material violation and
Executive's failure to cure or remedy such material violation within
such 30-day period);
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(II) inattention to or failure to perform Executive's
assigned duties and responsibilities competently for any reason other
than due to Disability (after 30 days following written notice from
the Board specifying such inattention or failure, and Executive's
failure to cure or remedy such inattention or failure within such
30-day period);
(III) engaging in activities or conduct injurious to the
reputation of the Company or its affiliates including, without
limitation, engaging in immoral acts which become public information
or repeatedly conveying to one person, or conveying to an assembled
public group, negative information concerning the Company or its
affiliates;
(IV) commission of an act of dishonesty, including, but not
limited to, misappropriation of funds or any property of the Company;
or
(V) commission by the Executive of an act which constitutes
a misdemeanor (involving an act of moral turpitude) or a felony.
(b) The Executive may terminate his employment with the
Company following a Change in Control of the Company (i) for any
reason by giving Notice of Termination during either of the
"Termination Periods" or (ii) for "Good Reason" by giving Notice of
Termination at any time within two years after the Change in Control.
Any failure by the Executive to give such immediate notice of
termination for Good Reason shall not be deemed to constitute a waiver
or otherwise to affect adversely the rights of the Executive
hereunder, PROVIDED the Executive gives notice to receive such
benefits prior to the expiration of such two year period. If the
Executive terminates his employment as provided in this Section 3(b),
then the Executive shall be entitled to the benefits set forth in this
Agreement in lieu of any termination, separation, severance or similar
benefits under the Executive's Employment Agreement, if any, or under
the Company's termination, separation, severance or similar plans or
policies, if any.
For purposes of this Agreement, there shall be two
"Termination Periods" during which the Executive may give Notice of
Termination and receive the benefits set forth in this Agreement:
(i) the first of which shall be the sixty (60) day
period commencing on the date of the Change of Control, and;
(ii) the second of which shall be the thirty (30)
day period commencing on the first anniversary of the date of the
Change of Control
For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any one or more of the following events:
(I) The assignment to the Executive of any duties
inconsistent in any material adverse respect with his position,
authority or responsibilities with the Company and its subsidiaries
immediately prior to the Change in Control, or any other material
adverse change in such position, including titles, authority, or
responsibilities, as compared with the Executive's position
immediately prior to the Change in Control;
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(II) A reduction by the Company in the amount of the
Executive's base salary or annual or long term incentive compensation
paid or payable as compared to that which was paid or made available
to Executive immediately prior to the Change in Control; or the
failure of the Company to increase Executive's compensation each year
by an amount which is substantially the same, on a percentage basis,
as the average annual percentage increase in the base salaries of
other executives of comparable status with the Company;
(III) The failure by the Company to continue to
provide the Executive with substantially similar perquisites or
benefits the Executive in the aggregate enjoyed under the Company's
benefit programs, such as any of the Company's pension, savings,
vacation, life insurance, medical, health and accident, or disability
plans in which he was participating at the time of the Change in
Control (or, alternatively, if such plans are amended, modified or
discontinued, substantially similar equivalent benefits thereto, when
considered in the aggregate), or the taking of any action by the
Company which would directly or indirectly cause such benefits to be
no longer substantially equivalent, when considered in the aggregate,
to the benefits in effect at the time of the Change in Control;
(IV) The Company's requiring the Executive to be
based at any office or location more than 50 miles from that location
at which he performed his services immediately prior to the Change in
Control, except for a relocation consented to in writing by the
Executive, or travel reasonably required in the performance of the
Executive's responsibilities to the extent substantially consistent
with the Executive's business travel obligations prior to the Change
in Control;
(V) Any failure of the Company to obtain the
assumption of the obligation to perform this Agreement by any
successor as contemplated in Section 11 herein; or
(VI) Any breach by the Company of any of the
material provisions of this Agreement or any failure by the Company to
carry out any of its obligations hereunder, in either case, for a
period of thirty business days after receipt of written notice from
the Executive and the failure by the Company to cure such breach or
failure during such thirty business day period.
4. NOTICE OF TERMINATION
Any termination of the Executive's employment following a
Change in Control, other than a termination as contemplated by Sections
3(a)(i) or 3(a)(iii) shall be communicated by written "Notice of Termination"
by the party affecting the termination to the other party hereto. Any
"Notice of Termination" shall set forth (a) the effective date of
termination, which shall not be less than 15 or more than 30 days after the
date the Notice of Termination is delivered (the "Termination Date"); (b) the
specific provision in this Agreement relied upon; and (c) in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination and the entitlement, or lack of entitlement, to the benefits set
forth in this Agreement. Notwithstanding the foregoing, if within fifteen
(15) days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a good faith dispute
exists concerning the termination, the actual Termination Date shall be the
date on which the dispute is finally
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determined in accordance with the provisions of Section 18 hereof. In the
case of any good faith dispute as to the Executive's entitlement to benefits
under this Agreement resulting from any termination by the Company for which
the Company does not deliver a Notice of Termination, the actual Termination
Date shall be the date on which the dispute is finally determined in
accordance with the provisions of Section 18 hereof. Notwithstanding the
pendency of any such dispute referred to in the two preceding sentences, the
Company shall continue to pay the Executive his full compensation then in
effect and continue the Executive as a participant in all compensation,
benefits and perquisites in which he was then participating, until the
dispute is finally resolved, PROVIDED the Executive is willing to continue to
provide full time services to the Company and its subsidiaries in
substantially the same position, if so requested by the Company. Amounts
paid under this Section 4 shall be in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other amounts
due under this Agreement. If a final determination is made, pursuant to
Section 18, that Good Reason did not exist in the case of a Notice of
Termination by the Executive, the Executive shall have the sole right to
nullify and void his Notice of Termination by delivering written notice of
same to the Company within three (3) business days of the date of such final
determination. If the parties do not dispute the Executive's entitlement to
benefits hereunder, the Termination Date shall be as set forth in the Notice
of Termination.
5. TERMINATION BENEFITS
(a) SEVERANCE PAYMENT. Subject to the conditions set forth
in this Agreement, on the Termination Date the Company shall pay the
Executive (reduced by any applicable payroll or other taxes required
to be withheld) a lump sum severance payment, in cash, equal to the
product of three (3) times the sum of the Executive's annual salary
for the current year plus his target bonus for the current year
(provided that if the Notice of Termination is given prior to the
determination of the Executive's salary or target bonus for the year
in which the Termination Date occurs, the amounts shall be the annual
salary for the prior year and the greater of the target bonus for the
prior year or the actual bonus earned by the Executive for the prior
year). The current year shall be (A) for the purposes of determining
annual salary, the year then generally used by the Company for setting
salaries for senior-level executives (currently April 1 through the
following March 31), and (B) for purposes of determining target bonus,
the fiscal year then generally used by the Company for setting target
bonuses for senior-level executives, in which the Termination Date
occurs, and the prior year shall be the twelve-month period
immediately preceding the current year.
(b) PAYMENT OF DEFERRED COMPENSATION. Any compensation
that has been earned by the Executive but is unpaid as of the
Termination Date, including any compensation that has been earned but
deferred pursuant to the Company's Deferred Compensation Plan or
otherwise, shall be paid in full to the Executive on the Termination
Date.
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6. OTHER BENEFITS
Subject to the conditions set forth in this Agreement hereof,
the following benefits (subject to any applicable payroll or other taxes
required to be withheld) shall be paid or provided to the Executive:
(a) HEALTH/WELFARE BENEFITS
(i) During the thirty-six (36) months following the
Termination Date (the "Continuation Period"), the Company shall
continue to keep in full force and effect all programs of medical,
dental, vision, accident, disability, life insurance, including
optional term life insurance, and other similar health or welfare
programs with respect to the Executive and his dependents with the
same level of coverage, upon the same terms and otherwise to the same
extent as such programs shall have been in effect immediately prior to
the Termination Date (or, if more favorable to the Executive,
immediately prior to the Change in Control), and the Company and the
Executive shall share the costs of the continuation of such insurance
coverage in the same proportion as such costs were shared immediately
prior to the Termination Date (or, if more favorable to the Executive,
immediately prior to the Change in Control) or, if the terms of such
programs do not permit continued participation by the Executive (or if
the Company otherwise determines it advisable to amend, modify or
discontinue such programs for employees generally), the Company shall
otherwise provide benefits substantially similar to and no less
favorable to the Executive in terms of cost or benefits ("Equivalent
Benefits") than he was entitled to receive at the end of the period of
coverage, for the duration of the Continuation Period.
(ii) All benefits which the Company is required by
this Section 6(a) to provide, which will not be provided by the
Company's programs described herein, shall be provided through the
purchase of insurance unless the Executive is uninsurable. If the
Executive is uninsurable, the Company will provide the benefits out of
its general assets.
(iii) If the Executive obtains other employment
during the Continuation Period which provides health or welfare
benefits of the type described in Section 6(a)(i) hereof ("Other
Coverage"), then Executive shall notify the Company promptly of such
other employment and Other Coverage and the Company shall thereafter
not provide the Executive and his dependents the benefits described in
Section 6(a)(i) hereof to the extent that such benefits are provided
under the Other Coverage. Under such circumstances, the Executive
shall make all claims first under the Other Coverage and then, only to
the extent not paid or reimbursed by the Other Coverage, under the
plans and programs described in Section 6(a)(i) hereof.
(b) RETIREMENT BENEFITS
(i) For purposes of this Agreement, "Retirement"
shall mean the Company's termination of the Executive's employment
within two years following a Change in control of the Company and at
or after the date on which the Executive attains age 65; provided,
however, that any termination for Cause or due to Death or Disability
shall not constitute Retirement.
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(ii) Subject to Section 6(b)(ii), the Executive
shall be deemed to be completely vested under the Company's 401(k)
Plan, Deferred Compensation Plan or other similar or successor plans
which are in effect as of the date of the Change in Control
(collectively, the "Plans"), regardless of the Executive's actual
vesting service credit thereunder.
(iii) Any part of the foregoing retirement benefits
which are otherwise required to be paid by a tax-qualified Plan but
which cannot be paid through such Plan by reason of the laws and
regulations applicable to such Plan, shall be paid by one or more
supplemental non-qualified Plans or by the Company.
(iv) The payments calculated hereunder which are not
actually paid by a Plan shall be paid thirty (30) days following the
Date of Termination in a single lump sum cash payment (of equivalent
actuarial value to the payment calculated hereunder using the same
actuarial assumptions as are used in calculating benefits under the
Plan but using the discount rate that would be used by the Company on
the Date of Termination to determine the actuarial present value of
projected benefit obligations).
(c) EXECUTIVE OUTPLACEMENT COUNSELING. During the
Continuation Period, unless the Executive shall reach normal
retirement age during the Continuation Period, the Executive may
request in writing and the Company shall at its expense engage within
a reasonable time following such written request an outplacement
counseling service to assist the Executive in obtaining employment.
7. PAYMENT OF CERTAIN COSTS
Except as otherwise provided in Section 18, if a dispute
arises regarding a termination of the Executive or the interpretation or
enforcement of this Agreement, subsequent to a Change in Control, all of the
reasonable legal fees and expenses incurred by the Executive and all
Arbitration Costs (as hereafter defined) in contesting any such termination
or obtaining or enforcing all or part of any right or benefit provided for in
this Agreement or in otherwise pursuing all or part of his claim will be paid
by the Company, unless prohibited by law. The Company further agrees to pay
pre-judgment interest on any money judgment obtained by the Executive
calculated at the prime interest rate reported in THE WALL STREET JOURNAL in
effect from time to time from the date that payment to him should have been
made under this Agreement.
8. EXCISE TAX PAYMENTS
(a) Notwithstanding anything contained in this Agreement to
the contrary, in the event that any payment (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended or
replaced (the "Code")), or distribution to or for the benefit of the
Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company (a "Payment"
or "Payments"), would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, interest
and penalties collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a
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"Gross-Up Payment") in an amount such that after payment by the
Executive of all such taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments;
PROVIDED, that the Executive shall not be entitled to receive any
additional payment relating to any interest or penalties attributable
to any action or omission by the Executive in bad faith.
(b) An initial determination shall be made by an accounting
firm mutually agreeable to the Company and the Executive and, if not
agreed to within three days after the Date of Termination, a national
independent accounting firm selected by the Executive (the "Accounting
Firm"), as to whether a Gross-Up Payment is required pursuant to this
Section 8 and the amount of such Gross-Up Payment. To permit the
Accounting Firm to make the initial determination, the Company shall
furnish the Accounting Firm with all information reasonably required
for such firm to complete such determination as soon as practicable
after the Date of Termination, but in no event more than fifteen (15)
days thereafter. All fees, costs and expenses (including, but not
limited to, the cost of retaining experts) of the Accounting Firm
shall be borne by the Company and the Company shall pay such fees,
costs and expenses as they become due. The Accounting Firm shall
provide detailed supporting calculations, reasonably acceptable both
to the Company and the Executive within thirty (30) days of the Date
of Termination, if applicable, or such other time as requested by the
Company or by the Executive (provided the Executive reasonably
believes that any of the Payments may be subject to the Excise Tax).
The Gross-Up Payment, if any, as determined pursuant to this Section
8(b) shall be paid by the Company to the Executive within five (5)
business days of the receipt of the Accounting Firm's determination.
If the Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably satisfactory to the Executive
that no Excise Tax will be imposed with respect to any such Payment or
Payments. Any such initial determination by the Accounting Firm of
the Gross-Up Payment shall be binding upon the Company and the
Executive subject to the application of Section 8(c).
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Overpayment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred upon
a "Final Determination" (as hereinafter defined) that the tax
liability of the Executive (whether in respect of the then current
taxable year of the Executive or in respect of any prior taxable year
of the Executive) will be increased by reason of the imposition of the
Excise Tax on a Payment or Payments with respect to which the Company
has failed to make a sufficient Gross-Up Payment. An Overpayment
shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed (or
shall be reduced) upon a Payment or Payments with respect to which the
Executive had previously received a Gross-Up Payment. A Final
Determination shall be deemed to have occurred when (i) in the case of
an Overpayment, the Executive has received from the applicable
governmental taxing authority a refund of taxes or other reduction in
his tax liability imposed as a result of a Payment or, in the case of
an Underpayment, the Executive receives notice from a
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competent governmental authority that his tax liability imposed as a
result of a Payment will be increased, and (ii) in the case of an
Overpayment or an Underpayment, upon either (x) the date a
determination is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority, or in the
event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made
by such court and either all appeals have been taken and finally
resolved or the time for all appeals has expired or (y) the statute of
limitations with respect to the Executive's applicable tax return has
expired. If an Underpayment occurs, the Executive shall promptly
notify the Company and the Company shall promptly pay to the Executive
an additional Gross-Up Payment equal to the amount of the Underpayment
plus any interest and penalties imposed on the Underpayment (other
than interest and penalties attributable to any action or omission by
the Executive in bad faith). If an Overpayment occurs, the amount of
the Overpayment shall be treated as a loan by the Company to the
Executive and the Executive shall, within ten (10) business days of
the occurrence of such Overpayment, pay the Company the amount of the
Overpayment, with interest computed in the same manner as for an
Underpayment.
(d) Notwithstanding anything contained in this Agreement to
the contrary, in the event it is determined that an Excise Tax will be
imposed on any Payment or Payments, the Company shall pay to the
applicable governmental taxing authorities as Excise Tax withholding,
the amount of the Excise Tax that the Company has actually withheld
from the Payment or Payments.
9. MITIGATION
The Executive is not required to seek other employment or
otherwise mitigate the amount of any payments to be made by the Company
pursuant to this Agreement, and employment by the Executive will not reduce
or otherwise affect any amounts or benefits due the Executive pursuant to
this Agreement, except as otherwise provided in Section 6(a)(iii).
10. CONTINUING OBLIGATIONS REGARDING CONFIDENTIAL INFORMATION
(a) ACKNOWLEDGMENTS BY THE EXECUTIVE. The Executive hereby
recognizes and acknowledges the following:
(i) In connection with the Business, the Company
has expended a great deal of time, money and effort to develop and
maintain the secrecy and confidentiality of substantial proprietary
trade secret information and other confidential business information
which, if misused or disclosed, could be very harmful to the Company's
business.
(ii) The Executive desires to become entitled to
receive the benefits contemplated by this Agreement but which the
Company would not make available to the Executive but for the
Executive's signing and agreeing to abide by the terms of this Section
10.
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(iii) The Executive's position with the Company
provides the Executive with access to certain of the Company's
confidential and proprietary trade secret information and other
confidential business information.
(iv) The Company compensates its employees to, among
other things, develop and preserve business information for the
Company's ownership and use.
(v) If the Executive were to leave the Company, the
Company in all fairness would need certain protection in order to
ensure that the Executive does not appropriate and misuse any
confidential information entrusted to the Executive during the course
of the Executive's employment with the Company.
(b) CONFIDENTIAL INFORMATION
(i) The Executive agrees to keep secret and
confidential, and not to use or disclose to any third parties, except
as directly required for the Executive to perform the Executive's
employment responsibilities for the Company, or except as required by
law, any of the Company's confidential and proprietary trade secret
information or other confidential business information concerning the
Company's business acquired by the Executive during the course of, or
in connection with, the Executive's employment with the Company (and
which was not known by the Executive prior to the Executive's being
hired by the Company). Confidential information means information
which would constitute material, nonpublic information under the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, regardless of whether the
Executive's use or disclosure of such information is in connection
with or related to a securities transaction.
(ii) The Executive acknowledges that any and all
notes, records, reports, written information or documents of any kind,
computer files and diskettes and other documents obtained by or
provided to the Executive, or otherwise made, produced or compiled
during the course of the Executive's employment with the Company,
regardless of the type of medium in which it is preserved, are the
sole and exclusive property of the Company and shall be surrendered to
the Company upon the Executive's termination of employment and on
demand at any time by the Company.
(c) ACKNOWLEDGMENT REGARDING RESTRICTIONS. The Executive
recognizes and agrees that the provisions of this Section 10 are
reasonable and enforceable because, among other things, (i) the
Executive is receiving compensation under this Agreement and (ii)
this Section 10 therefore does not impose any undue hardship on the
Executive. The Executive further recognizes and agrees that the
provisions of this Section 10 are reasonable and enforceable in view
of the Company's legitimate interests in protecting its confidential
information.
(d) BREACH. In the event of a breach of Section 10(b), the
Company's sole remedy shall be the discontinuation of the payment,
allocation, accrual or provision of any amounts or benefits as
provided in Sections 5 or 6. The Executive recognizes and agrees,
however, that it is the intent of the parties that neither this
Agreement nor any of its provisions shall be construed to adversely
affect any rights or remedies that Company would have had, including,
without limitation, the amount of any damages for which it
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could have sought recovery, had this Agreement not been entered into.
Accordingly, the parties hereby agree that nothing stated in this
Section 10 shall limit or otherwise affect the Company's right to seek
legal or equitable remedies it may otherwise have, or the amount of
damages for which it may seek recovery, in connection with matters
covered by this Section 10 but which are not based on breach or
violation of this Section 10 (including, without limitation, claims
based on the breach of fiduciary or other duties of the Executive or
any obligations of the Executive arising under any other contracts,
agreements or understandings). Without limiting the generality of the
foregoing, nothing in this Section 10 or any other provision of this
Agreement shall limit or otherwise affect the Company's right to seek
legal or equitable remedies it may otherwise have, or the amount of
damages for which it may seek recovery, resulting from or arising out
of statutory or common law or any Company policies relating to
fiduciary duties, confidential information or trade secrets. Further,
the Executive acknowledges and agrees that the fact that Section 10(c)
is limited to the Continuation Period, and that the sole remedy of the
Company hereunder is the discontinuation of benefits, shall not reduce
or otherwise alter any other contractual or other legal obligations of
the Executive during any period or circumstance, and shall not be
construed as establishing a maximum limit on damages for which the
Company may seek recovery.
11. BINDING AGREEMENT; SUCCESSORS
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns. The
Company shall 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, by agreement to
assume expressly 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. For purposes of
this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the Executive and the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, beneficiaries, devises and legatees. If the Executive
should die while any amounts are payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive's devisee, legatee,
beneficiary or other designee or, if there be no such designee, to the
Executive's estate.
12. NOTICES
For the purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if
delivered by hand, (ii) on the date of transmission, if delivered by
confirmed facsimile, (iii) on the first business day following the
date of deposit if delivered by guaranteed overnight delivery service,
or (iv) on the third business day following the date delivered or
mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If to the Executive:
Raymond Marcy
7911 N. Upper Ridge Drive
Parkland, Florida 33067; and
If to the Company:
Interim Services Inc.
2050 Spectrum Boulevard
Fort Lauderdale, Florida 33309
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
13. GOVERNING LAW
The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Florida, without
regard to principles of conflicts of laws.
14. MISCELLANEOUS
No provisions of this Agreement may be amended, modified,
waived or discharged unless such amendment, waiver, modification or discharge
is agreed to in writing signed by the Executive and the Company. 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 set forth expressly in this Agreement. Section headings contained herein
are for convenience of reference only and shall not affect the interpretation
of this Agreement.
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which will
constitute one and the same instrument.
16. NON-ASSIGNABILITY
This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, or transfer
this Agreement or any rights or obligations hereunder, except as provided in
Section 11. Without limiting the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer
by his will or trust or by the laws of descent or distribution, and in the
event of any attempted assignment or transfer contrary to this paragraph the
Company shall have no liability to pay any amount so attempted to be assigned
or transferred.
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17. TERM OF AGREEMENT
This Agreement shall commence on the date hereof and shall
continue in effect through May 7, 2001; PROVIDED, however, if a Change in
Control of the Company shall have occurred during the original or any
extended term of this Agreement, this Agreement shall continue in effect for
a period of twenty-four (24) months beyond the month in which such Change in
Control occurred; and, PROVIDED FURTHER, that if the Company shall become
obligated to make any payments or provide any benefits pursuant to Section 5
or 6 hereof, this Agreement shall continue for the period necessary to make
such payments or provide such benefits.
18. RESOLUTION OF DISPUTES
(a) The parties hereby agree to submit any claim, demand,
dispute, charge or cause of action (in any such case, a "Claim")
arising out of, in connection with, or relating to this Stock Option
Agreement to binding arbitration in conformance with the
J*A*M*S/ENDISPUTE Streamlined Arbitration Rules and Procedures or the
J*A*M*S/ ENDISPUTE Comprehensive Arbitration Rules and Procedures, as
applicable, but expressly excluding Rule 28 of the J*A*M*S/ENDISPUTE
Streamlined Rules and Rule 32 of the J*A*M*S/ENDISPUTE Comprehensive
Rules, as the case may be. All arbitration procedures shall be held
in Fort Lauderdale, Florida and shall be subject to the choice of law
provisions set forth in Section 13 of this Agreement.
(b) In the event of any dispute arising out of or relating
to this Agreement for which any party is seeking injunctive relief,
specific performance or other equitable relief, such matter may be
resolved by litigation. Accordingly, the parties shall submit such
matter to the exclusive jurisdiction of the United States District
Court for the Southern District of Florida or, if jurisdiction is not
available therein, any other court located in Broward County, Florida,
and hereby waive any and all objections to such jurisdiction or venue
that they may have. Each party agrees that process may be served upon
such party in any manner authorized under the laws of the United States
or Florida, and waives any objections that such party may otherwise have
to such process.
19. NO SETOFF
The Company shall have no right of setoff or counterclaim in
respect of any claim, debt or obligation against any payment provided for in
this Agreement.
20. NON-EXCLUSIVITY OF RIGHTS
Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
subsidiaries or successors and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under
any other agreements with the Company or any of its subsidiaries or
successors, except to the extent payments are made pursuant to Section 5,
they shall be in lieu of any termination, separation, severance or similar
payments pursuant to the Executive's Employment Agreement, if any, and the
Company's then existing termination, separation, severance or similar plans
or policies, if any. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of
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the Company or any of its subsidiaries shall be payable in accordance with
such plan or program, except as explicitly modified by this Agreement.
21. NO GUARANTEED EMPLOYMENT
The Executive and the Company acknowledge that this Agreement
shall not confer upon the Executive any right to continued employment and
shall not interfere with the right of the Company to terminate the employment
of the Executive at any time.
22. INVALIDITY OF PROVISIONS
In the event that any provision of this Agreement is
adjudicated to be invalid or unenforceable under applicable law in any
jurisdiction, the validity or enforceability of the remaining provisions
thereof shall be unaffected as to such jurisdiction and such adjudication
shall not affect the validity or enforceability of such provision in any
other jurisdiction. To the extent that any provision of this Agreement,
including, without limitation, Section 10 hereof, is adjudicated to be
invalid or unenforceable because it is overbroad, that provision shall not be
void but rather shall be limited to the extent required by applicable law and
enforced as so limited. The parties expressly acknowledge and agree that
this Section 22 is reasonable in view of the parties' respective interests.
23. NON-WAIVER OF RIGHTS
The failure by the Company or the Executive to enforce at any
time any of the provisions of this Agreement or to require at any time
performance by the other party of any of the provisions hereof shall in no
way be construed to be a waiver of such provisions or to affect either the
validity of this Agreement, or any part hereof, or the right of the Company
or the Executive thereafter to enforce each and every provision in accordance
with the terms of this Agreement.
24. EMPLOYMENT AGREEMENT.
Simultaneously with the execution and delivery to this
Agreement, the Company and the Executive have executed and delivered an
Employment Agreement. If circumstances arise which cause both the Employment
Agreement and this Agreement to apply to the Company and the Executive, then,
to the extent of any inconsistency between the provisions of this Agreement
and the Employment Agreement, the terms of this Agreement alone shall apply.
However, if this Agreement does not apply, then the provisions of the
Employment Agreement shall control and be unaffected by this Agreement.
25. UNFUNDED PLAN.
The Company's obligations under this Agreement shall be
entirely unfunded until payments are made hereunder from the general assets
of the Company, and no provision shall be made to segregate assets of the
Company for payments to be made under this Agreement. The Executive shall
have no interest in any particular assets of the Company but rather shall
have only the rights of a general unsecured creditor of the Company.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first above set forth.
PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY CERTIFYING
THAT THE EXECUTIVE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND
STUDY BEFORE EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE
SIGNING IT; (C) HAS HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT
TO ASK ANY QUESTIONS THE EXECUTIVE HAS ABOUT THE AGREEMENT AND HAS RECEIVED
SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS THE
EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.
THIS AGREEMENT IN SECTION 18 CONTAINS A BINDING ARBITRATION
PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
INTERIM SERVICES INC.
By: /s/ John B. Smith
------------------------------------
Senior Vice President and Secretary
EXECUTIVE
By: /s/ Raymond Marcy
------------------------------------
Raymond Marcy
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