EXHIBIT 10.3
December 20, 2002
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Re: CHANGE OF STATUS AND SEPARATION AGREEMENT
Dear Xxx:
This letter, upon your signature, will constitute the entire agreement
("Agreement") between you and Xxxxx & Xxxxx Company ("G&E"), and all of its
respective subsidiaries, divisions, affiliates, and related entities
(collectively, the "Company") regarding the transition of your employment
status, duties and responsibilities and the termination of your employment with
the Company.
1. You have decided it would be in the best interests of you and your family
not to move to New York and to seek new employment opportunities. You are
resigning "with Good Reason" pursuant to your Employment Agreement dated
December 14, 2001.
2. a) Your transition date shall be January 2, 2003 ("Transition Date").
On and after the Transition Date, until July 2, 2003, or earlier
upon 45 days written notice by you to the Company (your
"Termination Date"), you shall have the title Executive Vice
President, Chief Administrative and Legal Officer and Corporate
Secretary of G&E, and will report to Xxxxx X. Xxxxxxxx, the Chief
Executive Officer of G&E ("CEO"). From the Transition Date through
July 2, 2003 you shall complete a legal and risk management
transition. From the Transition Date through your Termination
Date, you shall work in the Company's Northbrook, IL office on
various strategic projects and business initiatives as directed by
the CEO from time to time.
b) From the Transition Date until your Termination Date, you shall
receive a base salary of Thirty-Seven Thousand Five Hundred
Dollars ($37,500) per month, payable semi-monthly, less
withholding taxes and customary payroll deductions.
c) You agree to resign as an officer and employee of the Company on
your Termination Date, and the Company hereby accepts such
resignations. If the Company and you shall mutually agree in
writing, your Termination Date would be extended in which case you
shall receive a base salary of Thirty-Seven Thousand Five Hundred
Dollars ($37,500) per month, payable semi-monthly, less
withholding taxes and customary payroll deductions.
3. After the Effective Date, you or your estate will receive the following:
(i) On your Termination Date, a lump sum in cash equal to One Hundred
Eighty-Seven Thousand Five Hundred Dollars ($187,500) representing
your calendar year 2002 bonus; and
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(ii) On your Termination Date, you may receive a cash bonus in respect
of 2003 in the discretion of the Company; and
(iii) After your Termination Date, you shall receive cash payments of
Seventy-Five Thousand Dollars ($75,000) per month, for six months,
payable semi-monthly, or an aggregate total of Four Hundred Fifty
Thousand Dollars ($450,000), representing one year's base salary;
and
(iv) On your Termination Date, you shall receive a lump sum in cash in
the amount of Forty-Three Thousand Dollars ($43,000) representing
the annual equivalent of your Company benefits for healthcare,
dental, vision, life insurance, disability coverages, and
perquisites for the twelve month period after the Termination
Date, which has in part been grossed up to cover your income
taxes; and
(iv) On your Termination Date, you will be paid in cash your accrued
vacation time pay for 4.5 weeks of accrued vacation pay;
all of the above to be reduced by withholding taxes and customary payroll
deductions.
4. In consideration of and your acceptance of this Agreement, and provided
you have fulfilled your other obligations set forth in this Agreement,
after the Effective Date the Company shall provide you with the following
benefits:
i) up to Eighteen Thousand Dollars ($18,000) of senior executive
outplacement benefits from the company of your choice, upon
receipt by the Company of bills for same; and
ii) live voicemail, network access, secretarial services and cellular
phone through your Termination Date; you may keep your cellular
phone; and
iii) you and the Company shall mutually agree upon a reasonable and
appropriate interoffice memorandum, and a press release if
necessary, announcing your exit from the Company.
5. Except as specifically provided in this Agreement, you hereby abrogate
and repudiate any and all claims you have under any and all other written
or oral agreements between you and the Company regarding the terms of
your employment and any and all compensation to be paid to you by the
Company.
6. After your Termination Date, except for your rights under various
employee stock option, deferred compensation and 401(k) plans in which
you are a participant, and the indemnification provisions under the
Company's bylaws, and the indemnification agreement between the Company
and you, and in connection with matters for which any of the Released
Parties has maintained or maintains insurance coverage in the past,
present or future, all of which are not waived by this Agreement, you
will no longer be covered by or eligible for any benefits under any
Company employee benefit plans in which you currently participate, except
to the extent you may be entitled to do so under applicable disability
premium waivers due to a disability arising prior to your Termination
Date or to the extent you exercise an individual conversion option. After
your Termination Date, you will receive by separate cover information
regarding your rights to health insurance continuation (COBRA) and any
401(k), stock option and deferred
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compensation plan benefits. To the extent that you have such rights,
nothing in this Agreement will impair those rights.
7. (a) In exchange for the compensation and other rights to be provided
to you herein, to which you are not otherwise entitled except
pursuant to this Agreement, you agree to and hereby do waive and
release, and promise never to assert, any claims of any kind or
nature whatsoever, in law or equity, known or unknown, direct and
indirect, that you have against the Company, and its respective
predecessors, subsidiaries, affiliates, associates, owners,
divisions, representatives, related entities, officers, directors,
shareholders, agents, partners, insurers, employee benefit plans
(and their trustees, administrators and other fiduciaries),
attorneys, employees, heirs, successors, and assigns
(collectively, the "Released Parties"), arising from or related to
your employment, the transition of your employment, and the
termination of your employment with the Company.
The claims that you are waiving, releasing and promising not to
assert include, but are not limited to, claims arising under
federal, state and local statutory and common law, such as the Age
Discrimination in Employment Act, as amended, the Americans with
Disabilities Act of 1990, the Family Medical Leave Act of 1993,
Title VII of the Civil Rights Act of 1964, as amended, the Equal
Pay Act of 1963, as amended, the Civil Rights Act of 1866, as
amended, the common law of contract and tort, and any other laws
and regulations relating to employment, or employment
discrimination and/or the payment of wages or benefits.
(b) In consideration of the foregoing and the execution of the
Agreement by you, the Company and the Released Parties hereby
waive and release and promise never to assert any claims of any
kind or nature whatsoever, in law or equity, known or unknown,
direct or indirect that the Company (and/or any of the Released
Parties) might have against you (and including, without
limitation, your partners, associates, agents, representatives,
related entities and/or affiliates, contractors and/or your
attorneys).
8. (a) You understand and agree that the claims that you are waiving,
releasing and promising never to assert include claims that you
now know or have reason to know exist, as well as those that you
do not presently have any reason to know, believe or suspect that
you have, including unknown, unforeseen, unanticipated and
unsuspected injuries, damages, loss and liability and the
consequences thereof. By signing this Agreement you agree that you
are expressly waiving any provision of any state, federal or local
statute, and common-law doctrine, providing, in substance, that a
release shall not extend to claims, demands, injuries or damages,
loss or liability, which are unknown or unsuspected to exist, by
the person making the release, when s/he is making the release.
(b) The Company (and the Released Parties) agree and understand that
the claims that they are waiving, releasing and promising never to
assert include claims that they now know or have reason to know
exist, as well as those that they do not presently have any reason
to know, believe or suspect that they may have, including unknown,
unforeseen, unanticipated and unsuspected injuries, damages, loss
and liability and the consequences thereof. By signing the
Agreement the Company (on behalf of itself and the Released
Parties) agrees that the Company (and the Released Parties) are
expressly waiving any provision of any state, federal or local
statute, and common law doctrine, providing in substance, that a
release shall not extend to claims, demands, injuries or damages,
loss or
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liability, which are unknown or unsuspected to exist by the party
making the release, when it/they are making the release.
9. You agree that you will not voluntarily, and without compulsion of legal
process, assist or encourage others to assert claims or to commence or
maintain litigation against the Released Parties. You also agree not to
take any action or make any statement which disparages or is intended to
disparage the Released Parties or their reputations. The Company agrees
that it will not take any action or make any statement which disparages
or is intended to disparage you.
10. (a) If your Termination Date is more than forty-five days from the
Effective Date, you shall provide the Company with a General
Release of all claims in form and substance, attached hereto, as
of your Termination Date.
(b) You agree to return to the Company, by your Termination Date, any
and all information and materials, whether in paper, magnetic,
electronic or other form, that you have about the Company's
practices, procedures, trade secrets, finances, client lists, or
marketing of the Company's services. You may keep form contracts
that you developed in your role as General Counsel or Chief Legal
Officer of the Company. On your Termination Date, you will
promptly execute any and all notices of resignation from any
Company position as requested by the CEO. After your Termination
Date, you will take no further action to bind or obligate the
Company. On your Termination Date, you will turn in your corporate
American Express card.
11. You agree that you will not, unless required by law or otherwise
permitted by express written permission from or request by the Company,
disclose to anyone any information regarding the following:
a. Any non-public information regarding the Company, including its
practices, procedures, trade secrets, finances, client lists, or
marketing of the Company's services.
b. The terms of this Agreement, except that you may disclose this
information to members of your immediate family and to your
attorney, accountant or other professional advisor(s) to whom you
must make the disclosure in order for them to render professional
services to you. You will instruct them, however, to maintain the
confidentiality of this information just as you must, and any
breach of this obligation of confidentiality by such family member
or professional advisor(s) shall be deemed to be a breach by you.
If required to disclose the terms of this Agreement by law, you
shall provide the Company with sufficient notice prior to any such
disclosure, including the basis for the legal requirement to
disclose, to allow the Company to seek a protective order
preventing the disclosure.
12. You agree that, commencing on the Effective Date, and thereafter for a
period of twelve months after your Termination Date, except for Xxxxx
Xxxxxxx and Xxxxx Xxxxxxxxxxx, you shall not, without the prior
permission of the CEO or CFO of the Company, directly or indirectly, on
behalf of yourself or any other person or entity solicit for employment
any then current executive, employee or independent contractor of the
Company, or request or induce any then current executive, employee or
independent contractor of the Company to leave the employ of, or
association with, the Company.
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13. Except as required by law or administrative agency or stock exchange
rules, the Company will keep the terms of this Agreement confidential. It
is expected that the Company will file this Agreement as an exhibit to
its SEC filings.
14. In the event that you breach any of your obligations under this Agreement
or as otherwise imposed by law, the Company will be entitled to recover
the benefits paid under the Agreement and to obtain all other relief
provided by law and equity. If the Company breaches any of its
obligations under this Agreement, you will be entitled to obtain all
relief provided by law and equity. If either you or the Company believes
there has been a breach of this Agreement, the party alleging such breach
shall notify the other party in writing and provide a reasonable
opportunity to cure such breach. In the event of a dispute between the
parties to this Agreement, the prevailing party shall be entitled to
recover its or his expenses and reasonable attorneys' fees incurred
therein from the unsuccessful party. This Agreement will be governed by
the law of the State of Illinois without regard to principles of
conflicts of laws thereof.
15. To accept the Agreement, please date and sign this Agreement and return
it, either by personal delivery or by mail, to XXXXX & XXXXX COMPANY, c/o
Xxxxx X. Xxxxxxxx, CEO, 00 X. 00xx Xxxxxx, Xxx Xxxx, XX 00000-0000. An
extra original for your records is enclosed.
A. YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.
B. THIS AGREEMENT AND ITS TERMS WILL REMAIN EFFECTIVE AND MAY BE
ACCEPTED BY YOU IN THE MANNER DESCRIBED IN THE ATTACHED COVER
LETTER.
C. ONCE YOU ACCEPT THIS AGREEMENT, YOU WILL HAVE SEVEN (7) DAYS AFTER
SIGNING TO REVOKE YOUR ACCEPTANCE. TO REVOKE, YOU MUST SEND,
EITHER BY PERSONAL DELIVERY OR BY MAIL, TO THE CEO AS INDICATED
ABOVE, A WRITTEN STATEMENT OF REVOCATION. IF YOU DO NOT REVOKE,
THE EIGHTH DAY AFTER THE DATE OF YOUR ACCEPTANCE WILL BE THE
"EFFECTIVE DATE" OF THIS AGREEMENT.
16. Nothing in this Agreement shall constitute an admission of liability or
wrongdoing by the Company or by you. This Agreement shall not be binding
on the Company unless and until it is signed, in unaltered form, and
returned to the Company as provided above.
17. In the event that any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement.
18. The obligations of the Company under this Agreement shall be binding on
the Company and its successors and assigns. This Agreement represents the
sole and entire agreement between you and the Company regarding the
transition and then termination of your services as Executive Vice
President, Chief Administrative Officer, Chief Legal Officer and
Corporate Secretary and supersedes any and all previous verbal or written
promises, representations, agreements, negotiations and/or discussions,
if any, between you and the Company with respect to the subject matters
covered herein. This Agreement cannot be terminated or changed except in
writing by you and a duly authorized representative of G&E.
19. All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when
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received if personally delivered; when transmitted if transmitted by
telecopy, electronic or digital transmission method, with electronic
confirmation; when received, if sent for next day delivery to a domestic
address by recognized overnight delivery service (E.G., Federal Express);
and upon receipt, if sent by certified or registered mail, return receipt
requested. In each case notice shall be sent to:
If to you, addressed to:
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
If to Xxxxx & Xxxxx Company, addressed to:
Xxxxx & Xxxxx Company
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Chief Executive Officer
Fax: (000) 000-0000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
20. This Agreement may be executed in any number of original or facsimile
counterparts, each of which shall be deemed an original, but all of which
when taken together shall constitute one and the same instrument.
XXXXX & XXXXX COMPANY
BY: /s/XXXXX X. XXXXXXXX
--------------------
Xxxxx X. Xxxxxxxx
Dated: December 20, 2002 President & Chief Executive Officer
By signing this Agreement, I acknowledge that I have had the opportunity to
review it carefully with an attorney of my choice, that I understand the terms
of the agreements contained therein, and that I voluntarily agree to them.
Dated: March 10, 2003 /s/ XXXXXX X. XXXXXX
----------------------
Xxxxxx X. Xxxxxx
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GENERAL RELEASE BY XXXXXX X. XXXXXX
-----------------------------------
FOR AND IN CONSIDERATION OF the terms and conditions of the Separation
Agreement dated as of December 20, 2002 by and between XXXXXX X. XXXXXX (the
"Executive") and XXXXX & XXXXX COMPANY (the "Company") (the "Separation
Agreement"), the Executive agrees, on behalf of himself, his heirs, executors,
administrators and assigns, to release and discharge the Company, and all of its
current and former officers, directors, employees, agents, stockholders,
subsidiaries, divisions, affiliates, parents, successors and assigns ("Released
Parties") from any and all manner of actions and causes of action, suits, debts,
dues, accounts, bonds, covenants, contracts, agreements, judgments, charges,
claims, and demands whatsoever ("Losses") which the Executive, his heirs,
executors, administrators and assigns have, or may hereafter have against the
Released Parties or any of them arising out of or by reason of any cause, matter
or thing whatsoever from the beginning of the world to the date hereof,
including without limitation any and all matters relating to his Employment
Agreement with the Company, his employment by the Company and the cessation
thereof, and all matters arising under any federal, state or local statute, rule
or regulation or principle of contract law or common law, including but not
limited to Title VII of the Civil Rights Act of 1964, AS AMENDED, 42 U.S.C.
xx.xx. 2000e ET SEQ., the Age Discrimination in Employment Act of 1967, AS
AMENDED, 29 U.S.C. xx.xx. 621 ET SEQ., the Americans with Disabilities Act of
1990, AS AMENDED, 42 U.S.C. xx.xx. 12101 ET SEQ., the Employee Retirement Income
Security Act of 1974, AS AMENDED, 29 U.S.C. xx.xx. 1001 ET SEQ., the New York
State Human Rights Law, AS AMENDED, N.Y. Exec. Law xx.xx. 290 ET SEQ., the New
York City Human Rights Law, AS AMENDED, N.Y.C. Admin. Code xx.xx. 8-101 ET SEQ.,
and any other equivalent state or local statute; PROVIDED, HOWEVER, that the
Executive does not release and discharge the Released Parties from any Losses
arising out of or in connection with his Separation Agreement. It is understood
that nothing in this General Release is to be construed as an admission on
behalf of the Released Parties of any wrongdoing with respect to the Executive,
any such wrongdoing being expressly denied. This General Release shall not
affect any unpaid claims of Executive under any medical, accident or disability
insurance policy or employee medical care account.
Notwithstanding anything to the contrary in this General Release,
Executive's rights, if any, to employee stock options, deferred compensation and
401-K plans in which Executive is a participant, as well as indemnification from
the Company for ongoing defense costs and any other liabilities or Losses
pursuant to the Company's Bylaws and/or pursuant to any indemnification
agreement with the Company to which Executive is a party, including without
limitation independent contractor sales agents, and/or in connection with
matters for which any of the Released Parties has maintained or maintains
insurance coverage in the past, present or future, are not waived by this
General Release.
The Executive represents and warrants that he fully understands the terms
of this General Release, that he has had the benefit of advice of counsel, and
that he knowingly and voluntarily, of his own free will without any duress,
being fully informed and after due deliberation, accepts its terms and signs the
same as his own free act. The Executive understands that as a result of
executing this General Release, he will not have the right to assert that the
Company unlawfully terminated his employment or violated any of his rights in
connection with his employment.
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The Executive affirms that he has not filed, and agrees not to initiate
or cause to be initiated on his behalf, any complaint, charge, claim, or
proceeding against the Released Parties before any federal, state, or local
agency, court or other body relating to his employment and the cessation
thereof, and agrees not to voluntarily participate in such a proceeding. The
Executive waives any right he may have to benefit in any manner from any relief
(whether monetary or otherwise) arising out of any such proceeding.
The Executive, having had the advice of counsel, knowingly waives the
remainder of the 21-day period he had to consider whether to execute this
General Release. Upon the Executive's execution of this General Release, he will
have seven (7) days after execution to revoke it. In the event of revocation,
the Executive must present written notice of revocation to Xx. Xxxxx Xxxxxxxx of
the Company. If seven (7) days pass without such notice of revocation, this
General Release shall become binding and effective on the eighth (8th) day (the
"Release Effective Date").
This General Release shall be governed by the laws of the State of
Illinois without giving effect to the principles of conflicts of law.
/s/ XXXXXX X. XXXXXX MARCH 10, 2003
-------------------- --------------
XXXXXX X. XXXXXX DATE
Sworn to before me this
___ day of ______ __, 200_
------------------------------------
Notary Public
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