Exhibit 10.5

 

June 30, 2008

 

VIA HAND DELIVERY

Mr. Edwin E. Hightower, Jr.

 

RE:       Appointment as SVP and Chief Legal Officer

 

Dear Mr. Hightower:

 

We are very pleased to confirm our conversations with respect to your
appointment to the position of Senior Vice President and Chief Legal Officer,
effective July 1, 2008.  In this position, you will continue to report directly
to me, and will be responsible for the following primary duties:

 

Managing in-house legal practice, including the provision of legal advice to all
internal clients on legal matters;

 

Advising Executive Committee and Board on legal issues affecting company
operations or implications of various proposed courses of conduct;

 

Managing outside counsel relationships (to augment internal attorneys as
needed), as well as engagement of lobbyists (as may be necessary);

 

Setting, in coordination with the Executive Committee and Board, legal policy
for the company;

 

Acting as Board Secretary;

 

Acting as Chief Compliance Officer, heading fraud prevention and detection
activities;

 

Acting as Plan fiduciary on all benefits plans, including the 401(k) plans; and,

 

Other duties as assigned.

 

Base Salary:

 

$300,000 per year payable in equal installments of approximately $11,538.46 on
the Company’s normal bi-weekly payroll schedule.

 

Cash  Bonus:

 

You will participate in the Company’s cash bonus program for executives that
will provide a target bonus amount equivalent to 50% of base salary at
threshold, 66.7% at target and 100% at superior, calculated on the base salary
actually paid to you during a calendar year.  For 2008, your cash bonus will be
calculated 6 months at current bonus eligibility level (30% of base salary at
target, per the Vice President compensation plan) and 6 months under the cash
bonus program for executives, as described, above.

 

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The actual amount of any award, either more or less, will be based, in part, on
an evaluation of your individual performance and contribution, as well as the
overall financial performance of the Company.  Of course, all bonus payments and
compensation decisions regarding executives are subject to final approval by the
Board or a duly authorized Committee thereof.

 

Any cash bonus payable pursuant to this paragraph shall be paid no later than
the 15th day of the third month following the end of the Company’s first taxable
year in which the bonus is no longer subject to a “substantial risk of
forfeiture” (within the meaning of Treasury Regulation § 1.409A-1(d)).

 

Stock Options:

 

You will be eligible to participate in the Company’s special equity incentive
plan, effective as of the date of your promotion.  Any future equity awards will
be at the discretion of the Board or a duly authorized Committee thereof.

 

General Severance:

 

Your current general severance agreement with the Company (as set forth
exclusively in a letter to you from Garry Welch dated February 12, 2008) is
superceded and replaced in its entirety with the following, effective as of the
date of your promotion:

 

In the event your employment is involuntarily terminated by the Company for any
reason other than for “Cause” and provided you execute a full and complete
general release of all employment-related claims, if any, against the Company,
the Company will pay you the sum of one times your annual base salary, as in
effect at the time of your termination.  Such sum shall be paid to you in
twenty-six (26) equal payments on the Company’s regular bi-weekly payroll cycle
over the twelve (12) month period immediately following the termination of your
employment, except as otherwise provided below.  In addition, during the twelve
(12) month period immediately following the termination of your employment, you
may continue to participate in the health and dental plans provided to you as of
the date of termination at the same level and in the same manner as if your
employment had not terminated.  If the terms of any benefit plan referred to in
this section do not permit your continued participation, then the Company will
arrange for other coverage provided substantially similar coverage at no
additional cost to you.

 

For the purposes of this Agreement, “Cause” means (i) your willful and continued
failure to perform substantially your duties with the Company (other than any
such failure resulting from your incapacity due to physical or mental illness)
or (ii) the willful engaging by you in illegal conduct or gross misconduct which
is demonstrably and materially injurious to the Company or its affiliates.

 

Notwithstanding the foregoing, if you are a “specified employee” (within the
meaning of Treasury Regulation § 1.409A-1(i)) of the Company, then to the

 

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extent (if any) the cash severance amounts otherwise payable to you under this
section for the first six (6) months after your termination of employment exceed
two (2) times the lesser of (a) your annualized compensation based on your
annual rate of pay for the calendar year preceding the calendar year in which
your termination of employment occurs (as adjusted in accordance with Treasury
Regulation § 1.409A-1(b)(9)(iii)(A)(1)) or (b) the compensation limit in effect
under Internal Revenue Code § 401(a)(17) for the calendar year in which such
termination occurs, such excess amount shall be paid on the first business day
of the Company that is six (6) months and one (1) day after your termination of
employment.  For purposes of this section, no termination of employment shall be
treated as having occurred for severance purposes unless such termination
qualifies as a “separation from service” under Internal Revenue Code § 409A.

 

All other terms and conditions of your employment, including your Change in
Control Severance Agreement, remain in full force and effect.

 

Please let us know whether you accept these general terms of your promotion, by
signing in the space provided below, and returning a copy to my attention.

 

Edwin, we believe that your appointment to the position of Senior Vice President
and Chief Legal Officer provides an excellent opportunity for you to continue to
contribute to our strong leadership team and share in the direct responsibility
for the ongoing success of an exciting, challenging, and growing company.

 

 

 

Kindest regards,

 

 

 

 

 

GEVITY HR, INC.

 

 

 

 

 

\s\ Michael Lavington

 

Michael Lavington

 

Chairman and CEO-designate

 

 

Agreed to and Accepted by:

 

 

 

\s\ Edwin E. Hightower, Jr.

 

Edwin E. Hightower, Jr.

 

 

 

Date: July 1, 2008

 

 

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