Employment Agreement - Interim Services Inc. and Roy G. Krause
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of November 18, 1998, is by and between
INTERIM SERVICES INC., a Delaware corporation (hereinafter referred to as the
"Company"), and ROY G. KRAUSE (hereinafter the "Executive").
RECITALS
A. The Executive currently serves as the Company's Executive Vice
President and Chief Financial Officer, and his services and knowledge are
valuable to the Company in connection with the management of its business.
B. The Company desires to continue to employ the Executive and to
enter into a new agreement embodying the terms of such employment.
C. The Executive desires to continue the Executive's employment and
to enter into a new agreement embodying the terms of such employment.
AGREEMENTS
NOW, THEREFORE, to induce the Executive to remain in the employ of
the Company and its subsidiaries, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Executive agree as follows:
1. EMPLOYMENT.
During the Term of Employment (as defined in Section 2 hereof), the
Executive shall serve as Executive Vice President and Chief Financial
Officer. The Executive shall perform and assume all duties and
responsibilities customary to such position and shall devote all of his
business time and energies thereto. In carrying out such duties and
responsibilities, the Executive shall report to, and be subject to the
direction of, the Chief Executive Officer and the Board of Directors of the
Company (the "Board").
2. TERM.
The Term of Employment under this Agreement shall commence as of the
date of this Agreement and shall continue at the will of the Company and the
Executive (the "Term of Employment"). Either party may terminate the
Executive's employment at any time and for any reason.
3. BASE SALARY.
The Company shall pay the Executive, in accordance with the Company's
regular payroll practices applicable to salaried employees, an annualized base
salary at the rate in effect
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on the date of this Agreement, as the same may from time to time be increased
or decreased at the sole discretion of the Compensation Committee of the
Board (the "Compensation Committee").
4. INCENTIVE AWARDS.
a) The Executive shall participate in the Company's annual incentive
plan for senior-level executives as in effect from time to time, subject to the
performance standards set by the Compensation Committee. Payment of any annual
incentive award shall be made at the same time that such awards are paid to
other senior-level executives of the Company. The Executive's annual incentive
award target shall be set by the Compensation Committee.
b) The Executive shall be eligible to receive grants under the
Company's long-term incentive plan as in effect from time to time; provided,
however, that the size, type and other terms and conditions of any such grant to
the Executive shall be determined by the Compensation Committee.
5. BENEFITS, FRINGES AND PERQUISITES.
The Executive shall be entitled to participate in all employee pension
and welfare benefit, fringe benefit and perquisite plans and programs made
available to the Company's senior-level executives as in effect from time to
time.
6. VACATION.
The Executive shall be entitled to vacation in accordance with the
Company's vacation policy applicable to its senior-level executives. Vacations
shall be arranged in order that they not materially interfere with the normal
functioning of the Company's business activities or the performance of the
Executive's duties hereunder.
7. BUSINESS EXPENSES.
The Company shall reimburse the Executive for any ordinary, necessary
and reasonable business expenses that the Executive incurs in connection with
the performance of his duties under this Agreement, in accordance with the
Company's policy regarding the reimbursement of business expenses.
8. TERMINATION OF EMPLOYMENT.
a) DEATH OR DISABILITY. The Executive's employment shall terminate
upon the Executive's Death, and Company may terminate the Executive's employment
due to Disability (as defined herein). If, during the Term of Employment, the
Executive's employment is terminated due to Death or Disability, the Executive
(or Executive's estate or legal representative, as the case may be) shall be
entitled to receive:
i) Executive's base salary through the date of such termination
of employment at the rate in effect at the time thereof;
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ii) an amount, payable at the same time that annual incentive
awards for the year in which the Executive's employment so terminates are
paid to senior-level executives of the Company, equal to the product of the
Executive's annual incentive award target for such year and a fraction, the
numerator of which is the number of days in such year through the date of
such termination of employment, and the denominator of which is 365;
provided, however, that no such amount shall be paid to the Executive (or
to Executive's estate or legal representative, as the case may be) if
annual incentive awards for such year are not paid to senior-level
executives of the Company generally;
iii) reimbursement for expenses incurred by the Executive in
accordance with the Company's policy but not reimbursed prior to the date
of such termination of employment;
iv) any vested deferred base salary and annual incentive awards
(including, without limitation, interest or other credits on such deferred
amounts); and
v) any other compensation or benefits that may be owed or
provided to the Executive in accordance with the terms and conditions of
any applicable plans and programs of the Company.
For purposes of this Agreement, "Disability" shall mean 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, then 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.
b) FOR CAUSE. The Company may terminate the Executive's employment
for Cause (as defined herein) if the Board determines that Cause exists and
serves written notice of such termination to the Executive. If, during the Term
of Employment, the Company terminates the Executive's employment for Cause, all
of the Executive's annual incentive awards, long-term incentive awards, stock
options and other stock or long-term incentive grants which are not then vested
or not then exercisable shall be canceled as of the date of the Board's written
notice of termination, and the Executive shall be entitled to receive:
i) Executive's base salary through the date of such termination
of employment at the rate in effect at the time thereof;
ii) reimbursement for expenses incurred by the Executive in
accordance with the Company's policy but not reimbursed prior to the date
of such termination of employment;
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iii) any vested deferred base salary and vested annual incentive
awards (including, without limitation, interest or other credits on such
deferred amounts but not including unvested bonuses or amounts payable for
the year in which the Board's written notice of termination for Cause is
made, or unvested bonuses or amounts payable after the Board's written
notice of termination for Cause is made); and
iv) any other compensation or benefits that may be owed or
provided to the Executive in accordance with the terms and conditions of
any applicable plans and programs of the Company.
The Executive shall be entitled to receive no other compensation or
benefits, whether pursuant to this Agreement or otherwise, except as and to
the extent required by law.
For purposes of this Agreement, "Cause" shall mean one or 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);
(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;
(V) commission by the Executive of an act which constitutes a
misdemeanor (involving an act of moral turpitude) or a felony;
(VI) the material violation of any of the Policies referred to in
Section 9 hereof (after 30 days following written notice from the Board
specifying such failure, and the Executive's failure to cure or remedy such
inattention or failure within such 30-day period);
(VII) refusal to perform the Executive's assigned duties and
responsibilities or other insubordination (after 30 days following written
notice from the Board specifying
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such refusal or insubordination, and the Executive's failure to cure or
remedy such refusal or insubordination within such 30-day period); or
(VIII) unsatisfactory performance of duties by the Executive as a
result of alcohol or drug use by the Executive.
c) WITHOUT CAUSE. The Company may terminate the Executive's
employment without Cause. If, during the Term of Employment, the Company
terminates the Executive's employment without Cause, other than due to
Disability, then in lieu of any amount otherwise payable under this Agreement,
or as damages for termination of Executive's employment without Cause, the
Executive shall be entitled to receive:
i) Within thirty (30) days of the date of the Board's written
notice of termination without Cause, a lump sum cash severance payment
(reduced by any applicable payroll or other taxes required to be withheld)
equal to the product of two (2) 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 notice of termination is given, then 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 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 Board gives the Executive written
notice of termination, and the prior year shall be the twelve-month period
immediately preceding the current year.
ii) Reimbursement for expenses incurred by the Executive in
accordance with the Company's policy but not reimbursed prior to the date
of such termination of employment.
iii) Any vested deferred base salary and annual incentive awards
(including, without limitation, interest or other credits on such deferred
amounts).
iv) Any other compensation or benefits that may be owed or
provided to the Executive in accordance with the terms and conditions of
any applicable plans and programs of the Company.
If the Company terminates Executive's employment without Cause, any
vesting or service requirements with respect to any employee stock options
granted to the Executive and then outstanding shall be deemed satisfied.
d) VOLUNTARY TERMINATION. If, during the Term of Employment, the
Executive terminates his employment other than due to Retirement, the Executive
shall be entitled to receive:
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i) Executive's base salary through the date of such termination
of employment at the rate in effect at the time thereof;
ii) reimbursement for expenses incurred by the Executive in
accordance with the Company's policy but not reimbursed prior to the date
of such termination of employment;
iii) any vested deferred base salary and annual incentive awards
(including, without limitation, interest or other credits on such deferred
amounts); and
iv) no other compensation or benefits except as and to the
extent required by law.
e) INELIGIBILITY FOR SEVERANCE PLAN PAYMENTS. Anything in this
Agreement to the contrary notwithstanding, Executive shall not be entitled to
any payment under any of the Company's severance plans, programs or
arrangements.
9. COMPANY POLICIES.
The Executive shall strictly follow and adhere to all written
policies of the Company which are not inconsistent with this Agreement or
applicable law including, without limitation, securities laws compliance
(including, without limitation, use or disclosure of material nonpublic
information, restrictions on sales of Company stock, and reporting
requirements), conflicts of interest (including, without limitation, doing
business with the Company or its affiliates without the prior approval of the
Board), and employee harassment.
10. CONFIDENTIALITY.
The Executive will not at any time (whether during or after
Executive's employment with the Company) disclose or use for Executive's own
benefit or purposes, or for the benefit or purpose of any other person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise, any trade secrets, information, data, or
other confidential information relating to customers, employees, job
applicants, services, development programs, prices, costs, marketing,
trading, investment, sales activities, promotion, processes, systems, credit
and financial data, financing methods, plans, proprietary computer software,
request for proposal documents, or the business and affairs of the Company
generally, or of any affiliate of the Company; provided, however, that the
foregoing shall not apply to information which is generally known to the
industry or the public other than as a result of the Executive's breach of
this covenant. The Executive agrees that upon termination of his employment
with the Company for any reason, he will return to the Company immediately
all memoranda, books, papers, plans, information, letters and other data, and
all copies thereof or therefrom (whether in written, printed or electronic
form), in any way relating to the business of the Company and its affiliates.
The Executive acknowledges and agrees that the Company's remedies at law
for a breach or threatened breach of any of the provisions of this Section
would be inadequate and, in recognition of this fact, the Executive agrees
that, in the event of such a breach or threatened
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breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
11. COVENANT NOT TO COMPETE.
a) IN GENERAL. The Executive agrees that during Executive's
employment with the Company and for a period of one (1) year after the
termination of such employment for whatever reason (the "Non-Compete Period"),
he shall not, anywhere in the world:
i) engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder (other than as a
stockholder of less than a one percent (1%) equity interest) or in any
other corporate or representative capacity with any other business, whether
in corporate, proprietorship, or partnership form or otherwise, where such
business is engaged in any activity which competes with the business of the
Company or its affiliates as conducted on the date the Executive's
employment terminated or during the 180 day period prior thereto, or which
will compete with any proposed business activity of the Company in the
planning stage on such date or during such period;
ii) solicit business from, or perform services for, or induce
others to perform services for, any company or other business entity which
at any time during the one (1) year period immediately preceding the
Executive's termination of employment with the Company was a client of the
Company or its affiliates; or
iii) offer, or cause to be offered, employment with any business,
whether in corporate, proprietorship, or partnership form or otherwise,
either on a full-time, part-time or consulting basis, to any person who was
employed by the Company or its affiliates or for whom the Company or its
affiliates performed outplacement services, in either case at any time
during the one (1) year period immediately preceding the date the
Executive's termination of employment with the Company.
For purposes of this Agreement, affiliates of the Company include
subsidiaries 50% or more owned by the Company and the Company's franchisees
and licensees.
b) CONSIDERATION. The consideration for the foregoing covenant not
to compete, the sufficiency of which is hereby acknowledged, is the Company's
agreement to employ the Executive and provide compensation and benefits pursuant
to this Agreement.
c) EQUITABLE RELIEF AND OTHER REMEDIES. The Executive acknowledges
and agrees that the Company's remedies at law for a breach or threatened breach
of any of the provisions of this Section would be inadequate and, in recognition
of this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
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specific performance, temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
d) REFORMATION. If the foregoing covenant no to compete would
otherwise be determined invalid or unenforceable by a court of competent
jurisdiction, such court shall exercise its discretion in reforming the
provisions of this Section to the end that the Executive be subject to a
covenant not to compete, reasonable under the circumstances, enforceable by
the Company.
12. COMPANY POLICIES, PLANS AND PROGRAMS.
Whenever any rights under this Agreement depend on the terms of a
policy, plan or program established or maintained by the Company, any
determination of these rights shall be made on the basis of the policy, plan
or program in effect at the time as of which the determination is made. No
reference in this Agreement to any policy, plan or program established or
maintained by the Company shall preclude the Company from prospectively or
retroactively changing or amending or terminating that policy, plan or
program or adopting a new policy, plan or program in lieu of the
then-existing policy, plan or program.
13. 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 up 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.
14. CHANGE IN CONTROL AGREEMENTS.
Simultaneously with the execution and delivery of this Agreement,
the Company and the Executive have executed and delivered a Change In Control
Agreement ("C-I-C Agreement"), which applies under the circumstances and
during the period described therein. If circumstances arise which cause both
the C-I-C 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 C-I-C Agreement, the terms of the C-I-C Agreement
alone shall apply. However, if the C-I-C Agreement does not apply (as, for
example, if there is no Change in
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Control as described therein, or the C-I-C Agreement has expired, or the
C-I-C Agreement simply does not apply), then the provisions of this Agreement
shall control and be unaffected by the C-I-C Agreement.
15. 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:
If to the Executive:
Roy G. Krause
7601 Marblehead Lane
Parkland, FL 33067
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.
16. 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.
17. ENTIRE AGREEMENT; AMENDMENT.
This Agreement and the C-I-C Agreement contain the entire agreement
between the parties concerning the subject matter hereof and supersede all
prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the parties with respect to the subject
matter hereof. 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.
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18. 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.
19. 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 13. 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.
20. RESOLUTION OF DISPUTES.
a) The parties shall 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 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 16 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.
21. 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.
22. 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
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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. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any
of its subsidiaries shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
23. WITHHOLDING.
The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as are required to be withheld
(with respect to amounts payable hereunder or under any benefit plan or
arrangement maintained by the Company) pursuant to any applicable law or
regulation.
24. 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 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
Sections 11 and 24 are reasonable in view of the parties' respective
interests.
25. 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.
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.
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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
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Senior Vice President and Secretary
EXECUTIVE
By: /s/ Roy G. Krause
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Roy G. Krause
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