Exhibit 10
(iii) 40.
CONTRACT
TERMINATION AGREEMENT
This
Contract Termination Agreement
(hereinafter the “Agreement”) is entered into by Xxxxxx
Xxxxxxxxxxx (hereafter “Xxxxxxxxxxx”), an individual, and The IT
Group, Inc., a Delaware corporation, and its subsidiaries and affiliates
(collectively referred to as the “Company”).
RECITALS
A. WHEREAS,
Xxxxxxxxxxx has been employed by the Company, and has held the position
of Sr. Vice President of The IT Group, Inc. and IT Corporation, as well as
serving as an officer of other affiliates and subsidiaries of the Company;
and
B. WHEREAS,
Xxxxxxxxxxx and the Company had agreed that Xxxxxxxxxxx would be
entitled to a contract of employment similar to that of other similarly
situated senior executives; and
C. WHEREAS,
Xxxxxxxxxxx and the Company wish to terminate Xxxxxxxxxxx’x
contract of employment and his entitlements to compensation and benefits,
and to provide for the termination of the employment
relationship;
D. NOW, THEREFORE,
in consideration of the aforementioned recitals and the mutual covenants
and conditions set forth below, the sufficiency of which consideration is
hereby acknowledged, Xxxxxxxxxxx and the Company hereby agree as
follows:
AGREEMENT
1. Resignation and
Termination of Employment. Effective as of July
29, 1999 (the “Resignation Date”), Xxxxxxxxxxx resigns as an
officer and effective September 27, 1999, Xxxxxxxxxxx’x employment with
the Company is terminated. Xxxxxxxxxxx irrevocably gives up whatever rights
he has, if any, to continued employment with the Company except as may be
expressly provided herein. The Company accepts Xxxxxxxxxxx’x
resignation, and has informed Xxxxxxxxxxx prior to his execution of this
Agreement that it will not permit Xxxxxxxxxxx to withdraw his resignation.
Xxxxxxxxxxx shall perform no further duties for the Company after July 29,
1999 except such duties as may arise under the terms of this
Agreement.
2. Contract
Termination and Payment. In consideration for the
promises and covenants herein set forth, the contract of employment is
terminated and Company shall pay to Xxxxxxxxxxx $251,882.82 (the
“Contract Termination Payment”) in a lump sum, without payroll
deductions. This Contract Termination Payment shall be payable seven (7) days
’ after the signature and acceptance of this Agreement by both
Xxxxxxxxxxx and Company. This Contract Termination Payment is in lieu of and
extinguishes all rights or claims to any other payment except as expressly
provided herein. Xxxxxxxxxxx agrees that he has been fully paid for any and
all accrued and vested wages and benefits to the date of his execution of
this Agreement.
3. Paid Time Off.
Pursuant to his resignation, Company has paid to
Xxxxxxxxxxx all accrued salary and vacation pay, less normal payroll
deductions, upon the termination of his employment with Company, except for
the sum of $13,461.50 which represents 100 hours of Paid Time Off carried
over from OHM. Vacation and Paid Time Off benefits will cease to accrue
after that date.
4.
Benefits.
x. Xxxxxxxxxxx’x
eligibility to participate in the Company’s Benefit Programs shall
terminate upon termination of his employment. The parties acknowledge that
Xxxxxxxxxxx is eligible to continue to elect continuation of such group
coverages in accordance with the Consolidated Omnibus budget Reconciliation
Act of 1985 (COBRA) for himself and any covered dependents upon his
resignation from the Company. Xxxxxxxxxxx has received notice from Company
of such rights and the cost to him for such continued coverages. The Company
shall pay to Xxxxxxxxxxx the lump sum of $11,159.00, less payroll
deductions, for these COBRA costs, which shall be payable seven (7) days
’ after the signature and acceptance of this Agreement by both
Xxxxxxxxxxx and Company.
b. In further
consideration of the promises and releases contained herein, Company shall
pay to Xxxxxxxxxxx the lump sum of $25,000.00, which represents a payment on
account of Xxxxxxxxxxx’x career transition or outplacement
costs.
c. The parties
acknowledge that Xxxxxxxxxxx is entitled to receive the sum of $30,869.14
under the OHM Supplemental Executive Retirement Plan, which sum shall be
payable to Xxxxxxxxxxx in accordance with his instructions and the terms of
that Plan.
5. Retirement
Plans. Xxxxxxxxxxx shall cease to participate in
Company’s qualified and non-qualified retirement plans upon the
termination of his employment, in accordance with the terms of those
plans.
6. Bonuses.
In lieu of all bonuses, Incentive Plan payments or awards
for which Xxxxxxxxxxx is or may be eligible, including but not limited to
the FY 1999 Management Incentive Plan (MIP) and the Executive Bonus Plan,
Xxxxxxxxxxx shall be paid the sum of $82,082.00, less payroll deductions, by
Company seven (7) days’ after the signature and acceptance of this
Agreement by both Xxxxxxxxxxx and Company.
7. Stock Rights and
Options.
The parties acknowledge that Xxxxxxxxxxx has
received the following options of the Company, which Xxxxxxxxxxx represents
that he has not exercised as of the date of his signature of this
Agreement.
| (i) Stock options
of the Company which were awarded to him on May 26, 1998 and February 23,
1999.
|
| (ii) Options
pursuant to Company’s November 17, 1998 Executive Stock Ownership
Program.
|
In consideration for
the payment of $30,000.00, which sum shall be payable to Xxxxxxxxxxx seven
(7) days’ after the signature and acceptance of this Agreement by both
Xxxxxxxxxxx and Company, Xxxxxxxxxxx shall return all of his rights in and
to the foregoing options to the Company, and such option grants shall be
null and void.
8. November 17, 1998
Executive Stock Ownership Program Loan. The
balance and accrued interest owing to the Company by Xxxxxxxxxxx on the
Executive Stock Ownership Loan shall be paid, in full, by Xxxxxxxxxxx on or
before February 29, 2000. The parties acknowledge that the amount which is
payable by Xxxxxxxxxxx on February 29, 2000, is $193,627.00, which sum
represents the principal balance, interest accrued to that date, and all
credits to which Xxxxxxxxxxx is entitled as of that date. The gross-up
payments on the bonus amounts credited to this loan total $51,082.00.
Xxxxxxxxxxx agrees that this amount shall be used to pay a portion of the
principal, reducing the amount payable on February 29, 2000 to the sum of
$142,545.00.
Xxxxxxxxxxx shall have the right to prepay at
any time all or any portion of the principal under this Loan without penalty
or premium. If the balance owing on the Loan is not paid when due,
Xxxxxxxxxxx agrees and promises to pay all costs of collection, including,
but not limited to, reasonable attorneys’ fees, on account of any such
collection.
9. Deferred
Compensation Xxxxxxxxxxx. shall be entitled to
receive all sums vested and payable to him under the Company Deferred
Compensation Plan and the Company Restoration Plan, pursuant to Xxxxxxxxxxx
’s elections and the terms of those benefit plans. The amount vested as
of October 12, 1999 is $32,998.06.
10. Other
Expenses. Xxxxxxxxxxx agrees to reimburse Company
for all personal expenses charged to the Company, and Company agrees to
reimburse Xxxxxxxxxxx for any reasonable expenses incurred by Company at
Company’s request, in accordance with Company policy.
11. Sole
Entitlement. Xxxxxxxxxxx agrees that his sole
entitlement to compensation, payments of any kind, monetary and/or
nonmonetary benefits and/or perquisites with respect to his employment with,
his services rendered to, and all other matters between Xxxxxxxxxxx and the
Company, is as expressly set forth in this Agreement.
12. Releases.
Xxxxxxxxxxx does hereby and forever release and
discharge the Company and the past and present parent, subsidiary and
affiliated corporations of the Company as well as the successors,
shareholders, officers and directors of corporate shareholders, officers,
directors, heirs, predecessors, assigns, agents, employees, attorneys and
representatives of each of them, past or present, from any and all cause or
causes of action, actions, judgments, liens, indebtedness, damage, losses,
claims, liabilities, and demands of whatsoever kind or character, known or
unknown, suspected to exist or not suspected to exist, anticipated or not
anticipated, whether or not heretofore brought before any state or federal
court or before any state or federal agency or other governmental entity,
whether statutory or common law, Including without limitation on the
generality of the foregoing, any and all claims, demands or causes of action
attributable to, connected with, or incidental to the employment of
Xxxxxxxxxxx by the Company, the separation of that employment and any
dealings between the parties concerning Xxxxxxxxxxx’x employment or any
other matter existing prior to the date of execution of this Agreement,
excepting only those obligations to be performed hereunder. This release is
intended to apply to any claims arising from federal, state or local laws
which prohibit discrimination on the basis of race, national origin, sex,
religion, age, marital status, pregnancy, disability, disability, ancestry,
sexual orientation, family or personal leave or any other form of
discrimination, or to laws such as workers’ compensation laws, which
provide rights and remedies for injuries sustained in the workplace or any
common law claims of any kind, including, but not limited to, breach of
privacy, misrepresentation, defamation,
wrongful
termination, tortious infliction of emotional distress, loss of consortium
and breach of fiduciary duty, violation of public policy and any other
common law claim of any kind whatever, any claims for severance pay, sick
leave, family leave, vacation, life insurance, bonuses (including, but not
limited to, bonuses payable under the FY 1999 Management Incentive Plan),
health insurance, disability or medical insurance or any other fringe
benefit or compensation, and all rights and claims arising under the
Employee Retirement Income Security Act of 1974 (“ERISA”), or
pertaining to ERISA regulated benefits.
Company hereby releases Xxxxxxxxxxx from any
claims that it has against Xxxxxxxxxxx, if these claims arise out of actions
which were taken by Xxxxxxxxxxx in good faith and in the manner that he
reasonably believed to be in the best interest of the Company, and in the
case of a criminal proceeding, that he had no reasonable cause to believe
that his conduct was unlawful.
13. Continuing
Fiduciary Obligations and Unfair Competition.
(a) Xxxxxxxxxxx agrees
that he is obligated to maintain the confidentiality of the Company’s
trade secrets and other confidential information not publicly known, and
covenants and agrees that he shall not use or divulge, disclose, or
communicate to any other person, firm, or corporation, any of the Company
’s trade secrets or confidential information except as disclosure shall
be compelled by judicial process.
(b) Xxxxxxxxxxx agrees
that he shall not, for a period of one year from July 29, 1999, directly or
indirectly, by or for himself, or as the agent of another, or through others
as an agent, directly or indirectly (i) recruit, solicit or induce, or
attempt to induce any officer or employee (other than employees engaged in
secretarial functions) of Company or any of its affiliates, to leave the
Company’s employ or otherwise interfere with the employment
relationship between any such person and the Company or any of its
affiliates or (ii) hire any such person recruited in violation of (i)
immediately above.
(c) Xxxxxxxxxxx agrees
that he shall not, for a period of one year from July 29, 1999, directly or
indirectly, by or for himself, or as the agent of another, or through others
as an agent, in any way interfere with the Company’s contractual
relations with its customers. Xxxxxxxxxxx shall otherwise be free to engage
in activities that directly compete with the business of the
Company.
(d) Xxxxxxxxxxx agrees
that he shall deliver to Company all correspondence, drawings, manuals,
letters, notes, notebooks, reports, programs, plans, proposals, financial
documents, or any other documents concerning the Company’s customers,
business plans, marketing strategies, products or processes which are
Company property, or which are non-public or which contain proprietary
information or trade secrets, upon termination of his
employment.
14. Prohibition
Against Defamation and Willful Disparagement. The
Company and Xxxxxxxxxxx agree that they will not orally or in writing
defame, criticize, or willfully disparage, or in any manner undermine the
reputation of the other, or in the case of the Company, any subsidiary or
affiliated corporation of the company, the Company itself, or any employee,
officer or director of the Company or any subsidiary or affiliate of the
Company, except as required by compulsion of law to truthfully testify. It
is the intention of the parties that any inquiries from potential employers
of Xxxxxxxxxxx as to Xxxxxxxxxxx’x job performance, his interpersonal
and other management skills and the reason for his departure from employment
at the Company be responded to by Xxx Xxxxxx and/or Xxxxx Xxxx
in
accordance with the
attached agreed statement. If Xxxxxxxxxxx or any director or officer or
agent or employee of Company fails in any manner to follow this procedure or
any other provision of this paragraph, the sole and exclusive remedy will be
to request in writing that the party correct the failure by means of a
letter which shall retract or disclaim, as appropriate, any information
inconsistent with the provisions of this paragraph.
15. Cooperation.
Xxxxxxxxxxx agrees to cooperate with the Company in
connection with any future or currently pending litigation, including
without limitation, by making himself available to testify in actions as
reasonably requested by the Company or by any party to the litigation. In
the event that Xxxxxxxxxxx is required to spend more than five hours total
of time in any such activities, including time spent in responding to
discovery requests (including depositions initiated by parties other than
the Company) he shall be compensated at an hourly rate of $150 per hour,
plus reasonable expenses, except that Xxxxxxxxxxx shall not receive such
compensation in any case or matter in which Xxxxxxxxxxx is personally named
as a defendant. In the event Xxxxxxxxxxx is named as a defendant in any
litigation or other proceeding involving the Company where Xxxxxxxxxxx is
required to defend himself with respect to events which relate to or
occurred during his employment with the Company, to the extent that
Xxxxxxxxxxx is not otherwise covered by any insurance policy maintained by
the Company, the Company shall be responsible for providing a defense to,
and indemnify, Xxxxxxxxxxx, to the same extent and under the same conditions
as if he were an officer of the Company.
The Company agrees to cooperate with
Xxxxxxxxxxx in defending the position that $1,400,000.00 previously paid to
him by the Company are not “excess parachute payments.
”
16. Legal Advice.
Each party has received independent legal advice
from his or its attorneys with respect to the advisability of making the
settlement provided for herein, with respect to the advisability of
executing this Agreement and with respect to its meaning. Xxxxxxxxxxx
specifically acknowledges that his release includes any unknown,
unsuspected, and/or unanticipated claims that he may have, whether or not
they may be material to this
Contract Termination Agreement and the releases
it contains. To the maximum extent permitted by law, Xxxxxxxxxxx waives any
and all state and federal laws to the contrary.
17. Factual
Investigation. Each party to this Agreement has
made such investigation of the facts pertaining to the matters resolved by
this Agreement and of all the matters pertaining thereto as he or it deems
necessary. Each party hereto is aware that he or it may hereafter discover
claims or facts in addition to or different from those he or it now knows or
believes to be true with respect to the matters resolved herein.
Nevertheless, it is the intention of each party to fully, finally and
forever settle and release all such matters and all claims relative thereto
which may exist or may heretofore have existed between them.
18.
Confidentiality. This Agreement and its
provisions are intended to be confidential. Accordingly, except as may be
required to satisfy the Company’s public disclosure or financial or
accounting requirements or as may be compelled by court order, neither the
Company nor Xxxxxxxxxxx shall disclose or publicize to any person, firm or
corporation, the terms of this Agreement without the consent of the other
party. As reasonably necessary, Xxxxxxxxxxx may discuss this Agreement with
his wife, attorney, financial advisor, tax advisor, benefit advisor or
compensation advisor and Company may discuss this Agreement with its
attorneys, officers, directors and managers provided, however, that each
agrees to be bound by the terms of this paragraph to keep the information
confidential. Xxxxxxxxxxx may
also discuss this
Agreement with Xxxxx X. Xxxx, and Xxx Xxxxxx, so long as in each instance
they are Company employees at the time of Xxxxxxxxxxx’x discussions. It
shall not be a breach of this confidentiality provision for Xxxxxxxxxxx to
advise any employer or prospective employer of the limitations set forth in
paragraph 13 above.
19. Assignment.
Each of the parties represents and warrants that he
or it has not heretofore assigned, transferred or granted or purported to
assign, transfer or grant any claims, matters, demands or causes of action
herein released, disclaimed, discharged or terminated, and agrees to
indemnify and hold harmless any other party from and against any and all
costs, expense, loss or liability incurred as a consequence of any such
assignment.
20. Recitals and
Paragraph Headings. Each term of this Agreement
is contractual and not merely a recital. All recitals are incorporated by
reference into this Agreement. Captions and paragraph headings are used
herein for convenience only, are no part of this Agreement and shall not be
used in interpreting or construing it.
21. Additional
Documents. The parties will execute all such
further and additional documents and undertake all such other actions as
shall be reasonable, convenient, necessary or desirable to carry out the
provisions of this Agreement.
22. No
Admissions. This Agreement effects the settlement
of claims which are denied, disputed and/or contested and nothing contained
herein shall be construed as an admission by any party hereto of any
liability of any kind to any other party. Each of the parties hereto denies
any liability in connection with any claim and intends merely to avoid the
uncertainties and costs of litigation and buy his or its peace.
23. Pennsylvania
Law. This Agreement was negotiated, and delivered
within the Commonwealth of Pennsylvania, and the rights and obligation so
the parties hereto shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Pennsylvania. Should any
litigation arise concerning this Agreement, it will be filed only in a court
in Allegheny County, Commonwealth of Pennsylvania, and then only if
consistent with the parties’ obligations under paragraph 30 hereof with
regard to arbitration.
24. Entire
Agreement. This Agreement constitutes a single
integrated contract expressing the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions with respect to
the subject matter hereof. There are no other agreements, written or oral,
express or implied, between the parties hereto, concerning the subject
matter hereof, except as set forth herein. This Agreement may be amended
only by an agreement in writing, signed by Xxxxxxxxxxx and the President of
Company.
25. Binding
Effect. This Agreement is binding upon and shall
inure to the benefit of the parties hereto, their heirs, assignees and
successors in interest (including successors in any reorganization or merger
with any other entity).
26. Construction of
Agreement. Each party has cooperated in the
drafting and preparation of this Agreement, and, accordingly, in any
construction or interpretation of this Agreement, the same shall not be
construed against any party by reason of the source of drafting.
27. Costs and
Attorneys’ Fees. Each party is to bear its
own costs and attorneys’ fees incurred in connection with the matters
resolved by this Agreement and in connection with the negotiation and the
preparation of this Agreement, except as provided in Para. 8 above. However,
in the event of litigation or arbitration relating to or for the enforcement
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees and costs actually incurred.
28. Taxes.
Xxxxxxxxxxx acknowledges his responsibility for any and
all taxes due with respect to the sums paid to him under this Agreement,
represents that he has received independent advice concerning his tax
obligations, and states that he has not relied upon representations or
advice, if any, of the Company or their counsel concerning the taxable or
nontaxable nature of the sums payable or options transferred hereunder.
Xxxxxxxxxxx agrees that he will indemnify and hold the company harmless from
any and all claims for taxes, penalties and/or interest based upon the
payments to be made under this Agreement.
29. No Waiver.
The failure to enforce at any time any of the
provisions of this Agreement, or to require at any time performance by the
other party of any of the provisions hereof, shall in no way be construed to
be a waiver of such provisions or to affect either the validity of this
Agreement or any part hereof or the right of either party thereafter to
enforce each and every provision in accordance with the terms of this
Agreement.
30. Arbitration.
Except in connection with an action by the Company
for injunctive or other equitable relief, any controversy, dispute, or claim
between the parties of this Agreement or any party released pursuant to it,
including any claim arising out of or in connection with the interpretation,
performance or breach of this Agreement, shall be resolved exclusively by
arbitration before a single arbitrator conducted in Pittsburgh,
Pennsylvania, in accordance with the rules of the American Arbitration
Association. This agreement to resolve any disputes by binding arbitration
shall extend to claims against any shareholder of the Company, any
subsidiary or affiliates of the Company, any officers, directors, employees,
or agents of the Company, or any of the above, and shall apply as well to
claims arising out of state and federal statutes and local ordinances as
well as to claims arising under the common law. The parties intend that this
Agreement to arbitrate be valid, enforceable and irrevocable and that it
provide the exclusive remedy with respect to all disputes within its
scope.
31. Xxxxxxxxxxx
’s Understanding. Xxxxxxxxxxx states that he
has carefully read this Agreement, which it has been fully explained to him
by his attorney, that he fully understands its final and binding effect and
understands that he is releasing certain rights and entitlements, that the
only promises made to him to sign the Agreement are those stated above, and
that he is signing this Agreement voluntarily.
32. Age
Discrimination in Employment Act Waiver. The
waiver given below is given only in exchange for consideration which is in
addition to anything of value to which Xxxxxxxxxxx is already entitled, the
sufficiency of which is hereby acknowledged by Xxxxxxxxxxx. The waiver set
forth below does not waive rights or claims which may arise after the date
of execution of this Agreement. Xxxxxxxxxxx acknowledges that (i) this
entire Agreement is written in a manner calculated to be understood by
Xxxxxxxxxxx; (ii) that by reviewing this Agreement or drafts thereof he has
been advised in writing to consult with an attorney before executing this
Agreement, and (iii) he was given a period of 21 days within which to
consider the Agreement, and (iv) to the extent he executes this Agreement
before the expiration of the 21-day period, he does so knowingly and
voluntarily and only after consulting with
an attorney.
Xxxxxxxxxxx shall have the right to cancel and revoke this Agreement during
a period of 7 days following his execution of the Agreement and this
Agreement shall not become effective, and no money shall be paid hereunder
until the expiration of such 7-day period. Xxxxxxxxxxx or his counsel shall
notify the Company’s counsel in writing of the date of the execution of
this Agreement and shall send by fax ((000)000-0000) to Company’s
counsel a signed and dated copy of the signature page signed by Xxxxxxxxxxx.
The 7-day period of revocation shall commence upon the date of Xxxxxxxxxxx
’s execution of this agreement. Within the 7-day revocation period,
Xxxxxxxxxxx or his counsel shall forward to the Company and Company’s
counsel a copy of this Agreement fully executed by Xxxxxxxxxxx. In order to
revoke this Agreement, Xxxxxxxxxxx shall deliver to the Company, prior to
the expiration of said 7-day period, a written notice of
cancellation.
In addition to the release set forth at
Paragraph 12 hereof, Xxxxxxxxxxx hereby voluntarily and knowingly waives all
rights or claims arising under the Federal Age Discrimination in Employment
Act.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the dates and years written
below.
EXECUTION AND
ACKNOWLEDGMENT BY XXXXXX X. XXXXXXXXXXX
I received this
Contract Termination Agreement
on November 15, 1999. I understand that I have twenty-one (21) days
thereafter within which to consider this Agreement with my legal counsel. I
freely choose to sign this
Contract Termination Agreement on November 15,
1999. I understand that I will have seven (7) days thereafter within which
to revoke my acceptance of this
Contract Termination Agreement and that the
Contract Termination Agreement shall not be effective under the expiration
of that seven (7) day period. Executed at Washington, DC, this 15th day of
November, 1999.
EXECUTION AND
ACKNOWLEDGMENT BY THE IT GROUP, INC.
Dated: November 18th,
1999
At:
Monroeville, Pennsylvania
| Duly Authorized XXX
X. XXXXXX
|
