1
EXHIBIT 10.21
SETTLEMENT AGREEMENT
AGREEMENT dated as of April 14,1999, by and among those former
stockholders of Xxxx Xxxxxx International, Inc., a Connecticut corporation
("Xxxx Xxxxxx") listed below who are signatories hereto (the "Consenting WH
Stockholders") and LAMALIE ASSOCIATES, INC., a Florida corporation with offices
at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx 00000 ("LAI").
WHEREAS, LAI acquired all of the outstanding stock of Xxxx Xxxxxx
pursuant to a merger agreement effective as of February 27, 1998 (the "Merger
Agreement") (capitalized terms used in this Agreement but not defined herein
have the meanings ascribed thereto in the Merger Agreement); and
WHEREAS, pursuant to the Merger Agreement, LAI entered into employment
agreements dated February 27, 1998 (the "Employment Agreements") with certain
of the former stockholders of Xxxx Xxxxxx, including those listed below; and
WHEREAS, pursuant to the Employment Agreements, LAI agreed not to
amend the LAI Partner Compensation Plan dated March 1, 1997 applicable to the
former stockholders of Xxxx Xxxxxx (the "Compensation Plan") without the
affirmative vote of holders of two thirds (2/3) or more of the shares of LAI
Common Stock held by former stockholders of Xxxx Xxxxxx who are employees of
LAI at the time of the amendment (excluding for this purpose the shares held by
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx) (a "2/3 Majority");
and
WHEREAS, the Consenting WH Stockholders constitute a 2/3 Majority; and
WHEREAS, LAI currently has outstanding promissory notes dated February
27, 1998 payable to the former stockholders of Xxxx Xxxxxx pursuant to the
Merger Agreement with payments due on February 27, 2000 and February 27, 2001
in the aggregate principal amount of approximately $7,962,000 bearing interest
at 5% per annum (the "LAI Notes"); and
WHEREAS, LAI has certain claims against the former stockholders of
Xxxx Xxxxxx pursuant to Sections 3 and 9 of the Merger Agreement, including
indemnity claims and adjustments to Merger Consideration (the "LAI Claim"),
which, under the terms of the Merger Agreement, would be offset against and
reduce the amount of the LAI Notes; and
WHEREAS, LAI and the Consenting WH Stockholders have concluded that it
is in the best interest of LAI and the former stockholders of Xxxx Xxxxxx to
settle the LAI Claim on the basis
2
set forth herein and to consent to the proposed amendment in the Compensation
Plan on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties, intending to be bound, as to themselves and their successors and
assigns, hereby agree as follows:
1. Consent to Retroactive and Future Amendments to Compensation Plan.
(a) In accordance with the terms of the Employment Agreements, the
signatures of the Consenting WH Stockholders affixed hereto constitute the
affirmative vote of a 2/3 Majority to the amendment of the LAI Partner
Compensation Plan dated March 1, 1997, in accordance with the terms of the
confidential XXX Xxxx Xxxxxx Partner Compensation Plan Changes memorandum dated
October 2, 1998, and effective December 30, 1998 as set forth on Exhibit A
hereto.
(b) In addition, the affirmative vote set forth in the preceding
paragraph (a) is intended, and shall be construed, individually and
collectively, as a continuous and ongoing waiver of the provisions of Section 3
of the Employment Agreements and shall relieve LAI of the obligation to obtain
an additional 2/3 Majority consent to any future amendment of the LAI Partner
Compensation Plan or successor thereto.
(c) The provisions of LAI Partner Compensation Plan dated March 1,
1997, as amended in accordance with the terms of the confidential XXX Xxxx
Xxxxxx Partner Compensation Plan Changes memorandum dated October 2, 1998, and
effective December 30, 1998 as set forth on Exhibit A hereto shall apply to
each consenting WH Stockholder notwithstanding and in lieu of any other
compensation arrangement, rider, or side letter, except as agreed in writing by
LAI.
2. LAI Obligations.
(a) LAI hereby waives any reduction in the amount of Merger
Consideration on account of uncollected Non-LGO Accounts Receivable payable to
the Consenting WH Stockholders;
(b) LAI hereby irrevocably waives all past, present and future
claims against the Consenting WH Stockholders for indemnification or offset in
respect of representations, warranties, defaults or otherwise under the Merger
Agreement.
(c) LAI shall pay the full amount (with accrued interest) due
under the LAI Notes on February 27, 2000 to the Consenting WH
2
3
Stockholders on April 19, 1999.
(d) Section 12(b) of the Employment Agreements of each of the
Consenting WH Stockholders who is employed by LAI as of the date hereof is
hereby amended to read in its entirety as follows:
12. REMEDIES
(b) Liquidated Damages. The Partner agrees that no exact measure
of the damage caused to the Company if this Agreement is terminated by
the Partner pursuant to Section 8(a) hereof or by the Company for Good
Cause as defined in Section 8(b) hereof can be determined, and,
therefore, for the purpose of liquidating the amount of damages and
not as a penalty, it is agreed that in the case of a termination of
this Agreement by the Partner pursuant to Section 8(a) hereof or by
the Company for Good Cause as defined in Section 8(b) hereof, and in
addition to the injunctive relief provided for by Section 12(a) above,
the damages caused shall be and are fixed, liquidated and determined
at an amount payable in cash, on February 27, 2001, equal to the
amount set forth opposite the Partner's name on the attached schedule;
provided, however, that this Section 12(b) shall not apply in the case
of termination of this Agreement by the Company for Good Cause as
defined in Section 8(b) hereof if such termination for Good Cause is
based on the Partner's failure to comply with the second or fourth
bullet points under "Professionalism", the sixth bullet point under
"Quality", or any of the bullet points under "Partnership" set forth
in the Partner Role Definition attached to this Agreement as Exhibit B.
3. Conditions Precedent. This Agreement shall not become effective or
binding unless and until it is:
(a) approved by the LAI Board of Directors (acting directly or
through its Executive Committee);
(b) executed by an executive officer of LAI under the authority of
the LAI Board of Directors (acting directly or through its Executive
Committee); and
(c) executed by a 2/3 Majority.
4. No Third Party Beneficiaries. Only those former Xxxx Xxxxxx
stockholders who are Consenting WH Stockholders shall be entitled to the
benefits hereof.
3
4
5. Attorneys' Fees and Costs. LAI agrees that it shall be responsible
for the attorneys' fees and costs of Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP up
to $60,000 and the fees of Xxxxxxx Xxxxx up to $10,000 incurred in the
negotiation and preparation of this Agreement, and agrees it will not seek from
the Consenting WH Stockholders reimbursement for such amounts.
6. Severability. Should any of the provisions of this Agreement be
rendered invalid by any tribunal of competent jurisdiction, it is agreed that
this shall not in any way or manner affect the enforceability of the other
provisions of this Agreement which shall remain in full force and effect.
7. Knowing and Voluntary Agreement; Merger. The parties acknowledge
that they are entering into this Agreement knowingly and voluntarily after
carefully reviewing it; that each has had the opportunity to review it with
counsel of their own choosing; that each understands its final and binding
effect; that the only promises made to obtain their respective agreement and
signature are those stated in this Agreement; that this Agreement supersedes
any and all prior oral or written agreements between the parties, and that this
document represents the complete terms of their agreement which may not be
amended or modified except in a writing signed by both parties. There are no
representations, inducements or promises not set forth herein on which either
party has relied or may rely.
8. Joint Participation in Preparation of Agreement. The parties hereto
participated jointly in the negotiation and preparation of this Agreement, and
each party has had the opportunity to obtain the advice of legal counsel and to
review, comment upon, and redraft it. Accordingly, it is agreed that no rule of
construction shall apply against any party in favor of any party. This
Agreement shall be construed as if the parties jointly prepared it, and any
uncertainty or ambiguity shall not be interpreted against any one party and in
favor of the other.
9. Choice of Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Florida.
10. Headings. The headings in this Agreement are used for ease of
reference only, and should not be used as aids in interpreting this Agreement.
11. Execution in Counterparts. This Agreement may be executed in
counterparts, which taken together shall constitute one document.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
4
5
LAMALIE ASSOCIATES, INC
By:
--------------------------------------
Xxxxxx X. Xxxxxxx, Chairman & CEO
CONSENTING WH STOCKHOLDERS
--------------------------------------
Xxxx X. Xxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxx X. Xxxx
--------------------------------------
A. Xxxxxx Xxxx
--------------------------------------
Xxxxx X. Xxx
--------------------------------------
Xxxxxxx X.X. Xxxx
5
6
--------------------------------------
Xxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. XxXxxxxxx
--------------------------------------
Xxxxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxx
--------------------------------------
Xxxxx X. Xxxxxxx, III
--------------------------------------
Xxxxxxx X. Xxxxx
6
7
--------------------------------------
X. Xxxxxxx Xxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------
X. Xxxxx Xxxxxx
--------------------------------------
Xxxxx X. Xxxxx
7
8
XXXX XXXXXX INTERNATIONAL/LAI
EMPLOYMENT AGREEMENTS - SCHEDULE OF DAMAGES
STOCKHOLDER LIQUIDATED DAMAGE PAYMENT
Xxxx Xxxx $90,000
Xxxxxx X. Xxxxxxxx $70,000
Xxxxxxxxx X. Xxxxxxxx $50,000
Xxxxx X. Xxxx $50,000
A. Xxxxxx Xxxx $80,000
Xxxxx X. Xxx $40,000
Xxxxxxx X.X. Xxxx $70,000
Xxxxxxx X. XxXxxxxxx $70,000
Xxxx X. Xxxxxx $180,000
Xxxxxxxxx X. Xxxxxx $80,000
Xxxxxxx X. Xxxxx $40,000
Xxxxx Xxxxx $70,000
Xxxxxx Xxxxx $90,000
Xxxxxxx X. Xxxxxxxxx $50,000
Xxxxxx X. Xxxx $60,000
Xxxxx X. Xxxxxxx, III $130,000
Xxxxxxx X. Xxxxx $170,000
X. Xxxxxxx Xxxxx $70,000
Xxxxxxx X. Xxxxxx $40,000
Xxxxxx X. Xxxxxx $80,000
Xxxx X. Xxxxxx $40,000
J. Xxxxx Xxxxxx, Xx $60,000
Xxxxx Xxxxx $180,000
8
