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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of December 31, 2006, between Kforce Inc., a Florida corporation
(the "Employer" or "the Company"), and David Dunkel (the
"Executive").
BACKGROUND
The Employer desires to continue to obtain the benefit of
services by the Executive, and the Executive desires to continue to
render services to the Employer.
The Compensation Committee of the Board of Directors of the
Employer has determined that it is in the Employer’s best
interest and that of its shareholders to recognize the substantial
contribution that the Executive has made and is expected to make in
the future to the Employer's business and to continue to retain
Executive’s services in the future.
The Employer and the Executive desire to set forth in this
Agreement the terms and conditions of the Executive's employment
with the Employer. Accordingly, in consideration of the mutual
covenants and representations set forth below, the sufficiency of
which is hereby acknowledged, the Employer and the Executive agree
as follows:
TERMS
1. EMPLOYMENT .
The Executive agrees to continue employment with the Employer
(and one or more of the Employer’s subsidiary corporations if
and when assigned by Employer) to render the services specified in
this Agreement upon the terms and conditions and for the
compensation provided in this Agreement, and Employer agrees to so
employ Executive. All compensation paid to the Executive by the
Employer or any subsidiary of the Employer, and all benefits and
perquisites received by the Executive from the Employer or any of
its subsidiaries, will be aggregated in determining whether the
Executive has received the compensation and benefits provided for
in this Agreement.
2. TERM OF EMPLOYMENT .
(a) End of Term . The term of the employment of the
Executive under this Agreement will be for the period commencing on
the date of this Agreement and ending on the earliest of:
(i) 2 years and 364 days after notice of termination of this
Agreement is given by the Employer to the Executive;
(ii) the date of termination of the
Executive’s employment by the Executive at Executive’s
election and without "Good Reason" (as defined in Section 9 of
this Agreement);
(iii) the date of termination of the Executive's employment by
the Employer for "Cause" (as defined in Section 8 of this
Agreement) or by the Employer without Cause in accordance with
Section 9 or by the Executive for Good Reason pursuant to
Section 9;
(iv) the date of the Executive’s death; or
(v) the Disability Effective Date (as such term is defined in
Section 5 of this Agreement) following the Executive's
Disability (as such term is defined in Section 5 of this
Agreement).
It is understood that at each and every moment of time the
remaining term of employment hereunder shall be 2 years and 364
days, unless this Agreement or Executive’s employment is
terminated in accordance with the provisions of this
Section 2.
(b) Date of Termination . As used in this Agreement the
term "Date of Termination" means (i) if the Executive’s
employment is terminated by the Employer pursuant to clause
(i) of Section 2(a) above, the date that is 2 years and
364 days after the date of the Executive’s receipt of the
notice of termination of this Agreement or any later date specified
in such notice, as the case may be, (ii) if the Executive
terminates Executive’s employment at Executive’s
election and without Good Reason pursuant to clause (ii) of
Section 2(a), the date of the Employer’s receipt of the
notice of termination from the Executive or any later date
specified in such notice, as the case may be, (iii) if the
Executive’s employment is terminated by the Employer for
Cause or by the Employer without Cause pursuant to Section 9
of this Agreement, or by the Executive for Good Reason, fifteen
days after the date of receipt of the notice of termination by the
Executive or the Employer, respectively, or any later date
specified in such notice, as the case may be, (iv) if the
Executive’s employment terminates by reason of the
Executive’s voluntary retirement, the date that such
retirement becomes effective in accordance with the Employer's
plans and policies; and (v) if the Executive's employment is
terminated by reason of death or Disability, the date of death of
the Executive or the Disability Effective Date (as that term is
defined in Section 5 of this Agreement).
3. SERVICES TO BE RENDERED; EXCLUSIVITY
.
(a) Service . During the term of the Executive’s
employment under this Agreement, the Executive shall perform the
duties of Chief Executive Officer, or any reasonably comparable
duties that may be assigned to the Executive from time to time.
(b) Full Time Efforts . During the term of this Agreement
and excluding any periods of vacation, family or sick leave or
holidays to which the Executive is entitled, the Executive shall
devote Executive’s full business time and energy to the
business, affairs and interests of the Employer and its
subsidiaries, and matters related thereto, and shall use
Executive’s reasonable commercial efforts and ability to
promote the interests of the Employer and its subsidiaries. The
Executive agrees that he/she will diligently endeavor to promote
the business, affairs and interests of the Employer and its
subsidiaries and that Executive will perform services contemplated
hereby in accordance with the policies established by the Employer
from time to time. The Executive shall serve without additional
remuneration in such senior executive capacities for one or more
direct or indirect subsidiaries of the Employer as the Employer may
from time to time request, subject to appropriate authorization by
the subsidiary or subsidiaries involved and any limitations under
applicable law and indemnification on the same terms as the
Executive is indemnified by the Employer. The failure of the
Executive to discharge an order or perform a function because the
Executive reasonably and in good faith believes such would violate
a law or regulation or be dishonest shall not be deemed a breach by
Executive of Executive’s obligations or duties under this
Agreement and shall not entitle the Employer to terminate this
Agreement pursuant to any of its provisions.
(c) Certain Permissible Activities . The Executive may
serve as a director or in any other capacity of any business
enterprise, including an enterprise whose activities may involve or
relate to the business of the Employer or any of its subsidiaries
but only if such service is expressly approved by the Employer in
writing. The Executive may (i) make and manage personal
business investments of Executive’s choice, (ii) teach
at educational institutions and deliver lectures, and
(iii) serve in any capacity with any civic, educational or
charitable organization, or any governmental entity or trade
association, in each such case without seeking or obtaining
approval by the Employer so long as such activities and service do
not materially interfere or conflict with the performance of
Executive’s duties under this Agreement. It is agreed that to
the extent that the Employer shall have approved any service of the
Executive pursuant to the first sentence of this Section 3(c) prior
to a Change in Control Date (as defined in Section 10 below),
or to the extent that the Executive may have engaged in activities
pursuant to the second sentence of this Section 3(c) prior to
such Change in Control Date, the continued conduct of such
activities or the conduct of activities similar in nature and scope
thereto during the
2 years and 364 days subsequent to such Change in
Control Date shall be permissible and not in violation of any
provisions of this Agreement and the previously obtained Employer
approval may not be revoked or limited in any material respect
during the 2 years and 364 days following such Change in Control
Date.
4. COMPENSATION AND BENEFITS .
(a) Base Salary . The Employer agrees that the Executive
will be paid for Executive’s services under this Agreement a
salary at the annual rate of at least $625,000, payable in periodic
installments in accordance with the Employer’s normal salary
payment dates for the Executive. Such salary as in effect from time
to time is referred to in this Agreement as the Executive’s
"Base Salary."
(b) Additional Benefits . The Executive shall also be
entitled during the term of this Agreement to all rights and
benefits for which Executive is otherwise eligible under any bonus
plan, stock option plan, stock purchase plan, participation or
extra compensation plan, supplemental executive retirement plan,
deferred compensation plan, profit-sharing plan, life, medical and
dental insurance policy, director and officer liability insurance
plan or indemnification program, vacation, sick leave, family leave
and holiday program or plan, or plans that confer the use of
automobiles or condominiums (and pay the related expenses thereof)
or that pay for club membership fees or tax or financial counseling
or other plans or benefits, in any such case, which the Employer or
any of its subsidiaries (i) may provide for the Executive or (ii)
provided the Executive is eligible to participate therein, may
provide generally to officers of the Employer (collectively,
"Additional Benefits"). This Agreement shall not affect adversely
(from the perspective of the Executive) the provisions of any other
compensation, retirement or other benefit program or plan of the
Employer or any of its subsidiaries and shall not be considered to
be a guarantee that the Executive will receive any awards or other
benefits under any plans, policies or arrangements which are
performance-related. Moreover, Executive's participation in any
such plan shall be subject to the provisions of applicable law,
including the Employee Retirement Income Security Act of 1974, as
amended.
(c) Individual Benefits . The Employer shall continue to
provide to the Executive such individual perquisites as are in
effect for Executive as of the first day of Executive’s
employment under this agreement.
(d) Expense Reimbursement . The Employer agrees to
reimburse the Executive in full for all such reasonable and
necessary business, entertainment and travel expenses incurred or
expended by Executive in connection with the performance of
Executive’s
duties under this Agreement; provided the
Executive submits to the Employer vouchers or expense statements
satisfactorily evidencing such expenses as may be reasonably
required by the Employer and such expenses are in accordance with
any applicable corporate policy.
(e) Limitations on Reductions . The Employer shall have
the right to reduce one or more Additional Benefits but only in
conjunction with a corollary reduction of such benefits applicable
to all of the Employer’s officers. Any increase in the
Executive's Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement.
(f) Benefits Upon Retirement . Employer shall establish
an executive retirement plan ("the Kforce Executive Retirement
Plan") in which Executive shall be entitled to participate
according to its terms and conditions. Employer shall also
establish a health, dental and vision plan for retired executives
("the Retirement Health Plan") in which Executive shall be entitled
to participate according to its terms and conditions. Should
Executive retire while employed by Kforce, and qualify for
retirement benefits under the Kforce Executive Retirement Plan,
Executive will be eligible to elect at that time, on behalf of
himself and his spouse, to participate in the Retirement Health
Plan. If Executive elects to participate in the Retirement Health
Plan at retirement, Employer shall maintain such plan in existence
until the death (or election to cease participating) of Executive
and Executive’s participating spouse.
5. TERMINATION UPON DISABILITY .
(a) Continuation of Benefits upon Disability . If the
Executive becomes totally and permanently unable to perform
Executive’s duties because of any Disability (as defined
below) during the term of Executive’s employment under this
Agreement, the Executive’s full-time employment under this
Agreement shall terminate effective on the thirtieth day after the
Executive's receipt of written notice of termination from the
Employer (such thirtieth day being referred to in this Agreement as
the "Disability Effective Date"). In addition to the payments
specified in Section 6 below, in the event of termination of
the Executive's employment pursuant to this Section 5, the
Employer shall continue to pay or provide the Executive the
following:
(i) until the earliest to occur of the Executive's death, the
Executive’s 65th birthday, 2 years and 364 days after the
Disability Effective Date or the date of the Executive’s
return to full-time employment hereunder pursuant to
Section 5(f) (such earliest day being referred to herein as
the "Disability Termination of Benefits Date") the Base Salary,
medical, dental and other insurance and welfare type Additional
Benefits in which the Executive was participating immediately prior
to the Disability
Effective Date (including, without limitation,
medical, dental, life and disability insurance), each such benefit
to be continued in a manner no less favorable to the Executive than
the benefit to which Executive was entitled immediately prior to
the Disability Effective Date; provided , however ,
if the Executive’s death occurs during the 2 years and 364
days after the Disability Effective Date, the Employer shall
continue to pay the Base Salary and to pay or provide medical,
dental and other insurance and welfare type benefits, on the basis
described in this clause (i), to the Executive’s family
members who were covered for such benefits immediately prior to the
Executive's death for the balance of such 2 years and 364 days
period;
(ii) until the Disability Effective Date, a continuation of
vesting of all unvested stock options granted by the Employer to
the Executive, such vesting to occur in accordance with the terms
of each such grant as in effect on the Disability Effective Date
and upon the assumption that no termination of employment had
occurred; provided , however , if the
Executive’s death occurs during the 2 years and 364 days
immediately after the Disability Effective Date or if a Change in
Control occurs prior to the Disability Effective Date, such vesting
shall include any vesting which would occur upon the
Executive’s death or a Change in Control during employment
with the Employer; and provided , further , that, if
and to the extent further vesting is prohibited by the terms of any
one or more of such grants or otherwise, the Executive shall be
entitled to in-lieu cash payments from the Employer on each date
(each a "Vesting Date") when vesting would have occurred absent
such prohibition, but in no event beyond 2 years and 364 days
following the Disability Effective Date, equal to the spread on
such Vesting Date between the exercise price and fair market value
of stock subject to stock options that would have otherwise vested
on such Vesting Date; and provided , further , that
if, after the Disability Effective Date, it is or becomes
impossible on any date to continue to calculate any future in-lieu
cash payments based on such continuation of vesting, the Executive
shall thereupon be entitled immediately to the additional vesting
which would normally have occurred during such 2 years and 364 days
period following the Disability Effective Date with respect to the
affected type of in-lieu cash payments described above and shall be
entitled immediately to receive payment of the amount specified for
such type of in-lieu cash payments based on such additional vesting
as of such date; and
(iii) until the Disability Termination of Benefits Date, if the
Executive is a participant in such plans on the Executive’s
Disability Effective Date, a continuation of crediting of
additional years of cumulative service (for all purposes, including
for purposes of accrual and vesting of benefits and equity-based
incentives) under any Executive Retirement Plan, Deferred
Compensation Plan and/or Senior Supplemental Executive Retirement
Plan (collectively, the "SERP") in accordance with the terms of the
SERP and upon the assumption that no termination of employment had
occurred; provided , however , that if the
Disability
Termination of Benefits Date occurs due to the
Executive’s death during the 2 years and 364 days immediately
after the Disability Effective Date or if a Change in Control
occurs prior to the Disability Termination of Benefits Date, such
continuation shall include any further accrual and vesting which
would occur upon the Executive's death or a Change in Control
during employment with the Employer; and
(b) Offset . The obligations of the Employer to make
payments under this Agreement to the Executive, pursuant to this
Section 5, following Executive’s Disability shall be
reduced prospectively to the extent that the Executive receives
payment of amounts under any salary continuation or similar feature
contained in any disability insurance policy covering the Executive
or under any salary continuation or similar feature under Social
Security or any similar federal, state or local program. In
addition, any medical, dental and other insurance and welfare type
Additional Benefits to be provided by the Employer pursuant to
clause (i) of Section 5(a) shall be secondary to any
similar benefits provided by Social Security, Medicare, any private
insurance maintained by or covering the Executive or any other
similar plan or program covering the Executive. The Executive shall
provide to the Employer upon written request from time to time a
certification as to the types and amounts of the benefits referred
to in the first two sentences of this Section 5(b) received by
the Executive or to which Executive is entitled.
(c) Substitution of Benefits . If the Executive’s
full-time services are terminated due to Executive’s
Disability and the Executive is entitled under the terms of this
Agreement to, but is no longer eligible under the relevant plan
for, Additional Benefits because of such termination, the Executive
(or in the event of Executive’s death prior to the date that
is 2 years and 364 days after the Disability Effective Date,
Executive’s designated Beneficiaries (as defined in
Section 7 below)) shall be entitled to, and the Employer shall
provide, to the extent required by in this Agreement, benefits
substantially equivalent to such Additional Benefits to which the
Executive was entitled immediately prior to Executive’s
Disability and shall do so for the period during which Executive
remains entitled to receive such Additional Benefits as provided in
this Section 5. With respect to the continuation of such
benefits, the Executive or Executive’s Beneficiaries (as such
term is defined in Section 7) shall also be paid by the
Employer an amount which, after federal, state, local or other
income or other taxes on such amount, shall reimburse the Executive
(or Executive’s Beneficiaries) for any additional tax
liabilities incurred by the Executive (or any such Beneficiary) by
reason of the receipt of such benefits after the termination of,
rather than during the term of, Executive’s employment under
this Agreement.
(d) Partial Disability . In the event of a partial
Disability of the Executive, it is understood that the Executive
will provide such part-time services as may be consistent with the
nature and extent of such Disability and Executive’s
position, duties,
responsibilities and status specified in
Section 3(a) of this Agreement, the Employer shall not be
entitled to terminate the Executive's employment under this
Agreement as a result of such partial Disability (provided that
despite such partial disability, the Executive is able to
substantially perform most of Executive’s duties), and the
terms and conditions of this Agreement shall remain in full force
and effect after such partial Disability.
(e) Definition of Disability . As used in this Agreement,
the term "Disability" means the failure of the Executive to render
for six consecutive calendar months, or for shorter periods
aggregating one hundred eighty or more business days in any twelve
month period, the services contemplated by this Agreement which a
physician selected by the Employer or its insurers (and reasonably
acceptable to the Executive or the Executive's legal
representative) determines is due to mental or physical illness or
injury.
(g) Return from Disability . If and to the extent the
Executive recovers from any such Disability, Executive will resume
Executive’s duties and responsibilities hereunder partially
or fully to the extent of Executive’s recovery, and the term
of the Executive's employment under this Agreement shall be
reinstated as if the Executive's employment had not been terminated
pursuant to Section 5(a) of this Agreement.
6. DEATH OF THE EXECUTIVE .
(a) Vesting of Options . If the Executive dies while an
employee of the Employer or while receiving any payments on account
of a Disability as set forth in Section 5 above and during the
term of this Agreement, all stock options, restricted stock or
other equity grants, and all other long term incentive grants or
awards standing in the name of the Executive, shall immediately
fully vest and must be exercised within 90 days of the date of the
Executive's death by the appropriate beneficiary.
(b) Continuation of Base Salary and Benefits . If the
Executive dies while an employee of the Employer and during the
term of this Agreement, the Employer shall continue to pay the Base
Salary and to pay or provide medical, dental and other insurance
and welfare type benefits, on the basis described in
Section 5(a)(i), to the Executive’s family members who
were covered for such benefits immediately prior to the Executive's
death, for a period of 2 years and 364 days following
Executive’s death.
7. PAYMENTS AND BENEFITS UPON TERMINATION OF
EMPLOYMENT FOR ANY REASON .
On the Date of Termination of the Executive’s employment
under this Agreement for any reason whatsoever, the Executive's
Base Salary will cease thereafter to accrue except as specifically
provided in Sections 5 or 9 and the Executive (or in the event of
Executive’s death, Executive’s designated
beneficiaries, Executive’s personal representative, or the
executor or administrator of Executive’s estate
(Executive’s "Beneficiaries")) will be entitled to such
rights and benefits under the Employer’s compensation and
benefit plans, policies and arrangements in which the Executive is
then a participant as may be provided for under such plans,
policies and arrangements (which shall not be modified adversely to
the Executive or Executive’s Beneficiaries after
Executive’s Date of Termination). In addition, the Employer
shall:
(a) pay and deliver to the Executive (or, in the event of
Executive’s death, to Executive’s Beneficiaries) not
later than thirty days after Executive’s Date of Termination
or such later date as the Executive or such Beneficiaries may
request in writing, all amounts of money and all stock or other
property owed to Executive by the Employer as of the Date of
Termination, including but not limited to Executive’s accrued
Base Salary, any amounts payable in lieu of accrued vacation,
amounts payable to Executive under any expense reimbursement plans
or policies for expenses incurred through the Date of Termination,
the amount of any bonus due under any incentive plan to the
Executive for any bonus period or performance measurement cycle of
the Employer that ended prior to the Date of Termination which
remained unpaid on the Date of Termination and any compensation
previously deferred by the Executive and any accrued interest on
earnings on such deferred compensation to the extent not previously
paid to the Executive;
(b) cause the trustee of any trusteed plan of the Employer to
pay and deliver, and the Employer shall pay and deliver under any
similar non-trusteed plan of the Employer, to the Executive (or, in
the event of Executive’s death, to Executive’s
Beneficiaries), at the earliest practicable date after payments
become due under such plan, all money, stock and other property
which such plans require to be paid or delivered or are otherwise
payable or deliverable to Executive after the termination of
Executive’s employment;
(c) continue to insure the Executive (or, in the event of
Executive’s death, Executive’s Beneficiaries) with
respect to Executive’s activities as a director, officer or
Executive of the Employer or any of its subsidiaries, for a period
of three years after such Date of Termination, under such policies
of director and officer liability insurance as Employer shall
provide for its senior officers generally; provided ,
however , that if a Change in Control shall have occurred
prior to such Date of Termination or shall thereafter occur, such
policies of insurance shall be no less favorable to the Executive
than such policies as may have been in effect for the Executive at
any time during the one hundred twenty day period immediately
preceding the Change in Control Date; and
(d) continue to honor such rights to
indemnification as the Executive (or, in the event of
Executive’s death, Executive’s Beneficiaries) may be
entitled pursuant to any plan of indemnification or indemnification
agreement in effect at the Date of Termination.
(e) The Executive immediately waives any right or entitlement to
the payments and benefits described in Section 7(a) –
(d) above in the event that the Executive breaches any term or
provision of this Agreement or the Confidentiality Agreement and
Restrictive Covenant and in the event of such breach the Executive
will pay to the Employer any damages the Employer may be able to
recover, in addition to any other relief to which Employer may be
entitled.
8. TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE.
(a) Definition of Cause . The Employer may terminate the
Executive’s employment under this Agreement if the
termination is for Cause. For purposes of this Agreement, the
Employer shall have "Cause" to terminate the Executive's employment
under this Agreement if, and only if, any of the following shall
occur:
(i) the Executive’s conviction by a court of competent
jurisdiction or entry of a guilty plea or a plea of nolo contendere
for an act on the Executive's part con
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