SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended Commission File No. 0-27682
November 30, 1999
Globe Business Resources, Inc.
Incorporated under the IRS Employer Identification
laws of Ohio No. 31-1256641
11260 Chester Road
Suite 400
Cincinnati, OH 45246
Phone: (513) 771-8287
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
As of January 7, 2000, 4,803,198 shares of the Registrant's common stock,
no par value, were outstanding.
<PAGE>
GLOBE BUSINESS RESOURCES, INC.
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
Page No.
--------
Part I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet -
November 30, 1999 and February 28, 1999 3
Consolidated Statement of Income -
Three and nine months ended November 30, 1999 and 1998 4
Consolidated Statement of Cash Flows -
Nine months ended November 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 16
Part II. Other Information
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 18
<PAGE>
PART I - FINANCIAL INFORMATION
GLOBE BUSINESS RESOURCES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
November 30, February 28,
1999 1999
--------------- ------------
(Unaudited)
ASSETS:
Cash $ 2,390 $ 1,123
Trade accounts receivable, less
allowance for doubtful accounts
of $1,126 and $977, respectively 14,209 11,982
Other receivables 1,099 1,418
Prepaid expenses 4,495 4,229
Rental furniture, net 54,695 55,426
Property and equipment, net 8,720 8,469
Goodwill and other intangibles,
less accumulated amortization of
$5,128 and $3,262, respectively 47,081 47,580
Note receivable from officer 100 100
Other notes receivable 1,054 490
Other, net 928 980
--------- ---------
Total assets $ 134,771 $ 131,797
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable $ 5,149 $ 6,250
Customer deposits 3,638 2,072
Accrued compensation 2,182 2,628
Accrued taxes 398 304
Deferred income taxes 5,877 5,738
Accrued interest payable 1,021 1,541
Other accrued expenses 1,078 1,250
Debt 69,441 68,900
--------- ---------
Total liabilities 88,784 88,683
--------- ---------
Common stock and other shareholders' equity:
Common stock, no par, 15,000,000 shares
authorized, 4,803,198, and 4,794,489
shares outstanding 24,058 24,018
Retained earnings 26,013 23,180
Fair market value in excess of historical
cost of acquired net assets attributable
to related party transactions (4,084) (4,084)
--------- ---------
Total common stock and other
shareholders' equity 45,987 43,114
--------- ---------
Total liabilities and shareholders' equity $ 134,771 $ 131,797
========= =========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
GLOBE BUSINESS RESOURCES, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
<TABLE>
<CAPTION>
For the three months For the nine months
ended, ended
------------------------- -------------------------
November 30, November 30, November 30, November 30,
------------ ----------- ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Corporate housing sales $ 25,577 $ 23,033 $ 80,765 $ 64,381
Rental sales 9,577 10,741 29,868 33,219
Retail sales 4,154 4,434 11,966 13,166
--------- --------- --------- ---------
39,308 38,208 122,599 110,766
--------- --------- --------- ---------
Cost of revenues:
Cost of corporate housing sales 17,954 16,652 56,014 45,318
Cost of rental sales 1,058 841 2,940 2,587
Cost of retail sales 2,935 2,681 7,668 8,144
Furniture depreciation and disposals 2,741 2,070 7,452 6,462
--------- --------- --------- ---------
24,688 22,244 74,074 62,511
--------- --------- --------- ---------
Gross profit 14,620 15,964 48,525 48,255
Operating expenses:
Warehouse and delivery 2,759 2,544 8,365 7,989
Occupancy 1,685 1,835 5,645 5,567
Selling and advertising 2,450 2,740 7,731 8,327
General and administration 5,330 4,947 16,521 14,868
Amortization of intangible assets 623 510 1,866 1,448
--------- --------- --------- ---------
12,847 12,576 40,128 38,199
--------- --------- --------- ---------
Operating income 1,773 3,388 8,397 10,056
Other expenses:
Interest expense 1,215 1,145 3,634 3,254
Other, net (75) (118) (16) (52)
--------- --------- --------- ---------
1,140 1,027 3,618 3,202
Income before income taxes 633 2,361 4,779 6,854
Provision for income taxes 261 921 1,950 2,674
--------- --------- --------- ---------
Net income $ 372 $ 1,440 $ 2,829 $ 4,180
========= ========= ========= =========
Earnings per common share:
Basic $ 0.08 $ 0.32 $ 0.59 $ 0.92
========= =========== ========= =========
Diluted $ 0.08 $ 0.31 $ 0.58 $ 0.90
========= =========== ========= =========
Weighted average number of
common shares outstanding:
Basic 4,798 4,532 4,797 4,546
Diluted 4,838 4,648 4,836 4,670
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
GLOBE BUSINESS RESOURCES, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
For the nine months ended,
---------------------------
November 30, November 30,
1999 1998
------------ ------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,829 $ 4,180
Adjustments to reconcile net income to
net cash provided by operating activities:
Rental furniture depreciation 5,974 5,839
Other depreciation and amortization 3,921 2,992
Provision for losses on accounts receivable 606 511
Provision for deferred income taxes 139 669
Loss (gain) on sale of property and equipment 21 (8)
Book value of furniture sales and rental buyouts 10,371 10,394
Changes in assets and liabilities:
Accounts receivable (2,516) (4,565)
Notes receivable (564) --
Other assets, net 56 195
Prepaid expenses (264) (1,618)
Accounts payable (1,101) 2,404
Customer deposits 1,556 (161)
Accrued compensation (461) 1,065
Accrued taxes 94 37
Accrued interest payable (520) (16)
Other accrued expenses (220) (310)
--------- ---------
Net cash provided by operating activities 19,921 21,608
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental furniture (15,614) (17,493)
Purchases of property and equipment (2,143) (1,992)
Purchases of businesses, net of cash acquired (1,018) (13,551)
Other investing activities -- 8
--------- ---------
Net cash used in investing activities (18,775) (33,028)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on the revolving credit agreement 141,224 126,708
Repayments on the revolving credit agreement (140,234) (114,015)
Repayments of other debt (559) (393)
Principal payments under capital lease obligations (364) (264)
Exercise of common stock options 117 5
Purchase of treasury stock (63) (653)
--------- ---------
Net cash provided by financing activities 121 11,388
--------- ---------
Net increase (decrease) in cash 1,267 (32)
Cash at beginning of period 1,123 526
--------- ---------
Cash at end of period $ 2,390 $ 494
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
GLOBE BUSINESS RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data;
shares in whole numbers except where noted)
NOTE 1 -- PRESENTATION OF INTERIM INFORMATION
In the opinion of the management of Globe Business Resources, Inc., the
accompanying unaudited consolidated financial statements include all adjustments
considered necessary to present fairly its financial position as of November 30,
1999, and the results of its operations for the three and nine months ended
November 30, 1999 and 1998 and its cash flows for the nine months ended November
30, 1999 and 1998. All adjustments are of a normal recurring nature. Interim
results are not necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented in accordance
with the requirements of Form 10-Q, and do not contain certain information
included in the Company's audited consolidated financial statements and notes in
its Form 10-K for the fiscal year ended February 28, 1999.
Certain prior year amounts have been reclassified to conform with current
year presentation.
NOTE 2 -- ACQUISITIONS
During the first nine months of fiscal 2000, the Company completed the
asset acquisition of Castleton of Tulsa, a privately owned corporate housing
business, and paid certain other consideration on fiscal 1998 and 1999
acquisitions. These transactions were completed by payment of approximately $0.5
million in cash, issuance of $0.3 million of notes payable and the assumption of
certain liabilities.
In accordance with APB No. 16, these acquisitions were accounted for using
the purchase method.
The purchase price allocation for the acquired businesses is as follows:
(Unaudited)
-----------
Cash, receivables and prepaids $ 8
Property and equipment 10
Other assets 4
Goodwill and other intangibles 1,367
-------
1,389
Liabilities assumed (363)
-------
$ 1,026
=======
Certain pro forma Globe consolidated income statement data are not
presented due to the immaterial impact of Castleton of Tulsa on the previously
reported operating results. Current year actual results reflect the acquisition
for the entire reporting period.
<PAGE>
NOTE 3 -- RENTAL FURNITURE
Rental furniture consists of the following:
November 30, February 28,
1999 1999
------------- ------------
(Unaudited)
Furniture on rental $ 26,709 $ 43,648
Furniture on hand 40,955 24,120
-------- --------
67,664 67,768
Accumulated depreciation (12,969) (12,342)
-------- --------
$ 54,695 $ 55,426
======== ========
NOTE 4 -- EARNINGS PER SHARE
For all periods presented, basic earnings per share was calculated by
dividing net income applicable to common stock by the weighted average number of
shares outstanding during the period.
For all periods presented, diluted earnings per share was calculated by
dividing net income applicable to common stock by the weighted average number of
shares and dilutive potential common shares outstanding during the period.
Potential common shares include outstanding stock options for all periods
presented and contingently issuable shares in fiscal 1999.
The following table presents the calculation of basic and diluted earnings
per share for the periods indicated. (Shares in thousands)
For the three For the nine
months ended months ended
-------------- ----------------
November 30, November 30,
-------------- ----------------
1999 1998 1999 1998
------ ------ ------ -------
(Unaudited) (Unaudited)
Net income used to calculate
basic and diluted
earnings per share $ 372 $1,440 $2,829 $4,180
====== ====== ====== ======
Weighted average common shares
used to calculate
basic earnings per share 4,798 4,532 4,797 4,546
====== ====== ====== ======
Basic earnings per common share $ 0.08 $ 0.32 $ 0.59 $ 0.92
====== ====== ====== ======
Shares used in the calculation
of diluted earnings per share:
Weighted average common shares 4,798 4,532 4,797 4,546
Dilutive effect of assumed
exercise of options
for the purchase of common shares 40 44 39 52
Dilutive effect of assumed issuance of
contingently issuable shares -- 72 -- 72
------ ------ ------ ------
Weighted average common shares used to
calculate diluted earnings per share 4,838 4,648 4,836 4,670
====== ====== ====== ======
Diluted earnings per common share $ 0.08 $ 0.31 $ 0.58 $ 0.90
====== ====== ====== ======
<PAGE>
NOTE 5 -- DEBT
Outstanding debt consists of:
November 30, February 28,
1999 1999
------------ ------------
(Unaudited)
The Fifth Third Bank, PNC Bank and
Norwest Bank unsecured revolving note,
average interest of 6.89% and 6.62% $35,407 $34,416
7.54% Senior Notes, unsecured, interest
payable semi-annually on March 1 and
September 1, due September 1, 2007 30,000 30,000
6.25% mortgage note payable to The Fifth
Third Bank, interest payable in monthly
installments, due December 1, 2002 1,400 1,445
6.0% note payable to seller of acquired
business, payable in monthly installments,
due December 31, 2000 325 550
6.0% note payable to seller of acquired
business, payable in quarterly
installments, due December 31, 2002 1,129 1,463
5.0% note payable to seller of acquired
business, payable in quarterly
installments, due December 31, 2002 450 500
5.0% note payable to seller of acquired
business, payable in monthly
installments, due February 29, 2000 229 --
Capital lease obligations 501 526
------- --------
$69,441 $68,900
======= =======
The funds required for the acquisition related payments were derived from
borrowings under the Company's unsecured revolving Credit Agreement and through
the issuance of a note payable.
The Company's unsecured revolving line of credit provides credit facilities
of up to $45 million. At November 30, 1999, the revolving Credit Agreement
provided a total unused credit facility of approximately $9.6 million.
<PAGE>
NOTE 6 -- SUBSEQUENT EVENT
The Company announced on January 14, 2000 that it has entered into a
definitive agreement with Equity Residential Properties Trust for the sale of
Globe for $13.00 per share, payable in cash upon closing, and up to an
additional $.50 per share post closing, upon final determination of costs, if
any, relating to any potential breaches on certain representations and
covenants. The agreement must be approved by Globe shareholders and is subject
to customary closing conditions.
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with
the Company's Consolidated Financial Statements beginning on page 3.
GENERAL
Globe is a major participant in the temporary relocation industry,
operating in both the corporate housing and furniture rental businesses. The
corporate housing business provides short-term housing through an inventory of
leased housing units to transferring or temporarily assigned corporate
personnel, new hires, trainees, consultants and individual customers. The
furniture rental business rents quality office and residential furniture to a
variety of corporate and individual customers. Additionally, the Company sells
residential and office furniture that no longer meets its showroom condition
standards for rental through its clearance centers and sells new furniture
through its showrooms and account executives.
The Company's fiscal year ends on February 28/29.
The discussions contained in this Item 2 include forward-looking
information which is subject to risks and qualifications including, but not
limited to, those set forth in Exhibit 99.
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain income
statement data as a percentage of total revenues and certain gross profit data
as a percentage of respective corporate housing, rental and retail sales
revenues.
For the three For the nine
months ended months ended
-------------- ------------------
November 30, November 30,
--------------- ------- --------
1999 1998 1999 1998
------ ------ ------- --------
Revenues:
Corporate housing sales 65.1% 60.3% 65.9% 58.1%
Rental sales 24.4% 28.1% 24.4% 30.0%
Retail sales 10.6% 11.6% 9.8% 11.9%
----- ----- ----- -----
Total revenues 100.0% 100.0% 100.0% 100.0%
Gross profit:
Corporate housing sales 29.8% 27.7% 30.6% 29.6%
Rental sales 89.0% 92.2% 90.2% 92.2%
Retail sales 29.3% 39.5% 35.9% 38.1%
----- ----- ----- -----
Gross profit before depreciation
and disposals 44.2% 47.2% 45.7% 49.4%
Furniture depreciation and disposals (7.0%) (5.4%) (6.1%) (5.8%)
----- ----- ----- -----
Combined gross profit 37.2% 41.8% 39.6% 43.6%
Operating expenses 31.1% 31.6% 31.2% 33.2%
Amortization of intangible assets 1.6% 1.3% 1.5% 1.3%
----- ----- ----- -----
Operating income 4.5% 8.9% 6.8% 9.1%
Interest/other 2.9% 2.7% 3.0% 2.9%
----- ----- ----- -----
Income before taxes 1.6% 6.2% 3.9% 6.2%
===== ===== ===== =====
Fiscal 2000 third quarter and first nine months results were impacted by
certain nonrecurring items related primarily to the consolidation of real estate
and clearance center inventories in Globe Furniture Rentals western markets and
the accelerated implementation of a comprehensive corporate housing business
information system. The following table presents selected income statement data
after adjustment to exclude these nonrecurring items.
Summary Financial Data, excluding nonrecurring items
For the three For the nine
months ended months ended
------------------- --------------------
November 30, November 30,
------------------- --------------------
1999 1998 1999 1998
------- -------- -------- --------
Revenues $ 39,308 $ 38,208 $122,599 $110,766
Gross profit 14,860 15,964 48,765 48,255
Operating expenses 11,762 12,066 37,110 36,751
Operating income 2,475 3,388 9,789 10,056
Income before taxes 1,335 2,361 6,171 6,854
Net income 778 1,440 3,653 4,180
Diluted earning per common share $ 0.16 $ 0.31 $ 0.76 $ 0.90
Impact of Corporate Housing Acquisitions
Globe implemented an aggressive corporate housing acquisition strategy in
fiscal 1997. Since that time, the Company has completed fifteen corporate
<PAGE>
housing acquisitions, including the March 1999 acquisition of Castleton of
Tulsa. All acquisitions to date have been accounted for using the purchase
method of accounting.
Corporate housing companies' assets consist primarily of accounts
receivable, customer deposits and some minor furniture and fixed asset balances.
Consequently, the purchase price for these businesses is allocated largely to
goodwill and other intangibles. Cost of goodwill and other intangibles related
to the corporate housing acquisitions approximates $50.9 million and is being
amortized on a straight-line basis over periods ranging from three to 35 years,
with a weighted average life of approximately 24 years. Goodwill and intangibles
amortization, which is a separate component of operating expenses, reduced
operating profit by $1.9 million, or 1.5% of revenues, in the first nine months
of fiscal 2000 and $1.4 million, or 1.3% of revenues, in the first nine months
of fiscal 1999.
Generally, the corporate housing business has a slightly lower operating
margin than the furniture rental business, consisting of a lower gross profit
margin offset somewhat by lower operating expenses as a percentage of revenues.
As a result, the Company's gross profit margin and operating expenses as a
percentage of revenues have been declining since the Company entered the
corporate housing business. Gross profit margin decreased to 39.6% in the first
nine months of fiscal 2000 from 43.6% in the first nine months of fiscal 1999.
Gross profit margin on rental sales in the first nine months of fiscal 2000 was
90.2%, versus 30.6% for corporate housing. Comparable gross profit margins for
the first nine months of fiscal 1999 were 92.2% and 29.6%, respectively. Because
the Company is integrating its furniture rental and corporate housing
operations, these gross profit percentages exclude furniture depreciation and
disposals which can no longer be related to specific revenue categories. An
additional result of this integration is that operating expenses and, therefore,
operating margins for furniture rental and corporate housing cannot be
specifically identified. Operating expenses, excluding amortization and the
impact of nonrecurring expenses, decreased to 30.3% of revenues in the first
nine months of fiscal 2000 from 33.2% of revenues in the first nine months of
fiscal 1999, while the operating margin, excluding amortization and the impact
of nonrecurring items, decreased to 9.5% of revenues in the first nine months of
fiscal 2000 from 10.4% of revenues in the first nine months of fiscal 1999. The
reduction in operating margin is primarily the result of the increasing mix of
corporate housing revenues over the comparable periods and a soft sales
environment. Including amortization expenses and excluding nonrecurring items,
the operating margin declined to 8.0% in the first nine months of fiscal 2000
from 9.1% in the first nine months of fiscal 1999.
Globe plans to continue its consolidation of corporate housing through
additional acquisitions, thereby capitalizing on the desire of many corporations
to have a corporate housing company that can meet their needs nationally. With
the acquisitions to date, Globe has expanded its presence into 29 markets and is
the market leader in ten of these markets, with annualized corporate housing
revenues exceeding $100 million. Globe is in the number three position in the
industry based on revenues.
A major risk of Globe's increasing presence in the corporate housing
business is the potential loss of furniture rental revenues from competing
corporate housing companies that are also customers. To date, the majority of
this business with unaffiliated customers has been retained, largely due to the
Company's superior level of service. Additionally, the significance of this risk
has lessened since Globe entered the corporate housing business. In the first
nine months of fiscal 2000, unaffiliated corporate housing customers accounted
for $5.3 million, or 4.3%, of Globe's revenues versus $6.4 million, or 5.8%, of
Globe's revenues in the first nine months of fiscal 1999. During these same
periods, furniture rental revenues from affiliated corporate housing providers,
which are not included in reported revenues, were $5.4 million and $4.0 million,
respectively.
The Company is implementing a comprehensive corporate housing business
information system which provides the tools for supporting Company-wide
<PAGE>
standardization, as well as enhancing apartment unit inventory management and
allowing operational efficiencies. Additionally, the system facilitates the
national sales effort and provides a common platform as the Company begins
implementation of its business-to-business e-commerce efforts during the second
half of fiscal 2000. Implementation of the corporate housing business
information system has been successfully completed in several markets and Globe
has retained the services of an outside consulting firm to expedite the
Company-wide rollout. Nonrecurring expenses consisting of consulting fees of
approximately $0.6 million are expected to be incurred and recorded in
administrative expenses during fiscal year 2000. Approximately $0.3 million of
these costs were incurred in the first nine months of the fiscal year.
Due to the significant impact of the corporate housing acquisitions on the
Company's operations and financial results, certain aspects of the Company's
historical results of operations and period-to-period comparisons will not be
indicative of future results.
Comparison of Third Quarter Fiscal 2000 to Third Quarter Fiscal 1999
Total revenues of $39.3 million increased $1.1 million, or 2.9%, in the
third quarter of fiscal 2000, from $38.2 million in the third quarter of fiscal
1999, primarily due to acquisitions.
Corporate housing sales of $25.6 million in the third quarter of fiscal
2000 increased 11.0% from $23.0 million in the third quarter of fiscal 1999.
This increase was primarily caused by acquisitions.
Rental sales of $9.6 million in the third quarter of fiscal 2000 decreased
10.8% from $10.7 million in the third quarter of fiscal 1999 partially as a
result of the elimination of intercompany revenues (furniture rented to
Company-owned corporate housing operations). Excluding the impact of these
eliminations, rental revenues decreased $1.1 million, or 8.9%, when compared
with the prior year quarter, reflecting a general softness in the residential
market and a loss of business from some competing corporate housing customers.
Management believes this softness represents a cyclical slowdown attributable to
the fact that corporate housing has taken over a substantial portion of the
furnished apartment distribution channel. As corporate housing has taken over
more of the furnished apartment distribution channel, furniture rental volume
growth from corporate housing customers has slowed. To date, the other customers
in the furnished apartment distribution channel (property management companies
and showroom customers) have not offset this slowdown.
Retail sales of $4.2 million decreased $0.2 million, or 6.3%, in the third
quarter of fiscal 2000 from $4.4 million in the third quarter of fiscal 1999,
with an increase of 30.4% in new office furniture sales more than offset by a
16.8% decline in used furniture sales. The used furniture decrease is primarily
attributable to the Company's decision to consolidate clearance centers in its
western markets and the closure of a store in Michigan.
Gross profit of $14.6 million in the third quarter of fiscal 2000 decreased
$1.4 million, or 8.4%, from $16.0 million in the third quarter of fiscal 1999
and declined as a percentage of revenues to 37.2% from 41.8% over the same
period partially due to the higher mix of corporate housing revenues and the
lower margins associated with these revenues. Gross profit percentage on
corporate housing sales improved to 29.8% from 27.7% over the period. Gross
profit percentage on rental sales decreased to 89.0% from 92.2% over the period
primarily due to an increase in housewares and other rental expenses. Gross
profit percentage on retail sales decreased to 29.3% from 39.5% over the period
resulting from lower margins on clearance center revenues and the impact of a
<PAGE>
nonrecurring liquidation sale associated with the inventory consolidation in the
western markets. Excluding this sale, retail gross profit was 35.1%. In
addition, the Company recorded a physical inventory adjustment of approximately
$0.3 million during the third quarter of fiscal 2000.
Operating expenses of $12.2 million (excluding amortization) in the third
quarter of fiscal 2000 increased 1.3% from $12.1 million in the third quarter of
fiscal 1999 as a result of acquisitions and approximately $0.5 million of
nonrecurring expenses associated with the consolidation of real estate and
clearance center inventories in the western markets and the accelerated
implementation of the corporate housing system. As a percentage of total
revenues, operating expenses declined to 31.1% from 31.6% over the same period.
Excluding the nonrecurring expenses, operating expenses decreased to 29.9% of
revenues from 31.6% of revenues during the period. Additional nonrecurring
expenses, estimated at approximately $0.4 million, are expected to be incurred
during the fourth quarter of fiscal year 2000 primarily due to the accelerated
rollout of the Company's corporate housing system.
As a result of the Company's continuing acquisition program, amortization
of intangible assets increased $0.1 million, or 22.2%, to $0.6 million in the
third quarter of fiscal 2000, from $0.5 million in the third quarter of fiscal
1999. As a percentage of revenues, amortization expense increased to 1.6% from
1.3% over the same period.
As a result of the changes in revenues, gross profit, operating expenses
and amortization discussed above, operating income decreased 47.7% to $1.8
million, or 4.5% of revenues in the third quarter of fiscal 2000, from $3.4
million, or 8.9% of revenues in the third quarter of fiscal 1999. Excluding
nonrecurring items, operating income decreased to $2.5 million, or 6.3% of
revenues during the quarter from $3.4 million, or 8.9% of revenues in the prior
year quarter.
Interest/other expense increased to $1.1 million in the third quarter of
fiscal 2000 from $1.0 million in the third quarter of fiscal 1999 and as a
percentage of total revenues increased to 2.9% from 2.7% over the same period.
Interest expense increased from the prior year period due to higher debt
balances in the current year period. The debt increase was the result of funding
required for acquisitions made in the fourth quarter of fiscal 1999.
Income before income taxes of $0.6 million in the third quarter of fiscal
2000 decreased $1.7 million, or 73.2%, compared to the third quarter of fiscal
1999 and as a percentage of revenues decreased to 1.6% from 6.2% over the same
period. Excluding nonrecurring items, income before taxes decreased to $1.3
million, or 3.4% of revenues from $2.3 million, or 6.2% of revenues during the
comparable quarters of fiscal 2000 and fiscal 1999.
The Company's effective tax rate, which includes federal, state and local
taxes, increased to 41.2% in the third quarter of fiscal 2000 from 39.0% in the
third quarter of fiscal 1999. This increase in tax rate is largely attributable
to Globe's expansion into states with higher tax rates than those included in
the prior year quarter.
Comparison of Nine Months Ended November 30, 1999
to Nine Months Ended November 30, 1998
Total revenues of $122.6 million increased $11.8 million, or 10.7%, in the
first nine months of fiscal 2000, from $110.8 million in the first nine months
of fiscal 1999, primarily due to acquisitions.
Corporate housing sales of $80.8 million in the first nine months of fiscal
2000 increased 25.4% from $64.4 million in the first nine months of fiscal 1999.
This increase was primarily caused by acquisitions.
Rental sales of $29.9 million in the first nine months of fiscal 2000
decreased 10.1% from $33.2 million in the first nine months of fiscal 1999
<PAGE>
primarily due to the elimination of intercompany revenues. Excluding the impact
of these eliminations, rental revenues decreased 5.2%, reflecting a general
softness in the residential market and a loss of business from some competing
corporate housing customers.
Retail sales of $12.0 million decreased $1.2 million, or 9.1% in the first
nine months of fiscal 2000 from $13.2 million in the first nine months of fiscal
1999, resulting from a decrease of $1.2 million, or 21.0%, in clearance center
revenues over the period. The decrease is primarily the result of closure of a
store in Michigan and a decrease in revenues in the Company's western markets
resulting from the decision to consolidate clearance centers.
Gross profit of $48.5 million in the first nine months of fiscal 2000
increased $0.2 million, or 0.6%, from $48.3 million in the first nine months of
fiscal 1999 and declined as a percentage of revenues to 39.6% from 43.6% over
the same period partially due to the higher mix of corporate housing revenues
and the lower margins associated with these revenues. Gross profit percentage on
corporate housing sales improved to 30.6% from 29.6% in the comparable prior
year period, while gross profit percentage on rental and retail sales decreased
to 90.2% and 35.9% from 92.2% and 38.1%, respectively. The decrease in rental
gross profit percentage was largely attributable to higher housewares expenses,
while the decrease in retail gross profit was primarily attributable to the
impact of a nonrecurring liquidation sale associated with the inventory
consolidation in the western markets. In addition, the Company recorded a
physical inventory adjustment of approximately $0.3 million during the third
quarter of fiscal 2000.
Operating expenses of $38.3 million (excluding amortization) in the first
nine months of fiscal 2000 increased 4.1% from $36.8 million in the first nine
months of fiscal 1999 as a result of acquisitions and approximately $1.2 million
of nonrecurring expenses associated with the consolidation of real estate and
clearance center inventories in the western markets and the accelerated
implementation of the corporate housing system. As a percentage of total
revenues, these expenses declined to 31.2% from 33.2% over the same period.
Excluding the nonrecurring charges, operating expenses decreased to 30.3% of
revenues during the first nine months of fiscal 2000 from 33.2% of revenues in
the first nine months of fiscal 1999. Additional nonrecurring expenses,
estimated at approximately $0.4 million, are expected to be incurred during the
fourth quarter of fiscal year 2000 primarily due to the accelerated rollout of
the corporate housing system.
As a result of Globe's continuing acquisition program, amortization of
intangible assets increased $0.5 million, or 28.9%, to $1.9 million in the first
nine months of fiscal 2000, from $1.4 million in the first nine months of fiscal
1999. As a percentage of revenues, amortization expenses increased to 1.5% from
1.3% over the same period.
As a result of the changes in revenues, gross profit, operating expenses
and amortization discussed above, operating income decreased 16.5% to $8.4
million, or 6.8% of revenues in the first nine months of fiscal 2000, from $10.1
million, or 9.1% of revenues in the first nine months of fiscal 1999. Excluding
nonrecurring items, operating income decreased to $9.8 million, or 8.0% of
revenues from $10.1 million, or 9.1% over the period.
Interest/other expense increased $0.4 million to $3.6 million in the first
nine months of fiscal 2000 from $3.2 million in the first nine months of fiscal
1999 and increased slightly to 3.0% of total revenues from 2.9% in the
comparable prior year period. The increased expense for fiscal 2000 was due
primarily to higher debt balances than in the comparable period of fiscal 1999.
The debt increase was the result of funding required for fiscal 1999
acquisitions.
Income before income taxes of $4.8 million in the first nine months of
fiscal 2000 decreased $2.1 million, or 30.3%, compared to the first nine months
of fiscal 1999 and as a percentage of revenues decreased to 3.9% from 6.2% over
the same period. Excluding nonrecurring items, income before taxes decreased to
<PAGE>
$6.2 million, or 5.5% of revenues from $6.9 million, or 6.2% of revenues during
the period.
The Company's effective tax rate, which includes federal, state and local
taxes, increased to 40.8% in the first nine months of fiscal 2000 from 39.0% in
the first nine months of fiscal 1999. This increase in tax rate is largely
attributable to Globe's expansion into states with higher tax rates than those
included in the prior nine month period.
LIQUIDITY AND CAPITAL RESOURCES
The Company maintains a $45.0 million unsecured line of credit which may be
used for acquisitions and general corporate purposes. At January 7, 2000, the
unused line of credit was $9.6 million. The term of this line of credit will
expire on September 30, 2000, requiring full payment of the then outstanding
balance. The Company expects to have other financing arrangements in place prior
to this date.
Principal payments of $4.3 million are due annually beginning September 1,
2001 on the $30.0 million unsecured Senior Notes due September 1, 2007. These
notes may be redeemed at a premium.
The Company maintains a $1.4 million mortgage note which requires full
payment of the then outstanding balance at the end of the initial term (December
1, 2002). Globe expects to renew the note for an additional five-year period at
that date.
From March 1, 1999 through January 7, 2000 Globe used approximately $0.5
million from its line of credit, issued approximately $0.3 million of notes
payable and assumed approximately $0.1 million of certain liabilities in
completing one acquisition and paying certain other consideration on fiscal 1998
and 1999 acquisitions. (See Note 2 to the consolidated financial statements for
further discussion of these acquisitions.)
Other than acquisitions, the Company's principal use of cash is for
furniture purchases. The Company purchases furniture to replace furniture which
has been sold and to maintain adequate levels of rental furniture to meet
existing and new customer needs. Furniture purchases were $15.6 million in the
first nine months of fiscal 2000 and $17.5 million in the first nine months of
fiscal 1999. The lower level of purchases in the first nine months of fiscal
2000 versus the prior year period reflects the lower level of rental sales
revenues. As the Company's growth strategies are implemented, furniture
purchases may increase.
Capital expenditures were $2.1 million and $2.0 million in the first nine
months of fiscal 2000 and 1999, respectively. These expenditures were financed
through cash provided by operations and utilization of the credit facilities.
Expenditures for the first nine months of both fiscal 2000 and fiscal 1999 were
largely attributable to continued development of computer systems. Costs to
further develop the computer systems and support user equipment needs, which are
anticipated to be approximately $1.5 million, will be incurred in the next 3-15
months and are expected to be financed through cash generated by operations.
Remaining capital expenditures are expected to be approximately $1.0 million and
are also expected to be funded by cash generated by operations. Any temporary
cash deficiencies resulting from timing of these expenditures will be funded via
the line of credit.
In the first nine months of fiscal 2000 and 1999, net cash provided by
operations was $19.9 million and $21.6 million, respectively, generating $2.2
million more cash than was necessary to fund investing activities (excluding
acquisitions) in the first nine months of fiscal 2000 and $2.1 million more cash
than was necessary to fund investing activities (excluding acquisitions) in the
first nine months of fiscal 1999.
<PAGE>
Aside from acquisitions, furniture purchases, which have historically been
seasonally weighted to the first half of the fiscal year, are the primary reason
for use of the credit facilities. Any temporary cash deficiencies resulting from
these purchases will be funded via the line of credit. The Company expects cash
flow from operations plus the credit facilities to be sufficient to fund the
Company's needs for the foreseeable future.
YEAR 2000
The Company successfully completed its Year 2000 Remediation Plan and has
not experienced material adverse consequences on its operations resulting from
non-compliance of either its information technology or non-information
technology systems.
To date, Globe has not experienced material adverse consequences related to
the operations of customers or vendors and it does not have a relationship with
any third-party vendor which is material to its operations, nor is it aware of
exposures related to these customer vendors. However, there can be no assurance
that future system failures of other companies on which the Company relies would
not have an adverse impact on Globe's operations. Costs associated with any such
failure cannot be reasonable estimated.
ITEM 3
Quantitative and Qualitative Disclosures About Market Risk
INTEREST RATE RISK
The Company is exposed to interest rate volatility with regard to future
issuances of fixed rate debt and existing issuances of variable rate debt.
Primary exposures include movements in the prime rate, U.S. Treasury Note rates
and LIBOR.
The table below provides information on Globe's significant debt issuances
by expected maturity date. (See Note 5 to the Consolidated Financial Statements
for further information.)
<TABLE>
<CAPTION>
Twelve Months Ended November 30,
---------------------------------------------------------------------------------
(Dollars in thousands) 2000 2001 2002 2003 2004 Thereafter Total
---- ---- ---- ---- ---- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Debt Characteristics:
Unsecured revolving note $35,407 $35,407
Average interest rate 6.89% 6.89%
Unsecured senior note $ 4,285 $4,286 $4,286 $4,286 $12,857 $30,000
Fixed interest rate 7.54% 7.54% 7.54% 7.54% 7.54% 7.54%
Mortgage note $ 71 $ 76 $ 81 $ 86 $ 92 $ 994 $ 1,400
Fixed interest rate 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25%
Other debt issues $924 $ 506 $510 $193 $ 2,133
Average fixed interest rate 5.61% 5.78% 5.77% 5.53% 5.68%
</TABLE>
<PAGE>
PART II
ITEM 1
Legal Proceedings
None
ITEM 2
Changes in Securities
None
ITEM 3
Defaults Upon Senior Securities
None
ITEM 4
Submission of Matters to a Vote of Security Holders
None
ITEM 5
Other Information
The Company announced on January 14, 2000 that it has entered into a
definitive agreement with Equity Residential Properties Trust for the sale of
Globe for $13.00 per share, payable in cash upon closing, and up to an
additional $.50 per share post closing, upon final determination of costs, if
any, relating to any potential breaches on certain representations and
covenants. The agreement must be approved by Globe shareholders and is subject
to customary closing conditions. A copy of the press release is filed herewith
as Exhibit 10.
<PAGE>
ITEM 6
Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Exhibits:
10 Press Release dated January 14, 2000
10.1 Severance Agreement for Sharon G. Kebe
10.2 Severance Agreement for Christopher S. Gruenke
10.3 Severance Agreement for Lyle J. Tomlinson
10.4 Severance Agreement for Louis W. Holliday, Jr.
10.5 Severance Agreement for Cory M. Nye
10.6 Severance Agreement for John H. Roby
10.7 Severance Agreement for George S. Quay IV
27 Financial Data Schedule
99 Safe Harbor Statement
(b) Reports on Form 8-K filed during the third quarter of 2000: None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Globe Business Resources, Inc.
By: /s/Sharon G. Kebe
---------------------------------
Sharon G. Kebe
Senior Vice President-Finance and
Treasurer
(Principal Financial Officer)
Signed: January 14, 2000
CONTACT: Sharon G. Kebe FOR IMMEDIATE RELEASE
(513) 771-8287
GLOBE BUSINESS RESOURCES ANNOUNCES
A DEFINITIVE AGREEMENT FOR SALE OF COMPANY
AND RELEASES THIRD QUARTER EARNINGS
CINCINNATI, January 14, 2000 - Earlier today it was announced that Globe
Business Resources, Inc. (NASDAQ:GLBE) entered into a definitive agreement with
Equity Residential Properties Trust (NYSE:EQR) for the sale of Globe for $13.00
per share (cash) upon closing and up to an additional $.50 per share post
closing, upon final determination of costs, if any, relating to any potential
breaches of certain representations and covenants. The agreement must be
approved by Globe shareholders and is subject to customary closing conditions.
Equity Residential is the largest publicly traded apartment company in America.
Nationwide, Equity Residential owns or has an interest in 1,062 properties in 35
states consisting of 226,152 units.
Globe's principals, Chairman and Chief Executive Officer, David D. Hoguet,
and President and Chief Operating Officer, Blair D. Neller, will retain a
minority interest in Globe and will continue to operate the business. "Equity
Residential's over 225,000 multifamily units and over 750,000 residents offer a
tremendous window of opportunity. We will harvest that opportunity while
continuing to expand our relationships with our corporate customers across the
industry," said Mr. Hoguet. Equity Residential's President and Chief Executive
Officer, Douglas Crocker II, said, "We continue to build on our position as a
leading provider of rental housing across the nation by selectively choosing
opportunities that complement our business. We see tremendous potential for
marketing synergies between Equity Residential and Globe, especially the use of
Globe's 1-800-FOR-RENT(R) reservation system."
Globe reported that for the third quarter of fiscal 2000, which ended
November 30, 1999, diluted earnings per share were 8 cents (16 cents before
nonrecurring items), as compared with 31 cents per share for the quarter ended
November 30, 1998. Diluted earnings per share for the first nine months of
fiscal 2000 were 58 cents (76 cents before nonrecurring items) as compared with
90 cents per share for the first nine months of fiscal 1999.
Revenues of $39.3 million for the third quarter of fiscal 2000 increased 3%
from $38.2 million in the third quarter of fiscal 1999. Revenues for the first
nine months of fiscal 2000 reached $122.6 million, an 11% increase from $110.8
million for the first nine months of fiscal 1999. Corporate housing revenues,
aided by acquisitions, reached $25.6 million and $80.8 million for the third
quarter and first nine months of fiscal 2000, respectively, increases of 11% and
25%, respectively, versus the comparable fiscal 1999 periods.
<PAGE>
Globe Business Resources, Inc., is a leading consolidator in the temporary
relocation industry. Doing business as Globe Corporate Stay International, the
Company is the third largest operator in the corporate housing market, providing
fully furnished short-term housing through an inventory of leased housing units
to relocated, transferred and temporary personnel. Doing business as Globe
Furniture Rentals, the Company is the third largest operator in the rent-to-rent
segment of the furniture rental business renting and selling quality office and
residential furniture to a variety of corporate and individual customers.
# # #
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
SHARON G. KEBE (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the Company's management team,
including the Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained hereinafter, the Company and the Executive
hereby agree as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
<PAGE>
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
<PAGE>
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Sharon G. Kebe
9213 Gourmet Lane
Loveland, Ohio 45140
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2)"Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement) of twenty-five percent (25%) or more of the Company's
<PAGE>
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
<PAGE>
removal of the Executive from, or any failure to reelect the Executive
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company;
<PAGE>
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Sharon G. Kebe
-------------------------------------
SHARON G. KEBE
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
CHRISTOPHER S. GRUENKE (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
<PAGE>
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
<PAGE>
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Christopher S. Gruenke
9971 Honeywood Drive
Cincinnati, Ohio 45241
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1)"Additional Bonus Guidelines" shall mean the method employed by the
Compensation Committee of the Board in determining an Executive's Targeted
Annual Bonus.
(2)"Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement) of twenty-five percent (25%) or more of the Company's
<PAGE>
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
<PAGE>
removal of the Executive from, or any failure to reelect the Executive
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company; (vii) any material breach
by the Company of any provision of this Agreement; or
<PAGE>
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Christopher S. Gruenke
-------------------------------------
CHRISTOPHER S. GRUENKE
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
LYLE J. TOMLINSON (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i)Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
<PAGE>
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
<PAGE>
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Lyle J. Tomlinson
1715 Skyline Drive
Rochester Hills, Michigan 48306
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement) of twenty-five percent (25%) or more of the Company's
<PAGE>
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
removal of the Executive from, or any failure to reelect the Executive
<PAGE>
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company;
<PAGE>
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Lyle J. Tomlinson
-------------------------------------
LYLE J. TOMLINSON
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
LOUIS W. HOLLIDAY, JR. (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
<PAGE>
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
<PAGE>
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Louis W. Holliday, Jr.
662 Scotland Court
Santa Rosa, California 95409
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less than
fifty percent (50%) of the outstanding common shares and fifty percent
(50%) of the voting power of the outstanding shares of the surviving or
resulting corporation are owned, immediately after such consolidation or
merger, by the owners of the Company's common shares immediately prior to
such consolidation or merger; or (y) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended and as in effect on the date of this Agreement (the "Exchange
Act")) shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act, as in effect on the date of this Agreement) of
twenty-five percent (25%) or more of the surviving or resulting
corporation's outstanding common shares, or of twenty-five percent (25%) or
more of the voting power of the outstanding shares of the surviving or
resulting corporation, and (z) in each such case, within two (2) years
after the consummation of such consolidation or merger, individuals who
were directors of the Company immediately prior to the public announcement
of such consolidation or merger cease to constitute a majority of the Board
of Directors of the Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition (in
one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated; or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act, as in effect on the date of this Agreement) shall
become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act, as in effect on the date of this Agreement) of twenty-five
percent (25%) or more of the Company's outstanding common shares, or of
<PAGE>
twenty-five percent (25%) or more of the voting power of the Company's
outstanding shares, and within two (2) years after such person become such
beneficial owner, individuals who were directors of the Company immediately
prior to the public announcement of the transaction pursuant to which such
person became such beneficial owner cease to constitute a majority of the
Board of Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the entire Board of Directors shall
cease for any reason to constitute a majority thereof unless the election
or the nomination for election by the Company's shareholders of each new
director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of three (3) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within sixty (60) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first paragraph of
this Agreement.
(11) "Good Reason" shall mean any of the following (without the Executive's
express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities and
status with the Company immediately prior to a Change in Control of the
Company, or a change in the Executive's titles or offices as in effect
immediately prior to a Change in Control of the Company, or any removal of
<PAGE>
the Executive from, or any failure to reelect the Executive to, any of such
positions, except in connection with the termination of his employment for
Disability, Retirement or Cause or as a result of the Executive's death or
by the Executive other than for Good Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the Annual
Bonus Guidelines, as in effect at the time of a Change in Control of the
Company;
(iii) any failure by the Company to continue in effect any benefit
plan or arrangement (including, without limitation, the Company's
retirement plan, group life insurance plan, and medical, dental, accident
and disability plans) in which the Executive is participating at the time
of a Change in Control of the Company without substituting other plans
providing the Executive with substantially similar benefits (hereinafter
referred to as "Benefit Plans"), or the taking of any action by the Company
which would adversely affect the Executive's participation in, or
materially reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if any)
in which the Executive is participating at the time of a Change in Control
of the Company without substituting other plans or arrangements providing
him with substantially similar benefits (hereinafter referred to as
"Incentive Plans") or the taking of any action by the Company which would
significantly reduce the Executive's opportunity to earn incentive
compensation which is related to performance results as compared to
performance expectations periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to a
location more than fifty (50) miles from 11260 Chester Road, Cincinnati
(Sharonville), Ohio, or the Executive's relocation to any place other than
the location at which the Executive performed the Executive's duties
immediately prior to a Change in Control of the Company, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations
at the time of a Change in Control of the Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the time
of a Change in Control of the Company;
<PAGE>
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section 6.1
hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however,
a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportion as their ownership of
stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have bee
satisfied:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to take
or to consider taking actions which, if consummated, would constitute a
Change in Control;
(iii) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(15) "Severance Payments" shall mean those payments described in Section
5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at the
annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Louis W. Holliday, Jr.
-------------------------------------
LOUIS W. HOLLIDAY, JR.
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
CORY M. NYE (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
<PAGE>
Company is terminated following a Change in Control and during the term of this
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
<PAGE>
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
<PAGE>
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
Cory M. Nye
19602 S.E. 9th Circle
Camas, Washington 98607
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2)"Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement) of twenty-five percent (25%) or more of the Company's
<PAGE>
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
<PAGE>
removal of the Executive from, or any failure to reelect the Executive
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company; (vii) any material breach
by the Company of any provision of this Agreement; or
<PAGE>
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/Cory M. Nye
-------------------------------------
CORY M. NYE
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
JOHN ROBY (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
<PAGE>
to this Section 5.1(ii) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
<PAGE>
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
John Roby
130 Lantern Lane
Plain City, Ohio 43064
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1)"Additional Bonus Guidelines" shall mean the method employed by the
Compensation Committee of the Board in determining an Executive's Targeted
Annual Bonus.
(2)"Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
<PAGE>
Agreement) of twenty-five percent (25%) or more of the Company's
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
removal of the Executive from, or any failure to reelect the Executive
<PAGE>
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company;
<PAGE>
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/John Roby
-------------------------------------
JOHN ROBY
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") dated as of June 24, 1999 is made
between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the "Company"), and
GEORGE S. QUAY, IV (the "Executive").
R E C I T A L S:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined hereunder) of the Company exists; and,
WHEREAS, the Board has, after due deliberation, determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of key members of the Company's management team, including the
Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained hereinafter, the Company and the Executive hereby agree
as follows:
1. Defined Terms. Certain capitalized terms used in this Agreement have the
meanings respectively ascribed thereto in Section 17 hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000. Commencing on January 1,
2001 and each January 1st thereafter, the term of this Agreement shall
automatically be extended for one (1) additional year unless, not later than
November 30th preceding that January 1st, the Company or the Executive shall
have given notice not to extend this Agreement or a Change in Control shall have
occurred prior to such January 1st; provided, however, if a Change in Control
shall have occurred during the term of this Agreement, this Agreement shall
continue in effect for a period of not less than twelve (12) months beyond the
date on which such Change in Control occurred. For the avoidance of doubt and as
an illustration only, if a Change of Control occurred on June 30, 2000, this
Agreement would remain in effect through June 30, 2001 irrespective of whether
or not the Company gave notice not to extend this Agreement past December 31,
2000.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the "Severance Payments"
described in Section 5.1 hereof in the event the Executive's employment with the
Company is terminated following a Change in Control and during the term of this
<PAGE>
Agreement. No amount or benefit shall be payable under this Agreement unless
there shall have been (or, under the terms hereof, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control. This Agreement shall not be construed as creating an express
or implied contract of employment prior to the date of a Change in Control and
the Executive shall not have any right to be retained in the employ of the
Company but shall remain an employee at-will.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event a Potential Change in
Control occurs or arises during the term of this Agreement, the Executive will
remain in the employ of the Company until the earliest of (a) a date which is
six (6) months from the date of such Potential Change of Control, (b) the date
of a Change in Control, (c) the date the Executive's employment with the Company
terminates by reason of the Executive's death or Disability, or (d) the
termination by the Company of the Executive's employment for any reason.
5. Severance Payments.
5.1 The Company shall pay the Executive the payments described in this
Section 5.1 ("Severance Payments") upon the termination of the Executive's
employment following a Change in Control during the term of this Agreement,
including the Executive's termination of employment for Good Reason, unless
such termination is (a) by the Company for Cause, or (b) by reason of the
Executive's Death or Disability. The Executive's employment shall be deemed
to have been terminated following a Change in Control by the Company
without Cause if the Executive's employment is terminated prior to a Change
in Control without Cause at the direction (or action which constitutes a
direction) of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination,
the Company shall make a lump sum or monthly, at the Executive's
option, cash severance payment to the Executive in an amount equal to:
(x) the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or in effect immediately prior to the Change in
Control; and (y) a pro-rated portion of Executive's Targeted Annual
Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
medical and dental insurance benefits substantially similar to those
that the Executive is receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant
to this Section 5.1(ii) shall be reduced to the extent comparable
<PAGE>
benefits are actually received by or made available to the Executive
without cost during the twelve (12) month period following the
Executive's termination of employment (and any such benefits actually
received by the Executive shall be reported to the Company by the
Executive).
5.2 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing the non-payment of
Severance Payments in connection with a termination which entitles the
Executive to Severance Payments. Such payments shall be made within five
(5) business days after delivery of the Executive's written request for
payment accompanied with such evidence of fees and expenses incurred as the
Company reasonably may require.
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control and during the
term of this Agreement, any termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance
with Section 12 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
6.2 Date of Termination. "Date of Termination", with respect to any
termination of the Executive's employment after a Change in Control during
the term of this Agreement, shall mean:
(a) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of
the Executive's duties during such thirty (30) day period), and
(b) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the
case of a termination by the Company, shall not be less than thirty
(30) days after the date the Notice of Termination is given (except in
the case of a termination for Cause)).
7. No Mitigation. The Company agrees that, if the Executive's employment by
the Company is terminated following a Change in Control and during the term of
this Agreement, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company
pursuant to Section 5. Further, the amount of any payment or benefit provided
for in Section 5 (other than Section 5.1(ii) ) shall not be reduced by any
<PAGE>
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
8. Non-Disclosure Covenant. In the performance of his or her duties for the
Company, Executive has had, and will continue to have, access to Confidential
Information (as defined below) of the Company. Executive acknowledges that the
Confidential Information obtained or developed in the course of employment with
the Company remains the property of the Company. Executive acknowledges that the
Company has invested substantial sums in the development of the Company's
Confidential Information.
As used herein, the term "Confidential Information" shall mean any written
or unwritten information which specifically relates to and/or is used in the
Company's interim corporate housing or furniture rental business (the
"Business") (including without limitation, the services, processes, designs,
plans, methods of operation, developments, financial information, market
information or plans in development, trade secrets, know-how, and the customers,
suppliers and others with whom the Company does or has in the past done
business, regardless of when and by whom such information was developed or
acquired) which the Company deems confidential and proprietary, which is
generally not known to the public and which gives or tends to give the Company a
competitive advantage over persons who do not possess such information;
provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or information
which the Executive has lawfully acquired from a source other than the Company.
The Executive acknowledges that the Confidential Information is novel,
proprietary to and of considerable value to the Company.
During his or her employment with the Company and after the Date of
Termination, Executive covenants and agrees that the Executive will not,
directly or indirectly, disclose or communicate to any person or entity any
Confidential Information of the Company ("Non-Disclosure Covenant"). Subject to
applicable law, this Non-Disclosure Covenant has no geographic or territorial
restriction or limitation and applies no matter where the Executive may be
located in the future. Nothing in this Agreement shall be deemed to be in
derogation of the Company's rights under federal and state laws and decisions
with respect to trade secrets or unfair competition.
9. Non-Solicitation Covenant. The Executive agrees that for a period of
twelve (12) months following the Date of Termination, the Executive will not,
either for his or her account or for or through any other person, firm or
corporation, directly or indirectly,: (i) call on, solicit or communicate with
any person who or that was a customer of the Company during the term of this
Agreement, for the purpose of soliciting interim corporate housing or furniture
rental business for someone other than the Company or a Company affiliate; or
(ii) solicit for employment with any other person, firm or corporation any
person who is or was an employee of the Company as of the Date of Termination.
<PAGE>
10. Breach of Non-Disclosure or Non-Solicitation Covenant. In the event the
Executive, directly or indirectly, breaches, violates or fails to fully perform
his or her obligations under Sections 8 or 9, Executive acknowledges and agrees
that each such breach will cause immediate and irreparable harm to the Company
in a manner that cannot be measured nor adequately compensated in damages.
The Executive has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Agreement, and hereby acknowledges and agrees that the same are
reasonable with respect to duration and geographical area, are designed to
protect the legitimate business interests of the Company, and do not confer
benefits upon the Company disproportionate to the detriment to the Executive.
The Executive agrees that, in the event any court of competent jurisdiction
determines that the above covenants are invalid or unenforceable, to join with
the Company in requesting the court to construe or modify the applicable
provision by limiting or reducing it so as to be enforceable to the extent
compatible with applicable law.
The Company and the Executive further agree that in the event of any such
breach and in addition to any and all other remedies that it may have at law or
in equity, the Company shall be entitled to temporary, preliminary and permanent
injunctive relief to restrain such breach by Executive, and to all costs and
expenses, including reasonable attorneys' fees, of any proceedings brought to
obtain such injunctive relief. Executive agrees to waive any objection to or
defense in respect of the geographical scope and duration of the covenants as
set forth in Sections 8 and 9 hereof. Nothing contained in this Section 10 shall
restrict or limit in any manner, the Company's right to seek and obtain any form
of relief, legal or equitable, in an action brought to enforce its rights
hereunder.
11. Successors; Binding Agreement.
11.1 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. In any event this Agreement shall be binding
upon the Company and any successors or assignee.
11.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
<PAGE>
12. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered in hand or when delivered or
mailed by United States certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Globe Business Resources, Inc.
11260 Chester Road, Suite 400
Cincinnati, Ohio 45246
Attention: Chairman
To the Executive:
George S. Quay, IV
9530 E. Desert Cove Avenue
Scottsdale, Arizona 85260
13. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer, as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The laws of
the State of Ohio shall govern the validity, interpretation, construction and
performance of this Agreement and the Agreement shall be an instrument under
seal. All references to sections of the Exchange Act shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under Federal
or local law and Any additional withholding to which the Executive has agreed.
The obligations of the Company and the Executive under Sections 4, 5, 6 and 16
shall survive the expiration of the term of this Agreement.
14. Validity. The invalidity or unenforceability or any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. In addition, if
any provision of this Agreement is held invalid or unenforceable by a court of
competent jurisdiction, then such provision shall be deemed modified to the
extent necessary to enable such provision to be valid and enforceable.
<PAGE>
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Settlement of Disputes; Arbitration. All claims by Executive for
benefits under this Agreement shall be directed to the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been denied. Other than
disputes under, or actions to enforce, the provisions of Section 8 or Section 9
hereof, which may be litigated in a court of competent jurisdiction, any further
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Cincinnati, Ohio in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall also be entitled to seek specific performance
of the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement in such arbitration or by a proceeding in a federal or state court in
Hamilton County, Ohio.
17. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(1) "Additional Bonus Guidelines" shall mean the method employed by
the Compensation Committee of the Board in determining an Executive's
Targeted Annual Bonus.
(2) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(3) "Board" shall mean the Board of Directors of the Company.
(4) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other
than any such failure resulting from the Executive's incapacity due to
physical or mental illness, or any such actual or anticipated failure
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, or
<PAGE>
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company.
(5) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less
than fifty percent (50%) of the outstanding common shares and fifty
percent (50%) of the voting power of the outstanding shares of the
surviving or resulting corporation are owned, immediately after such
consolidation or merger, by the owners of the Company's common shares
immediately prior to such consolidation or merger; or (y) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended and as in effect on the date of this
Agreement (the "Exchange Act")) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act, as in effect
on the date of this Agreement) of twenty-five percent (25%) or more of
the surviving or resulting corporation's outstanding common shares, or
of twenty-five percent (25%) or more of the voting power of the
outstanding shares of the surviving or resulting corporation, and (z)
in each such case, within two (2) years after the consummation of such
consolidation or merger, individuals who were directors of the Company
immediately prior to the public announcement of such consolidation or
merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated;
or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, as in effect on the date of this
Agreement) shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
<PAGE>
Agreement) of twenty-five percent (25%) or more of the Company's
outstanding common shares, or of twenty-five percent (25%) or more of
the voting power of the Company's outstanding shares, and within two
(2) years after such person become such beneficial owner, individuals
who were directors of the Company immediately prior to the public
announcement of the transaction pursuant to which such person became
such beneficial owner cease to constitute a majority of the Board of
Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period.
(6) "Company" shall mean Globe Business Resources, Inc., an Ohio
corporation and its successors and assigns.
(7) "Date of Termination" shall have the meaning stated in Section 6.2
hereof.
(8) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of three (3) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability, and,
within sixty (60) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.
(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(10) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(11) "Good Reason" shall mean any of the following (without the
Executive's express written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control
of the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
removal of the Executive from, or any failure to reelect the Executive
<PAGE>
to, any of such positions, except in connection with the termination
of his employment for Disability, Retirement or Cause or as a result
of the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive's base salary or
Targeted Annual Bonus, or a change detrimental to Executive in the
Annual Bonus Guidelines, as in effect at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the
Company's retirement plan, group life insurance plan, and medical,
dental, accident and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company
without substituting other plans providing the Executive with
substantially similar benefits (hereinafter referred to as "Benefit
Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in, or materially
reduce the Executive's benefits under, any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if
any) in which the Executive is participating at the time of a Change
in Control of the Company without substituting other plans or
arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any
action by the Company which would significantly reduce the Executive's
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company;
(v) a relocation of the Company's principal executive offices to
a location more than fifty (50) miles from 11260 Chester Road,
Cincinnati (Sharonville), Ohio, or the Executive's relocation to any
place other than the location at which the Executive performed the
Executive's duties immediately prior to a Change in Control of the
Company, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations at the time of a Change in Control of the
Company;
(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at the
time of a Change in Control of the Company;
<PAGE>
(vii) any material breach by the Company of any provision of this
Agreement; or
(viii) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.
(12) "Notice of Termination" shall have the meaning stated in Section
6.1 hereof.
(13) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include:
(i) the Company,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or
(iii) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportion as
their ownership of stock of the Company.
(14) "Potential Change in Control", shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall
have bee satisfied:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(15) "Severance Payments" shall mean those payments described in
Section 5.1 hereof.
(16) "Targeted Annual Bonus" shall mean the bonus established for the
Executive pursuant to the Annual Bonus Guidelines for that fiscal year at
the annual April meeting of the Board's Compensation Committee.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective
as of the date and year first above written.
GLOBE BUSINESS RESOURCES, INC.,
an Ohio corporation
By: /s/David D. Hoguet
----------------------------------
Name: David D. Hoguet
Title: Chairman
/s/George S. Quay, IV
-------------------------------------
GEORGE S. QUAY, IV
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-2000
<PERIOD-END> NOV-30-1999
<CASH> 2,390
<SECURITIES> 0
<RECEIVABLES> 15,335
<ALLOWANCES> 1,126
<INVENTORY> 54,695
<CURRENT-ASSETS> 0
<PP&E> 17,091
<DEPRECIATION> 8,371
<TOTAL-ASSETS> 134,771
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0
0
<COMMON> 24,058
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 134,771
<SALES> 11,966
<TOTAL-REVENUES> 122,599
<CGS> 7,668
<TOTAL-COSTS> 114,202
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,634
<INCOME-PRETAX> 4,779
<INCOME-TAX> 1,950
<INCOME-CONTINUING> 2,829
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</TABLE>
GLOBE BUSINESS RESOURCES, INC.
EXHIBIT 99 - SAFE HARBOR
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
from civil litigation in many instances for forward-looking statements. In order
to take advantage of the Act, such statements must be accompanied by meaningful
cautionary statements that identify important factors that could cause actual
results to differ materially from those that might be projected. This exhibit to
the Registrant's Form 10-Q is being filed in order to allow the Registrant to
take advantage of the new provisions of this Act by providing the following
cautionary statements:
Risk Factors Affecting Globe
Globe's business operations and strategy are subject to a number of
uncertainties and risks which could adversely affect its performance in the
future. Among these are the following factors:
Globe's principal growth strategy depends on the acquisition of other
companies in the corporate housing and furniture rental businesses. Although
previous acquisitions have been successful to date, there can be no assurance
that any additional acquisitions will be consummated or that, if acquisitions
are consummated, they will be successful. Acquisitions require a significant
commitment of corporate resources, management attention and capital which, in
certain cases, could exceed that available to Globe. Additionally, Globe could
experience unexpected costs and operational difficulties in integrating acquired
businesses.
There can be no assurances that Globe will be able to maintain large
customer contracts, enter into new contracts, or increase market share by
expanding into new markets in the future.
Globe depends on the continued availability of an adequate supply of
corporate housing units in its markets. There can be no assurances that Globe
will be able to obtain the necessary units and lease terms to match customer
demand.
Many of Globe's competitors have greater financial and other resources than
Globe. These resources could give them an advantage in price and service areas.
Several of Globe's furniture rental customers compete with Globe in its
corporate housing business. As Globe expands in the corporate housing area, it
may continue to lose furniture rental business from those competitors.
Globe is dependent on its computer systems in its daily operations. In
addition, Globe is developing and implementing a comprehensive corporate housing
business information system. Significant time or cost overruns, in excess of the
anticipated $0.6 million in nonrecurring consulting fees, on this system
development and implementation or unidentified deficiencies in other Globe
systems could have a material adverse affect on Globe's operations.
Globe also depends on continuing lines of credit to fund its operations,
including furniture purchases. Any interruption of current lines of credit could
have a material adverse affect on Globe if it were unable to obtain additional
financing.
While Globe has not experienced any negative effects resulting from Year
2000 non-compliance of either its own operations or the operations of customers
or vendors and it does not have a relationship with any third-party vendor which
is material to its operations, there can be no assurance that all possible
exposures have been addressed or that future failures would not have an adverse
impact on Globe's operations. Costs associated with any such failure cannot be
reasonably estimated.
<PAGE>
GLOBE BUSINESS RESOURCES, INC. EXHIBIT 99 - SAFE HARBOR - CONTINUED
The Company believes that the industry it serves is significantly
influenced by economic conditions generally and by levels of job creation,
relocations of employees and general business activity. A prolonged economic
downturn could have a material adverse affect on Globe's operations.
