Exhibit 10.1
SEPARATION AGREEMENT
AND
FULL AND FINAL RELEASE OF
CLAIMS
This Separation
Agreement and Full and Final Release of Claims
(“Agreement”) is made and entered into between Erik
Vonk (“Mr. Vonk” or “Employee”) and Gevity
HR, Inc. (“Gevity” or
“Employer”).
WHEREAS, Mr. Vonk
and Staff Leasing, Inc, (a predecessor to Gevity) entered into an
Employment Agreement effective as of March 21, 2002
(“Employment Agreement”) which provides for certain
payments to be made to Mr. Vonk upon his termination of employment
from Gevity without cause and imposes certain restrictive covenants
and confidentiality requirements on Mr. Vonk;
WHEREAS, Mr. Vonk
and Gevity have mutually agreed to terminate Mr. Vonk’s
employment relationship and desire to enter into this Agreement
which, except as described in this Agreement, supersedes the
Employment Agreement and provides for certain payments and benefits
to be made to Mr. Vonk upon his termination of employment and
imposes additional restrictive covenants and provisions on Mr.
Vonk;
WHEREAS, Mr. Vonk
and Staff Leasing, Inc., d/b/a Gevity HR, entered into a Securities
Purchase Agreement dated as of March 22, 2002 (“Purchase
Agreement”) pursuant to which Mr. Vonk acquired shares of
common stock of Gevity and received certain registration rights
with respect to such shares;
WHEREAS, Mr. Vonk
and Gevity have mutually agreed to amend the registration rights
set forth in Section 3.3 of the Purchase Agreement.
NOW, THEREFORE, in
consideration of the covenants and agreements hereinafter set
forth, intending to be legally bound hereby, Mr. Vonk and Gevity
agree as follows:
1.
SEVERANCE .
Mr. Vonk and Gevity have mutually
agreed to end their employment relationship (and Mr. Vonk’s
employment relationship with all subsidiaries of Gevity) effective
October 18, 2007 (“Severance Date”). In resolution of
their employment relationship, Mr. Vonk and Gevity have agreed to
the terms below.
2.
BENEFITS .
In consideration of his decision to
enter into this Agreement, and conditioned upon Mr. Vonk’s
material compliance with the restrictive covenant and confidential
information provisions of the Employment Agreement and Sections 4,
5, and 16 of this Agreement (regardless of whether such covenants,
provisions, and sections are otherwise deemed enforceable),
Gevity agrees to provide Mr. Vonk with the following:
(a)
on the date payment would have been
made had Mr. Vonk’s employment with Gevity continued, payment
of Mr. Vonk’s Base Salary for services Mr. Vonk rendered
to Gevity through the Severance Date;
(b)
within five business days after this
Agreement is executed, payment of any amounts owed to Mr. Vonk
under the Employer’s benefit plans and programs as of the
Severance Date, as shown on Exhibit A to this Agreement;
(c)
a cash payment totaling $1,500,000,
payable in equal installments of $28,846.15 (less applicable tax
withholdings) on each of Gevity’s regular pay dates,
beginning on the first pay date following the Severance Date, and
continuing through the pay date that covers October 18, 2009
provided, however, that if $1,500,000 has not been paid in full on
October 18, 2009, the final payment shall be in such amount as is
necessary such that the total of all payments under this Section
2(c) equals $1,500,000, and provided, further, that all of the
payments otherwise due to be made under this Section 2(c) before
April 18, 2008 shall be delayed and paid in a single lump sum
payment on Gevity’s first regular pay date that comes on or
after April 18, 2008;
(d)
healthcare coverage (with Gevity
paying the applicable premium) for Mr. Vonk and his wife,
Karin Vonk, eligible dependants under the Gevity insured group
health plan, as in effect from time to time, for the period which
begins on Mr. Vonk’s Severance Date and ends on the
second anniversary of the Severance Date; if Mr. Vonk is
eligible for COBRA coverage on the second anniversary of the
Severance Date (with such second anniversary treated as the date
Mr. Vonk terminates employment with Gevity solely for purposes
of having such second anniversary treated as a qualifying event for
Mr. Vonk), Mr. Vonk shall have the right to purchase COBRA
healthcare continuation coverage at that time under Gevity’s
group health plan on such terms and subject to such conditions as
set forth in Section 4980B of the Internal Revenue Code
(“Code”) and the corresponding provisions of the
Employee Retirement Income Security Act of 1974, as amended;
notwithstanding the foregoing, if Gevity cannot provide healthcare
coverage to Mr. Vonk and his wife, Karin Vonk, under its group
health plan based upon discontinuation of such health and welfare
plans, change in plan rules or similar types of events, Gevity
shall reimburse Mr. Vonk (as a taxable benefit to Mr. Vonk)
promptly upon his submission of statements reflecting the same, an
amount equal to the expenses incurred by Mr. Vonk for
equivalent replacement health coverage for the period beginning on
the date he is no longer covered under Gevity’s group health
plan and ending on the second anniversary of the Severance
Date;
(e)
an extension of Mr. Vonk’s 90
day option exercise period (i) to the period ending on the
first anniversary of the Severance Date to exercise (a) the option
granted to him on March 21, 2002 to purchase 100,000 shares of
Gevity stock at
2
a per share price of
$3.02 and (b) the option granted to him on May 30, 2002 to purchase
900,000 shares of Gevity stock at a per share price of $3.90 and
(ii) to the period ending on the second anniversary of the
Severance Date to exercise (a) the option granted to him on
December 15, 2003 (but only to the extent vested as of the
Severance Date with respect to the right to purchase 68,181 of
Gevity stock at a per share price of $21.85), (b) the option
granted to him on February 15, 2005 (but only to the extent vested
as of the Severance Date with respect to the right to purchase
57,937 shares of Gevity stock at a per share price of $21.14), and
(c) the option granted to him on February 22, 2006 (but only to the
extent vested as of the Severance Date with respect to the right to
purchase 34,762 shares of Gevity stock at a per share price of
$29.22). This extension of the exercise period for the vested
portion of these five options shall have no effect whatsoever on
any of the other terms and conditions of such options, which
options shall remain in full force and effect as originally written
except for the extension of the exercise periods as provided above
(Gevity acknowledges and agrees that the options to purchase the
number of shares specified in this Section 2(e) are fully vested as
to the number of shares specified in this Section 2(e) and Gevity
and Mr. Vonk acknowledge and agree that his options to purchase any
other shares (including without limitation any unvested portion of
the options granted on the dates specified in this Section 2(e))
held by Mr. Vonk on his Severance Date shall be and are
automatically forfeited in full by Mr. Vonk on his Severance Date);
and
(f)
reimbursement in accordance with
Gevity’s normal business reimbursement policy of business
expenses incurred by Mr. Vonk in connection with his employment
with Gevity prior to the Separation Date, provided Mr. Vonk timely
and properly submits such expenses in accordance with
Gevity’s normal business expense reimbursement
policy.
To the extent this
Agreement is subject to Section 409A of the Internal Revenue Code
(“Code”), Mr. Vonk and the Company intend all payments
under this Agreement to comply with the requirements of such
section, and this Agreement shall, to the extent practical, be
operated and administered to effectuate such intent. To the extent
necessary to avoid adverse tax consequences under Section 409A of
the Code, the timing of any payment under this Agreement shall be
delayed by six months and one day in a manner consistent with
§ 409A(a)(2)(B)(i) of the Code. All tax and other amounts
which Gevity is required to withhold or deduct will be deducted
from the payments to Mr. Vonk under this Agreement. Except as
described in Sections 2 (a-f), Mr. Vonk’s eligibility
for, coverage under, and participation in all retirement, savings,
welfare, fringe benefit, compensation and bonus plans shall
terminate on the Severance Date. The above benefits shall continue
to be payable and/or enforceable regardless of Mr. Vonk’s
death or disability, and the provisions of this Section 2 shall be
enforceable by Mr. Vonk’s heirs and/or personal
representatives, as applicable. Upon Mr. Vonk’s
disability, payment shall be made to Mr. Vonk or, in the event
a legal guardian has been
3
appointed for Mr. Vonk
and Gevity is notified in writing of such appointment, his legal
guardian (in Gevity’s discretion), and upon Mr. Vonk’s
death, payment shall be made to Mr. Vonk’s estate, all in
such manner and at such times as set forth in this Section
2.
3.
NO
OBLIGATION . Mr.
Vonk acknowledges and agrees that the monies and benefits set forth
in Section 2 represent good, valuable and sufficient consideration
for the mutual promises and duties set forth in this
Agreement.
4.
RELEASES BY GEVITY AND MR. VONK
.
(a)
In consideration for the payments
being provided to him above, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the provisions of Section 4(b) below,
Mr. Vonk, for himself, attorneys, heirs, executors, administrators,
successors and assigns, fully, finally and forever releases and
discharges Gevity, all parent, subsidiary and/or affiliated
companies, as well as its and their successors, assigns, officers,
directors, agents, representatives, attorneys, stockholders,
insurers, employees and employee benefit plans or programs (and the
trustees, administrators, fiduciaries, and insurers of such plans
or programs), and any other person acting by, through, under, or in
concert with any of the persons or entities listed in this section
(collectively, the “Gevity Releasees”), of and from any
and all liability, claims, demands, actions, obligations, causes of
action, suits, grievances, damages, losses, and expenses, of any
and every nature whatsoever, known or unknown, at law or in equity,
suspected or unsuspected, anticipated or unanticipated, which Mr.
Vonk may have had, claims to have had, or now has or claims to
have, which are or may be based on any facts, acts, conduct,
documents, representations, omissions, contracts, deferred
compensation plans, claims, events or other things occurring at any
time on or before the date of this Agreement and arising out of or
relating to Mr. Vonk’s employment with or separation from
Gevity. It is understood that, subject to the provisions of Section
4(b) below, this Release includes, but is not limited to all
claims, actions or causes of action that were or could have been
asserted during the negotiations over this Agreement, any claims,
actions or causes of action that were or could have been asserted
before any administrative agency or in court, as well as any
claims, actions, or causes of action for fraud, misrepresentation,
defamation, discrimination or harassment in any form, retaliation,
any claims under any federal, state, local or ot
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