EXHIBIT 99.1
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SEPARATION AGREEMENT AND GENERAL RELEASE
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This Separation Agreement and General Release (this "Agreement")
is made as of this 12th day of December 2006 (the "Effective Date"),
by and between Xxxx Xxxxxx (the "Employee") and Xxxxxxxx & Struggles
International, Inc. and its affiliates (collectively, the "Company"),
concerning the termination of Employee's employment with the Company.
WHEREAS, the Company and the Employee entered into a Letter
Agreement dated September 15, 2005 (the "Letter Agreement");
WHEREAS, the Employee's employment as Chief Information Officer,
Chief Operating Officer of the European Region, and Head of Knowledge
Management Center in India, will be terminated by the Company
effective on December 31, 2006 (the "Termination Date"); and
WHEREAS, the Company and the Employee intend that this Agreement
shall be in complete settlement of all rights of the Employee under
the Letter Agreement or otherwise relating to his employment by the
Company.
NOW THEREFORE, in consideration of the mutual promises and
agreements set forth below, the Company and the Employee agree as
follows:
1. TERMINATION. The Employee's employment as Chief Information
Officer, Chief Operating Officer of the European Region, and Head of
Knowledge Management Center in India and all other officer, director
and other positions held by the Employee with the Company shall
terminate as of the close of business on the Termination Date.
Through the Termination Date, the Employee will continue to: (a) serve
as an employee of the Company with the same duties and
responsibilities as before and under the same terms and conditions set
forth in his Letter Agreement, (b) be paid his currently monthly
salary ($33,333.33 per month), and (c) be eligible to participate in
all benefit plans and programs available to employees of Xxxxxxxx &
Struggles, Inc. generally, in accordance with the terms of such plans
and programs. Any business expenses properly incurred by the Employee
prior to the Termination Date will be reimbursed in accordance with
the Company's expense reimbursement policy.
2. 2006 BONUS PAYMENTS. The Employee shall receive a 2006
bonus payment of $210,000 from the Company ("Bonus Payment"), which
will be paid at the same time as bonus payments are made to other
employees in early 2007. Such payment is contingent, however, upon
Employee's delivery to the Company of an executed General Release and
Waiver, which is attached as EXHIBIT A to this Agreement (the
"Release"), during the 21-day period following the Termination Date
with such delivery pursuant to Section 16(d) below.
3. OTHER PAYMENTS.
(a) SEVERANCE. The Employee shall receive a severance
payment (the "Severance Payment") of: (i) 12 months of Base
Salary equal to $400,000, and (ii) 12 months of Target Bonus
equal to $262,500, for a total a lump-sum severance payment of
$662,500. To avoid subjecting the Employee to the payment of any
interest or additional tax imposed under Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Severance Payment will be paid to the Employee six months after
the Termination Date. The Company's obligation to pay the
Severance Payment is conditioned upon the Employee's execution of
this Agreement and the Release, and the continued compliance by
the Employee with all of the terms and conditions of this
Agreement.
(b) SCHOOL FEES. The Company has already paid for the
Employee's children's school fees through July 2007 in the amount
of $105,770. The Company will not request a refund for these
fees already paid. The Company will not, however, be liable or
pay for any further school fees.
(c) HOUSING (EXISTING LEASE). The Company has already made
certain payments toward the Employee's housing lease through July
23, 2007. The Company will not request a refund for the amount
already paid nor cancel the lease, and the Company further will
make such additional payments toward the Employee's housing lease
as may be required under such lease; provided, however, that the
Company's total additional obligation hereunder will not exceed
$105,760. The Company will not be liable for nor pay for any
other housing expenses.
(d) RELOCATION FEES. In accordance with the Company's
applicable policies on expense reimbursement, the Company will
reimburse the Employee for the following expenses incurred in
connection with the Employee's relocation back to the United
States from London, England: (i) reasonable moving expenses for
normal household goods, not to exceed $8,000, and (ii) one way
business class flights from London, England for the Employee and
his family members who will be relocating back with the Employee.
Such Relocation Fees will be reimbursed to the Employee subject
to the provision of actual expenses invoiced. Such relocation
must occur no later than 15 August 2007 to be eligible for this
reimbursement.
(e) TAX PREPARATION FEES. In accordance with the Company's
applicable policies on the payment and/or reimbursement of fees
for professional tax preparation for EX PATRIATED employees, the
Company will pay and/or reimburse the Employee for fees incurred
in the preparation of the Employee's personal income tax returns
for the years in which the Employee was employed by the Company
in London, United Kingdom; and/or received income from the
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Company for his service on behalf of the Company in London,
United Kingdom, regardless of when that income was earned.
4. EQUITY AWARDS.
(a) Subject to Sections 4(b) and (c) below and effective as
of the Termination Date, the Employee shall forfeit and/or
relinquish any and all interests and rights in and under all
unvested equity awards granted under any plan or program
maintained by the Company, and all option awards which are vested
as of the Termination Date shall continue to be exercisable for a
period of sixty (60) days following the Termination Date. Other
than the awards set forth on EXHIBIT B hereto, the Employee
acknowledges and agrees that he does not possess, nor is he
entitled to, any other equity awards under any plan or program of
the Company.
(b) Six months after the Termination Date, the Employee
shall be paid an amount equal to the product of (i) the result of
(A) the number of options which would have vested to the Employee
on the Termination Date had his option awards provided for pro-
rata daily vesting less (B) the number of options that were
vested to the Employee on the Termination Date, MULTIPLIED BY
(ii) the result of (A) the December 29, 2006 closing price of
Xxxxxxxx & Struggles International, Inc. common stock as recorded
on the New York Stock Exchange and as reported in THE WALL STREET
JOURNAL (the "Closing Price") less (B) the exercise price for
such option.
(c) Six months after the Termination Date, the Employee
shall be paid an amount equal to the product of (i) the result of
(A) the number of shares restricted stock that would have vested
to the Employee on the Termination Date had his restricted stock
award provided for pro-rata daily vesting less (B) the number of
shares of restricted stock per such award that were vested to the
Employee on the Termination Date, MULTIPLIED BY (ii) the Closing
Price.
5. TERMINATION OF BENEFITS. Except as specifically provided in
this Agreement with respect to plans or arrangements specifically
identified in this Agreement, the Employee's continued participation
in all employee benefit plans (pension and welfare) and compensation
plans will cease as of the Termination Date. Any payments made to the
Employee pursuant to this Agreement, other than with respect to the
continued payment of salary to the Termination Date, shall be
disregarded for purposes of determining the amount of benefits to be
accrued on behalf of the Employee under any pension or other benefit
plan maintained by the Company. Nothing contained herein shall limit
or otherwise impair the Employee's right to receive pension or similar
benefit payments which are vested as of the Termination Date under any
applicable tax qualified pension or other tax qualified benefit plan.
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6. MEDICAL BENEFITS. The Employee's entitlement to continue
family medical coverage, which shall include vision and dental
coverage, under the benefit plans of the Company operated in the
United States will be determined in accordance with the provisions of
COBRA.
7. NO OTHER PAYMENTS. The Employee agrees and acknowledges
that, other than as specifically provided for in this Agreement, no
additional payments are due from the Company on any basis whatsoever.
8. RELEASE. As part of this Agreement, and in consideration of
the additional payments provided to the Employee in accordance with
this Agreement, the sufficiency of which is hereby acknowledged, the
Employee is required to execute the Release within the 21-day period
following the Termination Date, deliver the executed Release to the
Company per Section 16(d) below, and not revoke the Release.
9. ASSISTANCE WITH CLAIMS. The Employee agrees to cooperate
with the Company or any affiliate in the defense, prosecution or
evaluation of any pending or potential claims or proceedings involving
or affecting the Company or any affiliate arising during the period of
Employee's employment with the Company (the "Employment Period") or
relating to any decisions in which the Employee participated or any
matter of which the Employee had knowledge. The Employee agrees,
unless precluded by law, to promptly inform the Company if he is asked
to participate (or otherwise become involved) in any claims that may
be filed against the Company or any affiliate relating to the
Employment Period. The Employee also agrees, unless precluded by law,
to promptly inform the Company if he is asked to assist in any
investigation (whether governmental or private) of the Company or any
affiliate (or their actions) relating to any matter, regardless of
whether a lawsuit has then been filed against the Company or any
affiliate with respect to such investigation. Specifically and
without limitation, the Employee will attend and participate in
meetings and interviews conducted by Company personnel, and/or
attorneys appointed by the Company and may be represented by counsel
who may attend such meetings and interviews, and execute written
affidavits confirming the Employee's statements in such meetings in
respect of any such matters; provided such meetings do not
unreasonably interfere with the Employee's employment or self-
employment entered into after the Termination Date. The Employee will
make himself available for the foregoing at mutually convenient times
during business hours from time to time as reasonably requested by the
Company. Promptly upon the receipt of the Employee's written request,
the Company agrees to reimburse the Employee for all reasonable out-
of-pocket expenses associated with such cooperation, including,
without limitation, meals, lodging, travel, and ground transportation
expenses; provided, however, subject to Section 16(k) of this
Agreement, that such reimbursement shall specifically exclude any fees
for legal representation engaged by the Employee, that is not
otherwise reimbursable pursuant to the Company's policies in effect at
such time or the Company's By-Laws. This Paragraph 9 shall not
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preclude the Employee from responding to an inquiry in an honest
manner.
10. NON-DISPARAGEMENT. (a) The Employee agrees that on and after
the Effective Date, he will not make any disparaging, critical or
derogatory statement about the Company or any affiliate or their
shareholders or any of their current or former officers, directors or
employees or otherwise make disparaging comment on any aspects of the
Employee's employment with the Company or the termination thereof; (b)
the Company agrees not to make any disparaging, critical or derogatory
statement (defined, solely for purposes of this paragraph 10(b), as a
press release, filing with any governmental agency, web site posting
or similar public disclosure made by the Company's executive officers)
about the Employee or Employee's employment with the Company or the
termination thereof; and (c) the provisions of this paragraph 10(a)
and 10(b) shall not apply to testimony as a witness, any disclosure
required by law to be made by the Company or the Employee, or the
assertion of or defense against any claim of breach of this Agreement
and shall not require either party to make false statements or
disclosures.
11. CONTINUED APPLICATION OF RESTRICTIVE COVENANTS CONTAINED IN
LETTER AGREEMENT. Except as may be modified by the following
provisions of this Paragraph 11, the Employee expressly acknowledges
and agrees that he will continue to remain subject to the
Confidentiality provision (Section 10) and Non-Solicitation/Non-
Competition provisions (Section 11) of the Letter Agreement, and any
confidentiality, non-solicitation and non-competition provisions
entered into in connection with any other agreement or compensation
award with the Company (the "Covenants"), and further agrees that the
obligations under the Covenants are not limited in any way by this
Agreement or termination from employment with the Company.
(a) The Employee shall return all documents, records and
property of the Company no later than the Termination Date.
Without limiting the generality of the foregoing, the Employee
shall return to the Company no later than the Termination Date
any and all original and duplicate copies of all the Employee's
work product and of files, calendars (except for personal
calendars), books, records, notes, notebooks, customer lists and
proposals to customers, manuals, computer equipment (including
any desktop and/or laptop computers, handheld computing devices,
home systems, computer disks and diskettes), mobile telephones
(including SIM cards and the like), Blackberry devices, personal
data assistants (PDAs), fax machines, and any other magnetic and
other media materials the Employee has in his possession or under
his control that belong to the Company that contain confidential
or proprietary information concerning the Company or their
clients or operations. The Employee also must return to the
Company by the Termination Date any keys, credit cards and I.D.
cards that belong to the Company or any of its affiliates but are
in the Employee's possession or within the Employee's control.
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(b) The Employee agrees not to instigate or participate in
any administrative or judicial proceeding against the Company or
any affiliate (except for proceedings to enforce this Agreement)
unless requested by the Company or otherwise required by law.
Excluded from this covenant not to xxx are any claims that by law
cannot be waived, including but not limited to the right to
participate in an investigation conducted by certain government
agencies. The Employee is, however, waiving his right to any
monetary recovery should any such agency (such as the Equal
Employment Opportunity Commission) pursue any claims on his
behalf.
(c) Subject to the foregoing provisions of this Paragraph
11, the Company will continue to have the right to enforce such
obligations of the Covenants.
12. DISCLOSURE TO PROSPECTIVE NEW EMPLOYER(S). The Employee
agrees that, prior to the commencement of any new employment, if prior
to the end of the expiration of the restrictive provisions of the
Covenants, he will furnish the prospective new employer with a copy of
the provisions of this Agreement (and as needed, relevant provisions
of the Letter Agreement or any other agreement with the Company)
relating to the Covenants. The Employee also agrees that, during such
period, the Company may advise any new employer or prospective new
employer of the provisions of this Agreement relating to the Covenants
and furnish the new employer or prospective new employer with a copy
of such provisions (and as needed, relevant provisions of the Letter
Agreement or any other agreement with the Company).
13. WITHHOLDING FOR TAXES. All benefits and payments provided
to the Employee pursuant to this Agreement, which are required to be
treated as compensation shall be subject to all applicable tax
withholding and reporting requirements.
14. SETTLEMENT OF DISPUTES. The Settlement of Disputes
provisions set forth in Section 12 of the Letter Agreement are hereby
incorporated by reference and are made part of this Agreement and
shall be applicable for all disputes as may arise hereunder,
regardless of whether the Letter Agreement is, or may deemed to be, in
full force and effect.
15. ATTORNEYS FEES. In the event of any dispute with respect to
a breach or asserted breach of this Agreement, the prevailing party as
determined by the presiding judge or arbitration panel in said
proceeding shall be entitled to recover such party's reasonable
attorneys' fees and expenses from the other party.
16. MISCELLANEOUS.
(a) BINDING EFFECT. This Agreement shall be binding upon
each of the parties and upon their respective heirs,
administrators, representatives, executors, successors and
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assigns, and shall inure to the benefit of each party and to
their heirs, administrators, representatives, executors,
successors and assigns.
(b) APPLICABLE LAW. This Agreement shall be construed in
accordance with the laws of the State of Illinois, without regard
to the conflict of law provisions of any jurisdiction.
(c) ENTIRE AGREEMENT. This Agreement reflects the entire
agreement between the Employee and the Company and, except as
specifically provided herein, supersedes all prior agreements and
understandings, written or oral relating to the subject matter
hereof, it being acknowledged, however, that the Employee shall
continue to be subject to the Covenants. To the extent that the
terms of this Agreement (including Exhibits to this Agreement)
are to be determined under, or are to be subject to, the terms or
provisions of any other document, this Agreement (including
Exhibits to this Agreement) shall be deemed to incorporate by
reference such terms or provisions of such other documents.
(d) NOTICES. Any notice pertaining to this Agreement shall
be in writing and shall be deemed to have been effectively given
on the earliest of (a) when received, (b) upon personal delivery
to the party notified, (c) one business day after delivery via
facsimile with electronic confirmation of successful
transmission, (d) one business day after delivery via an
overnight courier service or (e) five days after deposit with the
United Postal Service, and addressed as follows:
to the Employee at: Xxxx Xxxxxx
0 Xxxxxxxx Xxxxxxx
Xx. Xxxxx Xxxx
Xxxxxx
XX0 0XX
Or such other address as the Employee duly notifies the Company.
to the Company at: Xxxxxxxx & Struggles International, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
(e) WAIVER OF BREACH. The waiver by either party to this
Agreement of a breach of any provision of this Agreement shall
not operate as or be deemed a waiver of any subsequent breach by
such party. Continuation of benefits hereunder by the Company
following a breach by the Employee of any provision of this
Agreement shall not preclude the Company from thereafter
exercising any right that it may otherwise independently have to
terminate said benefits based upon the same violation.
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(f) AMENDMENT. This Agreement may not be modified or
amended except by a writing signed by the parties to this
Agreement.
(g) COUNTERPARTS. This Agreement may be signed in multiple
counterparts, each of which shall be deemed an original. Any
executed counterpart returned by facsimile shall be deemed an
original executed counterpart.
(h) NO THIRD PARTY BENEFICIARIES. Unless specifically
provided herein, the provisions of this Agreement are for the
sole benefit of the parties to this Agreement and are not
intended to confer upon any person not a party to this Agreement
any rights hereunder.
(i) TERMS AND CONSTRUCTION. Each party has cooperated in
the drafting and preparation of this Agreement. The language in
all parts of this Agreement shall be in all cases construed
according to its fair meaning and not strictly for or against
either party.
(j) ADMISSIONS. Nothing in this Agreement is intended to
be, or will be deemed to be, an admission of liability by the
Employee or the Company to each other, or an admission that they
or any of their agents, affiliates, or employees have violated
any state, federal or local statute, regulation or ordinance or
any principle of common law of any jurisdiction, or that they
have engaged in any wrongdoing towards each other.
(k) INDEMNIFICATION. The Employee shall continue to be
eligible for indemnification by the Company to the extent
provided to other former Executives of the Company, as provided
in the Company by-laws as currently in effect, any policy of
insurance obtained by the Company or as may be required by
Delaware law.
(l) INTERNAL REVENUE CODE SECTION 409A. It is intended
that any amounts payable under this Agreement and the Company's
and Employee's exercise of authority or discretion hereunder
shall comply with Code Section 409A (including the Treasury
regulations and other published guidance relating thereto) so as
not to subject the Employee to the payment of any interest or
additional tax imposed under Code Section 409A. To the extent
any amount payable to Employee from the Company, per this
Agreement or otherwise, would trigger the additional tax imposed
by Code Section 409A, the payment arrangements shall be modified
to avoid such additional tax. This provision includes, but is
not limited to, Treasury Regulation Section 1.409A-3(g)(2),
relating to a six-month delay in payment of deferred compensation
to a "specified employee" (as defined in the Treasury Regulations
under Section 409A) upon a separation from service.
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IN WITNESS WHEREOF, this Separation Agreement and General Release
has been duly executed as of the Effective Date.
/s/ Xxxx Xxxxxx /s/ Xxxxxxxx X. Xxxxxxx
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Xxxx Xxxxxx Xxxxxxxx & Struggles
International, Inc.
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By: Xxxxxxxx X. Xxxxxxx
Title: Chief Human Resources Officer
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EXHIBIT A
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GENERAL RELEASE AND WAIVER
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1. This document (the "RELEASE") is attached to, is
incorporated into, and forms a part of, a Separation Agreement and
General Release, dated December 12, 2006 (the "AGREEMENT") by and
between Xxxxxxxx & Struggles International, Inc. (the "COMPANY") and
Xxxx Xxxxxx (the "EMPLOYEE"). Except for (i) a Claim (as defined
below) based upon a breach of the Agreement, (ii) a Claim which is
expressly preserved by the Agreement, (iii) a Claim duly filed
pursuant to the group welfare and retirement plans of the Company, or
(iv) a claim filed pursuant to any policy of liability insurance or
the Company's bylaws, the Employee, on behalf of himself and the other
Employee Releasors (as defined below), releases and forever discharges
the Company and the other Company Releasees (as defined below) from
any and all Claims which the Employee now has or claims, or might
hereafter have or claim, whether known or unknown, suspected or
unsuspected (or the other Employee Releasors may have, to the extent
that it is derived from a Claim which the Employee may have), against
the Company Releasees based upon or arising out of any matter or thing
whatsoever, from the beginning of time to the date affixed beneath the
Employee's signature on this General Release and Waiver and shall
include, without limitation, Claims (other than those specifically
excepted above) arising out of or related to the Letter Agreement
dated September 15, 2005, and Claims arising under (or alleged to have
arisen under) (a) the Age Discrimination in Employment Act of 1967, as
amended; (b) Title VII of the Civil Rights Act of 1964, as amended;
(c) The Civil Rights Act of 1991; (d) Section 1981 through 1988 of
Title 42 of the United States Code, as amended; (e) the Employee
Retirement Income Security Act of 1974, as amended; (f) The
Immigration Reform Control Act, as amended; (g) The Americans with
Disabilities Act of 1990, as amended; (h) The National Labor Relations
Act, as amended; (i) The Fair Labor Standards Act, as amended; (j) The
Occupational Safety and Health Act, as amended; (k) The Family and
Medical Leave Act of 1993; (l) any state or local anti-discrimination
law; (m) any state wage and hour law; (n) any other local, state or
federal law, regulation or ordinance; (o) any public policy, contract,
tort, or common law; or (p) any allegation for costs, fees, or other
expenses including attorneys' fees incurred in these matters. The
Employee further represents that, except as set forth in the following
sentence, he has not, and never will, institute against the Company or
any of the Company Releasees any action or other proceeding in any
court, administrative agency, or other tribunal of the United States,
any State thereof or any foreign jurisdiction, with respect to any
Claim or cause of action of any type, other than as provided under
(i), (ii), (iii) or (iv) above, arising or which may have existed at
any time prior to the effective date of the Agreement. Excluded from
this covenant not to xxx are any claims that by law cannot be waived,
including but not limited to the right to participate in an
investigation conducted by certain government agencies. The Employee
is, however, waiving his right to any monetary recovery should any
such agency (such as the Equal Employment Opportunity Commission)
pursue any claims on his behalf. If the Employee institutes a claim
that is not permitted by the foregoing, he agrees to pay the
reasonable costs incurred by the Company or any of the Company
Releasees in defending such action, including reasonable attorneys'
fees, experts' fees and costs.
2. For purposes of this Release, the terms set forth below
shall have the following meanings:
(a) The term "Agreement" shall include the Agreement and
the Exhibits thereto.
(b) The term "Claims" shall include any and all rights,
claims, demands, debts, dues, sums of money, accounts, attorneys'
fees, experts' fees, complaints, judgments, executions, actions
and causes of action of any nature whatsoever, cognizable at law
or equity.
(c) The term "Company Releasees" shall include the Company
and its affiliates and their current, former and future officers,
directors, trustees, members, employees, shareholders, partners,
assigns and administrators and fiduciaries under any employee
benefit plan of the Company and of any affiliate, and insurers,
and their predecessors and successors.
(d) The term "Employee Releasors" shall include the
Employee, and his family, heirs, executors, representatives,
agents, insurers, administrators, successors, assigns, and any
other person claiming through the Employee.
3. The Employee acknowledges that: (a) the Employee has read
and understands this Release and the Agreement in their entirety; (b)
the payments and other benefits provided to the Employee under the
Agreement exceed the nature and scope of that to which the Employee
would otherwise have been entitled to receive from the Company; (c)
the Employee has been advised in writing to consult with an attorney
about this Release and the Agreement before signing and has had ample
opportunity to do so; (d) the Employee has been given twenty-one (21)
days to consider this Release and the Agreement before signing; (e)
the Employee has the right to revoke this Release in full within seven
(7) calendar days of signing it by providing written notice to the
Company per the notice provisions of Section 16(d) of the Agreement,
and that this Release and the Agreement shall not become effective
until that seven-day revocation period has expired; and (f) the
Employee enters into this Release knowingly and voluntarily, without
duress or reservation of any kind, and after having given the matter
full and careful consideration.
* * * *
/s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx
Date: December 13, 2006
EXHIBIT B
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NON-QUALIFIED STOCK OPTIONS
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Grant Number Option Vested as of Forfeited as of Expiration of
Date Of Shares Exercise Termination Termination Date Vested Options
Price Date
05/12/04 20,000 $27.00 13,333 6,667 None - all vested
options exercised.
03/10/05 10,000 $36.17 3,333 6,667 None - all vested
options exercised.
03/03/06 10,000 $32.96 - 10,000 None vested.
RESTRICTED STOCK UNITS
----------------------
Grant Date Number of Shares Vested as of Forfeited as of
Termination Date Termination Date
03/10/05 5,000 1,666 3,334
03/10/05 20,000 - 20,000
03/03/06 5,000 - 5,000
03/03/06 2,002 - 2,002
