Exhibit 10.3
As of December 21, 2000
Xx. Xxxxx Xxxxxxx
c/o Cross Country TravCorps, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Xx. Xxxxxxx:
The purpose of this letter agreement and general release (the
"Agreement") is to acknowledge, and set forth the terms of, our agreement with
regard to the termination of your employment with Cross Country TravCorps, Inc.
(formerly known as Cross Country Staffing, Inc. and referred to hereinafter as
the "Company").
1. (a) You hereby confirm your resignation as of December 31, 2000 (the
"Termination Date") as (i) Chairman of Board of Directors of the
Company, a position you held pursuant to that certain Employment
Agreement dated December 16, 1999 (the "Employment Agreement") between
you and the Company (attached hereto as EXHIBIT A) and (ii) Chairman of
Hospital Hub, Inc. to which you were appointed pursuant to a letter
agreement between the Company and TravCorps Corporation dated on
December 16, 1999.
(b) You agree that your resignation as Chairman of the Board of
Directors is without "Good Reason," as that term is defined in Section
9(f) of the Employment Agreement. Further, it is agreed that the rights
and obligations of the Company and you under the Employment Agreement
are terminated in their entirety, except as otherwise provided in
Sections 6, 7, and 8 of the Employment Agreement, or in this Agreement.
(c) You agree that Section 6 - Restrictive Covenant set forth in the
Employment Agreement shall hereby be amended so that the covenants and
restrictions set forth in such Section 6 shall continue to be binding
upon you until the fourth anniversary of the date on which you cease to
be a member of the Board of Directors of the Company.
Xx. Xxxxx Xxxxxxx
Page 2
(d) You agree to continue to serve as a member of the Board of
Directors of the Company after the Termination Date until you resign or
are removed from the Board of Directors pursuant to the procedures set
forth in the Bylaws of the Company.
(e) Following the Termination Date, you agree to make yourself
available to provide consulting services related to the transition to a
new Chairman of the Board of the Company and other advice or services
as may be requested by the Board of the Company ("Consulting
Services"). In consideration of the Consulting Services, you will
receive the amounts set forth in Section 2(b) of this Agreement. You
will receive no additional compensation for rendering the Consulting
Services. The Consulting Services will be provided at such times and
locations as may be requested upon reasonable notice by the Company and
are reasonably convenient for you, taking into account your other
responsibilities and activities. The Company shall reimburse you for
all reasonable out-of-pocket expenses (other than travel to and from
the Company's office) you incur in connection with your performance of
the Consulting Services upon presentation of receipts in accordance
with the Company's standard practice.
2. (a) You will continue to be paid your current base salary of $270,000
per annum through the Termination Date in accordance with the Company's
normal payroll practices. You will, subject to and in accordance with
the Company's normal practices and policies, be entitled to receive
payment for: (i) any unreimbursed business expenses through the
Termination Date that are promptly submitted to the Company, and (ii)
any accrued (but unused) vacation for the year 2000 through the
Termination Date. In addition, pursuant to Section 2(a) of your
Employment Agreement, you will receive a bonus in accordance with the
terms of the Bonus Plan of the Company for the services you performed
for the Company during 2000 to be paid in accordance with the Company's
normal practices for paying 2000 bonuses.
(b) After the Termination Date, the Company agrees to pay you
two-hundred fifty dollars ($250.00) per hour for consulting services
rendered by you to the Company under Section 1(e) of this Agreement.
(c) You hereby waive any rights as an employee or deemed employee of
the Company or any of its affiliates during the period you are
providing Consulting Services. The parties hereto acknowledge and
agree that all compensation paid in consideration for the Consulting
Services shall represent fees as an independent contractor, and
shall therefor, be paid without any deductions or withholdings taken
therefrom for taxes or any other purpose. You further acknowledge
that the Company makes no warranties as to any tax consequences
regarding payment of such fees, and you specifically agree that the
determination of any tax liability or other consequences of
Xx. Xxxxx Xxxxxxx
Page 3
the payment set forth in Section 2(b) is your sole and complete
responsibility and that you will pay all federal, state and local
taxes, if any, assessed on such payment.
(d) The Company agrees to pay you amounts which outside members of the
Board of Directors of the Company receive for acting in such capacity.
3. (a) You hereby acknowledge that, effective as of the Termination Date,
you will cease to be an employee of the Company and will not be
eligible for any benefits or compensation previously provided to you
under the Employment Agreement, except as otherwise provided in this
Agreement.
(b) The Company agrees, at its cost, to provide to you, and the members
of your immediately family currently participating in the Company's
Tufts medical insurance plan and Cigna dental insurance plan, medical
and dental insurance coverage that is similar to such insurance that is
made available to employees of the Company located in Massachusetts.
The Company agrees to continue to provide this medical and dental
coverage until the earlier of (i) the date on which you receive medical
or dental coverage from another insurance plan, and (ii) the date on
which you cease to be a member of the Board of Directors of the
Company.
4. You agree that any rights, either express or implied, to make an
investment in Hospital Hub, Inc. that you were granted prior to the
execution of this Agreement are hereby terminated.
5. (a) You acknowledge that as a result of the diminution of your
responsibilities in the Company, you agree to the cancellation and
termination of all stock options unvested as of the Termination Date
that are set forth on SCHEDULE I. These options were granted under the
Cross Country Staffing, Inc. Equity Participation Plan (the "EPP") and
are set forth in your Stock Option Agreement, which is dated December
16, 2000 and attached hereto as EXHIBIT B (the "Stock Option
Agreement").
(b) As of the Termination Date, pursuant to Section 3(a) of your Stock
Option Agreement, your exercisable and vested stock options are set
forth on SCHEDULE II. As additional consideration for entering into
this Agreement, for so long as you remain a consultant to, and Director
of, the Company, you may retain such options, which remain governed by
the Stock Option Agreement and the EPP and therefore the options will
remain exercisable within 30 days from the date on which you cease to
be a consultant to, and member of the Board of Directors of, the
Company.
Xx. Xxxxx Xxxxxxx
Page 4
6. You acknowledge that the payments to made to you pursuant to this
Agreement exceed those to which you would otherwise be entitled under
the normal operation of any benefit plan, policy, or procedure of the
Company or under any previous agreement (written or oral) between you
and the Company. You further acknowledge that the agreement by Company
to provide you such additional payments beyond your entitlement is
conditioned upon your release of all claims against the Company as
provided by Section 7 hereof and your compliance with the terms of this
Agreement.
7. (a) For and in consideration of the promises set forth in this
Agreement, you, your heirs, dependents, executors, administrators,
trustees, legal representatives and assigns (collectively referred to
as "Releasors") hereby forever release and discharge the Company and
its subsidiaries, all employee benefit and/or pension plans or funds,
and their successors and assigns, and all of its or their past, present
and/or future officers, trustees, agents, attorneys, employees,
fiduciaries, administrators and assigns, whether acting as agents for
the Company or its subsidiaries, or in their individual capacities
(collectively referred to as "Releasees"), from any and all claims,
demands, causes of action, fees and liabilities of any kind whatsoever,
whether known or unknown, which Releasors ever had, now have or
hereafter may have against Releasees by reason of any actual or alleged
act, omission, transaction, practice, conduct, occurrence, or other
matter up to and including the date of your execution of this Agreement
in connection with, or in any way related to or arising out of, your
employment, service as a trustee, service as a fiduciary or termination
of any of the foregoing with the Company or its subsidiaries, or any
other agreement, understanding, relationship or arrangement with the
Company or its subsidiaries; provided, however, that nothing in this
letter agreement shall be deemed to vitiate any rights to
indemnification which you may have under the Company's charter or
bylaws or under applicable law.
(b) Without limiting the generality of the foregoing, Releasors release
and discharge Releasees from: (i) any claim of discrimination or
retaliation under the Age Discrimination in Employment Act of 1967, as
amended, Title VII of the Civil Rights Act, the Americans with
Disabilities Act, the Massachusetts Fair Employment Practices Act, the
Massachusetts Age Discrimination Law, the Massachusetts Maternity Leave
Act, and the Massachusetts Small Necessities Leave Act, and/or any
other federal, state or local law or ordinance prohibiting employment
discrimination; (ii) any claim for breach of contract (express or
implied), fraud, wrongful or constructive discharge, intentional or
negligent misrepresentation, retaliatory discharge, intentional
interference with contract, detrimental reliance, defamation, emotional
distress or compensatory or punitive damages; and (iii) any claim for
attorney's fees, costs, disbursements and the like.
Xx. Xxxxx Xxxxxxx
Page 5
(c) You agree that you will not, from any source or proceeding, seek or
accept any award or settlement with respect to any claim or right
covered by Section 7(a) or (b) above, including, without limitation,
any source or proceeding involving any person or entity, the United
States Equal Employment Opportunity Commission or other similar federal
or state agency. Except as otherwise prohibited by law, you further
agree that you will not, at any time hereafter, commence, maintain,
prosecute, participate in as a party, permit to be filed by any other
person on your behalf (to the extent it is within your control or
permitted by law), or assist in the commencement or prosecution of as
an advisor, witness (unless compelled by legal process or court order)
or otherwise, any action or proceeding of any kind, judicial or
administrative (on your own behalf, on behalf of any other person
and/or on behalf of or as a member of any alleged class of persons) in
any court, agency, investigative or administrative body against any
Releasee with respect to any actual or alleged act, omission,
transaction, practice, conduct, occurrence or any other matter up to
and including the date of your execution of this Agreement which you
released pursuant to Section 7(a) or (b) above. You further represent
that, as of the date you sign this Agreement, you have not taken any
action encompassed by this Section 7(c). If, notwithstanding the
foregoing promises, you violate this Section 7(c), you shall indemnify
and hold harmless Releasees from and against any and all demands,
assessments, judgments, costs, damages, losses and liabilities and
attorneys' fees and other expenses which result from, or are incidents
to, such violation.
(d) The release and covenants in this Section 7 relate only to matters
arising during the period of your employment with the Company and its
predecessor, TravCorps Corporation, prior to the Termination Date and
to matters arising out of the circumstances surrounding the termination
of your employment from the Company and the execution of this
Agreement.
8. For and in consideration of the promises set forth in this Agreement,
the Company agrees to release you from any and all claims, demands,
causes of action, fees and liabilities of any kind whatsoever
(collectively referred to as "Claims"), known to the Company on the
Termination Date which the Company ever had, now has or hereafter may
have against you by reason of any act or alleged act, omission,
transaction, practice, conduct, occurrence, or other matter
(collectively referred to as "Actions"), up to and including the
Termination Date in connection with, or in any way related to or
arising out of, your employment as the Chairman of the Directors of the
Company or as the Chairman of Hospital Hub, Inc.; provided, however,
this release specifically excludes any Claims arising out of or related
to any Actions: (a) constituting or resulting in a breach of a
director's duty of loyalty to the Company or its stockholders, (b) not
in good faith or that involve intentional misconduct or a knowing
violation of law, (c)
Xx. Xxxxx Xxxxxxx
Page 6
constituting or resulting in a violation of Section 174 of the
General Corporation Law of the State of Delaware, or (d) from which
you may have derived an improper personal benefit.
9. The existence, terms, and conditions of this Agreement are and shall be
deemed to be fully confidential and shall not be disclosed by you to
any other person or entity, except: (i) as may be required by law; (ii)
to your accountant to the extent necessary to prepare your tax returns;
(iii) to your spouse and attorney, provided that you give to each such
person to whom disclosure is made notice of the confidentiality
provisions of this Agreement and each agrees to keep the existence,
terms and conditions of this Agreement fully confidential.
10. Pursuant to Section 7(f)(2) of the Age Discrimination in Employment Act
of 1967, as amended, the Company hereby advises you that you should
consult independent counsel before executing this Agreement; and you
acknowledge that you have been so advised. You further acknowledge that
you had an opportunity to consider this Agreement for at least
twenty-one (21) days before signing it. It is understood and agreed
that the offer contained in this Agreement will automatically expire on
the 30th day following the date on which this Agreement is received by
your attorneys.
11. This Agreement shall not become effective until the eighth day
following the date on which you sign it (the "Effective Date"). You
understand that you may at any time prior to the Effective Date revoke
this Agreement by delivering written notice of revocation to Xxxxxx
Xxxxxxx, c/o Cross Country TravCorps, Inc., 0000 Xxxx xx Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000.
12. This Agreement represents the complete understanding between you and
the Company and supersedes any and all other agreements between the
parties, except as otherwise provided herein. No other promises or
agreements shall be binding unless in writing and signed by you and the
Company.
13. All questions pertaining to the validity, construction, execution and
performance of this Agreement shall be construed and governed in
accordance with the laws of The Commonwealth of Massachusetts without
regard to the conflicts or choice of law provisions thereof.
14. This Agreement is binding upon, and shall inure to the benefit of you
and the Company and your and its respective heirs, executors,
administrators, successors and assigns.
If this Agreement is acceptable to you, please sign the enclosed
duplicate original and return the signed Agreement to me.
Xx. Xxxxx Xxxxxxx
Page 7
CROSS COUNTRY TRAVCORPS, INC.
By: /s/ XXXXXX XXXXXXX
-------------------------
Xxxxxx Xxxxxxx
Accepted and Agreed to:
By: /s/ XXXXX X. XXXXXXX
-------------------------
Xxxxx X. Xxxxxxx
EXHIBIT B
SCHEDULE I
Pursuant to the Stock Option Agreement, for each Vesting Date after the 12 month
anniversary of the Grant Date, the Participant's vested rights would increase by
12.5 percent of the total number of shares granted in each Tranche. Pursuant to
Section 5(a) of this Separation Agreement, the Participant forfeits the option
rights that he would have acquired on each of six Vesting Dates occurring after
the date as of this Agreement is executed. The number of shares of Company stock
forfeited by the Participant is represented below.
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TRANCHE NUMBER OF UNVESTED OPTIONS
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Tranche 1 1976.8092
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Tranche 2 3721.0526
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Tranche 3 3721.0526
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Tranche 4 813.9803
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Tranche 5 813.9803
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Total Number of Unvested Options per anniversary period = 11,046.875
Total Number of Unvested Options = 11,046.875 x 6 = 66281.25
SCHEDULE II
The Participant's rights in 25 percent of the total number of shares granted in
each Tranche set forth in the Stock Option Agreement will have vested as of
December 31, 2000. Upon the execution of this Agreement, the Participant will
retain the right to these vested options pursuant to Section 6(b) of this
Separation Agreement. The number of shares for each Tranche to which the
Participant has an retained an option is set forth below.
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TRANCHE NUMBER OF VESTED OPTIONS OPTION PRICE
-----------------------------------------------------------------------------
Tranche 1 3,953.6013 $44.96
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Tranche 2 7,442.1030 $67.44
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Tranche 3 7,442.1030 $89.92
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Tranche 4 1,627.9559 $112.40
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Tranche 5 1,627.9559 $134.88
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TOTAL NUMBER OF OPTIONS: 22,093.7281
