EXHIBIT 10.17
EMPLOYMENT AGREEMENT
AGREEMENT, dated this lst day of January, 2002 (the "Agreement"),
between Xxxxxxxx & Struggles, Inc., a Delaware corporation, and any successor
(the "Employer") and Xxxx X. Xxxxxx (the "Employee"). The parties hereby agree,
as follows:
1. Employment. The Employer shall employ the Employee as Chief Human
Resources Officer and the Employee hereby accepts such position and agrees to
serve the Employer in such capacity during the employment period fixed by
Section 3 hereof (the "Employment Period"). The Employee shall report to the
Chief Executive Officer of the Employer. The Employee's duties and
responsibilities shall be such duties and responsibilities as are consistent
with the position of Chief Human Resources Officer of the Employer. The Employee
shall devote substantially all of his business time and attention to the
performance of his duties and responsibilities hereunder.
2. Compensation.
(a) Annual Base Salary. The Employer shall pay the Employee,
pursuant to the Employer's normal and customary payroll procedures, a base
salary of $500,000 per annum (the "Annual Base Salary").
(b) Annual Bonus. In addition to the Annual Base Salary, during
the Employment Period, the Employee may receive an annual bonus (the "Annual
Bonus"), based on the achievement of performance objectives, which shall be
determined by the Compensation Committee of the Board of Directors of the
Employer (the "Board").
(c) Incentive Compensation; Benefit Plans. Commencing in January
2002, the Employee shall participate in the Employer's Annual Bonus Plan, Change
in Control Severance Plan and Severance Plan. In addition, during the Employment
Period (i) the Employee shall be entitled to participate in all other savings
and retirement plans, practices, policies and programs of the Employer which are
made available generally to other employees of the Employer and (ii) the
Employee and/or the Employee's family, as the case may be, shall be eligible for
participation in, and shall receive all benefits under, all welfare benefit
plans, practices, policies and programs provided by the Employer (including,
without limitation, vacation, medical, prescription, dental, disability, life
insurance, group life insurance, accidental death and travel accident insurance
plans and programs, together the "Benefit Plans") which are made available
generally to other employees of the Employer. The Employer's Physical
Examinations Policy and the Financial Planning Program for Senior Partners will
apply to the Employee.
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3. Employment Period.
The Employment Period shall commence on January 1, 2002 (the
"Effective Date") and shall end July 1, 2003. Notwithstanding the foregoing, the
Employee's employment hereunder may be terminated during the Employment Period
upon the earliest to occur of the following events:
(a) Death. The Employee's employment hereunder shall terminate
immediately upon his death.
(b) Disability. The Employer may terminate the Employee's employment
hereunder for "Disability," which shall mean (i) a physical or mental incapacity
of the Employee which entitles the Employee to benefits under the long-term
disability plan applicable to the Employee and maintained by the Employer; or
(ii) in the event that no such long-term disability plan is maintained by the
Employer, the Employee has been unable to perform his duties hereunder for a
period of 180 days within any twelve-month period as a result of the Employee's
incapacity due to physical or mental illness.
(c) Cause. The Employer may terminate the Employee's employment
hereunder for Cause. For purposes of this Agreement, the term "Cause" shall mean
(i) fraud, or the embezzlement or misappropriation of funds or property of the
Employer or any of its affiliates by you, the conviction of, or the entrance of
a plea of guilty or nolo contendere by Employee, to a felony, or a crime
involving moral turpitude; (ii) neglect, misconduct or willful malfeasance which
is materially injurious to the Employer or any of its affiliates; or (iii)
willful failure or refusal to perform your duties, or a willful, material breach
of contract. If, subsequent to the Employee's termination of services hereunder
for other than Cause, it is discovered that the Employee's services could have
been terminated for Cause, the Employee's services shall, at the election of the
Employer, be deemed to have been terminated for Cause retroactively to the date
the events giving rise to Cause occurred.
(d) Good Reason. The Employee may terminate his employment
hereunder for Good Reason (and such termination shall be treated as if it were a
termination by the Employer without Cause, and not a voluntary termination by
the Employee). "Good Reason" shall mean (i) a diminution of the amount of the
Employee's base salary or target bonus or benefits; (ii) termination of the
Employee's participation in Tier One of the Employer's Change in Control
Severance Plan or the Employee's participation in the Top Management level of
the Employer's Severance Plan; (iii) the elimination of the Employee's position
or a diminution of responsibilities associated with the Employee's position; or
(iv) a change in the location of the Employee's principal place of employment
more than 50 miles from its initial location without the Employee's approval.
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Notwithstanding the foregoing, an isolated and inadvertent action
taken in good faith and which is remedied by the Employer within 30 days after
receipt of written notice thereof given by the Employee shall not constitute
Good Reason.
(e) Without Cause. The Employer may terminate the Employee's
employment hereunder without Cause.
(f) Without Good Reason. The Employee may terminate his employment
hereunder without Good Reason, provided that the Employee provides the Employer
with notice of his intent to terminate his employment without Good Reason at
least six months in advance of the Date of Termination; provided, however, that
the Employer may treat such notice as a resignation and accept it prior to the
expiration of six months at the Employer's sole discretion.
4. Expense Reimbursement. During the Employment Period, the Employer
shall reimburse the Employee for all reasonable business expenses upon the
presentation of statements of such expenses in accordance with the Employer's
policies and procedures now in force or as such policies and procedures may be
modified with respect to all employees of the Employer. The Employer shall pay
or reimburse the Employee on a grossed-up basis for two business class round
trip tickets per year between New York and Europe and accommodations in
accordance with the Employer's travel policy in effect at the time. The Employer
shall also pay or reimburse the Employee for the cost of a health club.
5. Termination Payments.
A. In the event of termination of the Employee's employment during
the Employment Period:
(i) by the Employer without Cause (pursuant to Section 3(f));
or
(ii) by the Employee for Good Reason (pursuant to Section 3(d))
then, the Employee shall be entitled to the following payments:
(a) Annual Base Salary through the Date of Termination (to the
extent not paid) within 10 days following the Date of
Termination;
(b) Earned but unpaid Annual Bonus in respect of the year ended
prior to the Date of Termination;
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(c) A pro rata portion of his target Annual Bonus (which target
shall not be less than $500,000) based upon the number of
months worked in the year in which the Date of Termination
occurs;
(d) Severance pay pursuant to the Top Management level of the
Employer's Severance Plan;
(e) Amounts vested under the terms of benefits plans in which
he is a participant under the terms thereof; and
(f) Unreimbursed expenses under Section 4 of this Agreement.
B. The Employee shall not be entitled to any further payments or
benefits under this Agreement in respect of any termination of the Employee's
employment during the Employment Period by the Employer without Cause (pursuant
to Section 3(f)) or by the Employee for Good Reason (pursuant to Section 3(d)).
The payments and benefits provided in this Section 5A(a) and 5A(b) are subject
to and conditioned upon the Employee's compliance with the restrictive covenants
provided in Section 7 and shall be subject to and conditioned upon the Employee
executing a valid general release and waiver, waiving all claims the Employee
may have against the Employer, its successors, assigns, affiliates, employees,
officers and directors.
C. In the event that the Employee's employment terminates at the
expiration of the Employment Period without renewal, then the Employee shall be
entitled to a pro rata portion of his target Annual Bonus (which target shall
not be less than $500,000) based upon the number of months worked in the year in
which the Date of Termination occurs and the Employee shall be entitled to
continue his participation in the Employer's benefit plans (to the extent he is
a participant on the date of expiration) for six months after expiration of the
Employment Period.
D. If the Employee's employment is terminated during the Employment
Period by the Employer for Cause, by the Employee without Good Reason, or as a
result of the Employee's death or Disability pursuant to Sections 3(c), 3(g),
3(a) and 3(b), respectively, the Employer shall pay the amounts referred to in
Section 5A(a) and 5A(b) to the Employee (or the Employee's estate or legal
representative in the event of the Employee's death) within thirty days
following the Date of Termination and the Employee shall not be entitled to any
further payments or benefits under this Agreement.
E. The Employer shall forgive the $700,000 principal amount of the
loan made to the Employee in June 2001 in accordance with the terms of the
Promissory Note attached hereto.
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6. Non-Exclusivity of Rights. Any vested benefits and other amounts
that the Employee is otherwise entitled to receive under any Benefit Plan or
other employee benefit plan, policy, practice or program of the Employer shall
be payable in accordance with such Benefit Plan or other employee benefit plan,
policy, practice or program as the case may be, except as explicitly modified by
this Agreement.
7. Confidentiality of Information; Duty of Non-Disclosure; Non-
Competition; Non-Solicitation.
(a) Confidential Information; Duty of Non-Disclosure. The
Employee's employment under this Agreement necessarily involves his access to
and understanding of certain trade secrets and confidential information
pertaining to the business of the Employer and its affiliates. During the
Employment Period and thereafter, he will not, directly or indirectly, without
the prior written consent of the Employer, disclose or use for the benefit of
any person, corporation or other entity, or for himself any and all files, trade
secrets or other confidential information concerning the internal affairs of the
Employer or its affiliates, including, but not limited to, information
pertaining to its clients, services, products, earnings, finances, operations,
methods or other activities; provided, however, that the foregoing shall not
apply to information which is of public record or is generally known, disclosed
or available to the general public or the industry generally (other than as a
result of the Employee's breach of this Section 7(a)). Notwithstanding the
foregoing, the Employee may disclose such information as is required by law
during any legal proceeding or to the Employee's personal representatives and
professional advisers and, with respect to such personal representatives and
professional advisers, the Employee shall inform them of his obligations
hereunder and take all reasonable steps to ensure that such professional
advisers do not disclose the existence or substance thereof. Further, the
Employee shall not, directly or indirectly, remove or retain, without the
express prior written consent of the Employer, and upon termination of
employment for any reason shall return to the Employer, any records, computer
disks, computer printouts, business plans or any copies or reproductions
thereof, or any information or instruments derived therefrom, arising out of or
relating to the business of the Employer and its affiliates or obtained as a
result of his employment.
(b) Non-Competition. During the Employment Period and for a period
of six months after the termination of the Employee's employment with the
Employer, the Employee shall not work for or provide services to a principal
competitor of the Employer and its affiliates in a substantially similar
function as the Employee held with the Employer during the two-year period prior
to the Employee's termination of employment with the Employer.
(c) Non-Solicitation. During the Employment Period and for a period
of one year after the termination of the Employee's employment with the
Employer, the Employee shall not (i) hire, solicit for hire, or assist any other
person in soliciting or
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hiring any employment candidate with whom the Employee has had contact while
employed by the Employer during the two years prior to such termination or (ii)
directly or indirectly solicit or hire, or assist any other person in soliciting
or hiring, any employee of the Employer and its affiliates (as of the date of
the Employee's termination of employment) or any person who, as of such date,
was in the process of being recruited by the Employer and its affiliates, or
induce any such employee to terminate his or her employment with the Employer
and its affiliates
(d) Remedies. The parties hereto hereby agree that it is impossible
to measure in money the damages which will accrue to the Employer by reason of a
failure by the Employee to perform any of his obligations under this Section 7
and the Employee acknowledges that such obligations are a material condition to
the Employer's decision to enter into this Agreement. Accordingly, if the
Employer institutes any action or proceeding to enforce the provisions hereof,
to the extent permitted by applicable law, the Employee hereby waives the claim
or defense that the Employer has an adequate remedy at law, and the Employee
shall not urge in any such action or proceeding the defense that any such remedy
exists at law. The restrictive covenants in this Section 7 are in addition to
any rights the Employer may have in law or at equity or under any other
agreement. In the event that a court of competent jurisdiction finds the
Employee to be in violation of the provisions of Sections 7(b) or 7(c), the
non-competition and/or non-solicitation period shall be extended by the period
of time during which such court found the Employee to have been in such
violation. The foregoing shall not prejudice the Employer's right to require the
Employee to account for and pay over to the Employer any profit obtained by the
Employee as a result of any transaction constituting a breach of this Section 7.
(e) Survival of Covenants. This Section 7 shall survive the
termination of the Employment Period.
8. Arbitration. This Agreement contains our entire understanding and
can be amended only in writing and signed by the Employee and Chief Executive
Officer of the Employer. The Employee specifically acknowledges that no promises
or commitments have been made to him that are not set forth in this Agreement.
Any controversy or claim arising out of or relating to this Agreement
or for the breach thereof, or Employee's employment, including without
limitation any statutory claims (for example, claims for discrimination
including but not limited to discrimination based on race, sex, sexual
orientation, religion, national origin, age, marital status, handicap or
disability; and claims relating to leaves of absence mandated by state or
federal law), breach of any contract or covenant (express or implied), tort
claims, violation of public policy or any other alleged violation of statutory,
contractual or common law rights (and including claims against officers,
directors, employees or agents of the Employer) if not otherwise settled between
the parties, shall be conclusively settled by arbitration to be held in New
York, New York, in accordance with the American Arbitration Association's
Employment Dispute Resolution Rules (the "Rules"). Arbitration shall be the
parties' exclusive
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remedy for any such controversies, claims or breaches. The parties agree they
shall not seek any award for punitive damages for any claims they may have under
this Agreement. The parties also consent to personal jurisdiction in New York,
New York with respect to such arbitration. The award resulting from such
arbitration shall be final and binding upon both parties. Judgment upon said
award may be entered in any court having jurisdiction.
Employee and the Employer hereby waive the right to pursue any claims,
including but not limited to employment termination - related claims, through
civil litigation outside the arbitration procedures of this provision, unless
otherwise required by law. Employee and the Employer each have the right to be
represented by counsel with respect to arbitration of any dispute pursuant to
this paragraph. The arbitrator shall be selected by agreement between the
parties, but if they do not agree on the selection of an arbitrator within 30
days after the date of the request for arbitration, the arbitrator shall be
selected pursuant to the Rules.
In the event of any arbitration hereunder, the parties agree each shall
bear its or his own attorneys' fees and costs associated with or arising from
such arbitration or other proceeding.
9. Miscellaneous.
(a) Notices. Any notice to be given hereunder shall be given in
writing. Notice shall be deemed to be given when delivered by hand, or three
days after being mailed, postage prepaid, registered with return receipt
requested, addressed as follows.
If to the Employer:
Xxxxxxxx & Struggles, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Legal Officer
If to the Employee:
Xx. Xxxx X. Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as any party hereto may designate by notice to the
others, and shall be deemed to have been given upon receipt.
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(b) Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the Employee's employment.
This Agreement expressly supersedes the Agreement, dated July 7, 2000, between
the Employer and the Employee and such Agreement shall be of no further force
and effect.
(c) Modification or Amendment; Waiver. This Agreement may be
amended only by an instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing signed by the
party or parties against whom or which enforcement of such waiver is sought. The
failure of any party hereto at any time to require the performance by any other
party hereto of any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the waiver by any
party hereto of a breach of any provision hereof be taken or held to be a waiver
of any succeeding breach of such provision or a waiver of the provision itself
or a waiver of any other provision of this Agreement.
(d) Successors. This Agreement is binding on and is for the benefit
of the parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be assigned by the Employer or by the
Employee.
(e) Severability. Each provision hereof is severable from this
Agreement, and if one or more provisions hereof are declared invalid, the
remaining provisions shall nevertheless remain in full force and effect. If any
provision of this Agreement or portion thereof is so broad, in scope or duration
or otherwise, as to be unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.
(f) Tax Withholding. The Employer may withhold from any amounts
payable to the Employee hereunder all federal, state, city or other taxes that
the Employer may reasonably determine are required to be withheld pursuant to
any applicable law or regulation.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to its principles of conflicts of law.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(i) Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Xxxxxxxx & Struggles, Inc.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: CEO
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
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PROMISSORY NOTE
$700,000.00 Dated May 1, 2002
FOR VALUE RECEIVED, the undersigned promises to pay to the order of XXXXXXXX &
STRUGGLES, INC., a Delaware corporation, the principal sum of Seven Hundred
Thousand Dollars and no Cents ($700,000.00) without interest thereon. Payment of
the entire principal sum shall be made in full on June 30, 2004, except that the
entire principal sum shall, without demand or notice of any kind, be and become
due and payable within thirty (30) days following the date that you cease to be
in the Company's employ if 1) the Company terminates your employment with
"Cause" as defined in your January 1, 2002 employment agreement with the Company
("the Agreement") or 2) you terminate your employment with the Company other
than for "Good Reason" (as defined in the Agreement) after June 30, 2002.
The principal sum shall be forgiven in the following amounts on the following
forgiveness dates: $350,000.00 on June 30, 2002, provided your employment has
not been terminated for Cause and $350,000.00 on June 30, 2003, provided you are
in the Company's employ on that date; provided however, that if the Company
terminates your employment without Cause, or you have resigned from the Company
for Good Reason, then the principal sum shall be forgiven in full and at once
upon the effective date of such termination or resignation. Applicable
withholding taxes attributable to the forgiveness of this Note will be withheld
by the Company or reimbursed to the Company by you, as provided in your
Agreement.
All payments under this Note shall be mailed via Federal Express or certified
mail, return receipt requested, to Xxxxxxxx & Struggles, Inc., 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Controller, or to such other address or person as the holder of this Note may,
in writing, direct.
/s/ Xxxx Xxxxxx
-------------------------
Xxxx Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
