NSP 8-K
Insperity, Inc. (NSP)
8-K
2025-07-01
For: 2025-06-30
View Original
Added on
April 12, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 30, 2025
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (281 ) 358-8986
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 30, 2025, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Insperity, Inc. (“Insperity” or “we”) approved the grant of special performance-based equity awards (the “Special Performance-Based Awards”) to our Chairman and Chief Executive Officer, Paul J. Sarvadi, and our President and Chief Operating Officer, A. Steve Arizpe. The Compensation Committee believes the Special Performance-Based Awards align with Insperity’s established pay-for-performance philosophy and create a meaningful incentive to drive significant stockholder value because the awards, which vest at the end of five years, will only be fully realized in connection with the executive’s continued service and if Insperity’s stock price appreciates to $225 per share, which is more than 3.6 times higher than the grant date price.
The Special Performance-Based Awards are intended to incentivize and support the retention of Mr. Sarvadi and Mr. Arizpe given their critical roles in guiding Insperity through the next phases of our plans for growth and profitability with our existing solutions and our efforts with Workday, Inc. (“Workday”) to jointly develop, market and sell a new full-service human resources solution for small and midsize businesses. We believe that this joint solution, which will combine Workday’s HR technology with Insperity’s HR services, has the potential to expand the total addressable market for our solutions and to positively impact the long-term growth, profitability, and value-creation of Insperity beyond what our existing solutions could provide alone.
Mr. Sarvadi had the strategic vision to combine our premium HR service experience with Workday’s leading HR technology to create the joint solution, as well as implementing a co-branding, co-marketing, and co-selling plan with Workday to take this new offering to the target market together. We believe that the joint solution will help businesses gain a competitive edge by making full-service HR solutions more affordable, easier and faster to implement, and less complex, and that it will promote client retention by providing a scalable solution that will be attractive to high growth businesses. Mr. Sarvadi has been instrumental in helping Insperity and Workday create a framework necessary for success and in guiding us through the development and towards the launch phases of the joint solution. Further, Mr. Arizpe is leading the teams responsible for developing the technology, operational processes, and sales and marketing plans that are foundational to the success of this joint solution.
Mr. Sarvadi and Mr. Arizpe have a strong history of leading Insperity through periods of challenge, transformation and growth. While the Board believes that it has a strong executive succession plan in place, the Compensation Committee, in consultation with the other non-employee Board members, believes that continuity of management is key to driving growth and profitability in each of our solutions, including the successful launch and initial growth of the joint solution and reinvigorating the growth strategy for our existing offerings. As a result, the Special Performance-Based Awards are intended to retain and incentivize Mr. Sarvadi and Mr. Arizpe at this transformational time while furthering our corporate strategy that is focused on long-term stockholder value creation.
Prior to granting the Special Performance-Based Awards, the Compensation Committee met multiple times over the past five months to discuss the potential need and terms of any such award, including with its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). The Special Performance-Based Awards are in the form of at-risk performance-based stock units (“PSUs”) with rigorous targets tied to significant sustained stock price appreciation with vesting at the end of a five-year period, thereby linking the Special Performance-Based Awards directly to retention as well as our long-term
growth. We believe this structure further promotes the alignment of the compensation of Mr. Sarvadi and Mr. Arizpe with significant long-term stockholder value creation.
In approving the grant of the Special Performance-Based Awards, the Compensation Committee, in consultation with FW Cook, considered a variety of factors, including:
•the critical roles of each of Mr. Sarvadi and Mr. Arizpe in setting the strategic direction of Insperity, and their strong history of leading Insperity through periods of transformation;
•incentives needed to retain, motivate and encourage Mr. Sarvadi and Mr. Arizpe to remain with Insperity for at least five years and continue driving the transformative growth strategy during the launch and initial growth phases of the new joint solution;
•the disruption to the business that likely would be caused by the departure of Mr. Sarvadi or Mr. Arizpe during the implementation of the new joint solution, particularly while we also continue to focus on improving our growth and profitability;
•the impact on our performance attributable to the substantial investment being made in developing the new joint solution;
•targets that would create substantial value for stockholders relative to Insperity’s historic stock prices; and
•benchmarks from comparison companies, including practices related to special long-term transformation-focused incentives.
The Special Performance-Based Awards will be forfeited in full if Insperity’s stock price appreciation at the end of the performance period fails to reach $105 for the requisite 30-day trading average stock price within the five-year performance period. Meanwhile, the maximum performance level is intended to reward extraordinary effort and achievement to drive significant stockholder returns and represents an increase in Insperity’s market capitalization of more than 260% (an increase of over $6 billion) as compared to the grant date.
Terms of the Special Performance-Based Awards
The Special Performance-Based Awards are stock-based awards that are 100% performance-based with a continued service requirement. They were granted effective July 1, 2025, pursuant to the terms of an Officer Special Performance Unit Award Agreement (the “Special PSU Award Agreement”) approved by the Compensation Committee.
Mr. Sarvadi and Mr. Arizpe can earn a maximum of 400,000 and 100,000 PSUs, respectively. For the executives to earn any of the PSUs, the 30-day average closing stock price of Insperity’s common stock must meet or exceed the applicable performance levels specified in the table below during the five-year performance period:
| Performance Level | % of Maximum | Approx. Multiple of Grant Date Price(1) | Performance Context(2) | ||||||||
| $225 | 100% | 3.6 x | Approx. 55% above all time stock price high | ||||||||
| $205 | 80% | 3.3 x | Approx. 45% above all time stock price high | ||||||||
| $185 | 65% | 3.0 x | Approx. 30% above all time stock price high | ||||||||
| $165 | 50% | 2.7 x | Approx. 15% above all time stock price high | ||||||||
| $145 | 40% | 2.3 x | Approx. all time stock price high | ||||||||
| $130 | 30% | 2.1 x | Approx. stock price high since 1/1/2020 (pre-COVID) | ||||||||
| $120 | 20% | 1.9 x | Approx. stock price high since 1/1/2024 | ||||||||
| $105 | 10% | 1.7 x | Approx. 10% above closing price following announcement of Workday strategic partnership on 2/8/2024(3) | ||||||||
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(1) The closing price of Insperity's stock on the grant date (July 1, 2025) was $62.06.
(2) The all-time high closing price of Insperity's stock was $144.63 on July 26, 2019.
(3) The closing price of Insperity's stock on February 8, 2024, was $96.35.
For example, if Insperity’s 30-day average closing stock price stock met or exceeded $165 during the five-year term of the award, then the executive would earn 50% of the maximum number of units (i.e., 200,000 PSUs for Mr. Sarvadi and 50,000 PSUs for Mr. Arizpe). If Insperity’s 30-day average closing stock price stock met or exceeded $225 during the five-year term of the award, then the executive would earn the maximum number of units (i.e., 400,000 PSUs for Mr. Sarvadi and 100,000 PSUs for Mr. Arizpe). Upon the achievement of any performance level, the PSUs are deemed achieved but do not vest until five years after the grant date, subject to continued employment by the executive as described below and in the Special PSU Award Agreement.
While Insperity has returned significant value to stockholders over many years through the payment of quarterly and special cash dividends, the determination of the average closing stock price will not be adjusted to reflect any cash dividends paid by Insperity during the performance period. Excluding the impact of any future cash dividends paid by Insperity increases the level of performance required to earn the PSUs.
The Special Performance-Based Awards are governed by the terms of the Insperity, Inc. Incentive Plan. There are no voting rights with respect to the PSUs prior to each unit’s settlement, if any, into shares of Insperity’s common stock following vesting. The PSUs may not be assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of other than by the laws of descent and distribution prior to the date the forfeiture restrictions with respect to such PSUs have lapsed, if at all.
In addition to achieving the requisite 30-day average closing stock price hurdles, to vest in all or a portion of the Special Performance-Based Award, the executive is generally required to remain continuously employed over the entire five-year performance period. If the executive resigns or is terminated for cause prior to completion of the five-year performance period, all PSUs are forfeited. Further, under the terms of the
Special PSU Award Agreement, there are no retirement-eligible provisions for the award and the PSUs are not covered by Insperity’s qualified retirement policy. If, however, the executive dies, terminates for disability, or is involuntarily terminated without cause, then the PSUs corresponding to any performance hurdle(s) previously reached after the grant date or obtained within 60 days following the executive’s last day of employment, will vest and be paid to the executive at the end of the five-year performance period.
In the event of a change in control (as defined in the incentive plan), the PSUs will not automatically vest, nor will payments automatically accelerate. Upon a change in control, the performance level for the PSUs will be measured based on the highest performance level achieved, determined as follows: (a) the highest performance hurdle reached prior to the change in control; (b) the actual closing stock price upon the date of the change in control; (c) the value received in exchange for each share of stock in connection with the change in control, and (d) except for a merger, sale or disposition of all or a substantial portion of the Company's assets, or the issuance of shares of stock of the Company in connection with the acquisition of the stock or assets of another entity as further described in the incentive plan, the highest performance hurdle obtained following a change in control. In addition, for purposes of determining the achievement of the performance hurdle under clause (d), if the executive is terminated without cause or resigns for "good reason" following such change in control, the measurement period for the highest performance hurdle following a change in control will end 60 days following the executive’s last day of employment. Awards following a change in control will vest five years after the original grant date or, if earlier, upon the termination of the executive without cause or the resignation by the executive for "good reason", within 18 months, following the change in control (i.e., a double trigger).
Any payments made pursuant to the Special Performance-Based Awards will be subject to clawback under Insperity’s Policy for the Recovery of Erroneously Awarded Compensation.
The foregoing summary of the terms of the Special Performance-Based Awards is not complete and is qualified in its entirety by reference to the full text of the form of Special PSU Award Agreement, which is filed as Exhibit 10.1 to this report.
Item 9.01. Financial Statements and Exhibits
(d)Exhibits
| Number | Exhibit | |||||||
| 10.1 | ||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
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 hereunto duly authorized.
| INSPERITY, INC. | |||||
| By: | /s/ Christian P. Callens | ||||
| Christian P. Callens | |||||
| Senior Vice President of Legal, General Counsel and Secretary | |||||
Date: July 01, 2025
Exhibit 10.1
INSPERITY, INC. INCENTIVE PLAN
(as Amended and Restated Effective May 22, 2023)
OFFICER SPECIAL PERFORMANCE UNIT AWARD AGREEMENT
This Officer Special Performance Unit Award Agreement (this “Agreement”) is between Insperity, Inc. (the “Company”) and (the “Grantee”), an employee of the Company or one of its Subsidiaries, regarding an award (this “Award”) of performance restricted stock units, each representing one share of Common Stock (as defined in the Insperity, Inc. Incentive Plan, as amended and restated effective May 22, 2023, and as subsequently amended, (the “Plan”), such units comprising this Award referred to herein as “Performance Stock Units” or “PSUs” awarded to the Grantee on (the “Award Date”), such number of PSUs subject to adjustment as provided in the Plan, and further subject to the following terms and conditions:
1. Relationship to Plan. This Award is subject to all of the terms, conditions and provisions of, and administrative interpretations under, the Plan, if any, which have been adopted by the Committee thereunder. Any question of interpretation arising under this Agreement shall be determined by the Committee and its determinations shall be final and conclusive upon all parties in interest. Except as defined herein, capitalized terms shall have the same meanings ascribed to them under the Plan.
2. Performance Determination. The Grantee’s final award, if any, shall be equal to the number of Performance Stock Units resulting from the Committee’s determination of the achievement of the Performance Goal(s) over the Performance Period specified on Schedule A attached hereto (the “Final Award”). The Committee shall determine the Final Award no later than sixty (60) days following the end of the Performance Period (the “Final Valuation Date”).
3. Vesting Schedule.
(a) Vesting. Subject to Sections 3(b), 3(c) and 4 below, the Grantee shall be eligible to vest in the Final Award on the last day of the Performance Period, provided that the Grantee has been in continuous Employment since the Award Date.
(b) Notwithstanding the Performance Period not being completed, Grantee shall be eligible to vest in the number of PSUs corresponding to any Performance Goal(s) achieved after the Award Date or obtained within sixty (60) days following the Grantee’s last day of employment, irrespective of the limitations set forth in subparagraph (a) above, provided that the Grantee has been in continuous Employment since the Award Date, upon the earliest occurrence of:
(i) an Involuntary Termination; or
(ii) the Grantee’s termination of Employment by reason of death or Disability.
Any PSUs eligible to vest under this Section 3(b) shall be considered the Final Award and shall vest five (5) years after the original Award Date and be paid within sixty (60) days thereafter.
(c) Change in Control.
(i) The Award granted under this Agreement will not partially or fully vest or otherwise accelerate vesting solely as the result of a Change in Control.
(ii) Upon a Change in Control, as defined herein but limited to subpart (c) of the definition under the Plan, after the Award Date and prior to the end of the Performance Period, the Final Award shall be determined by the Committee based on the number of PSUs corresponding to the greater of any Performance Goal(s): (1) achieved prior to the date of the Change in Control, (2) based on the actual closing price of the Company’s Common Stock on the date of the Change in Control, or (3) based on the value received in exchange for each share of Common Stock, if applicable, in connection with the Change in Control (the “Change in Control Value”). Any Final Award determined pursuant to this Section 3(c)(ii) shall be paid within sixty (60) days following the end of the Performance Period, however the Grantee shall become vested in the Change in Control Value only if continuously employed through the last day of the Performance Period, except in the event of a Qualifying Termination.
(iii) Upon a Change in Control, as defined herein but limited to subparts (a) and (b) of the definition under the Plan, after the Award Date and prior to the end of the Performance Period, the Final Award shall be determined by the Committee based on the number of PSUs corresponding to the greater of any Performance Goal(s): (1) achieved prior to the date of the Change in Control, (2) based on the actual closing price of the Company’s Common Stock on the date of the Change in Control, (3) based on the value received in exchange for each share of Common Stock, if applicable, in connection with the Change in Control, or (4) if measurable, achieved after the Change in Control (the “Continuing Change in Control Value”). Any Final Award determined pursuant to this Section 3(c)(iii) shall be paid within sixty (60) days following the end of the Performance Period, however the Grantee shall become vested in the Continuing Change in Control Value only if continuously employed through the last day of the Performance Period, except in the event of a Qualifying Termination.
(iv) Notwithstanding the foregoing, in the event of a Qualifying Termination:
a. Within 18 months following a Change in Control under Section 3(c)(ii), the Final Award based on the Change in Control Value
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shall vest and be paid within a reasonable period of time thereafter, but in no event later than ninety (90) days following the Qualifying Termination.
b. Within 18 months following a Change in Control under Section 3(c)(iii), the Final Award determined by the Committee based on the Continuing Change in Control Value where the Section 3(c)(iii)(4) measurable value shall mean, if measurable, the Performance Goal(s) achieved, if any, between the Change in Control date and sixty (60) days after the Grantee’s last day of Employment, shall vest and be paid within a reasonable period of time thereafter, but in no event later than ninety (90) days following the Qualifying Termination.
c. Occurring 18 months or more after a Change in Control under Section 3(c)(ii), the Final Award based on the Change in Control Value shall vest and be paid within sixty (60) days following the end of the Performance Period.
d. Occurring 18 months or more after a Change in Control under Section 3(c)(iii), the Final Award determined by the Committee based on the Continuing Change in Control Value where the Section 3(c)(iii)(4) measurable value shall mean, if measurable, the Performance Goal(s) achieved, if any, between the Change in Control date and sixty (60) days after the Grantee’s last day of Employment, shall vest and be paid within sixty (60) days following the end of the Performance Period.
(v) However, in the event of a Non-Assumption, any Final Award under Section 3(c)(ii) shall be paid within sixty (60) days of the Change in Control.
(d) For purposes of this Agreement:
(i) “Cause” shall be determined solely by the Compensation Committee and means a termination of Grantee’s Employment for:
a. Gross negligence or willful misconduct in the performance of the Grantee’s duties;
b. Conviction or plea of nolo contendre for a felony or any crime involving moral turpitude; or
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c. Committing an act of fraud or deceit intended to result in personal and unauthorized enrichment of Grantee at the Company’s expense.
(ii) “Change in Control” means a Change in Control as defined in Section 2 of the Plan (including subparts (a), (b) and (c) of such definition) which also constitutes a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5).
(iii) “Disability” means that the Grantee has a disability such that he has been determined to be eligible for benefits under a long-term disability plan sponsored by the Company or a Subsidiary or, if the Grantee is not covered by such a plan, a physical or mental impairment (a) which causes a Grantee to be unable to perform the normal duties for an employer as determined by the Committee in its sole discretion; and (b) which is expected either to result in death (or blindness) or to last for a continuous period of at least twelve (12) months. The Committee may require that the Grantee be examined by a physician or physicians selected by the Committee. The Grantee’s termination of Employment by reason of Disability under Section 3(b)(ii) above is subject to execution and delivery to the Company of an effective Waiver and Release Agreement.
(iv) “Employment” means employment with the Company, a successor following a Change in Control or a Subsidiary other than a Subsidiary that is a licensed professional employer organization.
(v) “Involuntary Termination” means a termination of Grantee’s Employment by the Company or Subsidiary or a successor to the Company without Cause as determined by the Compensation Committee. Any vesting by reason of an Involuntary Termination is subject to execution and delivery to the Company of an effective Waiver and Release Agreement.
(vi) A “Non-Assumption” shall be deemed to occur on the date of the consummation of an event that constitutes a Change in Control as defined herein, but limited to subpart (c) of the definition of under the Plan, where in connection with such Change in Control, the successor entity, or a parent of the successor entity, has not agreed to assume, replace or substitute this Award with another award of equivalent or greater value, and on substantially similar or more favorable terms.
(vii) “Performance Period” means the period of time beginning on the Award Date and ending five (5) years thereafter.
(viii) “Qualifying Termination” means a termination of the Grantee’s Employment following a Change in Control for one of the following reasons:
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a. A termination initiated by the Grantee due to items (1) through (4) below referred to herein as “Good Reason” that the Grantee has not consented to in writing:
(1) A material diminution in the Grantee’s title, position, authority, duties or responsibilities from those applicable to Grantee preceding the Change in Control;
(2) A change in the geographic location at which Grantee must perform services, which shall mean requiring Grantee to be permanently based more than fifty (50) miles from the Grantee’s principal Company location;
(3) A material diminution in Grantee’s base salary other than as part of an across-the-board reduction applicable to all the Company’s executives of less than ten (10) percent; or
(4) A material diminution in Grantee’s bonus opportunity, incentive compensation or perquisites, if inconsistent with other executives with similar levels of authority, duties or responsibilities; or
b. An Involuntary Termination.
For purposes of this Agreement, the Grantee’s termination of Employment will be considered to be a Qualifying Termination for Good Reason if the Grantee has provided written notice to the Company of the condition the Grantee claims constitutes Good Reason within ninety (90) days of the initial existence of such condition, the condition specified in the notice remains uncorrected for thirty (30) days after receipt of the notice by the Company, and the Grantee actually terminates Employment after the thirty (30) day correction period and before the expiration of the time limit required of a Qualifying Termination. Any vesting by reason of a Qualifying Termination is subject to execution and delivery to the Company of an effective Waiver and Release Agreement.
(ix) “Waiver and Release Agreement” means the legal document in a form approved by the Company, in which a Grantee, in exchange for the benefits specified in Section 3(a), Section 3(b) or Section 3(c), agrees to be subject to the repayment conditions of the Waiver and Release Agreement and releases the Company and other related parties, from liability and damages arising from or in connection with the Grantee’s Involuntary Termination, Qualifying Termination or termination of Employment by reason Disability. In order for a Waiver and Release Agreement to be effective, the Waiver and Release Agreement must be:
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a. Executed and returned by the Grantee (or Grantee’s legal representative) to the Company, after termination of the Grantee’s Employment, and within the period provided in the Waiver and Release Agreement,
b. Unrevoked by the Grantee (and Grantee’s legal representative) during the seven (7) day period following the date of execution (or if longer, such other period required under applicable federal or state law), and
c. Effective and irrevocable no later than the sixtieth (60th) day after the date of a Grantee’s termination of Employment.
4. Forfeiture of Award. If, during the Performance Period, the Grantee’s Employment terminates other than by reason of death, Disability, Involuntary Termination or Qualifying Termination pursuant to the provisions of Section 3, all PSUs as of the Employment termination date shall be forfeited immediately after termination of employment. Except in the case of a Qualifying Termination or Involuntary Termination, the Company has sole discretionary authority to determine when a Grantee’s Employment terminates for all purposes under this Agreement and the Plan. If a Grantee’s Employment terminates due to Disability, Involuntary Termination or Qualifying Termination, all PSUs as of the Grantee’s termination date shall expire on the date that Grantee fails to deliver a timely, effective and irrevocable Waiver and Release Agreement.
5. Dividend Equivalents; No Shareholder Rights. During the period of time between the Award Date and the earlier of the settlement date or forfeiture date of the PSUs, the PSUs shall be evidenced by book entry registration. With respect to each PSU granted or to be settled as part of the Final Award, no adjustment shall be made for any cash dividends. The Grantee shall have no rights of a shareholder with respect to PSUs until and unless shares of Common Stock are transferred to the Grantee.
6. Settlement and Delivery of Shares. The Grantee will receive one share of Common Stock with respect to each PSU that becomes vested as of a vesting event under Section 3(a), Section 3(b) or Section 3(c) above, which shall be delivered to the Grantee as soon as administratively practicable, but not later than sixty (60) days following the date the PSU becomes vested. The Company shall not be obligated to deliver any shares of Common Stock if counsel to the Company determines that such sale or delivery would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any national securities exchange or inter-dealer quotation system upon which the Common Stock is listed or quoted. In no event shall the Company be obligated to take
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any affirmative action in order to cause the delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.
7. Notices and Disclosure. Unless the Company notifies the Grantee in writing of a different procedure, any notice or other communication to the Company with respect to this Award shall be in writing and shall be delivered:
(a) by registered or certified United States mail, postage prepaid, to Insperity, Inc., Attn: General Counsel, 19001 Crescent Springs Drive, Centre V, Kingwood, Texas 77339;
(b) by hand delivery or otherwise to Insperity, Inc., Attn: General Counsel, 19001 Crescent Springs Drive, Centre V, Kingwood, Texas 77339; or
(c) by email to the Company’s General Counsel or his delegate.
Notwithstanding the foregoing, in the event that the address of the Company is changed, notices shall instead be made pursuant to the foregoing provisions at the Company’s then current address.
Any notices provided for in this Agreement or in the Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the Company to the Grantee, five days (5) after deposit in the United States mail, postage prepaid, addressed to the Grantee at the address specified at the end of this Agreement or at such other address as the Grantee hereafter designates by written notice to the Company.
The foregoing notwithstanding, the Grantee agrees that the Company may deliver by email all documents relating to the Plan or this Award (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). The Grantee also agrees that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, such posting is deemed to notify the Grantee.
8. No Transfer or Assignment of Award. The Grantee’s rights under the Plan and this Agreement are personal; no assignment or transfer of the Grantee’s rights under and interest in this Award may be made by the Grantee other than by will or by the laws of descent and distribution, and this Award is payable during his lifetime only to the Grantee, or in the case of a Grantee who is mentally incapacitated, this Award shall be payable to his guardian or legal representative.
9. Payment of Par Value. In the event that the Company does not settle the Award from the Company’s treasury shares or in consideration of the Grantee’s past service, the Company’s obligation to deliver the shares of Common Stock to Grantee upon the vesting of PSUs shall be subject to the payment in full of the requisite par value per share of the shares of
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Common Stock prior to such issuance (collectively, the “Par Value”). The Grantee approves and authorizes the Company to deduct the Par Value of the shares of Common Stock from the Grantee’s payroll from the Company or its affiliates. If the Company is unable to or otherwise does not make such payroll deduction, Grantee acknowledges and agrees that he shall be responsible for the payment of any and all federal, state and local taxes on such income if the Company pays the Par Value on behalf of Grantee.
10. Withholding. The Company’s obligation to deliver shares of Common Stock to the Grantee upon the vesting of PSUs shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements (the “Required Withholding”). The Company shall withhold from the Common Stock that would otherwise have been delivered to the Grantee the number of shares necessary to satisfy the Grantee’s Required Withholding, and deliver the remaining shares of Common Stock to the Grantee, unless the Grantee has made arrangements with the Company for the Grantee to deliver to the Company cash, a check or other available funds for the full amount of the Required Withholding by 5:00 p.m. Central Time in Houston, Texas on the date the PSUs become vested. The amount of the Required Withholding and the number of shares of Common Stock to be withheld by the Company, if applicable, to satisfy the Grantee’s Required Withholding, shall be based on the Fair Market Value of the shares of Common Stock on the date prior to the applicable date of vesting and shall be limited to the withholding amount calculated using the minimum statutory withholding rates or; in accordance with any policy adopted by the Company, such other applicable withholding rates not in excess of the maximum statutory rates in effect for the applicable jurisdiction.
11. Successors and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by the Grantee, the Company and their respective permitted successors and assigns (including personal representatives, heirs and legatees), except that the Grantee may not assign any rights or obligations under this Agreement except to the extent and in the manner expressly permitted herein.
12. Right to Employment or Service. The granting of this Award shall not impose upon the Company any obligation to maintain Grantee as an Employee and shall not diminish the power of the Company to terminate Grantee's Employment at any time. The Company and its Subsidiaries reserve the right to terminate a Grantee’s Employment at any time, with or without cause.
13. Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such invalidity, illegality, or unenforceability shall not affect any of the other terms,
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provisions, covenants, or conditions of this Agreement, each of which shall be binding and enforceable.
14. Governing Law. This Agreement, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by, construed, and enforced in accordance with the laws of the State of Texas.
15. Section 409A. It is the intent of the Company and the Grantee that this Award comply with or be exempt from the requirements of Section 409A and the provisions of this Agreement will be administered, interpreted and construed accordingly. To the extent this Award constitutes “deferred compensation” under Section 409A, (a) the time of settlement of this Award specified in Section 6 is a specified time within the meaning of Treasury Regulation § 1.409A-3(i)(1), (b) if a Waiver and Release Agreement is due during the sixty (60) day settlement period under Section 6 and such period begins in one taxable year and ends in another taxable year, any settlement under Section 6 shall not be made until the beginning of the second taxable year, and (c) if the Grantee is a “specified employee” within the meaning of Section 409A on the date of his or her “separation from service” within the meaning of Section 409A, any payments of deferred compensation hereunder shall be made on the first to occur of (x) the date that is six (6) months after the date of the Grantee’s separation from service, (y) the date of the Grantee’s death, or (z) such other date as complies with the requirements of Section 409A. For purposes of this Agreement, “termination of Employment” (and similar phrases) shall mean a “separation from service” within the meaning of Treasury Regulation 1.409A-1(h).
16. Recoupment Policy and Clawback Provision. Any amounts granted or paid under this Agreement may be subject to the Policy for the Recovery of Erroneously Awarded Compensation or other applicable recoupment or clawback policy of the Company in effect from time to time.
17. Restrictive Covenants. Grantee’s right to receive settlement of the PSUs shall be further conditioned upon his or her compliance with any Non-Compete Agreement between Grantee and the Company, and the provisions of this Section 17. In the event Grantee fails to comply with any of the provisions of this Section 17, Grantee shall repay to the Company any prior settlement of PSUs subject to this Agreement and will forfeit any undistributed or unvested PSUs covered by this Agreement. For purposes of this Section 17, the term “Company” means the Company and its Subsidiaries.
(a) Definitions. As used in this Section 17, the following terms shall have the following meanings:
(1) “Non-Compete Agreement” means any agreement between the Grantee and the Company or a Subsidiary where the Grantee agrees to restrictive covenants.
(2) “Non-Solicit Period” means the period during which Grantee is employed by the Company and extending until twenty-four (24) months following Grantee’s termination of Employment.
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(3) “Proprietary Information” includes all confidential or proprietary scientific or technical information, data, formulas and related concepts, business plans (both current and under development), client lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to the business of the Company, whether in written or electronic form of writings, correspondence, notes, drafts, records, maps, invoices, technical and business logs, policies, computer programs, disks or otherwise. Proprietary Information does not include information that is or becomes publicly known through lawful means.
(b) Confidential Treatment. Grantee acknowledges and agrees that he or she has acquired, and will in the future acquire as a result of his or her Employment or otherwise, Proprietary Information of the Company which is of a confidential or trade secret nature, and all of which has a great value to the Company and is a substantial basis and foundation upon which the Company’s business is predicated. Accordingly, other than in the legitimate performance of Grantee’s job duties, Grantee agrees:
(1) to regard and preserve as confidential at all times all Proprietary Information;
(2) to refrain from publishing or disclosing any part of the Proprietary Information and from using, copying or duplicating it in any way by any means whatsoever; and
(3) not to use on Grantee’s own behalf or on behalf of any third party or to disclose the Proprietary Information to any person or entity without the prior written consent of the Company.
(c) Property of the Company. Grantee acknowledges that all Proprietary Information and other property of the Company which Grantee accumulates during Grantee’s Employment are the exclusive property of the Company. Upon the termination of Grantee’s Employment, or at any time upon the Company’s request, Grantee shall surrender and deliver to the Company (and not keep, recreate or furnish to any third party) any and all work papers, reports, manuals, documents and the like (including all originals and copies thereof) in Grantee’s possession which contain Proprietary Information relating to the business, prospects or plans of the Company. Further, Grantee agrees to search for and delete all Company information, including Proprietary Information, from his or her computer, smartphone, tablet, or any other personal electronic storage devices, other than payroll information or other financial information that Grantee may need for his or her tax filings, and, upon request, certify to the Company that Grantee has completed this search and deletion process.
(d) Cooperation. Grantee agrees that, following any termination of his or her Employment, Grantee will not disclose or cause to be disclosed any Proprietary Information, unless (in any such case) required by court order.
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Pursuant to the Defend Trade Secrets Act of 2016, Grantee shall not be held criminally or civilly liable under any Federal or state trade secret law for the disclosure of any Proprietary Information that (i) is made (A) in confidence to a Federal, state or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Company may seek the assistance, cooperation or testimony of Grantee following any such termination in connection with any investigation, litigation or proceeding arising out of matters within the knowledge of Grantee and related to his or her Employment, and in such instance, Grantee shall provide such assistance, cooperation or testimony and the Company shall pay Grantee’s reasonable costs and expenses in connection therewith.
(e) Non-Solicitation.
(1) Grantee and the Company agree to the non-solicitation provisions of this Section 17(e): (i) in consideration for the Proprietary Information provided by the Company to Grantee; and (ii) to protect the Proprietary Information of the Company disclosed or entrusted to Grantee by the Company or created or developed by Grantee for the Company, the business goodwill of the Company developed through the efforts of Grantee and the business opportunities disclosed or entrusted to Grantee by the Company.
(2) Grantee expressly covenants and agrees that, during the Non-Solicit Period, Grantee will not: (i) engage or employ, or solicit or contact with a view to the engagement or employment of, any person who is an officer or employee of the Company; or (ii) canvass, solicit, approach or entice away or cause to be canvassed, solicited, approached or enticed away from the Company any person who or which is or was a customer of the Company, during the prior two years of Grantee’s Employment, and either (x) about which Grantee received Proprietary Information or (y) with which Grantee had contact or dealings on behalf of the Company.
(3) Grantee expressly recognizes that he or she is a key employee and an important member of management who will be provided with access to Proprietary Information and trade secrets as part of Grantee’s Employment and that the restrictive covenants set forth in this Section 17 are reasonable and necessary in light of Grantee’s position and access to the Proprietary Information.
(f) Relief. Grantee and the Company agree and acknowledge that the limitations as to time and scope of activity to be restrained as set forth in this Section 17 are reasonable and do not impose any greater restraint than is necessary to protect the legitimate business interests of the Company. Grantee and the Company also acknowledge that money damages would not be sufficient remedy for any breach of this Section 17 by Grantee, and the Company shall be
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entitled to enforce the provisions of this Section 17 by terminating any unearned or unvested PSUs, taking action to recoup the value of any PSUs already settled and paid to Grantee, and to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Section 17 but shall be in addition to all remedies available at law or in equity, including the recovery of damages from Grantee and Grantee’s agents. However, if it is determined that Grantee has not committed a breach of this Section 17, then the Company shall resume vesting of the PSUs due under this Agreement and pay to Grantee all PSUs that would have vested but had been suspended pending such determination.
(g) Reformation. The Company and Grantee agree that the foregoing restrictions are reasonable under the circumstances and that any breach of the covenants contained in this Section 17 would cause irreparable injury to the Company. Grantee expressly represents that enforcement of the restrictive covenants set forth in this Section 17 will not impose an undue hardship upon Grantee or any person or entity affiliated with Grantee. Further, Grantee acknowledges that Grantee’s skills are such that Grantee can be gainfully employed and that the restrictive covenants will not prevent Grantee from earning a living. Nevertheless, if any of the aforesaid restrictions are found by a court of competent jurisdiction to be unreasonable, or overly broad as to time, or otherwise unenforceable, the parties intend for the restrictions herein set forth to be modified by the court making such determination so as to be reasonable and enforceable and, as so modified, to be fully enforced.
(h) Protected Disclosures. Notwithstanding any provision to the contrary in this Agreement, nothing in this Agreement prohibits Grantee from reporting possible violations of law or regulation to any governmental agency or entity, including the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Nothing in this Agreement limits Grantee’s ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or other information, without notice to the Company. Additionally, Grantee and the Company acknowledge and agree that Grantee does not need the prior authorization of the Company to make any such reports or disclosures and Grantee is not required to notify the Company or any of its affiliates that Grantee has made such reports or disclosures.
(i) Survivability. The provisions of this Section 17 shall survive any termination of the Agreement and settlement of PSUs, and shall remain applicable to Grantee.
17. Entire Agreement; Binding Effect. This Agreement shall cover all shares of Common Stock acquired by the Grantee pursuant to this Agreement, including any community and/or separate property interest owned by the Grantee’s spouse in said shares. All
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terms, conditions and limitations on transferability imposed under this Agreement upon shares acquired by the Grantee shall apply to any interest of the Grantee’s spouse in such shares. This Agreement and the Plan constitute the entire understanding between the parties regarding this Award, and supersedes any and all prior written or oral agreements between the parties with respect to the subject matter hereof. There are no representations, agreements, arrangements, or understanding, either written or oral, between or among the parties with respect to the subject matter hereof which are not set forth in this Agreement. This Agreement is binding upon the Grantee’s heirs, executors and personal representatives with respect to all provisions hereof. Except as set forth herein, this Agreement cannot be modified, altered or amended, to the detriment of the Grantee, except by an agreement, in writing, signed by both a duly authorized executive officer of the Company and the Grantee.
| INSPERITY, INC. | ||||||||||||||
| Award Date: | By: | |||||||||||||
| Name: | ||||||||||||||
| Title: | ||||||||||||||
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Acknowledgement and Acceptance by the Grantee
I, _________________________, the undersigned Grantee, hereby acknowledge that I have received copies of the Insperity, Inc. Incentive Plan, as amended and restated effective May 22, 2023 (the “Plan”), the First Amendment and corresponding Prospectus for the Plan, and that I will consult with and rely upon only my own tax, legal and financial advisors regarding the consequences and risks of the Award. I hereby agree to and accept the foregoing Officer Special Performance Unit Award Agreement, subject to the terms and provisions of the Plan and administrative interpretations thereof referred to above.
| GRANTEE: | |||||||||||
| Date: | |||||||||||
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SCHEDULE A
OFFICER SPECIAL PERFORMANCE UNIT AWARD AGREEMENT
Pursuant to the Officer Special Performance Unit Award Agreement (the “Agreement”) granted to the Grantee under the Insperity, Inc. Incentive Plan, as amended and restated effective May 22, 2023, and as subsequently amended, (the “Incentive Plan”), this Schedule A sets forth the Performance Goals corresponding to the percentage of shares of Performance Stock Units (“PSUs”) specified on the Agreement between the Grantee and Company that the Grantee is eligible to earn over the Performance Period. The number of PSUs set forth on a Grantee’s Agreement assumes achievement of the maximum Performance Level.
Performance Goal(s): for the purposes of this Schedule A, the Performance Level represents the 30-day average closing stock price that Insperity’s Common Stock must meet or exceed. The closing stock price shall be the Fair Market Value of Insperity’s Common Stock as defined under the Incentive Plan.
Performance Level | % of Maximum Granted PSUs | ||||
| $225 | 100% | ||||
| $205 | 80% | ||||
| $185 | 65% | ||||
| $165 | 50% | ||||
| $145 | 40% | ||||
| $130 | 30% | ||||
| $120 | 20% | ||||
| $105 | 10% | ||||
For a Grantee to be eligible to vest in any of the granted PSUs, the Performance Level must be achieved prior to the end of the Performance Period. The Committee will not interpolate for any result between Performance Levels. The number of PSUs set forth in the Grantee’s Agreement will be multiplied by the percentage of maximum granted PSUs specified in the table that corresponds to the Performance Level to determine the PSUs credited. Once a Performance Level is achieved, the PSUs credited are considered locked-in by the Grantee, subject to any conditions specified in the Agreement, and any subsequent decrease in the 30-day average closing stock price of Insperity’s Common Stock over the Performance Period, will not reduce the Performance Level achieved. If the level of achievement for the Performance Period is less than $105, then no PSUs will be credited to the Grantee. If the Performance Level exceeds $225, the maximum PSUs credited will still be limited to the number of PSUs set forth on a Grantee’s Agreement.
This Award is granted subject to the terms, conditions and limitations of the Incentive Plan, the Agreement and this Schedule A.