E
XHIBIT
10.2
E MPLOYMENT A GREEMENT
OF
J AMES F. V ERHEY
This EMPLOYMENT AGREEMENT (“
Agreement ”) is made and entered into effective as of
January 1, 2007, by and between JAMES F. VERHEY (“
Employee ”) and BUSINESS STAFFING, INC. (the “
Company ”).
R ECITALS
A. Employee is currently employed by the Company
pursuant to that certain Employment Agreement by and between the
Company and Employee dated effective January 1, 2002 (the
“ 2002 Employment Agreement ”). The Company
leases Employee to Kaiser Ventures LLC (“ Kaiser
”) and he works as Kaiser’s Executive Vice President
and Chief Financial Officer.
B. The intent of this Agreement is to set forth the
terms and conditions of Employee’s employment by the Company
and his serving as a leased employee to Kaiser. This Agreement
shall supersede the 2002 Employment Agreement.
NOW THEREFORE
, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. E MPLOYMENT , P OSITIONS AND D UTIES . The
Company hereby employs Employee upon the terms and conditions set
forth in this Agreement. Employee acknowledges and agrees that he
will be a leased employee only to Kaiser. Employee’s
positions with Kaiser as a leased employee continue to be Executive
Vice President and Chief Financial Officer. In such capacity,
Employee shall have the responsibilities and duties normally
incident to such positions, including, but not limited to, those
duties and responsibilities set forth in Schedule
“A” attached hereto and incorporated herein by
this reference and such other duties and responsibilities as may be
reasonably assigned to him from time-to-time by Kaiser’s
President or Chief Executive Officer. Employee’s business
time commitment to the Company and as a leased employee to Kaiser
at Kaiser’s corporate offices will be an average of six
(6) days per month with Employee’s work schedule to be
coordinated with Kaiser’s Chief Executive Officer. There
shall be no reduction in Employee’s annual base salary or
benefits as a result of Employee’s reduced time commitment as
provided herein. Kaiser and Employee acknowledge the need for
flexibility in Employee’s work schedule so that Employee
agrees to adjust his general schedule to give priority to, assist
in the preparation for, and attend important meetings for Kaiser or
the Company that may occasionally be scheduled at times other than
Employee’s general work schedule.
2. T ERM AND C REDIT FOR P AST E MPLOYMENT . Employee’s employment under the terms of
this Agreement shall commence as of January 1, 2007, and shall
continue for a minimum of five (5) years from the effective
date of this Agreement (“ Initial Term
”)
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unless sooner terminated as provided herein;
provided, however, the term of this Agreement shall be
automatically extended on a month to month basis after the Initial
Term until such time as Kaiser has disposed of all of its material
assets unless otherwise earlier terminated as provided in this
Agreement. Notwithstanding the date of the commencement of this
Agreement, for purposes of the calculation of benefits or for any
other similar purpose, the Company shall credit Employee with the
time he was employed by the Company, Kaiser or any predecessor of
Kaiser.
3. B ASE S ALARY .
As of January 1, 2007, Employee’s annual base salary
shall be $152,640. Prior to the first meeting of the Board of
Managers in any calendar year, the Human Relations Committee of the
Board will review Employee’s salary and report its
recommendations for any revision to the full Board at such meeting
and will communicate its review to the Company. Employee’s
annual base salary shall be adjusted effective as of January 1
of each year, commencing January 1, 2008, by the increase in
the consumer price index over the prior applicable year utilizing
the Consumer Price Index for Urban Wage Earners and Clerical
Workers, U.S. City Average, All Items, published by the Bureau of
Labor Statistics of the United Stated Department of Labor. The
entire Board of Managers of Kaiser together with the Company have
final responsibility for the review, approval or disapproval of any
revisions to Employee’s annual base salary.
4. B ONUS P ROGRAM
a. I
NCENTIVE
P
ERFORMANCE
B
ASED
B
ONUS
P
ROGRAM
. Employee acknowledges that in 2001 Kaiser
discontinued it historical annual performance bonus program and
that the Company is also terminating its discretionary cash bonus
program simultaneously with the effective date of this Agreement.
In lieu of these previous cash bonus programs, Employee shall be
eligible for and be paid an incentive performance bonus in
accordance with the terms of the Company’s Executive Officer
New Revenue Incentive Participation Plan dated effective
January 1, 2007, the terms of which are incorporated herein by
this reference.
b. W
EST
V
ALLEY
MRF I
NCENTIVE
P
ERFORMANCE
B
ONUS
. If Kaiser’s interest in the
West Valley MRF is sold while Employee is employed by the Company,
Employee shall be paid a bonus upon the completion of such sale and
collection of the sales price in amount equal to one percent
(1.00%) of the net sales price of Kaiser’s West Valley
MRF interest in excess of the Target Value of $8,396,574 assigned
to such interest in connection with the Class C and D Units as
increased for cash distributions resulting from a recapitalization
or refinancing of the West Valley MRF. No bonus shall be paid if
the net sales price as may be increased for any cash distribution
resulting from a recapitalization or refinancing of the West Valley
MRF equals or is less than the Target Value assigned to the West
Valley MRF. Such bonus, if any, shall be paid no later than thirty
(30) days following the collection of the consideration for
the sale of Kaiser’s interest in the West Valley MRF. If the
sale is in whole or in part on an installment basis, the bonus
shall be paid to Employee on any installment payments as they are
collected. In the event the sale is other than a cash transaction
such as a merger, the bonus shall be measured by the value of the
consideration received as if it was a cash transaction and the
bonus earned shall may be paid to Employee in cash,
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the merger consideration or in such other form
as the Company may reasonable determine to implement the intent and
purpose of this West Valley MRF incentive bonus.
5. A NNUAL G RANT OF C LASS A U NITS AND V ESTING AND C ONVERSION OF P REVIOUSLY G RANTED O PTIONS . During the term of this Agreement, the Company
shall cause to be issued to Employee 25,000 Kaiser Class A
Units as of January 15 of each year beginning as of
January 15, 2007, if Employee is employed by the Company as of
the immediately preceding December 31; provided, however, the
amount of this annual grant of Class A Units shall be reviewed
may be modified by the Company prior to the January 15, 2010
grant of Class A Units. Notwithstanding the foregoing, the
annual grant of Class A Units may be delayed until the
Employee complies with the provisions of Paragraph 6.b.
below.
It is acknowledged and agreed that
all options granted to Employee by Kaiser or its predecessor prior
to the date of this Agreement are fully vested in Employee and all
outstanding options to acquire Kaiser Ventures Inc. common stock
have been converted to options to acquire Class A Units in
Kaiser.
6. O THER B ENEFITS .
a. I
NSURANCE
AND
O
THER
B
ENEFITS
. Employee will be entitled to
participate in all benefits provided by the Company to its
employees and to senior executives in accordance with and subject
to the Company’s policies and procedures as they may exist
from time-to-time, including, but not limited to, medical and
dental insurance, life insurance, disability insurance, 401(k)
savings plan, any pension or retirement plan, deferred compensation
plan, education and seminar reimbursement, car allowance, and
reimbursement of reasonable expenses for company business. These
benefits shall be at least at the same level as provided to
Employee as of the day prior to the effective date of this
Agreement except that contributions to the Company’s 401(k)
savings plan, money purchase plan and supplemental executive
retirement plan of the Company shall be appropriately modified to
reflect the current compensation of Employee. Benefits shall also
include life insurance for the benefit of Employee with a face
amount of not less than that in effect as of December 31,
2002, with premium paid in accordance with the Company’s
policies in effect on December 31, 2002, except that the
Company may self-insure if insurance is not available on a
commercially reasonably basis. In addition, the Company shall only
be responsible for the payment of the premium for the first level
(first one-third) of Employee’s life insurance benefit and
the third level (the last one-third) of such coverage. Employee
shall be responsible for the payment of the premium for the second
level (second 1/3) of coverage. Employee shall be entitled to four
(4) weeks of paid vacation per year.
b. A
DDITIONAL
W
ELLNESS
B
ENEFITS
. In addition to the benefits
described above, the Company shall reimburse Employee for all costs
associated with an annual physical not otherwise covered by
insurance and the costs not otherwise covered by insurance for a
more comprehensive physical exam and medical tests and evaluation
every two years, including the costs that may be associated with a
full body scan. Employee’s first comprehensive medical exam
shall be completed by December 31, 2007,
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with the next comprehensive exam to be completed
by December 31, 2009, and shall continue thereafter every two
years during the term of this Agreement. If as a result of any
annual physical Employee is diagnosed with a medical condition that
may reasonably be considered to materially impact Employee’s
performance of his duties under this Agreement, Employee shall
promptly advise the Chairman of Kaiser’s Human Relations
Committee of such diagnosis. In the event Employee does not
complete the comprehensive medical exam every two years as provided
herein, Employee’s annual grant of Class A Units shall
be delayed until such time as Employee complies with this
comprehensive medical exam requirement. For example, if Employee
fails to have a comprehensive medical exam completed by
December 31, 2007, the annual grant of Class A Units to
Employee which Employee would have received on January 15,
2008 will be delayed until such time as Employee completes the
required comprehensive medical exam. The Company may also pay or
reimburse Employee for certain other reasonable health and wellness
benefits as may be pre-approved by the Company. Employee shall
provide to the General Counsel of the Company written notice that
he has completed the comprehensive medical exam as provided herein
together with reasonable documentation that such exam was
performed.
7. C OMPENSATION P AYABLE U PON T ERMINATION B Y THE C OMPANY W ITHOUT C AUSE .
In the event Employee is terminated by the Company for any reason
except for “cause”, as “cause” is defined
in Paragraph 11 below, the Company shall pay to Employee the
following compensation and Employee shall receive the following
benefits as severance benefits:
a. if the termination occurs during the Initial
Term, Employee shall be paid two (2) years of annual base
salary;
b. the Company shall continue to provide and pay
its portion of all of Employee’s health insurance, dental
insurance, vision insurance, life insurance, wellness, welfare and
other benefits for a period of twenty four (24) months
following the date of termination, including the Company’s
portion of any retirement and deferred compensation plans such as
the Company’s 401(k) plan and SERP, as applicable. After such
termination, Employee shall be entitled, for a period of three
years to exercise his Equity Incentives as to any then vested,
including any options vesting within one year of termination as
provided in the next sentence, notwithstanding any other applicable
provision contained in any option agreement. In addition to the
foregoing, with respect to any restricted Equity Incentives,
Employee shall continue to vest in such securities for a period of
one-year following termination.
All amounts due Employee shall be
payable in one lump sum or as may be mutually agreed upon between
Employee and the Company as may be permitted under applicable law.
Employee shall have no duty to seek other employment during this
period of time and there shall be no offset for any compensation
paid to Employee from any other source. If the Company or an
Affiliate of the Company desires to retain Employee as a consultant
after termination of Employee’s employment, the parties shall
negotiate the terms of such consulting agreement which shall be
documented in an agreement executed by the parties.
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8. C OMPENSATION P AYABLE U PON C ONSTRUCTIVE T ERMINATION . In the event that Employee is constructively
terminated by the Company as defined in Paragraph 9 below, Employee
shall be paid and receive the same compensation and benefits as
provided in Paragraph 7 above for termination by the Company
without cause.
9. C ONSTRUCTIVE T ERMINATION D EFINED . Employee shall be deemed to have been
constructively terminated by the Company upon the occurrence of any
of the following events:
a. The assignment to Employee of duties materially
and adversely inconsistent with Employee’s positions at
Kaiser as a leased employee as of the effective date of this
Agreement. This includes a change in reporting responsibilities,
authority including title, or responsibilities; provided, however,
a lateral transfer within Kaiser or to an Affiliate shall not be
deemed a constructive termination;
b. Any requirement that Employee permanently
relocate to an office more than 50 miles from the then location to
which he is assigned as of the effective date of this Agreement;
and/or
c. Any failure to provide Employee with
compensation and benefits in the aggregate on terms that are not
materially less favorable
