EXHIBIT 10.6
WITHOUT PREJUDICE & SUBJECT TO CONTRACT
THIS AGREEMENT is made on the 7th day of October, 2002
BETWEEN:
(1) INSTINET GROUP INCORPORATED, a Delaware Corporation (the "US Employer")
(2) INSTINET GLOBAL SERVICES LIMITED of Commodity Quay East Smithfield
London E1W 1AZ (the "UK Employer"); and
(3) XXXXX XXXXXXXX whose address is 00 Xxxxxxxxxx Xxxxxxx Xxxxxx XX0 0XX
(xxx "Executive")
WHEREAS:
(A) The Executive was employed by the US Employer under the terms of an
Employment Agreement made with the Employer's predecessor company dated
2 April 2001 governed by the laws of the State of New York ;
(B) The Executive's role was global but he had his base in, was paid from
and was tax resident in the United Kingdom, working at the premises of
the UK Employer, such that the laws of England and Wales in relation to
his employment might also be applicable; and
(C) This Agreement (the "Agreement") is a Compromise Agreement under the
laws of England and Wales and the conditions regulating Compromise
Agreements under the Employment Rights Act 1996 (as amended), the Sex
Discrimination Xxx 0000 (as amended) and the Race Relations Act 1976
(as amended) are satisfied in relation to this Agreement; and
(D) This Agreement also serves as a release, as set out below, in relation
to all claims the Executive might have in relation to any Federal,
State or local law applicable in the United States (including all
claims under New York law).
NOW IT IS HEREBY AGREED as follows:
TERMINATION OF EMPLOYMENT
1. The parties agree that:
(a) The Executive's employment with the US Employer (and for the
avoidance of doubt, all of its Associated Companies,
including, without limitation, the UK Employer) terminated at
midnight on 30 June 2002 (the "Termination Date");
(b) The Executive's Form P45 shall be made up to the Termination
Date and issued to him accordingly;
(c) The Executive acknowledges and confirms that all the Accrued
Obligations (as defined at Clause 7(f)(i) of the Employment
Agreement) have been met in full, and that there are no
outstanding salary, business expenses or accrued holiday pay
sums owing to the Executive.
SEPARATION PAYMENTS AND BENEFITS
2. In consideration of, and as compensation for, the termination of the
Executive's employment on the Termination Date and the Executive's
agreement to give the undertakings set out at Clause 10 of this
Agreement, the US Employer agrees to provide the sums and benefits
set out in this clause to the Executive or to the Executive's estate
(in circumstances where any payments provided for under this
agreement are outstanding at the date of the Executive's death). The
sums and benefits to be provided to the Executive under this
Agreement are in place of, and not in addition to, payments the
Executive would otherwise be entitled to pursuant to any policy or
practice of the Instinet Group. All payments due to the Executive
under this Agreement are set out as gross amounts, and, since a Form
P45 will have been issued
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to the Executive prior to their payment, unless otherwise stated,
basic rate tax of 22% shall be deducted from such payments at source,
on the understanding that the Executive confirms and warrants that he
shall be responsible for all further tax, employee's national
insurance and any Federal, State and local tax withholdings under US
law, and in this regard, the Executive gives the undertaking set out
at paragraph 10(i) below:
(a) SEVERANCE PAYMENTS
The Executive will be entitled to receive severance payments for the
two year period immediately following the Termination Date (the
"Severance Period") at the rate of L240,000 per annum in equal
monthly instalments payable on the 15th day of each month consistent
with the UK Employer's normal pay-roll practices the first such payment
to be made on the execution of this Agreement (with any appropriate
backdating) and the last to be made on 15 June 2004. The severance
payments will be paid in to the Executive's nominated bank account in
the UK by credit transfer in pounds sterling. The Executive confirms
and warrants that the payment of these sums will fulfil the US
Employer's obligations under Clause 7(f)(i)(A) of the Employment
Agreement;
(b) 2002 PRO-RATA BONUS
The Executive is entitled to receive US$446,301 as a pro rata bonus for
the calendar year of 2002. This payment will be made within 30 days of
the date of this Agreement. It will be paid in US dollars by credit
transfer into a US dollar bank account in the UK nominated by the
Executive. The Executive confirms and warrants that the payment of
these sums will fulfil the US Employer's obligations under Clause
7(f)(i)(B) of the Employment Agreement;
(c) 200% OF AVERAGE ANNUAL BONUS
The Executive is entitled to receive two equal payments of US$635,500;
the first in February 2003, and the second in February 2004. These sums
shall be paid in US dollars to a US dollar bank account in the UK
nominated by the Executive. The
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Executive confirms and warrants that the payment of these sums will
fulfil the US Employer's obligations under Clause 7(f)(i)(C) of the
Employment Agreement;
(d) MEDICAL AND HEALTH INSURANCE
The Executive is entitled to remain in his current medical plan or
similar plan providing comparable benefits as far as is reasonably
practicable to those which the Executive currently enjoys for the
Severance Period at the US Employer's expense. The UK Employer agrees
to provide at its expense, cover in respect of total and permanent
disability for the Severance Period which is substantially equivalent
in all material respects to the cover enjoyed by the Executive during
his employment. The Executive confirms that he will undertake all
necessary steps to facilitate the provision of such cover, including
making himself available for medicals and providing relevant
information both to the UK Employer and any third party broker or
insurer or their representatives or health professionals. The Executive
confirms and warrants that the provision of these benefits will fulfil
the US Employer's obligations under Clause 7(f)(i)(D) of the Employment
Agreement;
(e) COMPANY CAR
The UK Employer shall pay to the relevant lease company the outstanding
balance of the lease on the Executive's company car as at the
Termination Date (the Lease Value), registration number W742 YGK and
shall procure that title to the company car above is transferred to him
as soon as reasonably practicable after the date of this Agreement and
that documentation is delivered to the Executive as soon as reasonably
practicable following the confirmation that the Lease Value has been
paid by the UK Employer to the lease company. It is agreed that the
taxable value of this benefit is the Lease Value to be settled by the
UK Employer, which is agreed in the sum of L27,207.98. It is
understood by the UK Employer that it may provide this benefit to the
Executive tax free as this value appears to fall within the exemption
on tax of up to L30,000 allowed by Section 148 of the Income &
Corporation Taxes Xxx 0000. The Executive is however given no guarantee
in this regard and the Executive therefore confirms that his
undertaking at Clause 10(i) below applies;
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(f) ACCOUNTANCY FEES
The Executive is entitled to contributions towards his accountancy fees
for his US and/or UK tax returns of up to L5,000 plus VAT in
aggregate, provided that such accountancy fees are incurred by the
Executive in relation to the period prior to the Termination Date, and
the relevant accountant's invoice or invoices are submitted to the
Executive prior to the end of 2002;
(g) Legal Fees
The UK Employer shall make a contribution to the Executive's legal fees
incurred in connection with the termination of his employment and the
negotiation of this Agreement up to a maximum of L20,000 plus VAT
within 30 days of receiving directly from the Executive's solicitors an
original invoice addressed to the Executive but marked payable by the
UK Employer.
EXECUTIVE'S CONFIRMATIONS
3. The Executive confirms and agrees that:
(a) he will be responsible for all legal fees incurred by him; and
(b) that, save as provided for in this Agreement, all payments and
benefits (including any non-contractual items) shall cease
with effect from the Termination Date.
EXIT FORMS
4. The US Employer confirms that the filing of the relevant exit form in
respect of the Executive for NASD has been completed. The UK Employer
also confirms that the filing of the UK FSA Form has already been
processed.
REUTERS OPTION SCHEMES
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5. (a) Subject at all times to, and in accordance with, the Rules
of the Reuters International Savings Related Share Option
Scheme 2000 (XXXX Number 18), the Executive may continue to
contribute to that Scheme up to 30 December 2002, if he so
chooses. The Executive must also exercise his options in
accordance with the Scheme Rules by 30 December 2002. After
that time, for further contributions may be made to the
qualifying plan and any options not exercised will be forfeit;
(b) The Executive is entitled to exercise his Options granted in
the year 2000 under the Reuters Employee Share Ownership Trust
Number 1 at any time during the period up to 30 December 2002
subject at all times to, and in accordance with, the rules of
the relevant scheme.
RESTRICTED STOCK UNITS
6. It is confirmed that the 8,235 Restricted Stock Units of the Executive
will vest in full on 20 March 2003. All entitlements and options of the
Executive in relation to these Restricted Stock Units will operate
strictly in accordance with the rules of the relevant scheme.
INSTINET 2000 STOCK OPTION PLAN
7. (a) It is confirmed, subject always to the rules of the Plan and
the relevant Option Agreements, that the Executive has 60 days
from the Termination Date to exercise his vested options
granted under the Instinet 2000 Stock Option Plan in 2000.
Unvested options lapsed on the Termination Date;
(b) It is confirmed that the Executive's options granted under the
Instinet 2000 Stock Option Plan in 2001 continue to vest
during the Severance Period in the manner set out in the rules
of the Plan and the relevant Option Agreements. At the end of
the Severance Period, the Executive will, subject always to
the rule of the Plan and the relevant Option Agreements, have
30 days to exercise those options which have vested by that
date, at all times in accordance with the rules of the Plan
and the relevant Option Agreements.
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PENSION
8. The UK Employer will procure that the Reuters Pensions Administrator
will produce a letter to the Executive confirming his options in
relation to his rights under the Reuters defined benefit Retirement
Plan and the Reuters unfunded unapproved Plan ("UURBS") as soon as
reasonably practicable after the execution of this Agreement. The UK
Employer shall remain bound by the terms of the Unfunded Unapproved
Retirement Benefits Deed between the Executive and the UK Employer
dated 16 July 1999 in accordance with the terms of the Deed insofar
as it refers to unfunded unapproved retirement benefits and on the
basis that the Executive's employment terminated on the Termination
Date. For the avoidance of doubt, the UK Employer will not be obliged
to continue any life cover under the Reuters Unapproved Life
Assurance Scheme (RULAS) or any other life cover.
THE UK EMPLOYER AND US EMPLOYER'S OBLIGATIONS
9.1 The UK Employer and the US Employer agree and undertake with the
Executive:
(a) that they will not, at any time disclose or communicate to any
third party the terms of this Agreement, and/or any
information whatsoever relating to the circumstances giving
rise to the making of this Agreement. This provision does
not preclude the UK Employer and the US Employer from
disclosing such terms, such facts and/or any such
information in obedience to an order of a Court or Tribunal
or competent jurisdiction or as otherwise required or
permitted by law or by virtue of any regulatory obligation
or subject to the same terms as to confidentiality as are
contained in this paragraph to their professional advisers
and/or the Inland Revenue or its US equivalent; and
(b) that they will not make or publish any statements (orally or
in writing) which could, or which reasonably could be expected
to, lower the reputation of the Executive.
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9.2 The UK Employer and the US Employer each confirm that, to their present
knowledge, without having undertaken any specific research, they are
not aware of any claim of any kind that they might have, or that any
Associated Company has, outstanding against the Executive. The UK
Employer and the US Employer also confirm that, subject always to the
terms of such cover, its Directors and Officers' Insurance cover is in
place in respect of all and any actions by the Executive in the course
of his duties as a director or officer of any of the companies in The
Instinet Group up to and including the Termination Date.
FULL AND FINAL SETTLEMENT
10. The Executive agrees and undertakes with the UK Employer and the US
Employer as follows:
(a) That by entering into this Agreement, he accepts the payments
and benefits to be conferred on him hereunder in full and
complete satisfaction and final settlement of all and any
claims or rights of action whether arising under the laws of
England and Wales (whether by common law, statute or
otherwise), the law of the European Union, and the laws of
the United States (including the laws of the State of New
York and, without limitation, any Federal, State and local
fair employment practice laws, workers compensation law and
any other employment relations statute, executive order, law
or ordinance in the United States, including, but not
limited to Title VII of the Civil Rights Xxx 0000, as
amended, the Age Discrimination in Employment Xxx 0000, as
amended, the Xxxxxxxxxxxxxx Xxx 0000, as amended, the Family
and Medical Leave Act, the Americans with Disabilities Xxx
0000, as amended and the Civil Rights Acts of 1866 and 1871)
and except as otherwise expressly set out in this Agreement,
any other duty and/or other employment-related obligation,
including any claims arising from his Employment Agreement,
tort, tortious course of conduct, contract, obligations of
"good faith", public policy, statute, common law, equity and
all claims for wages and benefits, monetary and equitable
relief, punitive compensatory relief and legal
representative's fees and costs, which the Executive may
have against the UK Employer, the US Employer or any of its
Associated Companies arising out of or in connection
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with the Executive's employment and/or its termination, but
excluding the following claims:
(i) any claim in connection with the enforcement of this
Agreement;
(ii) any claim to exercise any stock option, RSU or share
option in accordance with the relevant scheme rules;
(iii) any claim in respect of accrued pension rights; and
(iv) any claim in respect of personal injury of which the
Executive is not aware and could not reasonably be
aware as of the date of this Agreement.
(b) That he shall refrain from instituting or continuing any
proceedings against the US Employer, the UK Employer or any of
the its or their Associated Companies or any of their present
or former directors, officers, workers, agents or employees
before an Employment Tribunal and/or Court or similar forum in
respect of any claim set out at Clause 10(a) above and any
further claim arising out of or in connection with the
Executive's employment with the US Employer, the UK Employer
and/or its termination;
(c) that he has complied with his obligations under Clause 12 of
the Employment Agreement and that, without prejudice to
that, he has returned to the UK Employer all property which
is in his possession or custody or under his control
belonging to the UK or US Employer or any of their
Associated Companies and all property belonging to third
parties which is in the Executive's possession or custody
under the Executive's control by virtue of his employment,
including but not limited to, the Executive's palm pilot,
security pass, corporate credit card, keys and any papers,
documents or information (stored electronically or
otherwise) which relate in any way to the UK or US Employer
or any of their Associated Companies but will exclude the
Executive's mobile phone, laptop and printer, title to which
is transferred to the Executive as of the Termination Date.
The Executive further undertakes
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with the UK and US Employers that the Executive will not
retain copies of such property and that the Executive will
act in good faith in returning all such property to the UK
Employer;
(d) that he will not at any time after the Termination Date
represent himself as being employed by or connected with the
UK and US Employer or any of their Associated Companies;
(e) that he will not, without the prior written consent of the UK
or US Employer, at any time:
(i) disclose or communicate to any third party (including
employees of the UK or US Employer and any of their
Associated Companies); or
(ii) otherwise cause or enable any third party (including
employees of the UK or US Employer and any of their
Associated Companies) to become aware of the terms of
this Agreement, and/or any information whatsoever
relating to the circumstances giving rise to the
making of this Agreement.
This provision does not preclude the Executive from disclosing
such terms, such facts and/or any such information in
obedience to an order of a Court or Tribunal of competent
jurisdiction or as otherwise required or permitted by law or
subject to the same terms as to confidentiality as are
contained in this paragraph to the Executive's professional
advisers and/or the Executive's immediate family and/or the
Inland Revenue or its US equivalent;
(f) That he will not make or publish any statements (orally or in
writing) which could, or which reasonably could be expected
to, lower the reputation of the UK Employer, the US Employer
(together the "Main Companies") or any of their Associated
Companies and any of their present or former officers,
directors, agents, workers or employees in the eyes of any
third party (together the "Associated Parties"), save that
this obligation of the Executive expires on
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30 June 2004 in respect of the Associated Parties and on 30
June 2007 in respect of the Main Companies;
(g) That he has abided and will continue to abide by all those
obligations implied by law, and without prejudice to those,
all those express obligations which continue to apply
notwithstanding the termination of his employment,
particularly, but without limitation, as set out in Clauses
8, 9, 10, 11, 12, 13 of the Employment Agreement and that the
US Employer is entitled to seek and obtain the full range of
appropriate remedies in the case of any breach of the above
obligations by the Executive;
(h) That he resigns, with effect from the Termination Date, from
all Board memberships in the Instinet Group and other
positions then held by him with the US Employer, the UK
Employer and all their Associated Companies and will complete
separate letters of resignation in relation to each Board
membership at set out in draft at Appendix One to this
Agreement;
(i) That in the event of any of the payments or benefits made or
provided to the Executive hereunder being assessed to income
tax and/or employee national insurance contributions or any
other tax or withholding deduction, beyond such deductions
which have already been made as set out in the Agreement
above ("Further Deductions"), that the Executive will
himself be personally liable for such Further Deductions, and
the Executive hereby indemnifies the US Employer, the UK
Employer and their Associated Companies in respect thereof;
(j) To give effect to Clause 10(a) above (but subject to the
exclusions in that Clause), the Executive hereby releases and
discharges the US Employer, the UK Employer and all of their
Associated Companies, and waives all and any rights of any
kind and description that he has or may have against the US
Employer, the UK Employer and their Associated Companies as
of the date of this Agreement in respect of his employment
and its termination and his resignation as a director or any
other matter including, but not limited to, any asserted and
unasserted claims arising from any of the matters set out at
Clause
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10(a) above. In this regard, the Executive, the US Employer
and the UK Employer wish for the purposes of English and
Welsh law to enter into a Compromise Agreement under which
the Executive wishes to compromise all of the following
claims which he has already intimated that he may have
against the US Employer, the UK Employer or any of its
Associated Companies or any of its or their present or former
directors, officers, workers, agents or employees, namely:
(a) any claim in relation to wages under part II of the
Employment Rights Xxx 0000;
(b) any claim in relation to a redundancy payment under
part XI of the Employment Rights Xxx 0000;
(c) any claim for unfair dismissal under the Employment
Rights Xxx 0000;
(d) any claim under the Sex Discrimination Xxx 0000;
(e) any claim under the Race Relations Xxx 0000;
and the Executive agrees to refrain from instituting or
continuing any such Tribunal or Court claims against the US
Employer, the UK Employer and any of their Associated
Companies. For the avoidance of doubt, such claims are to be
treated as "particular proceedings" within the terms of
Section 203(3)(b) of the Employment Rights Act 1996 and
"particular complaints" for the purposes of Section 72(4A)(b)
of the Race Relations Xxx 0000 and Section 77(4A)(b) of the
Sex Discrimination Act 1975 (together referred to as the
Acts, which expression shall include all Regulations made
under them and all modifications or amendments). The
Executive warrants that there are no other claims of any
kind outstanding against the US Employer, the UK Employer or
any of their Associated Companies.
(k) The Executive warrants he has received independent legal
advice as to the terms and effect of this Agreement in
accordance with the provisions of the
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Acts, from a relevant independent adviser, namely Xxxx Xxxxx
of MacFarlanes Solicitors (the Adviser) who is a solicitor of
the Supreme Court, holding a current practising certificate
and whose firm has professional indemnity cover for the risk
of a claim by the Executive in respect of any loss arising in
consequence of such advice. The Executive will procure that
the Adviser completes the Adviser's Certificate at Appendix
Two to this Agreement. It is agreed that on receipt of the
completed certificate by the UK Employer's representative,
the conditions relating to Compromise Agreements under the
Acts will have been satisfied.
DEFINITION
11. For the purposes of this Agreement, "Associated Company" means a
company which is from time-to-time a "subsidiary" or a "holding
company" (and those expressions shall have the meanings assigned to
them respectively by Section 736 of the Companies Xxx 0000 as amended
prior to the date hereof) of the US Employer or, as the case may be,
of the UK Employer, or a subsidiary (other than the US Employer or the
UK Employer) of a holding company of the US Employer or the UK
Employer respectively. "The Instinet Group" means any company which
falls within the above definition, including, for the avoidance of
doubt, the US Employer and the UK Employer.
NO ADMISSION OF LIABILITY
12. This Agreement is made, and the consideration set out in this
Agreement above, is given without any admission of liability
whatsoever by the US Employer, the UK Employer or any of their
Associated Companies.
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EXECUTIVE'S BREACH OF THIS AGREEMENT
13. The Executive agrees that, without limiting the US and UK Employer's
remedies in any way, should he reasonably be in fundamental breach of
any of his obligations under this Agreement, the US and UK Employers
shall be entitled immediately to cease all outstanding payments and
benefits due to the Executive pursuant to this Agreement without
waiver of or prejudice to any of the waivers and/or releases entered
into by the Executive in this Agreement and without waiver of or
prejudice to any claim which the US and/or the UK Employer may have
against the Executive in respect of the fundamental breach of the
Executive referred to above.
GOVERNING LAW
14. The terms of this Agreement shall be governed by the laws of the State
of New York, except those provisions relating purely to the laws of
England and Wales, which shall be governed by the law of England and
Wales.
ENTIRE AGREEMENT
15. The terms of this Agreement constitute the entire understanding
between the Executive, the UK Employer and the US Employer and
supersede all, if any, subsisting agreements, arrangements or
understandings, written or oral, relating to the termination of the
Executive's employment and any such agreements, arrangements or
understandings shall be deemed to have been terminated by mutual
consent.
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RIGHTS OF THIRD PARTIES
16. For the purposes of the laws of England and Wales, the Contracts
(Rights of Third Parties) Xxx 0000 shall apply to this Agreement such
that it is agreed that any Associated Company shall be entitled to
enforce the benefits of the Executive's obligations under this
Agreement. The parties agree that this Agreement can be rescinded,
varied and/or terminated by mutual agreement between them in writing
without the agreement of any Associated Company even if such recision,
variation or termination effects the benefits conferred on such
Associated Company.
OPEN AGREEMENT
17. Notwithstanding that this Agreement is marked "without prejudice and
subject to contract" it shall, when signed by the Executive, the
Executive's independent legal adviser and on behalf of the US Employer
and the UK Employer, become open and binding.
EXECUTION
18. (a) The Executive acknowledges that he has had a reasonable and
adequate opportunity from his receipt of this document to
review it.
(b) Following his signing of the Agreement, the Executive has the
right to revoke the Agreement at any time within seven (7)
calendar days of his signing it, not including the date of
his signing (the "Revocation Period"). Notice of Revocation
shall be given in writing and sent by overnight mail no later
than the seventh day following the date the Executive signs
this Agreement to Xxxxxxx Xxxxxxxx of 00 Xxxxx Xxxxxx Xxxxxx
X0X 0XX. If the Executive does not revoke the Agreement, this
Agreement shall be deemed to be effective and to be
enforceable as of the date of this Agreement. If the
Executive gives Notice of Revocation during the Revocation
Period in the manner specified above, this Agreement shall
become null and void and all rights and claims of the parties
which would have existed, but for the execution of this
Agreement shall be restored.
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STATEMENT BY THE EXECUTIVE WHO IS SIGNING BELOW: THE US AND UK COMPANY HAS
ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
RELEASE. I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE PROVISIONS OF THIS
RELEASE AND HAVE HAD SUFFICIENT TIME AND OPPORTUNITY TO CONSULT WITH MY
PERSONAL TAX, FINANCIAL AND LEGAL ADVISERS PRIOR TO EXECUTING THIS DOCUMENT,
AND I INTEND TO BE LEGALLY BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE
THIS RELEASE WITHIN SEVEN (7) DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL
NOT BECOME ENFORCEABLE OR EFFECTIVE UNTIL THAT SEVEN (7) DAY PERIOD HAS EXPIRED.
XXXXX XXXXXXXX
Signed: /s/ Xxxxx Xxxxxxxx
----------------------------------
THIS IS A RELEASE. READ CAREFULLY BEFORE SIGNING.
IN WITNESS WHEREOF this Agreement has been signed by or on behalf of the
parties hereto the day and year first before written
Signed by XXXXX XXXXXXXX )
in the presence of : )
Witness signature :
Name :
Address :
Occupation :
Signed by Xxxx X. Xxxxxxx )
)
for and on behalf of: )
INSTINET GROUP INCORPORATED
Witness signature :
Name :
Address :
Occupation :
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Signed by Xxxxxx Xxxxx )
)
for and on behalf of: )
INSTINET GLOBAL SERVICES LIMITED
Witness signature :
Name :
Address :
Occupation :
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