Exhibit 3
EXECUTION COPY
March 14, 2003
Xx. Xxxxx X. Xxxxxxxx
00-00 Xxxxxxxx Xxxxxxx
Xxxx Xxxx, X.X. 00000
Re: SEPARATION AGREEMENT
Dear Xxxxx:
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 termination of your employment with
the Company.
1. You hereby resign as an officer and employee of G&E, and as an officer and
director of all entities constituting the Company effective March 14, 2003
(your "Termination Date"). Your last day in the New York, New York office
will be March 14, 2003. Between the date of this Agreement and your
Termination Date, you will assist the Company in a reasonable manner in
transitioning your duties and responsibilities to other persons at the
Company. You will have no authority to bind the Company or to direct
employees, independent contractors or business strategies of the Company
after March 14, 2003. You shall execute and deliver the letter of
resignation annexed hereto as EXHIBIT A.
2. (a) You understand and agree the Company shall make no other payments
to, or with respect to, you, and shall have no other obligations to
you except as described in this Agreement. You and the Company agree
that this Agreement shall supersede all prior agreements between you
and the Company with respect to the subject matter hereof including,
without limitation, the Employment Agreement made and entered into
as of May 15, 2001 to which you and G&E are parties (the "Employment
Agreement").
(b) From and after the Effective Date of this Agreement (see Section 13
below), you will receive the following:
(i) Effective as of the Termination Date and through December 31,
2003 you will receive
(A) in accordance with the Company's normal payroll
practices, base compensation payments, based on an
annual base compensation of $1 million, (less
withholding taxes and customary payroll deductions)
regardless of whether you obtain other employment and no
amount you receive from another employer shall offset
these payments;
(B) reimbursement of any premiums you become obligated to
pay for health insurance continuation (I.E. "COBRA")
with respect to your employment at the Company provided,
however, that your entitlement to any such
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reimbursement shall cease upon your becoming entitled to
health insurance from any other employer; and
(C) continuation of disability and life insurance benefits
set forth in Exhibit A to your Employment Agreement.
(ii) On or about the 15th day of each of the five months commencing
January 2004, you will receive a payment of $100,000 ( less
withholding taxes and customary payroll deductions);
(iii) Effective as of the Termination Date the principal balance
outstanding on any "Loan" (the "Loan") pursuant to Section 8
of the Employment Agreement (after taking account of the
repayment described in Section 2(d)) together with interest
accrued through the Termination Date shall be forgiven. You
shall be fully and solely responsible for all taxes on any
income which is taxable to you by reason of such forgiveness.
(iv) On the Effective Date you will be paid for your vacation time
which has been accrued for the period January 1, 2003 through
the Termination Date but has not been used, less withholding
taxes and customary payroll deductions.
(c) Any "Options" you currently hold pursuant to any "Option Agreement"
(as each such term is defined in the Employment Agreement) shall be
cancelled effective as of the Termination Date.
(d) On the Effective Date, but effective as of the Termination Date,
pursuant to Section 7 of the Employment Agreement the Company shall
repurchase from you all of the "Purchased Stock" (as defined in the
Employment Agreement) at a price equal to the price you paid for it
($4.11 per share) and all of such proceeds shall be applied to
repayment of the Loan.
3. After your Termination Date, except as described in Section 2(b)(i)(B),
you will no longer be covered by or eligible for any benefits under any
Company employee benefit plans in which you currently participate. After
your Termination Date, you will receive by separate cover information
regarding your rights to health insurance continuation (COBRA) [and any
401(k) PLUS plan and Deferred Compensation Plan benefits].
4. (a) You agree for yourself and your spouse and child or children (if
any), your heirs, beneficiaries, devisees, executors,
administrators, attorneys, personal representatives, successors and
assigns, hereby forever to release, discharge, and covenant not to
xxx G&E, G&E's past, present, or future parent, affiliated, related,
and/or subsidiary entities, and all of their past and present
directors, shareholders, officers, general or limited partners,
employees, agents, and attorneys, and agents and representatives of
such entities, and employee benefit plans in which you are or have
been a participant by virtue of your employment with the Company
(collectively the "Released Parties"), from any and all claims,
debts, demands, accounts, judgments, rights, causes of action,
equitable relief, damages, costs, charges, complaints, obligations,
promises, agreements, controversies, suits, expenses, compensation,
responsibility and liability of every kind and character whatsoever
(including attorneys' fees and costs), whether in law or equity,
known or unknown, asserted or unasserted, suspected or unsuspected
(collectively, "Claims"), which you have or may have had against
such entities based on any events or
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circumstances arising or occurring on or prior to the Termination
Date, including, without limitation, any Claims arising directly or
indirectly out of, relating to, or in any other way involving in any
manner whatsoever, (a) your employment with the Company or the
termination thereof or (b) your status at any time as a holder of
any securities of the Company, and any and all claims arising under
federal, state, or local laws relating to employment, or securities,
including without limitation, any claims arising under the
Employment Agreement, any claims under or related to options to
acquire equity in the Company or any affiliated entity, any claims
of wrongful discharge, breach of express or implied contract, fraud,
misrepresentation, defamation, or liability in tort, claims of any
kind that may be brought in any court or administrative agency, any
claims arising under Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act, the Family and Medical Leave Act,
the Securities Act of 1933, the Securities Exchange Act of 1934, the
Xxxxxxxx-Xxxxx Act, the Human Rights laws of the State and City of
New York and similar statutes, ordinances, and regulations of any
country, state or locality, provided, however, notwithstanding
anything to the contrary set forth herein, that this general release
shall not extend to any obligation assumed under this Agreement by
any party hereto and shall not release the Company from any
obligation that it has or may have in the future to indemnify you or
Your Releasees (as defined below) under the Articles of
Incorporation, or By-Laws of the Company or any policy of Directors
and Officers Liability Insurance carried by the Company. 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 any of the Released Parties.
(b) In consideration of the foregoing and the execution of the Agreement
by you, the Company and the Released Parties hereby waive, release,
discharge, covenant not to xxx, and promise never to assert any
Claims that the Company (and/or any of the Released Parties) has or
may have against you (and including, without limitation, your
spouse, children, if any, heirs, beneficiaries, devisees, executors,
administrators, partners, associates, agents, representatives,
related entities and/or affiliates, contractors attorneys,
successors and assigns, collectively "Your Releasees"), based upon
any events or circumstances arising or occurring on or prior to the
Termination Date, including without limitation, any Claims arising
directly or indirectly out of, relating to, or in any other way
involving in any manner whatsoever (a) your employment with the
Company or the actions taken by you as a director, officer or
employee of the Company or the termination thereof or (b) your
status at any time as a holder of any securities of the Company, and
any and all Claims arising under federal, state or local laws
relating to employment or securities including without limitation
any claims under the Employment Agreement, any Claims of breach of
express contract, fraud, misrepresentation, defamation or liability
in tort; provided however that this general release shall not extend
to any obligation assumed under this Agreement by any party hereto.
The Company further agrees that it will not voluntarily, and without
compulsion of legal process, assist or encourage others to assert
Claims or to commence or maintain litigation against you or Your
Releasees PROVIDED, ---------- HOWEVER, notwithstanding anything
herein to the contrary you understand and agree that you and -------
Your Releasees shall not be released from any of your acts, actions,
failures to act or activities prior to the date hereof which
constitute an act of dishonesty, or fraud, or other crime, or expose
the Company to any potential liability under federal or state
securities laws.
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(c) If requested, on or immediately following the Termination Date, you
and G&E and the Company shall execute additional releases
substantially in the form set forth in Sections 4(a) and (b), but
speaking as of the Termination Date.
(d) For so long as the Company maintains any Directors and Officers
Liability Insurance for the benefit of any of its directors or
officers, and to the extent permitted by law and the Company's
Bylaws, you shall be covered thereunder (at the Company's sole
expense) to the same extent as other directors and officers of the
Company are then covered for acts occurring during the period of
time you were employed by the Company (with the Company being
responsible for any deductible or co-insurance thereunder).
5. (a) For a period of one year following the Termination Date you agree
that you shall not for yourself or any third party, directly or
indirectly: (i) solicit or attempt to influence the Company's
existing clients, leads or prospects with the purpose or effect of
diverting their business away from the Company; or (ii) during the
period of such individual's employment, engagement or association
with the Company, solicit for employment or otherwise solicit as a
consultant or independent contractor salesperson, or discourage from
performing services for the Company, any individual then employed by
the Company or engaged by the Company as an independent contractor
salesperson.
(b) In the event that the provisions of the Section 5(a), or any portion
thereof, should ever be adjudicated by a court of competent
jurisdiction in proceedings to which the Company is a proper party
to exceed the time or geographic or other limitations permitted by
applicable law, then such provisions will be deemed reformed to the
maximum time or other limitations permitted by applicable law, as
determined by such court in such action, the parties hereby
acknowledging their desire that in such event such action be taken.
Without limiting the foregoing, the covenants contained herein will
be construed as separate covenants covering their respective subject
matters, including, without limitation, with respect to (i) each
business now conducted by the Company or its successors, and (ii)
the Company and its successors separately. In addition to the above,
all provisions of this Agreement are severable, and the invalidity
or unenforceability of any provision or provisions of this Agreement
or portions or aspects thereof will not affect the validity or
enforceability of any other provision, or portion of this Agreement,
which will remain in full force and effect as if executed with the
unenforceability or invalid provision or portion or aspect thereof
modified, as set forth above; except that, should the release in
Section 4(a) be held or declared invalid or unenforceable as a
result of any action taken by you or any person acting on your
behalf, the Company shall be relieved of its obligations to you and
may attempt to recover any consideration previously paid to you
pursuant to this Agreement, provided, however, that none of the
payments to be made to you shall in any way be diminished during the
pendency of any claim asserted by the Company.
(c) You acknowledge that your breach or threatened breach of the
provisions of Section 5(a) will cause irreparable harm to the
Company for which monetary damages alone will not provide an
adequate remedy. Accordingly, you agree that if you violate this
provision, the Company, in addition to any other rights or remedies
available to it under this provision, will be entitled to an
injunction to be issued by any court of competent jurisdiction
restraining you from committing or continuing any violation of this
provision.
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6. (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 liability, which are
unknown or unsuspected to exist by the party making the release,
when it/they are making the release.
7. You agree to reasonably co-operate with management of the Company at the
Company's expense and consistent with your other business commitments in
providing information on matters with respect to which you have knowledge
as Chief Executive Officer.
8. You agree that, without the prior written consent of the Company, you will
not, nor will you cause anyone acting on your behalf to: (a) make
derogatory, disparaging, or critical statements to any person or entity
about the "Released Parties" ("Disparaging Statements"); or (b) make any
public disclosures or communicate, directly or indirectly, with the press
or other media, including but not limited to, through the issuance of a
press release, concerning the past or present employees or businesses of
the Company or any of its related affiliates or your employment with the
Company or the termination thereof; provided that nothing herein shall
prohibit you from disclosing to potential future employers the termination
of your employment with the Company. You agree that if any Disparaging
Statements are made regarding the Released Parties, you will reasonably
attempt to cause such disparagement to cease. The Company agrees that,
without your prior written consent, senior management and the directors of
the Company will not make nor cause or direct others to make Disparaging
Statements about you, including but not limited to, through the issuance
of a press release, press interview or in Company meetings, or concerning
your employment with the Company or the termination thereof. The Company
agrees that if any such Disparaging Statements regarding you are made,
senior management and the directors of the Company will reasonably attempt
to cause such disparagement to cease. The initial press release issued by
the Company shall not be issued in connection with any other person or
event, and shall contain, in its substantive part, only the language set
forth in Exhibit B. Xxxxxx xxxxx releases or communications to others
regarding you shall not be inconsistent with Exhibit B, except that the
quote in the second paragraph may be deleted without the need for any
further approval from you. Notwithstanding the foregoing or anything else
set forth herein to the contrary, nothing contained herein shall prohibit
the Company from making any public disclosures with respect to you in its
public filings required to be made under federal or state securities laws
or pursuant to the rules or regulations of any regulatory or
administrative bodies or stock exchanges. Accordingly, notwithstanding
anything set forth herein to the contrary, you acknowledge that the
Company xxxx
Xxxx 5 of 11
disclose the existence of this Agreement in, and will file a copy of this
Agreement as an exhibit to, appropriate filing(s) with the Securities &
Exchange Commission in accordance with the applicable rules and
regulations promulgated under the Securities Exchange Act of 1934, as
amended, and you hereby consent to such disclosure and filing of this
Agreement.
9. You agree to return to the Company, by 5:00 p.m. on your Termination Date,
any and all tangible 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 also you agree to return by such time, all
of the Company's other property, including, without limitation, office
keys, Company identification cards, access, and other passes, and all
documents, files, equipment, computers, laptops, telephones, cell phones,
beepers, pagers, palm pilots, blackberrys or similar devices, fax
machines, televisions, credit cards, computer software, diskettes and
access materials and other property prepared by, for or belonging to the
Company. You will promptly execute any and all notices of resignation from
any Company position as requested by the Chief Administrative Officer. You
will take no further action to bind or obligate the Company. You will
immediately turn in your corporate American Express card and shall be
responsible for any personal charges billed to such card. All charges
related to the business of the Company shall be paid by the Company.
10. 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 (unless and until it is disclosed
publicly by the Company), 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.
11. In the event that you breach any of your obligations under this Agreement
or as otherwise imposed by the law, the Company will be entitled to seek
to recover the benefits paid under the Agreement and to obtain all other
relief provided by law and equity. This Agreement will be governed by the
law of the State of New York without regard to principles of conflicts of
laws thereof.
12. Except as described in Section 5(c), any dispute or controversy arising
under, out of, in connection with or in relation to this Agreement shall
be finally determined and settled by arbitration. Arbitration shall be
initiated by one party making written demand upon the other party and
simultaneously filing the demand together with required fees in the office
of the American Arbitration Association in New York, New York. The
arbitration proceeding shall be conducted in New York, New York by a
single arbitrator in accordance with the Expedited Procedures of the
Employment Dispute Resolution Rules of the American Arbitration
Association, except as otherwise provided herein. Except as required by
the arbitrator, the parties
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shall have no obligation to comply with discovery requests made in
connection with the arbitration proceeding. The arbitration award shall be
a final and binding determination of the dispute and shall be fully
enforceable as an arbitration award in any court having jurisdiction and
venue over such parties. During the pendency of any arbitration, the
Company shall continue to pay you the amounts, and provide all benefits,
specified in this Agreement. The party prevailing in arbitration shall be
entitled to reimbursement of his or its costs, including reasonable
attorney's fees.
13. To accept the Agreement, please date and sign this Agreement and return
it, either by personal delivery or by fax or mail, to XXXXX & XXXXX
COMPANY, c/o Xxxxxx X. Xxxxxx, Chief Administrative Officer, 0000 Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000. An extra original for your records
is enclosed.
A. YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.
B. YOU HAVE UP TO 21 DAYS FROM THE DATE YOU RECEIVE THIS AGREEMENT TO
ACCEPT THE TERMS OF THIS AGREEMENT, ALTHOUGH YOU MAY ACCEPT IT AT
ANY TIME WITHIN THOSE 21 DAYS.
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 CHIEF ADMINISTRATIVE OFFICER
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.
14. 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.
15. This Agreement represents the sole and entire agreement between you and
the Company regarding the termination of your services as Chief Executive
Officer and President 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 signed by you and a duly authorized
representative of G&E.
16. 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 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:
Xxxxx X. Xxxxxxxx
00-00 Xxxxxxxx Xxxxxxx
Xxxx Xxxx, X.X. 00000
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With a copy to:
Xxxxxx Xxxxx & Xxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Fax: 000.000.0000
If to Xxxxx & Xxxxx Company, addressed to:
Xxxxx & Xxxxx Company
0000 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Administrative 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.
17. This Agreement may be executed in any number of counterparts, all of
which, when taken together, shall constitute one and the same instrument.
18. Upon presentation of appropriate invoices therefore, upon execution of
this Agreement, and in order to make the Agreement effective, and no later
than March 31, 2003, the Company shall pay Fifty Thousand Dollars
($50,000) to Xxxxxx Xxxxx & Xxxx, LLP as your legal fees for professional
services rendered and costs incurred in negotiating the termination of
your employment and this Agreement.
19. Notwithstanding anything to the contrary provided in this Agreement, (a)
during the period of time that payments are being made to you or are
required to be made to you pursuant to this Agreement, you shall not be
obligated to seek any other employment or in any other manner mitigate the
payment obligations of the Company set forth herein, and (b) any
compensation, consulting or other fees that you receive during the period
of time that payments are being made to you or are required to be made to
you by the Company hereunder, shall not reduce the obligation of the
Company to make the payments to you as set forth herein.
Signature Page to Follow
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Signature Page
XXXXX & XXXXX COMPANY
-------------------------------------
By: Xxxxxx X. Xxxxxx
Dated: March __, 2003 Executive Vice President
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 __, 2003
-------------------------------------
Xxxxx X. Xxxxxxxx
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EXHIBIT A
Xxxxx X. Xxxxxxxx
00-00 Xxxxxxxx Xxxxxxx
Xxxx Xxxx, X.X. 00000
As of March 14, 2003
Xxxxxx X. Xxxxxx, Esq.
General Counsel and
Chief Administrative Officer
Xxxxx & Xxxxx Company
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: RESIGNATION
Dear Xxx:
Effective immediately, I hereby resign as the Chief Executive Officer and
President of Xxxxx & Xxxxx Company, and as an officer and director of Xxxxx &
Xxxxx Company and each of Xxxxx & Xxxxx Company's subsidiaries and affiliates.
Very truly yours,
Xxxxx X. Xxxxxxxx
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EXHIBIT B
PRESS RELEASE - MARCH 14, 2003
Xxxxx & Xxxxx Company, one of the leading providers of integrated real estate
services, announced today that its President and CEO, Xx. Xxxxx Xxxxxxxx, has
resigned to pursue other opportunities.
Xxxxxx Xxxxxxxxx, former Chairman and current Board member, said on behalf of
the Company: "We were fortunate to have Xxxxx join the Company in 2001, we
appreciate his efforts during his tenure and we wish him success in his future
endeavors."
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