CHANGE IN CONTROL SEVERANCE
AGREEMENT                                Exhibit 10.2

 

THIS AGREEMENT is entered into as of this 15th day of September 2008, by and
between Gevity HR, Inc., a Florida corporation (the "Company"), and Michael J.
Lavington ("Executive").

W I T N E S S E T H

 

WHEREAS, the Company considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the best interests
of the Company and its stockholders; and

WHEREAS, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may arise and that such
possibility may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and

WHEREAS, the Board (as defined in Section 1) has determined that it is in the
best interests of the Company and its stockholders to secure Executive's
continued services and to ensure Executive's continued dedication to his duties
in the event of any threat or occurrence of a Change in Control (as defined in
Section 1) of the Company; and

WHEREAS, the Board has authorized the Company to enter into this Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:

1.        Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below:

 

(a)

"Board" means the Board of Directors of the Company.

(b)       "Bonus Amount" means the greater of (i) the average annual incentive
bonus earned by Executive from the Company (or its affiliates) during the last
three (3) completed fiscal years of the Company immediately preceding
Executive's Date of Termination (annualized in the event Executive was not
employed by the Company (or its affiliates) for the whole of any such fiscal
year), and (ii) the Executive's target annual incentive bonus for the year in
which the Date of Termination occurs.

(c)       "Cause" means (i) the willful and continued failure of Executive to
perform substantially his duties with the Company (other than any such failure
resulting from Executive's incapacity due to physical or mental illness or any
such failure subsequent to Executive being delivered a Notice of Termination
without Cause by the Company or delivering a Notice of Termination for Good
Reason to the Company) after a written demand for substantial

 

 

 

 

performance is delivered to Executive by the Board which specifically identifies
the manner in which the Board believes that Executive has not substantially
performed Executive's duties, or (ii) the willful engaging by Executive in
illegal conduct or gross misconduct which is demonstrably and materially
injurious to the Company or its affiliates. For purpose of this paragraph (c),
no act or failure to act by Executive shall be considered "willful", unless done
or omitted to be done by Executive in bad faith and without reasonable belief
that Executive's action or omission was in the best interests of the Company or
its affiliates. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board, based upon the advice of counsel for
the Company or upon the instructions of the Company's chief executive officer or
another senior officer of the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best interests of
the Company. Cause shall not exist unless and until the Company has delivered to
Executive a copy of a resolution duly adopted by three-quarters (3/4) of the
entire Board (excluding Executive if Executive is a Board member) at a meeting
of the Board called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with counsel, to be heard
before the Board), finding that in the good faith opinion of the Board an event
set forth in clauses (i) or (ii) has occurred and specifying the particulars
thereof in detail.

 

(d)

"Change in Control" means the occurrence of any one of the following events:

(i)        individuals who, on the date hereof, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the date
hereof, whose election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;

(ii)       any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the "Company Voting Securities"); provided,
however, that the event described in this paragraph (ii) shall not be deemed to
be a Change in Control by virtue of any of the following acquisitions: (A) by
the Company or any Subsidiary, (B) by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary, (C) by any
underwriter temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a

 

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Non-Qualifying Transaction (as defined in paragraph (iii)), or (E) unless
otherwise approved by the Board, pursuant to any acquisition by Executive or any
group of persons including Executive (or any entity controlled by Executive or
any group of persons including Executive);

(iii)      the consummation of a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's stockholders, whether
for such transaction or the issuance of securities in the transaction (a
"Business Combination"), unless immediately following such Business Combination:
(A) more than 50% of the total voting power of (x) the corporation resulting
from such Business Combination (the "Surviving Corporation"), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the "Parent Corporation"), is
represented by Company Voting Securities that were outstanding immediately prior
to such Business Combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 25%
or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Business Combination were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or

(iv)      the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or a sale of all or substantially all of the
Company's assets.

Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 25% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided that, if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.

 

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(e)         "Date of Termination" means (1) the effective date on which
Executive's employment by the Company terminates as specified in a prior written
notice by the Company or Executive, as the case may be, to the other, delivered
pursuant to Section 10 or (2) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.

(f)         "Disability" means termination of Executive's employment by the
Company due to Executive's absence from Executive's duties with the Company on a
full-time basis for at least one hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness.

(g)       "Good Reason" means, without Executive's express written consent, the
occurrence of any of the following events after a Change in Control:

(i)        (A) any change in the duties or responsibilities (including reporting
responsibilities) of Executive that is inconsistent in any material and adverse
respect with Executive's position(s), duties, responsibilities or status with
the Company immediately prior to such Change in Control (including any material
and adverse diminution of such duties or responsibilities) or (B) a material and
adverse change in Executive's titles or offices (including, if applicable,
membership on the Board) with the Company as in effect immediately prior to such
Change in Control;

(ii)       a reduction by the Company in Executive's rate of annual base salary
or annual target bonus opportunity (including any material and adverse change in
the formula for such annual bonus target) as in effect immediately prior to such
Change in Control or as the same may be increased from time to time thereafter;

(iii)      any requirement of the Company that Executive (A) be based anywhere
more than fifty (50) miles from the office where Executive is located at the
time of the Change in Control or (B) travel on Company business to an extent
substantially greater than the travel obligations of Executive immediately prior
to such Change in Control;

(iv)      the failure of the Company to (A) continue in effect any employee
benefit plan, compensation plan, welfare benefit plan or material fringe benefit
plan in which Executive is participating immediately prior to such Change in
Control or the taking of any action by the Company which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits in the aggregate (at substantially
equivalent cost with respect to welfare benefit plans), or (B) provide Executive
with paid vacation in accordance with the most favorable vacation policies of
the Company (and its affiliated companies) as in effect for Executive
immediately prior to such Change in Control, including the crediting of all
service for which Executive had been credited under such vacation policies prior
to the Change in Control;

 

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(v)       any purported termination of Executive's employment which is not
effectuated pursuant to Section 10(b) (and which will not constitute a
termination hereunder); or

(vi)      the failure of the Company to obtain the assumption agreement from any
successor as contemplated in Section 9(b).

An isolated, insubstantial and inadvertent action taken in good faith and which
is remedied by the Company within ten (10) days after receipt of notice thereof
given by Executive shall not constitute Good Reason. Executive's right to
terminate employment for Good Reason shall not be affected by Executive's
incapacities due to mental or physical illness and Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any event or condition constituting Good Reason; provided, however, that
Executive must provide notice of termination of employment within ninety (90)
days following Executive's knowledge of an event constituting Good Reason or
such event shall not constitute Good Reason under this Agreement.

 

(h)       "Qualifying Termination" means a termination of Executive's employment
(i) by the Company other than for Cause or (ii) by Executive for Good Reason.
Termination of Executive's employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination.

(i)        "Retirement" means Executive's mandatory retirement (not including
any mandatory early retirement) in accordance with the Company's retirement
policy generally applicable to its salaried employees, as in effect immediately
prior to the Change in Control, or in accordance with any retirement arrangement
established with respect to Executive with Executive's written consent.

(j)        "Subsidiary" means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets or liquidation or dissolution.

(k)       "Termination Period" means the period of time beginning with a Change
in Control and ending two (2) years following such Change in Control.
Notwithstanding anything in this Agreement to the contrary, if (i) Executive's
employment is terminated prior to a Change in Control for reasons that would
have constituted a Qualifying Termination if they had occurred following a
Change in Control; (ii) Executive reasonably demonstrates that such termination
(or Good Reason event) was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change in Control;
and (iii) a Change in Control involving such third party (or a party competing
with such third party to effectuate a Change in Control) does occur, then for
purposes of this Agreement, the date immediately prior to the date of such
termination of employment or event constituting Good Reason shall be treated as
a Change in

 

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Control. For purposes of determining the timing of payments and benefits to
Executive under Section 4, the date of the actual Change in Control shall be
treated as Executive's Date of Termination under Section 1(e).

2.         Obligation of Executive. In the event of a tender or exchange offer,
proxy contest, or the execution of any agreement which, if consummated, would
constitute a Change in Control, Executive agrees not to voluntarily leave the
employ of the Company, other than as a result of Disability or an event which
would constitute Good Reason if a Change in Control had occurred, until the
Change in Control occurs or, if earlier, such tender or exchange offer, proxy
contest, or agreement is terminated or abandoned.

3.         Term of Agreement. This Agreement shall be effective on the date
hereof and shall continue in effect until the Company shall have given three (3)
years' written notice of cancellation; provided that, notwithstanding the
delivery of any such notice, this Agreement shall continue in effect for a
period of two (2) years after a Change in Control, if such Change in Control
shall have occurred during the term of this Agreement. Notwithstanding anything
in this Section to the contrary, this Agreement shall terminate if Executive or
the Company terminates Executive's employment prior to a Change in Control
except as provided in Section l(k).

 

4.

Payments Upon Termination of Employment.

(a)       Qualifying Termination. If during the Termination Period the
employment of Executive shall terminate pursuant to a Qualifying Termination,
then the Company shall provide to Executive:

(i)        within five (5) days following the Date of Termination, a lump-sum
cash amount equal to the sum of (A) Executive’s base salary through the Date of
Termination and any bonus amounts which have become payable, to the extent no
theretofore paid or deferred, and (B) any accrued vacation pay, to the extent
not theretofore paid; plus

(ii)       on the first business day which is six (6) months and one (1) day
after Executive separates from service (within the meaning of Section 409A of
the Internal Revenue Code (“Code”)), a lump sum cash amount equal to a pro rata
portion of Executive’s annual bonus for the fiscal year in which Executive’s
Date of Termination occurs, which portion shall at least be equal to (A)
Executive’s Bonus Amount, multiplied by (B) a fraction, the numerator of which
is the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred
sixty-five (365), and reduced by (C) any amounts paid from the Company’s annual
incentive plan for the fiscal year in which Executive’s Date of Termination
occurs; plus

(iii)      on the first business day which is six (6) months and one (1) day
after Executive separates from service (within the meaning of Section 409A of
the Code, a lump-sum cash amount equal to (A)three (3) times Executive’s highest
annual rate of

 

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base salary during the 12-month period immediately prior to Executive’s Date of
Termination, plus (B) three (3) times Executive’s Bonus Amount.

(iv)      in addition to the payments set forth in Sections 4 (a)(i), (ii) and
(iii) as well as Section 5, any stock incentives (as defined in the stock
incentive plans maintained by the Company) that have been awarded to Executive
under the terms of the stock incentive plans maintained by the Company shall
fully vest upon the occurrence of a Change in Control, as such term is defined
in Section 1(d) with 50% substituted for 25% in Section 1(d)(ii) (whether or not
a Qualifying Termination has occurred) and all other terms and conditions of any
such stock incentive award shall remain in effect to the extent not inconsistent
with the provisions of this Section 4(a)(iv).

(b)       If during the Termination Period the employment of Executive shall
terminate pursuant to a Qualifying Termination, the Company shall continue to
provide, for a period of three (3) years following Executive's Date of
Termination, Executive (and Executive's dependents, if applicable) with the same
level of medical, dental, accident, disability and term life insurance benefits
upon substantially the same terms and conditions (including contributions
required by Executive for such benefits) as existed immediately prior to
Executive's Date of Termination (or, if more favorable to Executive, as such
benefits and terms and conditions existed immediately prior to the Change in
Control); provided that, if Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on the same after-tax basis as if continued participation had been
permitted. Notwithstanding the foregoing, in the event Executive becomes
reemployed with another employer and becomes eligible to receive welfare
benefits from such employer, the welfare benefits described herein shall be
secondary to such benefits during the period of Executive's eligibility, but
only to the extent that the Company reimburses Executive for any increased cost
and provides any additional benefits necessary to give Executive the benefits
provided hereunder. Any medical or dental coverage provided under this Section
4(b) shall be in addition to any rights Executive has under Part 6 of Title 1 of
ERISA.

(c)       If during the Termination Period the employment of Executive shall
terminate other than by reason of a Qualifying Termination, then the Company
shall pay to Executive within thirty (30) days following the Date of
Termination, a lump-sum cash amount equal to the sum of (1) Executive's base
salary through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred, and (2) any accrued
vacation pay, in each case to the extent not theretofore paid. The Company may
make such additional payments, and provide such additional benefits, to
Executive as the Company and Executive may agree in writing.

 

5.

Certain Additional Payments by the Company.

(a)       Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment, award, benefit or distribution
(or any acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any

 

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entity which effectuates a Change in Control (or any of its affiliated entities)
to or for the benefit of Executive (whether pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 5) (the "Payments") would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Company shall pay to Executive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Executive of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b)       Subject to the provisions of Section 5(a), all determinations required
to be made under this Section 5, including whether and when a Gross-Up Payment
is required, the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior
to the Change in Control (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive within fifteen
(15) business days of the receipt of notice from the Company or the Executive
that there has been a Payment, or such earlier time as is requested by the
Company (collectively, the "Determination"). In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Executive may appoint another nationally
recognized public accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely
by the Company and the Company shall enter into any agreement requested by the
Accounting Firm in connection with the performance of the services hereunder.
The Gross-up Payment under this Section 5 with respect to any Payments shall be
made no later than thirty (30) days following such Payment; provided, however,
in no event shall such payment be made earlier than six (6) months and one (1)
day after Executive separates from service (within the meaning of Section 409A
of the Code). If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such effect, and
to the effect that failure to report the Excise Tax, if any, on Executive's
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. The Determination by the Accounting Firm shall be
binding upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination, it is
possible that Gross-up Payments which will not have been made by the Company
should have been made ("Underpayment") or Gross-up Payments are made by the
Company which should not have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that the Executive
thereafter is required to make payment of any Excise Tax or additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to
or for the benefit of Executive. In the event the amount of the Gross-up Payment
exceeds the amount necessary to reimburse the Executive for his Excise Tax, the
Accounting Firm shall determine

 

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the amount of the Overpayment that has been made and any such Overpayment
(together with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive (to the extent he has received a refund if
the applicable Excise Tax has been paid to the Internal Revenue Service) to or
for the benefit of the Company. Executive shall cooperate, to the extent his
expenses are reimbursed by the Company, with any reasonable requests by the
Company in connection with any contests or disputes with the Internal Revenue
Service in connection with the Excise Tax.

6.         Withholding Taxes. The Company may withhold from all payments due to
Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.

7.         Reimbursement of Expenses. If any contest or dispute shall arise
under this Agreement involving termination of Executive's employment with the
Company or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall pay directly or reimburse
Executive, on a current basis, for all reasonable legal fees and expenses, if
any, incurred by Executive in connection with such contest or dispute
(regardless of the result thereof), together with interest in an amount equal to
the prime rate of the Chase Manhattan Bank, N.A., from time to time in effect,
but in no event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives Executive's
statement for such fees and expenses through the date of payment thereof,
regardless of whether or not Executive's claim is upheld by a court of competent
jurisdiction/arbitration panel. Any payments or reimbursement under this Section
7 shall be paid on the first business day which is six (6) months and one (1)
day after Executive has a “separation from service” under Section 409A of the
Code. To the extent fees, expenses or interest are incurred after such date, the
Company shall pay or reimburse such fees, expenses and interest pursuant to this
Section 7 (to the extent not previously paid or reimbursed) on the first
business day of each month following such date. However, no payments or
reimbursements shall be made under this Section 7 after the third anniversary of
the date the last applicable statute of limitations has run with respect to the
claims which are the subject of the contest or dispute.

8.         Scope of Agreement. Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with the Company or its Subsidiaries,
and if Executive's employment with the Company shall terminate prior to a Change
in Control, Executive shall have no further rights under this Agreement (except
as otherwise provided hereunder); provided, however, that any termination of
Executive's employment during the Termination Period shall be subject to all of
the provisions of this Agreement.

 

9.

Successors: Binding Agreement.

(a)       This Agreement shall not be terminated by any Business Combination. In
the event of any Business Combination, the provisions of this Agreement shall be
binding upon the Surviving Corporation, and such Surviving Corporation shall be
treated as the Company hereunder.

 

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(b)       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 unconditionally to assume expressly and
agree to perform this Agreements in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
As used in this Agreement, "Company" means the Company has hereinbefore defined,
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise. Failure of
the Company to obtain such assumption prior to the effectiveness of any such
succession that constitutes a Change in Control, shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle Executive
to compensation and other benefits from the Company in the same amount and on
the same terms as Executive would be entitled hereunder if Executive's
employment were terminated following a Change in Control by reason of a
Qualifying Termination. For purposes of implementing the foregoing, the date on
which any such Business Combination becomes effective shall be deemed the date
Good Reason occurs, and shall be the Date of Termination if requested by
Executive.

(c)       This Agreement is personal to the Executive and without the express
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution, and any such
purported assignment shall be void. This Agreement shall inure to the benefit of
and be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.

 

10.

Notice.

(a)         For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered or five (5) days after deposit in the United
States mail, certified and return receipt requested, postage prepaid, addressed
as follows:

 

(b)

If to the Executive:

 

Michael J. Lavington

 

10590 Copper Lake Drive

 

Bonita Springs, FL 34135

 

 

If to the Company:

 

Gevity HR, Inc.

 

9000 Town Center Parkway

 

Bradenton, FL 34202

 

Attn: General Counsel

 

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herewith, except that notices of change of address shall be effective only upon
receipt.

 

(c)       A written notice of Executive's Date of Termination by the Company or
Executive, as the case may be, to the other, shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specify the termination date (which date shall be not
less than fifteen (15) (thirty (30), if termination is by the Company for
Disability) nor more than sixty (60) days after the giving of such notice). The
failure by Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of Executive or the Company hereunder or preclude Executive or
the Company from asserting such fact or circumstance in enforcing Executive's or
the Company's rights hereunder.

11.       Full Settlement; Resolution of Disputes. The Company's obligation to
make any payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall be in lieu and in full settlement of all other
severance payments to Executive under any other severance or employment
agreement between Executive and the Company, and any severance plan of the
Company. The Company's obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b), such amounts shall not be reduced
whether or not Executive obtains other employment.

12.       Employment with Subsidiaries. Employment with the Company for purposes
of this Agreement shall include employment with any Subsidiary.

13.       Survival. The respective obligations and benefits afforded to the
Company and Executive as provided in Sections 4 (to the extent that payments or
benefits are owed as a result of a termination of employment that occurs during
the term of this Agreement), 5 (to the extent that Payments are made to
Executive as a result of a Change in Control that occurs during the term of this
Agreement), 6, 7, 9(c) and 11 shall survive the termination of this Agreement.

14.       GOVERNING LAW. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO THE PRINCIPLE
OF CONFLICTS OF LAWS.

15.       Severability. The invalidity, illegality or unenforceability of any
provision of this Agreement shall not affect the validity, legality or
enforceability of any other provision of this Agreement, which other provisions
shall remain in full force and effect. If the effect of a final

 

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and unappealable holding or finding that any such provision is either invalid,
illegal or unenforceable is to modify to the Executive's detriment, reduce or
eliminate any compensation, reimbursement, payment, allowance or other benefit
to the Executive intended by the Company and Executive in entering into this
Agreement, the Company shall promptly negotiate and enter into an agreement with
the Executive containing alternative provisions (reasonably acceptable to the
Executive) that will restore to the Executive (to the extent legally
permissible) substantially the same economic, substantive and income tax
benefits the Executive would have enjoyed had any such provision of this
Agreement been upheld as valid, legal and enforceable.

16.       Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.

 

17.

Miscellaneous.

(a)       No provision of this Agreement may be modified or waived unless such
modification or waiver is agreed to in writing and signed by Executive and by a
duly authorized officer of the Company. 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.

(b)       Failure by Executive or the Company to insist upon strict compliance
with any provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of Executive
to terminate employment for Good Reason, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.

(c)       Except as otherwise specifically provided herein, the rights of, and
benefits payable to, Executive, his estate or his beneficiaries pursuant to this
Agreement are in addition to any rights of, or benefits payable to, Executive,
his estate or his beneficiaries under any other employee benefit plan or
compensation program of the Company.

(d)       If any amounts which are required or determined to be paid or payable
or reimbursed or reimbursable to the Executive under this Agreement (or,
following a Change in Control, under any other plan, agreement, policy or
arrangement with the Company) are not so paid promptly at the times provided
hereon or therein, such amounts shall accrue interest at an annual percentage
rate of ten percent (10%) from the date such amounts were required or determined
to have been paid or payable or reimbursed or reimbursable to the Executive
until such amounts and any interest accrued thereon are finally and fully paid;
provided, however, that in no event shall the amount of interest contracted for,
charged or received hereunder exceed the maximum non-usurious amount of interest
allowed by applicable law.

 

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(e)       The Executive acknowledges receipt of a copy of this Agreement
(together with any attachments hereto), which has been executed in duplicate and
agrees that, with respect to the subject matter hereof, this is the entire
agreement with the Company. Any other oral or any written representations,
understandings or agreements with the Company or any of its officers or
representatives covering the same subject matter which are in conflict with this
Agreement hereby are merged into and superseded by the provisions of this
Agreement. Notwithstanding anything to the contrary in this Agreement, any
payments made or benefits provided under this Agreement shall be an offset to
the payments and/or benefits otherwise payable under any other agreement between
Executive and the Company.

(f)        To the extent this Agreement is subject to Section 409A of the Code,
Executive and the Company intend all payments under this Agreement to comply
with the requirements of such section, and this Agreement shall, to the extent
practical, be operated and administered to effectuate such intent. To the extent
necessary to avoid adverse tax consequences under Section 409A of the Code, the
timing of any payment under this Agreement shall be delayed by six months and
one day in a manner consistent with § 409A(a)(2)(B)(i) of the Code.

(g)       If the Company engages in a sale of substantially all its assets and
Executive is offered comparable employment with the buyer of such assets, the
Company and the buyer shall specify in writing at the time of the sale whether
Executive has a termination of employment in connection with the sale; provided,
however, (i) the buyer must accept assignment of this Agreement in order for the
Company to agree that no termination of employment has occurred, (ii) if the
buyer and the Company fail to specify whether a termination of employment has
occurred, Executive shall be treated as having terminated employment and (iii)
any determination of whether a termination of employment has occurred shall be
made in accordance with Treas. Reg. 1.409A-1(h)(4).

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a
duly authorized officer of the Company and Executive has executed this Agreement
as of the day and year first above written.   

 

GEVITY HR, Inc.

 

/s/ Edwin E. Hightower, Jr.

 

 

Name: Edwin E. Hightower, Jr.

 

Title:

Senior Vice President

 

Chief Legal Officer

 

                

 

/s/ Michael J. Lavington

 

Executive

 

 

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