This excerpt taken from the BBSI DEF 14A filed Apr 18, 2006.
Effective January 26, 1999, the Company entered into an employment agreement with Michael D. Mulholland, Vice President-Finance, Treasurer, and Secretary of the Company. The agreement provides for a term of not less than two years as of each anniversary date of the agreement and is subject to automatic extension for an additional year annually unless either party notifies the other of an election to terminate the agreement by December 27 of the prior year. In the event of a change in control of the Company, the agreement will be renewed automatically for a two-year period beginning with the day immediately preceding the change in control. The employment agreement provides for an annual salary of not less than $155,000, subject to annual review by the Board, together with other compensation and benefits provided for in the Companys compensation policy for executive officers adopted in 1995.
Pursuant to the employment agreement, if Mr. Mulhollands employment is terminated by the Company following a change in control of the Company other than by reason of death or disability or for cause, or by Mr. Mulholland within 90 days following a change in duties related to a change in control of the Company, he will be entitled to receive a lump sum payment of an amount equal to two times his then-current annual base salary, subject to reduction to the extent that such amount would be subject to the excise tax imposed on benefits that constitute excess parachute payments under Section 280G of the Internal Revenue Code of 1986, as amended.
A change in control of the Company for purposes of the employment agreement includes (i) any occurrence which would be required to be reported as such by the proxy disclosure rules of the SEC, (ii) the acquisition by a person or group (other than the Company or one of its employee benefit plans) of 30% or more of the combined voting power of its voting securities, (iii) with certain exceptions, the existing directors ceasing to constitute a majority of the Board, (iv) certain transactions involving the merger, sale, or transfer of a majority of the assets of the Company, or (v) approval by the stockholders of a plan of liquidation or dissolution of the Company. A change in control does not, however, include a business combination transaction in which the Company becomes a privately-held company and William W. Sherertz continues as President and Chief Executive Officer. A change in duties includes a significant change in the nature or scope of Mr. Mulhollands position, responsibilities, authorities or duties, a significant diminution in his eligibility to participate in compensation plans or benefits, a change in the location of his employment by more than 30 miles, or a significant violation of the Companys obligations under the agreement.
The Company entered into an employment agreement with Michael L. Elich effective October 1, 2001, which provides for his continued employment until terminated by either party upon notice to the other party. The agreement provides for a minimum annual salary of $120,000. Mr. Elich will be entitled to a lump-sum payment in an amount equal to 100% of his then annual base salary following his termination by the Company other than for cause or by Mr. Elich within 90 days following a change in duties (as described in the preceding paragraph), in each case only upon the occurrence of circumstances resulting in the relinquishment by William W. Sherertz of his position as President and Chief Executive Officer of the Company.
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