EX-10.3 OFFER LETTER AGREEMENT / GARRY WELSH



 





Exhibit 10.3




August 3, 2007




Via Hand Delivery

Mr. Garry Welsh




RE: Offer of Employment




Dear Garry:




     We are very pleased to confirm our discussions regarding your joining Gevity as Senior Vice
President of Finance and Chief Financial Officer, as soon as practical. In this capacity, you will
report directly to Erik Vonk, Chairman and Chief Executive Officer, serve on the Company’s
Executive Team and be primarily responsible for the duties and responsibilities of this position
set forth below and as they may evolve over time. We have prepared the following general summary of
the key terms of our offer of employment for your review.




	 	 	 	 	 
	 

	 	Start Date:
	 	On or about August 6, 2007.
	 
	 	 	 	 
	 

	 	Primary Duties:
	 	Overseeing the Company’s finance and health, retirement
and welfare benefits areas, serving as the Company’s
principal financial officer.
	 
	 	 	 	 
	 

	 	 	 	Participating in the on-going development of the company’s
strategic plan.
	 
	 	 	 	 
	 

	 	 	 	Assumption of shared responsibility for the development of
and the execution under the Company’s annual operating
plan.
	 
	 	 	 	 
	 

	 	Base Salary:
	 	$450,000 per year payable in equal installments of
$17,307.69 on the Company’s normal bi-weekly payroll
schedule. You will be eligible for a first review on
January 1, 2008.
	 
	 	 	 	 
	 

	 	Paid Time Off:
	 	You will be eligible for a total of 216 hours of paid time
off (including 4 weeks of paid vacation) during each
calendar year of employment, prorated for partial years.
	 
	 	 	 	 
	 

	 	Cash Bonus:
	 	Short Term Incentive — Commencing on January 1, 2008, you
will participate in the Short Term Incentive Program for
Executives. This program currently awards a target cash
bonus amount equal to 66.7% of your base salary actually
paid to you during a calendar year (for performance at
target level), 50% of target at






 









 





Garry Welsh
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	 	 	 	threshold and 150% of target at superior. The actual amount of
the award will be based, in part, on Mr. Vonk’s 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 senior
executives are subject to final approval by the Compensation
Committee of the Board. For your 2007 performance, you will be
eligible to receive a cash bonus, payable at the time that other
such bonuses are paid, in an amount of $42,000.00 at target,
subject to adjustment, up or down, based on Mr. Vonk’s evaluation
of your individual performance and contribution. Again, any such
award is subject to approval of the Compensation Committee of the
Board.
	 
	 	 	 	 
	 

	 	Stock Options

And Restricted

Shares:
	 	Initial Stock Option Award — As an inducement to commence
employment with Gevity, you will receive an award of
non-qualified stock options to purchase 60,000 shares of
the Company’s common stock having a 10-year term and 4-year
vesting schedule, pursuant to which 25% of such options
vest on each anniversary of the date of the award, with an
exercise price equal to the price per share at the close of
trading on your first day of active employment. In
addition, you will receive an award of 15,000 restricted
shares of the Company’s common stock having a 4-year
vesting schedule, pursuant to which 25% of such shares vest
on each anniversary of the date of the award. Such options
and restricted shares will be granted under and subject to
the terms of the Company’s 2005 Equity Incentive Plan.

	 
	 	 	 	 
	 

	 	 	 	
Long Term Incentive — Commencing on January 1, 2008, you
will participate in the Company’s Long Term Incentive Plan
for executives that will provide you with a target equity
incentive, generally in the form of a Stock Option grant or
such other award type as determined by the Board or a duly
authorized Committee thereof, with a target value equal to
100% of your base salary (for performance at target
levels), 75% of target at threshold and 150% of target at
superior, as determined by the Black-Scholes valuation
method (or such subsequently adopted valuation method). The
actual annual award will be recommended by Mr. Vonk to the
Compensation Committee of the Board, based on the
contribution of the disciplines under your direct control
as well as on overall performance of the Company.
	 
	 	 	 	 
	 

	 	Benefits:
	 	You are immediately eligible to participate in Gevity’s health and welfare
benefits. Should you elect to participate in Gevity’s






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Garry Welsh
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	 	 	 	health and welfare benefits, they will begin immediately upon
your hire date. You should submit your Benefits Election Form
with your other new hire paperwork. The Company’s contribution
toward coverage commences as of your date of employment.
	 
	 	 	 	 
	 

	 	 	 	In case you would opt continuation of an existing plan, the
Company will make its best efforts to either contribute to that
plan or reimburse you for plan expenses for an aggregate value
approximately equal to contributions made by the Company to its
own plan on your behalf.
	 
	 	 	 	 
	 

	 	Relocation:
	 	In order to assist you with your relocation to the
Bradenton/Sarasota, FL area, and in lieu of any other
assistance available under the Company’s Relocation
Policy, you will be paid $250,000 on the first regular
payroll date following the first date of your employment
with the Company, which will be subject to gross up for
tax purposes.
	 
	 	 	 	 
	 

	 	Change in

Control:
	 	You will be eligible to enter into a Change in Control
Severance Agreement in the form customarily used by the
Company for other senior executives of the Company.
Generally, the agreement provides for certain payments to
you if you are terminated within a two (2) year period
following a change in control of the Company. Please refer
to the form of such agreement provided to you for the
specific terms and conditions.
	 
	 	 	 	 
	 

	 	Indemnification

Agreement:
	 	You will be eligible to enter into an Indemnification
Agreement with the Company in the customary form of such
agreement for senior executives, as the same may be
amended from time to time.
	 
	 	 	 	 
	 

	 	General

Severance:
	 	In the event your employment is terminated for Good Reason
or 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 but in no event shall
payments extend beyond March 15th of the year
following your termination. In addition, during the
Severance Period, you may continue to participate in the
health and dental plans provided to you as of the






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Garry Welsh
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	 	 	 	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 providing substantially similar coverage at no
additional cost to you.
	 
	 	 	 	 
	 

	 	 	 	For purposes of this offer, Paragraph 1(c) of the Change of
Control Severance Agreement is incorporated herein to define
“Cause” and the circumstances in which your employment may be
terminated for Cause. “Good Reason” means, without Executive’s
express written consent, the occurrence of any of the following
events:
	 
	 	 	 	 
	 

	 	 	 	     (i) (A) any change in the duties or responsibilities of
Executive that is inconsistent in any material and adverse
respect with Executive’s primary position, duties,
responsibilities, or status with the Company (including any
material and adverse diminution of such duties or
responsibilities) or (B) a material and adverse change in
Executive’s titles or offices with the Company;
	 
	 	 	 	 
	 

	 	 	 	     (ii) a reduction by the Company in Executive’s rate of
annual base salary or annual target bonus opportunity as the same
may be increased from time to time; or
	 
	 	 	 	 
	 

	 	 	 	     (iii) any requirement of the Company that Executive be based
anywhere more than fifty (50) miles from the office where
Executive is located at the time of his initial employment.
	 
	 	 	 	 
	 

	 	 	 	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 thirty (30) days following
Executive’s knowledge of an event constituting Good Reason or
such event shall not constitute Good Reason under this Agreement.






     As a condition of employment, the Company must be satisfied that you are not subject to any
agreement or understanding that would directly or indirectly restrict your ability to perform
duties for the Company. You will also need to successfully undergo a background check and drug
screen



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Garry Welsh
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prior to beginning employment. Further, as a senior executive, you will be required to qualify for
registration as a “controlling person” under the various state laws that regulate the Company’s
business.



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



     Garry, we believe that the position of Senior Vice President of Finance and Chief Financial
Officer provides an excellent opportunity for you to join a strong leadership team and share in the
direct responsibility for the ongoing success of an exciting, challenging, and growing company.



     Our senior management and the board of directors look forward to welcoming you to the Gevity
team.



	 	 	 	 	 
	 	Very Truly Yours,

 	 
	 	/s/ Erik Vonk
 	 
	 	Erik Vonk 	 
	 	Chairman and Chief Executive Officer 	 
	 



	 	 	 	 	 
	Agreed to and Accepted by:

 	 	 
	/s/ Garry Welsh 	 	 
	Garry Welsh 	 	 
	 	 	 



Cc: Edwin E. Hightower, Jr., Esq.





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