Exhibit 10.36
GENERAL RELEASE AND SEPARATION AGREEMENT
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By this General Release and Separation Agreement ("Agreement"), between
Xxxxx X. Xxxxxx ("Xxxxxx") and the Board of Trade of the City of Chicago
("CBOT"), the parties hereby stipulate and agree as follows:
WHEREAS, Xxxxxx and the CBOT entered into an employment agreement on or
about February 20, 2001 (the "Employment Agreement") for a term of four years
(the "Employment Period"); and
WHEREAS, said Employment Agreement was amended by a letter agreement
between the parties dated February 19, 2002 (the "Letter Agreement"); and
WHEREAS, Xxxxxx and the CBOT wish to sever their employment relationship
and terminate the Employment Period on terms and conditions which both parties
consider reasonable and appropriate; and
WHEREAS, Xxxxxx and the CBOT desire to avoid any litigation and controversy
and to settle and compromise fully any and all claims and issues that have been
raised, or could have been raised, as a result of Xxxxxx'x employment
relationship with the CBOT, the parties' Employment Agreement, the Letter
Agreement and any other claims; and
WHEREAS, the parties have agreed to the terms of this Agreement in order to
completely resolve any and all issues between them.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, it is agreed by and between Xxxxxx and the CBOT that:
1. Xxxxxx will voluntarily resign from all offices and directorships with
the CBOT effective November 4, 2002, and shall be relieved of his duties and
responsibilities as set forth in Paragraph 2 of the Employment Agreement at
that time. Xxxxxx shall continue as an
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active employee, on paid-vacation status, until November 30, 2002, at which time
his employment shall terminate.
2. The CBOT will pay Xxxxxx his Base Salary, as defined in Paragraph 3(a)
of the Employment Agreement ($1,250,000 per annum), through December 31, 2004.
3. The CBOT agrees to pay Xxxxxx a Performance Bonus for the 2002 fiscal
year in cash in the amount of $500,000 and his 2002 supplemental 401(k) plan
payment (including tax gross-up thereunder), less withholdings and deductions
required by law, on or before December 31, 2002, even though Xxxxxx will not be
employed by the CBOT for the full fiscal year.
4. Notwithstanding the provisions of the Employment Agreement relating to
the forfeiture of the Incentive Award, Xxxxxx will remain vested in, and retain
the right to exercise, his vested Appreciation Units for the period ending March
31, 2003. Any portion of his vested Appreciation Units, which now total 40% of
the Incentive Award referenced in Paragraph 3(d) of and Appendix A to the
Employment Agreement, that is not exercised during the period ending March 31,
2003 shall be forfeited; provided further that Xxxxxx shall be entitled to
exercise his vested Appreciation Units only in accordance with the terms set
forth in Appendix A to the Employment Agreement and in the Letter Agreement
except as expressly modified herein. Provided further that Xxxxxx shall be
entitled to exercise his vested Appreciated Units if and only if he has complied
with and continues to comply with the terms set forth in Paragraphs 5, 6 and 7
of the Employment Agreement.
5. The CBOT shall continue to provide Xxxxxx all health benefits covering
Xxxxxx (and his covered dependents) on the date hereof, at the CBOT's cost, for
a period of one year from the effective date of his termination of employment.
Thereafter, Xxxxxx shall be entitled to all benefits under COBRA (and other
similar statutes) as provided by applicable law. In the
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event that Xxxxxx obtains other employment with company paid health insurance
benefits, however, the CBOT's obligation to bear the costs of continued health
insurance benefits will cease.
6. The CBOT agrees to provide Xxxxxx with an office, clerical assistance
and a parking space at the CBOT's principal offices, located at 000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, for a period of one year from the effective
date of his termination of employment.
7. Notwithstanding any provision to the contrary in Paragraph 7 of the
Employment Agreement, the CBOT agrees that the Non-Compete Period will be
limited to a period of one year from the effective date of Xxxxxx'x resignation
from office except with respect to the following entities, their affiliates and
subsidiaries: Eurex, BrokerTec, the St. Louis Merchants Exchange and the Board
of Trade Clearing Corporation. With respect to those entities, their affiliates
and subsidiaries, the Non-Compete Period shall be two years from the effective
date of Xxxxxx'x resignation from office. In all other respects, however, Xxxxxx
will be required to comply with the terms of the Employment Agreement, including
but not limited to Paragraphs 5, 6 and 7 pertaining to Confidential Information,
Inventions and Patents, Non-Compete, and Non-Solicitation. For this purpose,
"affiliate" means with respect to each of the foregoing four named companies
("special competitors"): (i) any entity beneficially owning more than 50% of the
vote and value of all equity interests ("control") of a special competitor, (ii)
any entity controlled by a special competitor, and (iii) any entity controlled
by an entity that controls a special competitor. For this purpose, a
"subsidiary" is any entity in which a special competitor owns 80% or more of the
vote and value of all equity interests in such entity.
8. Xxxxxx understands and agrees that the compensation and benefits
provided for in Paragraphs 2 through 6 of this Agreement, and benefits payable
or otherwise provided under
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CBOT group benefit plans for its employees, constitute all of the compensation
and benefits to which Xxxxxx is entitled as a result of his separation from
employment with the CBOT, and Xxxxxx hereby waives any and all other claims for
additional compensation and/or benefits to which he may otherwise have been
entitled under the Employment Agreement and/or Letter Agreement.
9. In exchange for the promises of the CBOT set forth in Paragraphs 4
through 6 of this Agreement, which Xxxxxx agrees constitute consideration which
is not otherwise owed or due to him, Xxxxxx agrees, for himself, his heirs,
successors, assigns or executors, to release and forever discharge the CBOT, any
of its affiliated or related companies, and its and their past and present
directors, officers, members, employees, representatives and insurers from any
and all claims, suits, demands, causes of action, contracts, covenants,
obligations, debts, costs, expenses, attorneys' fees, liabilities of whatever
kind or nature in law or equity, by statute or otherwise whether now known or
unknown, vested or contingent, suspected or unsuspected, and whether or not
concealed or hidden, which have existed or may have existed, or which do exist,
arising from any matter whatsoever, at the present time or at any time prior to
the date of this Agreement (the "Claims"), including, but not limited to: (1)
any and all claims under the Illinois Wage Payment and Collection Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, Title VII of
the Civil Rights Act of 1964, The Civil Rights Act of 1866, the Rehabilitation
Act of 1973, the Age Discrimination in Employment Act, the Illinois
Constitution, the Illinois Human Rights Act, the Chicago Human Rights Ordinance,
the Fair Labor Standards Act, the Illinois Minimum Wage Law, Federal Executive
Order 11246 and any other statute, law, order, regulation or enactment of any
type; (2) any and all claims for breach of contract, express or implied,
including but not limited to any claims for breach of the Employment Agreement
and/or Letter Agreement, retaliatory discharge, wrongful discharge and/or any
other tort or common law
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cause of action; and (3) any and all claims for attorneys' fees or costs. The
foregoing to the contrary notwithstanding, "Claims" shall not include: (x) any
and all claims under any employee benefit plan and (y) any and all claims for
enforcement of this Agreement.
10. In signing this Agreement, Xxxxxx acknowledges that he intends that it
shall be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. Xxxxxx expressly consents that this Agreement shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the effectiveness of a
general release of unknown, unsuspected and unanticipated Claims), if any, as
well as those relating to any other Claims hereinabove mentioned or implied.
Xxxxxx acknowledges and agrees that the General Release contained in Paragraph 9
is an essential and material term of this Agreement and without such General
Release the CBOT would not have made the promises set forth in Paragraphs 4
through 6 of this Agreement. Xxxxxx further agrees that in the event he brings
his own Claim in which he seeks damages against the CBOT or any other released
party, or in the event he seeks to recover against the CBOT or any other
released party in any Claim brought by a governmental agency on his behalf, this
General Release shall serve as a complete defense to such Claims.
11. Xxxxxx and the CBOT agree that no interest or right Xxxxxx has, or any
of his beneficiaries has, to receive payment or to receive benefits under this
Agreement shall be subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment, or other alienation or encumbrance of any kind, except
as required by law. Nor may such interest or right to receive payment or
distribution be taken, voluntarily or involuntarily, for the satisfaction of the
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obligations or debts of, or other claims against Xxxxxx or his beneficiaries,
including for alimony, except to the extent required by law.
12. This Agreement shall not be construed as an admission of any wrongdoing
by Xxxxxx or by the CBOT, its affiliates, or its and their directors, officers,
members, agents or employees.
13. The parties agree to issue a joint press release concerning this
Agreement and the separation of Xxxxxx'x employment with the CBOT, a copy of
which is attached hereto as Exhibit A. In the event either party receives an
inquiry about this Agreement or the separation of Xxxxxx'x employment with the
CBOT, each party agrees to respond in a manner consistent with the information
provided in the joint press release.
14. This Agreement shall be interpreted in accordance with the laws of the
State of Illinois. Whenever possible, each provision of his Agreement shall be
interpreted in a manner as to be effective and valid under applicable law, but
if any provision shall be held to be prohibited or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting the remainder of such provision or
any of the remaining provisions of this Agreement.
15. Xxxxxx specifically acknowledges that, at least 21 days prior to the
required date for executing this document, he was given a complete copy of this
Agreement and by this Agreement was advised in writing to consult with an
attorney concerning its meaning and effect.
16. Xxxxxx understands that after he signs this Agreement, he has seven (7)
days to revoke it. If Xxxxxx desires to revoke the Agreement, a written
revocation must be delivered to the CBOT's attorney, Xxxxxx X. Xxxxxx, at 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, within seven (7)
calendar days of the date Xxxxxx signs this Agreement.
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17. If this Agreement is revoked within seven (7) days of signing, the
CBOT shall be relieved of all obligations under this Agreement.
18. Each party acknowledges that he or it has read and understands this
Agreement and voluntarily enters into same with full knowledge of its terms
and conditions. Each party further acknowledges that the terms of this
Agreement are valid and binding.
19. The indemnification of Xxxxxx set forth at Section 9(b) of his
Employment Agreement shall apply to his service as a member of the Board of
Directors of the CBOT (and each Committee thereof on which he serves) in
like manner as is provided for his service as an officer thereunder and, any
provision of Sections 8, 9 and 10 of this Agreement to the contrary
notwithstanding, such officer's(s') and director's indemnification shall
survive the termination of Xxxxxx'x employment in accordance with Section 11
of the Employment Agreement.
20. The CBOT shall pay all professional fees and expenses incurred by
Xxxxxx in connection with his separation of employment and the preparation of
this Agreement.
BY AND FOR THE CBOT, AGREED TO AND ACCEPTED:
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Its: Chairman
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Dated: 11/4/02
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Signed and sworn to before me this 31st day of October, 2002.
/s/ Xxxxx X. Xxxxxxxxx
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NOTARY PUBLIC
BY AND FOR XXXXX X. XXXXXX, AGREED TO AND ACCEPTED:
By: /s/ XXXXX X. XXXXXX
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XXXXX X. XXXXXX
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Dated: ___________________________________
Signed and sworn to before me this 31st day
of October, 2002
/s/ Xxxxx X. Xxxxxxxxx
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NOTARY PUBLIC
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Exhibit A
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Chicago Board of Trade
Wednesday, November 6, 2002
FOR IMMEDIATE RELEASE
Contact: Xxxxx X. Xxxxxxxx
000-000-0000
xxxxxxxxx@xxxx.xxx
CBOT ANNOUNCES RESIGNATION OF XXXXX XXXXXX
AS PRESIDENT AND CEO
NAMES EVP XXXXXXX XXX AS SUCCESSOR, PROMOTES EVP XXXXX
XXXXX TO ADDITIONAL ROLE OF CHIEF OF STAFF
Chicago, November 5 - The Chicago Board of Trade (CBOT) today announced that its
Board of Directors has accepted the resignation of Xxxxx X. Xxxxxx as President
and Chief Executive Officer, effective immediately, and has named Executive Vice
President Xxxxxxx X. Xxx to replace him. The CBOT also announced the promotion
of Xxxxx Xxxxx from Executive Vice President and General Counsel to a newly
created position of Executive Vice President and Chief of Staff. Xxxx Xxxxxx,
the third member of the CBOT's Office of the President, will continue as
Executive Vice President and Chief Information Officer.
In informing the Board of Directors of his resignation, Xxxxxx said, "When I
came to the CBOT, I told you my number one goal was to make the exchange a
better place, to have the membership say at the end of each year that this
institution was running much better than it was at the beginning of the year.
As I prepare to leave, I believe I can say we achieved that goal. During the
past 18 months we have successfully executed the agenda that I was hired to
implement. We have hired high quality professionals to supplement the employee
team already in place. And we melded them into an effective organization. I
have met many wonderful people in this episode of my career and I am thankful to
all of them for their help and support. You have my best wishes for your
future."
CBOT Chairman Xxxxxxxx X. Xxxxxxxx said, "On behalf of our members, I want to
thank Xxxxx Xxxxxx for the work he has performed on behalf of the Exchange.
Xxxxx instilled new business disciplines that continue to pay off for the CBOT
from an operational perspective. He helped us return the CBOT to a position of
strong financial stability to the point where we have been able to make
investments in our infrastructure that will benefit our customers and members.
Under David's watch we have strengthened relations with the Chicago Mercantile
Exchange, the Chicago Board Options Exchange, and the Board of Trade Clearing
Corporation. He also has brought in tremendous professional talent such as
Xxxxxx Xxx, Xxxx Xxxxxx and others who, along with Xxxxx Xxxxx and other members
of our outstanding senior management team will help the Exchange move forward
seamlessly and successfully."
Xxxxxxxx added, "Xxxxxx Xxx has done a tremendous job as Executive Vice
President in the past year and a half, bringing a new level of energy and an
outside perspective to the business aspects of the Exchange. He understands the
derivatives business and the exchange marketplace, and he has assembled a team
of professionals who are developing new products and markets, and better
servicing the needs of our customers and members. The CBOT has become a more
product-oriented exchange, and under Bernie's leadership, with the support of
our members and employees, this effort will continue to flourish."
Mr. Xxx said, "I am honored to take on this responsibility during what I see as
a time of tremendous opportunity for the Chicago Board of Trade. The Exchange
is on track for a record year in trading volume, which I believe is due in large
part to our members and to our hybrid strategy of providing our customers with
the best open auction and electronic trading platforms. We will continue to
promote the themes of "liquidity, flexibility and integrity" at the Chicago
Board of Trade as we strengthen our mix of commodity, interest rate and equity
products. I look forward to working with our Board of Directors, members,
employees and customers as the Exchange moves to complete its restructuring and
positions itself for future growth."
Prior to joining the CBOT in 2001, Mr. Xxx served as President and CEO of
Cargill Investor Services Inc. (CIS), a wholly owned subsidiary of Xxxxxxx Inc.
Mr. Xxx joined CIS in 1985 and held various operational positions with the
company both in Chicago and in Singapore, where he served as Director of Cargill
Investor Services (Singapore) Pte. Ltd. from November 1994 until April 1997. He
returned to Chicago and was named Vice President and head of Global Execution,
a position he held until named President and CEO in 1998. He also has served as
a Governor and First Vice Chairman of the Board of Trade Clearing Corporation.
Mr. Xxx holds a Bachelor of Science degree from St. John's University in
Collegeville, Minnesota.
In announcing the promotion of Xxxxx Xxxxx to Executive Vice President and
Chief of Staff, Xxxxxxxx noted, "Xxxxx has done an outstanding job during her
tenure at the Exchange, and her knowledge of our business and her superior
management capabilities are augmented by the excellent rapport she has with
our members and employees. This new position will give Xxxxx an expanded and
important role in all business aspects of the CBOT, and her strategic insights
will continue to play a vital part of the Exchange's future successes."
Xx. Xxxxx was appointed Executive Vice President and General Counsel in
1994, where she has served as the Exchange's top strategist on a wide
variety of legal and regulatory matters associated with major exchange and
industry endeavors. Previously, Xx. Xxxxx served as Vice President and Special
Counsel of the CBOT for eight years. She joined the Exchange in 1983 after
holding positions in the law firm of Xxxxx & XxXxxxxx in Rome, the Economic
Crime Project in Chicago, and the Oklahoma Securities Commission. Xx. Xxxxx
holds a Bachelor's degree from Xxxxx College and a Juris Doctor degree from
Xxxxxx Xxxxxxxxxx University.
For more information on the CBOT's products and markets, log on to the exchange
web site at xxx.xxxx.xxx
