GVHR » Topics » tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

This excerpt taken from the GVHR 8-K filed Oct 15, 2008.
tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

2008 Incentive Awards for Michael Lavington

 

On October 10, 2008, the Compensation Committee (the “Committee”) of the Board of Directors of Gevity HR, Inc. (the “Company”) finalized and approved the 2008 incentive compensation award opportunities and performance measures for Michael Lavington, the Company’s Chief Executive Officer.

 

In recognition of Mr. Lavington having performed significant oversight duties at the request, and on behalf, of the Company’s Board of Directors, the Committee determined that it was appropriate to establish 2008 incentive opportunities for Mr. Lavington based on the results of the Company for the full fiscal year ending December 31, 2008. The short-term (cash) incentive opportunity is based on the previously established company-wide performance goals of earnings per share and operating ratio applicable to all other executive officers of the Company.

 

The short-term incentive award for Mr. Lavington will be determined using a weighting of 100% company performance metrics: comprised of earnings per share (weighted 50%) and an operating ratio (weighted 50%). The award amount, if any, will be determined at the sole discretion of the Committee taking into account the overall performance of the Company. At target, the total short-term incentive award opportunity will be equivalent to 130% of annualized base pay for Mr. Lavington.

 

Equity or Other Awards  

 

The Committee also determined that Mr. Lavington will be considered for discretionary grants of plan based awards in 2009. The Committee will consider Mr. Lavington’s contribution, as evaluated by the Committee in its sole discretion, to the overall operation and performance of the Company when making its grant determination. Any such discretionary grant will be made under a shareholder-approved plan, using one or more stock incentives, stock awards or other form of compensation available under the applicable plan.

 

Tax considerations

 

Section 162(m) of the Internal Revenue Code of 1986 precludes the Company from taking a tax deduction for certain compensation in excess of $1 million in any one year paid to its chief executive officer, unless certain specific and detailed criteria are satisfied. Certain qualifying "performance-based" compensation is not subject to the $1 million deduction limit. While the Committee generally structures compensation programs so as to maintain the tax deductibility of payments made to covered employees such as Mr. Lavington; the Committee retains discretion to establish programs and make payments that may not be fully deductible when considered to be in the best interest of the Company and its shareholders. Mr. Lavington’s 2008 incentive compensation award opportunities and performance measures do not qualify as “performance-based” compensation and, as a result, compensation paid to Mr. Lavington in excess of $1,000,000 would not be deductible.

 

 

 

 

The Committee concluded that the foregoing approach was the most beneficial to shareholders and the Company because the measures maintain consistency with those applicable to the other named executive officers and reflect a full rather than partial year performance period.

 

 

 

 

This excerpt taken from the GVHR 8-K filed Sep 16, 2008.
tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On September 15, 2008, Michael J. Lavington, Chairman of the Board of Gevity HR, Inc. (the “Company”), received his work authorization and entered into an Employment Agreement with Company containing the general terms of his employment by the Company as its Chief Executive Officer. The appointment of Mr. Lavington to the position of Chief Executive Officer was previously approved by the Company’s Board of Directors (the “Board”) subject to his receipt of work authorization and the terms of his employment in such position were approved by the Compensation Committee of the Board (the “Compensation Committee”). Mr. Lavington has been a director of the Company since 2006 and was elected Chairman of the Board on October 18, 2007. Garry Welsh, the Company’s Chief Financial Officer, had been serving as the Company’s Interim Chief Executive Officer since November 9, 2007.

 

Following is a description of the material terms of Mr. Lavington’s employment:

 

  Mr. Lavington assumed his new position as Chief Executive Officer and began his employment with the Company on September 15, 2008. The Employment Agreement is for an initial two-year term and shall be extended for successive one-year terms beginning on the second anniversary of the effective date unless either party gives a notice not to extend.

 

Mr. Lavington will be paid an initial annual base salary of $710,000, which shall be reviewed at least annually and shall be subject to upward adjustment at the sole discretion of the Board. In addition, for each fiscal year during his employment, the Board, in its sole discretion, will determine whether Mr. Lavington will be eligible for an annual bonus under the terms of the Company’s annual bonus program for executives which may consist of cash, Company stock (restricted or otherwise) or a combination thereof. The determination of Mr. Lavington’s eligibility for an annual bonus award and the amount, if any, shall be based upon satisfaction of certain criteria prescribed by the Compensation Committee. The annual bonus, if any, for any fiscal year shall be payable after the end of the fiscal year at such time and in such manner as determined by the Compensation Committee but in no event shall any payment for a fiscal year be made later than March 15 of the following fiscal year.

 

Additionally, in connection with his initial employment, Mr. Lavington will receive (i) a cash sign on bonus of $130,000 and (ii) an award of nonqualified options to purchase 125,000 shares of common stock of the Company having a 10-year term and a four year vesting schedule pursuant to which 25% of such options will vest on each anniversary date of the grant at an exercise price equal to the closing price of such common stock on Mr. Lavington’s first day of active employment. The options to purchase common stock of the Company were granted under and subject to the terms of the Company’s 2005 Equity Incentive Plan.

 

On September 15, 2008, the Company and Mr. Lavington also entered into a Change in Control Severance Agreement in the form customarily used by the Company for other senior executives. The agreement provides for certain payments in the event Mr. Lavington is employed by the Company at the time of a Change in Control (as defined in such agreement) and his employment is terminated within two years after the Change in Control for a reason other than for Cause (as defined in such agreement) or by him for Good Reason (as defined in such

 

agreement). In such event, the agreement provides for a lump sum payment equal to the sum of (i) three times the amount of his highest annual rate of base salary during the 12-month period immediately prior to his termination plus (ii) three times an amount equal to the greater of his target annual bonus for the year in which the termination occurs or his average annual bonus earned in the three years prior to termination. Additionally, Mr. Lavington will receive a lump sum payment equal to the greater of his target annual incentive bonus for the year in which the termination occurs or his average annual incentive bonus earned in the three years prior to the termination multiplied by a fraction, the numerator of which is the number of days elapsed in the fiscal year through the Date of Termination (as defined in such agreement) and the denominator of which is 365, less any annual incentive bonus amounts paid to him during the fiscal year in which the termination occurs. Mr. Lavington is also entitled to receive, for a period of three years, medical, dental, accident, disability and term life insurance benefits upon substantially the same terms and conditions as existed immediately prior to the Date of Termination. In most instances of a Change in Control, the options to purchase common stock of the Company and any shares of restricted common stock held by him at the time of the Change of Control would fully vest at that time.

The foregoing descriptions of each of the Employment Agreement and Change in Control Severance Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of each of the Employment Agreement and Change in Control Severance Agreement which are filed as Exhibits 10.1 and 10.2 to this Form 8-K, respectively, and incorporated herein by reference.

 

Mr. Lavington, age 61, has worked in executive HR roles and at the Managing Director level for major UK and US corporations. He has also been a main Board Director of Mecca Leisure Group, a UK FTSE company. In the late 1980’s, Mr. Lavington was the Divisional Managing Director of Mecca Leisure’s Overseas Division, which included the Hard Rock Cafe Group. More recently, from 1997 to 1999, he was President and CEO of Resorts USA Inc., a subsidiary of the Rank Group where he also served as the Group HR Director from 1990 to 1997. From 2000 until 2002, he was Senior Vice President HR and Property for Global Telesystems (GTS). In 2003, he became an independent business consultant and has served clients in both the UK and the US.

 

This excerpt taken from the GVHR 8-K filed Nov 5, 2007.
tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Certain Officers

In connection with the resignation of Erik Vonk as Chief Executive Officer and Chairman of the Board of Gevity HR, Inc. (the “Company”) effective October 18, 2007 (the “Severance Date”), Mr. Vonk and the Company entered into a Separation Agreement and Full and Final Release of Claims, dated November 2, 2007 (the “Separation Agreement”). The Separation Agreement provides that the Company will pay Mr. Vonk a total of $1,500,000 through October 18, 2009, together with health and welfare benefits through that period of time. The Separation Agreement also provides 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 Company stock at a per share price of $3.02 and (b) the option granted to him on May 30, 2002 to purchase 900,000 shares of Company 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 Company 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 Company 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 Company stock at a per share price of $29.22).

The foregoing description of the Separation Agreement is qualified in its entirety by reference to the full text of the Separation Agreement, which the Company intends to file in its next periodic report.

This excerpt taken from the GVHR 8-K filed Oct 24, 2007.
tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 18, 2007, Erik Vonk resigned his position as Chief Executive Officer and Chairman of the Board of Gevity HR, Inc. (the “Company”) effective October 18, 2007 (the “Effective Date”). The Company and Mr. Vonk anticipate entering into a severance arrangement and will disclose the arrangement upon completion.

The Board of Directors of the Company intends to appoint Michael J. Lavington as the new chief executive officer. Mr. Lavington is a U.K. citizen and his appointment as the new chief executive officer is subject to the approval of work authorization. Mr. Lavington has been a director of the Company since 2006 and was elected Chairman of the Board on October 18, 2007.

Mr. Lavington, age 61, has worked in executive HR roles and at the Managing Director level for major UK and US corporations. He has also been a main Board Director of Mecca Leisure Group, a UK FTSE company. In the late 1980’s, Mr. Lavington was the Divisional Managing Director of Mecca Leisure’s Overseas Division, which included the Hard Rock Cafe Group. More recently, from 1997 to 1999, he was President and CEO of Resorts USA Inc., a subsidiary of the Rank Group where he also served as the Group HR Director from 1990 to 1997. From 2000 until 2002, he was Senior Vice President HR and Property for Global Telesystems (GTS). In 2003, he became an independent business consultant and has served clients in both the UK and the US.

The Company and Mr. Lavington are in the process of finalizing his compensation arrangements and will disclose them upon completion.

 

 

 

 

 

This excerpt taken from the GVHR 8-K filed Aug 31, 2007.
tem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Gevity HR, Inc. (the “Company”), has revised its form of Change in Control Severance Agreement for senior executives to bring such agreement into compliance with the provisions of Section 409A of the Internal Revenue Code by delaying certain payments until a period that is six months and one day after the date of termination giving rise to the payment. As a result of these changes, on August 29, 2007, each of Erik Vonk and Clifford M. Sladnick entered into an amendment to their respective Change in Control Severance Agreements with the Company to bring such agreements into compliance with the provisions of Section 409A of the Internal Revenue Code. The foregoing description is qualified in its entirety by reference to the full text of the amendments. A copy of Amendment Number One to the Change in Control Severance Agreement between the Company and Erik Vonk is attached as Exhibit 99.1 hereto and incorporated herein by reference. A copy of Amendment Number One to the Change in Control Severance Agreement between the Company and Clifford M. Sladnick is attached as Exhibit 99.2 hereto and incorporated herein by reference.

 

On August 29, 2007, each of James Hardee and Garry Welsh entered into revised Change in Control Severance Agreements with the Company which increase to two years the period for which each is entitled to receive medical, dental, accident, disability and term life insurance benefits. The foregoing description is qualified in its entirety by reference to the full text of the revised agreements. A copy of the revised Change in Control Severance Agreement between the Company and James Hardee is attached as Exhibit 99.3 hereto and incorporated herein by reference. A copy of the revised Change in Control Control Severance Agreement between the Company and Garry Welsh is attached as Exhibit 99.4 hereto and incorporated herein by reference.

On August 29, 2007, the Company and Paul Benz entered into a Change in Control Severance Agreement in the form customarily used by the Company for other senior executives. The agreement provides for certain payments in the event Mr. Benz is employed by the Company at the time of a Change in Control (as defined in such agreement) and his employment is terminated within two years after the change of control for a reason other than for Cause (as defined in such agreement) or by him for Good Reason (as defined in such agreement). In such event, the agreement provides for a lump sum payment equal to the sum of (i) two times the amount of his highest annual rate of base salary during the one year period prior to his termination plus (ii) two times an amount equal to the greater of his target annual bonus for the year in which the termination occurs or his average annual bonus earned in the three years prior to termination. Additionally, Mr. Benz will receive a lump sum payment equal to the greater of his target annual incentive bonus for the year in which the termination occurs or his average annual incentive bonus earned in the three years prior to the termination multiplied by a fraction, the numerator of which is the number of days elapsed in the fiscal year through the Date of Termination (as defined in such agreement) and the denominator of which is 365, less any annual incentive bonus amounts paid to him during the fiscal year in which the termination occurs. Mr. Benz is also entitled to receive for a period of two years medical, dental, accident, disability and term life insurance benefits upon substantially the same terms and conditions as existed immediately prior to the Date of Termination. In most instances of a Change in Control, the options to purchase common stock of the Company and the shares of restricted common stock held by him at the time of the Change of Control would fully vest at that time. The foregoing description of the agreement is qualified in its entirety by reference to the full text of the agreement, which is attached as Exhibit 99.5 hereto and incorporated herein by reference.

 

This excerpt taken from the GVHR 8-K filed Jul 27, 2007.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Certain Officers

Peter Grabowski, Senior Vice President National Sales & Field Service Operations, resigned from Gevity HR, Inc. (the “Company”) effective July 23, 2007. In connection with his resignation, Mr. Grabowski and the Company entered into a Separation Agreement and Full and Final Release of Claims, dated July 24, 2007 (the “Agreement”). The Agreement provides that the Company will pay Mr. Grabowski severance totaling $240,000 payable in equal installments of $15,000 through March 13, 2008, together with health and welfare benefits on the same terms and conditions currently in place through that period of time. The Agreement also provides for a full and final release by Mr. Grabowski of any and all claims he may have against the Company. The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

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