Exhibit 10.2
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated as of the 14
th day
of July 2008, is by and between SPHERION CORPORATION, a
Delaware corporation (hereinafter referred to as the “
Company ”), and Loretta A. Penn (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 Senior Vice
President and Chief Service Excellence Officer, and her 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 her position, and that the Company and the
Board be able to receive and rely upon her advice, if so requested,
as to the best interests of the Company and its stockholders
without concern that she 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.
E. The
Company and the Executive desire to enter into this Agreement, upon
the terms and subject to the conditions hereinafter set
forth.
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 . For purposes of this Agreement, a
“ Change in Control ” of the Company shall be
deemed to have occurred upon any of the following events as such
are defined in Section 409A of the Internal Revenue Code of
1986, as amended: (i) a change in the ownership of the
Company; (ii) a change in effective control of the Company; or
(iii) a change in the ownership of a substantial portion of
the assets of the Company.”
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 2000 and 2006 Stock Incentive Plans, Deferred Stock
Plan, any similar, predecessor 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.
2
3.
Termination Following Change in Control
(a) The
Executive’s employment may be terminated for any reason by
the Company following a Change in Control of the Company. If the
Executive’s employment is terminated by the Company for any
reason other than for the reasons set forth in subparagraphs (i),
(ii), (iii), (iv) or (v) below within two years following
a Change in Control, 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 in subparagraphs (i),
(ii), (iii), (iv) or (v) 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;
(iv) termination
by the Company for “ Cause ;” or
(v) voluntary
termination by the Executive (other than for “ Good
Reason ” as provided in section 3(b) below).
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.
3
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 written Policies of the Company
which are not inconsistent with this Agreement or applicable law
(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 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.
(b) The
Executive may terminate her employment with the Company following a
Change in Control of the Company 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 her
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.
4
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 her 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;
(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 she 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 she
performed her 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.
5
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 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 her full
compensation then in effect and continue the Executive as a
participant in all compensation, benefits and perquisites in which
she 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 her Notice of Termination by delivering w
| 
