EXHIBIT 10.23
REMEDYTEMP, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Effective As of October 1, 2001
Mr. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
To reflect the Compensation Committee of the Board of Directors and the
Board of Directors' favorable impression of ▇▇. ▇▇▇▇▇▇'▇ performance as
President and Chief Executive Officer of RemedyTemp, Inc. ("Remedy" or the
"Company") and after considering objective market data, Remedy and ▇▇▇▇▇▇ now
mutually desire to amend and restate that certain Employment Letter Agreement
dated December 16, 1997, modified by that certain Amendment No. 1 to the
Employment Letter Agreement effective on January 18, 2001(the "Employment
Agreement").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and such other good and valuable consideration, effective as of October
1, 2001 (the "Effective Date"), the parties hereto agree as follows:
1. POSITION. You will be employed as the President and Chief Executive
Officer of the Company, subject to the direction, control of, and reporting to,
the entire Board of Directors of the Company (the "Board"). Additionally, the
Executive Committee of the Board shall continue to assist you in performing your
duties and to review your performance with the Board. Such Executive Committee
shall consist of only non-employee, non-officer directors. You agree to devote
your full business time and energies to the business and affairs of the Company,
to use your best efforts, skill and abilities to promote the Company's interests
and to perform your duties in accordance with policies, standards and practices
established from time to time by the Board or a committee thereof. Your duties
may also include serving as an officer and/or director of any subsidiaries or
other affiliates of the Company as reasonably requested. While employed by the
Company, you agree that you will not render services to others or engage in any
other activities that would interfere with or prevent your fulfilling your
obligations to the Company. You agree that you will not serve on any boards of
directors without the prior written approval of the Board.
2. BASE SALARY. Your base salary will be at the annual rate of not less
than $480,000 per annum. The amount of your base salary may be increased
annually at the discretion of the
Compensation Committee of the Board. Your salary will be payable on the same
date as salaries to other executives of the Company are paid.
3. INCENTIVE COMPENSATION. In addition to your base salary, you may be
paid a cash bonus at such time bonuses are paid to officers of the Company in an
amount to be determined by the sole discretion of the Compensation Committee of
the Board; provided, however, that there will be a maximum bonus level of 60% of
your base salary with no minimum bonus level. The exact amount of your bonus
will be based upon your satisfaction of objective factors and criteria
established by the Compensation Committee, in its sole discretion, which may
include: (1) Company financial performance; and (2) MBO objectives established
specifically for you.
4. EQUITY PARTICIPATION.
4.1. RESTRICTED STOCK GRANT. In addition to your initial
option grant to purchase 125,000 shares of Remedy Class A Common Stock ("Common
Stock") that was granted to you in January 1998 and vesting at a rate of 20% per
year for 5 years (the "Initial Option"), you shall receive within six (6) months
of the Effective Date 150,000 shares of restricted stock of the Company pursuant
to the terms set by the Compensation Committee of the Board and the terms of the
Company's Amended and Restated Stock Incentive Plan.
4.2. OPTIONS UPON TERMINATION. If the Company terminates your
employment without cause, your severance benefits (including vesting of options)
will be governed by Section 8 and Section 9 of this Amended and Restated
Employment Agreement. If the Company terminates your employment "for cause," as
defined in Section 8, then all of your unexercised options, whether or not
vested, shall expire and become unexercisable as of the date of such "for cause"
termination.
In order to permit a so called "cashless exercise" of your
option, the Company will cooperate with you to permit you to exercise the option
(to the extent it is then exercisable), immediately sell the shares and apply
the proceeds of sale to the exercise price but only to the extent the Company
can do so without violating any applicable provision of law and only if the
shares purchased are at the time registered under the Securities Act of 1933 and
can be sold by you under Rule 144 of the Securities and Exchange Commission or
any successor provision.
5. INDEMNIFICATION. The Company will enter into its customary form of
indemnification agreement applicable to directors and executive officers of the
Company and will also indemnify you for losses relating to claims against you by
your former employer in connection with your non-compete agreement with your
former employer.
6. PERQUISITES. The Company will provide you with a monthly car
allowance of $1,500 and will reimburse you for your business-related fuel
expenses while you are employed with the Company. In addition, the Company will
pay the standard dues and fees with respect to a country club membership of your
choosing while you are employed with the Company; provided, however, that such
monthly dues paid by the Company shall not exceed the dues for Marbella Country
Club plus 10%. You are also eligible to participate in the health insurance,
disability insurance, life insurance and retirement programs made available from
time to time by
2
the Company to other executive officers. You shall be entitled to four (4) weeks
paid vacation each calendar year effective as of the Start Date. The Company
will reimburse you for all reasonable out-of-pocket business expenses incurred
in performing the services contemplated by this Amended and Restated Employment
Agreement in accordance with then prevailing Company policies, provided that
reasonable documentation of such expenses is provided by you.
7. DEATH AND DISABILITY. If you become disabled and are unable to
perform your duties, the Company will continue to pay your salary and provide
the perquisites referred to in Section 6 for the period of such disability up to
a maximum of 90 days, and the Company will have the right to terminate this
Amended and Restated Employment Agreement effective upon the expiration of said
90-day period. Thereafter you will be entitled to receive benefits under any
then-existing disability insurance program of the Company. "Disability" means
any physical or mental condition which renders you unable to perform the
essential functions of your position, even with reasonable accommodation. In the
event of your death, this Amended and Restated Employment Agreement shall
automatically terminate.
8. SEVERANCE BENEFITS. In the event of termination of your
employment by the Company without cause at any time, or if the Company does not
offer you a new employment agreement containing material terms that are at least
equivalent to this Amended and Restated Employment Agreement, as amended, on or
before the expiration of the current Employment Agreement, the Company will pay
you, as a lump-sum severance benefit, the amount of 1.6 times your annual base
salary and maximum bonus potential then in effect (less appropriate withholding
amounts) (the "Severance Amount"), and the Company will release any and all
shares of Common Stock held for your benefit in any deferred compensation
account with the Company without penalty.
Notwithstanding anything contained in this Amended and
Restated Employment 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 your benefit
whether paid or payable or distributed or distributable pursuant to the terms of
this Amended and Restated Employment Agreement or otherwise in connection with,
or arising out of, your employment with the Company, would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by you with respect to such excise tax (such excise tax, interest and
penalties collectively referred to as the "Excise Tax"), then you shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by you of the Excise Tax imposed upon said payments and
distributions, including any Excise Tax on the Gross-Up Payment, the net amount
you retain, after deduction of the Excise Tax and any federal, state and local
income or payroll tax upon the Gross-Up Payment, equals the net amount you would
have received in the absence of the Excise Tax.
In consideration for the agreements set forth herein and the
Severance Amount, you shall, upon the termination of your employment, execute a
release of the Company, the Board, and all officers, employees and agents of the
Company from any and all claims, liabilities, actions, causes of action,
obligations, costs, damages, losses and demands of every kind and nature
whatsoever known or unknown, which arise out of, relate to or are in any manner
3
whatsoever connected with any action, transaction, occurrence or event which has
occurred prior to the date of the release and those which may arise out of or
are in any manner whatsoever connected with or related to the termination of
your employment with the Company. Such release shall be in a form reasonably
acceptable to you and the Company and shall include a waiver of all rights
granted under Section 1542 of the California Civil Code which reads as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which, if
known by him must have materially affected his settlement with the debtor. Cal.
Civ. Code Section 1542.
The Severance Amount will be paid and the Common Stock held in
the deferred compensation account will be released within five (5) business days
of the termination of your employment (after accounting for any statutory
waiting periods that are applicable) with the Company either without cause or
through non-renewal of your Employment Agreement."
For purposes of this Section 8 and Section 4, termination for
cause shall mean termination for one of the following reasons: dishonesty in
performing your duties; willful misconduct; breach of fiduciary duty involving
self-dealing or personal profit; intentional material failure to perform duties
or abide by Company policies, in each case to the extent such duties or policies
have been communicated to you in writing or their existence is otherwise known
to you and you have not cured such failure within a reasonable time after
written notice of such failure is given to you; conviction, entry of a plea of
guilty or nolo contendere in connection with any alleged violation, or any
actual violation, of any law, rule, regulation (other than traffic violations or
similar offenses) or any cease-and-desist or other court order that would
embarrass the Company; involvement in any legal proceeding which, in the opinion
of legal counsel to the Company, would be required to be disclosed pursuant to
rules and regulations of the Securities and Exchange Commission, other than
proceedings under federal bankruptcy laws or state insolvency laws involving
entities in which you have less than a fifty percent (50%) interest; any
intentional material breach of this Amended and Restated Employment Agreement;
non-prescription use of any controlled substance or the use of alcohol or any
other non-controlled substance which the Board reasonably determines renders you
unfit to serve in your capacity as an officer of the Company; or any intentional
act or omission which the Board reasonably determines has a material adverse
effect on the public image, reputation or integrity of the Company. Except as
provided above, termination for cause shall not include termination on account
of job performance failing to meet criteria or expectations of the Board.
If you voluntarily resign, or your employment is terminated by
the Company for cause, or your employment terminates as a result of your death
or disability, you will not be entitled to any severance benefits pursuant to
the first paragraph of this Section 8 except as provided in Section 7 with
respect to disability pay and disability insurance and except in the case of
death for any life insurance benefits. In the event that a voluntary resignation
by you is caused by: (i) a substantial reduction in your duties and
responsibilities below those appropriate for your position as provided in
Section 1, (ii) a change without your written consent in the reporting
provisions of Section 1; (iii) an intentional material breach of this Amended
and Restated Employment Agreement or material misrepresentation by the Company,
or (iv) any other material change in the circumstances of your employment made
by the Company for the
4
purpose and with the intention and effect of causing you to resign, you will be
treated as having been terminated by the Company without cause.
Notwithstanding the above, in lieu of the severance package
described in this Section 8, you will receive a severance package equal in value
to 2.9 times your annual base salary and maximum bonus potential then in effect
(with such amount adjusted to be no more than and subject to the maximum
parachute limitations of the Internal Revenue Code) if your employment with the
Company is terminated within two (2) years following a Change in Control of the
Company (defined below in Section 9.1).
9. SPECIAL OPTION VESTING EVENTS.
9.1. CHANGE IN CONTROL. A "Change in Control" of the Company
shall be deemed to have occurred if: (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock are converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's Common Stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, or (y) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company, or (ii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or (iii) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of 51% or more of the
Company's outstanding Common Stock, or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
Board of Directors shall cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of at least a majority
of the directors then still in office who were directors at the beginning of the
period.
In the event that there is a Change in Control of the Company
and your employment with the Company is terminated by the Company within two (2)
years of such Change in Control event for any reason, except for cause, all
options to purchase shares of the Common Stock that had been granted to you as
of the date of such termination shall become fully vested and exercisable for
the balance of their term; provided that the Company has the right to cash out
these options in a Change in Control transaction.
9.2. VOLUNTARY TERMINATION OF EMPLOYMENT. If you voluntarily
terminate your employment with the Company, all options granted that are not
vested as of such voluntary termination date will expire. In such case, you will
have the right to exercise your options with respect to the number of shares
that are exercisable on the date of termination (determined without any
acceleration of the exercise dates) at any time within three (3) months after
the date of resignation.
5
9.3. TERMINATION OF EMPLOYMENT WITHOUT CAUSE. If your
employment is terminated by the Company without cause, your granted options will
vest automatically and will remain exercisable for the balance of their term.
Options that have not been granted as of the date of termination are void and
without legal effect.
10. TERM OF EMPLOYMENT. The term of this Amended and Restated
Employment Agreement shall be for five (5) years, commencing on the Effective
Date, unless terminated earlier as provided in this Amended and Restated
Employment Agreement.
11. NONDISCLOSURE. You agree that, for so long as you remain in the
employ of the Company and thereafter, you will not disclose to any person or
entity or otherwise use or exploit any proprietary or confidential information
of the Company, including without limitation trade secrets, processes,
proposals, reports, methods, computer software or programming or budgets or
other financial information regarding the Company, its business, properties,
customers or affairs obtained by you while you are employed by the Company,
except to the extent required by you to perform your duties pursuant to this
Amended and Restated Employment Agreement. Information will not be deemed to be
confidential for purposes of this Amended and Restated Employment Agreement if
it is or becomes generally available to the public other than as a result of a
disclosure by you. You will have the right to use any such confidential
information to the extent necessary to assert any right or defend against any
claim arising under this Amended and Restated Employment Agreement or pertaining
to confidential information or its use and to the extent necessary to comply
within the applicable provision of law. All files, records, documents, computer
recorded information, specifications and other similar items relating to the
business of the Company, whether prepared by you or otherwise coming into your
possession, shall remain the exclusive property of the Company and shall not be
removed from the premises of the Company except when (and only for the period)
necessary to carry out your duties. If removed, all such materials shall be
immediately returned to the Company upon any termination of your employment, and
no copies thereof shall be kept by you, except that you shall be entitled to
retain documents reasonably related to your rights as an optionholder,
stockholder and former employee of the Company. You acknowledge and agree that
the remedy for any breach of the provisions of this Section 10 may be inadequate
in that the Company may, in addition to all other remedies that may be available
to it at law, seek injunctive relief prohibiting any such breach.
12. NONINTERFERENCE WITH BUSINESS. During the period of your employment
and for a one (1) year period thereafter (regardless of the reason for
termination of employment) you agree that you will not participate with or
advise in any capacity any person or entity in any negotiation between such
person or entity and the Company or any affiliate of the Company. In addition,
during such period you agree that you will not, directly or indirectly, solicit
or induce (or assist in or encourage the solicitation of) any employee of the
Company or its affiliated entities to leave the employ of the Company for
purposes of accepting employment with any other person or entity. For purposes
of this Amended and Restated Employment Agreement "affiliate" means the
corporation or other entity controlled by the Company, directly or indirectly,
through stock ownership or any other means.
6
13. DEFERRED COMPENSATION.
13.1. PARTICIPATION IN COMPANY PLANS. You will be eligible to
participate in any and all of the Company's deferred compensation plans that are
made available to executive officers of the Company.
13.2. SPECIAL DEFERRED COMPENSATION. In addition to
participation in any Company sponsored deferred compensation plan under Section
13.1 of this Amended and Restated Employment Agreement, you may participate in a
special deferred compensation plan designed for you providing for a one-time
deferral of $100,000, which amount shall be invested in the Common Stock on your
original hire date and deferred during the term of this Amended and Restated
Employment Agreement.
14. ASSIGNMENT. This Amended and Restated Employment Agreement is
personal to you and is not assignable by you under any circumstances. Likewise,
the Company will not have the right to assign this Amended and Restated
Employment Agreement to any other person or entity except the Company's
wholly-owned business entities or for any corporation or entity into which the
Company may be merged or consolidated or any person or entity which may acquire
all or a substantial portion of the assets of the Company.
15. ENTIRE AGREEMENT. This Amended and Restated Employment Agreement
sets forth the entire understanding of you and the Company with respect to the
subject matter hereof and supersedes all prior agreements, memoranda,
discussions and understandings of any kind. This Amended and Restated Employment
Agreement cannot be amended except in a writing signed by you and the Company,
and no course of dealing contrary to its terms shall constitute an amendment. No
right or obligation hereunder can be waived except in a writing signed by the
party making the waiver.
16. PARTIAL INVALIDITY. If any provision of this Amended and Restated
Employment Agreement is invalid or unenforceable in any jurisdiction that
provision shall, as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any way affecting the remaining
provisions of this Amended and Restated Employment Agreement.
17. GOVERNING LAW. This Amended and Restated Employment Agreement shall
be construed and enforced in accordance with the substantive law of the State of
California without regard to provisions relating to choice of law or conflict of
laws.
18. EFFECT ON EMPLOYMENT AGREEMENT.
This Amended and Restated Employment Agreement shall supersede and
replace any inconsistent provisions of the Employment Agreement. Except, as
amended hereby, the Employment Agreement shall continue in full force and effect
in accordance with its terms. The provisions of the Employment Agreement which
are not inconsistent with those of this Amendment shall be incorporated herein
by this reference.
If this letter correctly sets forth the terms of our agreement with
respect to your employment, please execute this letter and the enclosed copy in
the place indicated and return the
7
copy to me, and thereupon (subject to Section 18) this letter shall become a
binding and enforceable agreement between you and the Company.
REMEDYTEMP, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇▇
Senior Vice President and Chief
Financial Officer
AGREED:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
▇▇▇▇ ▇▇▇▇▇▇
Dated: January 22, 2002
8