EXHIBIT 99.1
------------
EXECUTION COPY
--------------
TRANSITION AND SEPARATION AGREEMENT AND GENERAL RELEASE
-------------------------------------------------------
This Transition and Separation Agreement and General Release
(this "Agreement") is made as of this 27th day of August, 2010 (the
"Effective Date"), by and between K. Xxxxxx Xxxxx (the "Executive")
and Xxxxxxxx & Struggles International, Inc. and its affiliates
(collectively, the "Company"), concerning the Executive's transition
and separation from employment with the Company.
WHEREAS, the Company and the Executive entered into a Letter
Agreement dated June 7, 2005 (the "Letter Agreement");
WHEREAS, the Executive and the Company have agreed that the
Executive's employment with the Company will end effective on August
31, 2010 or on such earlier date as may be mutually agreed upon by the
Company and the Executive (the "Separation Date"); and
WHEREAS, the Company and the Executive intend this Agreement to
document the complete understanding of the parties as to all rights of
the Executive under the Letter Agreement or otherwise relating to the
Executive's employment by, and transition and separation from
employment with, the Company.
NOW THEREFORE, in consideration of the mutual promises and
agreements set forth below, the receipt and adequacy of which is
hereby acknowledged, the Company and the Executive agree as follows:
1. SEPARATION/TRANSITION. The Executive's employment as
Executive Vice President, General Counsel and Secretary shall
terminate as of the close of business on the Separation Date. The
Executive hereby resigns from all other officer, direct and other
positions with the Company and any and all of its affiliates effective
as of the close of business on the Effective Date. Through the
Separation Date, the Executive shall take reasonable and appropriate
actions to cooperatively and smoothly transition the duties and
responsibilities of the position of Executive Vice President, General
Counsel and Secretary to his successor or successors. Through the
Separation Date, the Executive will (a) be paid the Executive's
currently monthly salary ($29,166.66 per month), and (b) 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 Executive prior to the Separation Date will be
reimbursed in accordance with the Company's expense reimbursement
policy.
2. CONSIDERATION.
(a) Separation Payment. In exchange for (i) the
Executive's execution of the General release and Waiver provided
in Exhibit A to this Agreement ("Release"), which Executive can
execute no earlier than the Separation Date, and delivery of same
during the 21-day period following the Separation Date with such
delivery pursuant to Section 15(d) below, (ii) non-revocation of
the Release, and (iii) continued compliance with all of the terms
and conditions of this Agreement, the Executive shall receive a
separation payment (the "Separation Payment") of (i) 12 months of
Base Salary equal to $350,000, and (ii) 12 months of Target Bonus
equal to $350,000, for a total Separation Payment of $700,000. To
avoid subjecting the Executive to the possible payment of any
interest or additional tax imposed under Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"), the
Separation Payment will be paid to the Executive in a lump-sum
cash payment on the first day of the seventh month following the
Separation Date.
(b) 2010 Bonus. In exchange for (i) the Executive's
execution of the Release, which Executive can execute no earlier
than the Separation Date, and delivery of same during the 21-day
period following the Separation Date with such delivery pursuant
to Section 15(d) below, (ii) non-revocation of the Release, and
(iii) continued compliance with all of the terms and conditions
of this Agreement, the Executive shall receive a "Pro-rata Bonus
Payment" for his service in 2010 through the Separation Date,
equal to $233,333, which will be paid as soon as practicable
after the Separation Date, but no later than 30 days after the
Separation Date.
(c) Transition Payment. In exchange for (i) the
Executive's execution of the Release, which Executive can execute
no earlier than the Separation Date, and delivery of same during
the 21 -day period following the Separation Date with such
delivery pursuant to Section 15(d) below, (ii) non-revocation of
the Release, and (iii) continued compliance with all of the terms
and conditions of this Agreement, the Executive shall receive a
"Transition Payment" equal to $65,000, which will be paid as soon
as practicable after the Separation Date, but no later than 30
days after the Separation Date.
3. TERMINATION OF BENEFITS. Except as specifically provided in
this Agreement with respect to plans or arrangements specifically
identified in this Agreement, the Executive's continued participation
in all employee benefit plans (pension and welfare) and compensation
plans will cease as of the Separation Date. Any payments made to the
Executive pursuant to this Agreement, other than with respect to the
continued payment of salary to the Separation Date, shall be
disregarded for purposes of determining the amount of benefits to be
accrued on behalf of the Executive under any pension or other benefit
plan maintained by the Company. Nothing contained herein shall limit
or otherwise impair the Executive's right to receive pension or
similar benefit payments which are vested as of the Separation Date
under any applicable tax qualified pension or other tax qualified
benefit plan.
4. MEDICAL BENEFITS. Pursuant to Section 3.1 of the Management
Severance Pay Plan, the Company shall provide the Executive with one
year of Continued Health Benefits at Company expense, with the one
year running from the date of the Separation Date, at the conclusion
of which, the Executive'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 shall be
determined in accordance with the provisions of COBRA.
5. NO OTHER PAYMENTS. The Executive 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.
6. RELEASES. As part of this Agreement, and in consideration
of the additional payments provided to the Executive in accordance
with this Agreement, the sufficiency of which is hereby acknowledged,
the Executive is required to execute Release No. 1 and Release No. 2
in accordance with paragraph 2 above, deliver the executed Releases to
the Company per Section 15(d) below, and not revoke the Releases.
7. DEPARTURE ANNOUNCEMENT. The Company and Executive agree to
a press release in the form attached hereto as Exhibit B.
8. ASSISTANCE WITH CLAIMS. The Executive 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
the Executive's employment with the Company (the "Employment Period")
or relating to any decisions in which the Executive participated or
any matter of which the Executive had knowledge. The Executive agrees,
unless precluded by law, to promptly inform the Company if the
Executive 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 Executive also agrees, unless
precluded by law, to promptly inform the Company if the Executive 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 Executive 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 Executive's statements in such
meetings in respect of any such matters; provided such meetings do not
unreasonably interfere with the Executive's employment or
self-employment entered into after the Separation Date. The Executive
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 Executive's written
request, the Company agrees to reimburse the Executive 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 15(k)
of this Agreement, that such reimbursement shall specifically exclude
any fees for legal representation engaged by the Executive, that is
not otherwise reimbursable pursuant to the Company's policies in
effect at such time or the Company's By-Laws. This Paragraph 8 shall
not preclude the Executive from responding to an inquiry in an honest
manner.
9. NON-DISPARAGEMENT. (a) The Executive agrees that on and
after the Effective Date, the Executive 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 Executive's employment with the Company or the
separation therefrom; (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 or a reference in response to
an inquiry from a potential employer regarding the Executive) about
the Executive or the Executive's employment with the Company or the
separation therefrom; and (c) the provisions of this paragraph 9(a)
and 9(b) shall not apply to testimony as a witness, any disclosure
required by law to be made by the Company or the Executive, 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. All reference inquiries shall be made to the Company's
Human Resources Department and shall be handled in a manner consistent
with the Company's then-applicable policies.
10. CONTINUED APPLICATION OF RESTRICTIVE COVENANTS CONTAINED IN
LETTER AGREEMENT. Except as may be modified by the following
provisions of this Paragraph 10, the Executive expressly acknowledges
and agrees that the Executive will continue to remain subject to the
Confidentiality provision (Section 9) and Non-Solicitation
/Non-Competition provisions (Section 10) 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 separation from employment with the Company.
(a) The Executive shall return all documents, records and
property of the Company no later than the Separation Date.
Without limiting the generality of the foregoing, the Executive
shall return to the Company no later than the Separation Date any
and all original and duplicate copies of all the Executive'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 Executive has in the Executive's
possession or under the Executive's control that belong to the
Company that contain confidential or proprietary information
concerning the Company or their clients or operations. The
Executive also must return to the Company by the Separation Date
any keys, credit cards and I.D. cards that belong to the Company
or any of its affiliates but are in the Executive's possession or
within the Executive's control.
(b) The Company shall return all documents, records and
property of the Executive at a time and in a manner mutually
convenient to the Executive and the Company, but in any event no
later than the Separation Date.
(c) The Executive agrees to turn over his personal hard
drive for deletion by Sonnenschein, Nath & Xxxxxxxxx LLP
("Sonnenschein) following his removal of personal information
from it. In addition, the Executive will provide a certification
by Sonnenschein that all Company records have been deleted from
the personal hard drive.
(d) The Executive 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 Executive is, however, waiving the Executive's
right to any monetary recovery should any such agency (such as
the Equal Employment Opportunity Commission) pursue any claims on
the Executive's behalf.
(e) Subject to the foregoing provisions of this Paragraph
10, the Company will continue to have the right to enforce such
obligations of the Covenants.
11. DISCLOSURE OF COVENANTS TO PROSPECTIVE NEW EMPLOYER(S). The
Executive 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, the Executive 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 Executive 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).
12. WITHHOLDING FOR TAXES. All benefits and payments provided
to the Executive pursuant to this Agreement, which are required to be
treated as compensation shall be subject to all applicable tax
withholding and reporting requirements.
13. SETTLEMENT OF DISPUTES. The settlement of disputes
provisions set forth in Section 11 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.
14. 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, experts' fees, costs and expenses from the other
party.
15. MISCELLANEOUS.
(a) Binding Effect. This Agreement shall be binding upon each
of the parties and upon their respective heirs, administrators,
representatives, executors, successors and 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 Executive 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 Executive 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 Executive at: 0000 X. Xxxxxxx
Xxxxxxx, XX 00000
with a copy to Xxxxxx X. Xxxxx
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
000 X. Xxxxxxxx Xx.
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax: (000)000-0000
to the Company at: Xxxxxxxx & Struggles International, Inc.
000 Xxxxx Xxxxxx Xxxxx Xxxxx 0000
Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
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 Executive 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.
(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 off 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 Executive 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 Executive 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 the
Executive'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
Executive to the payment of any interest or additional tax imposed
under Code Section 409A. To the extent any amount payable to the
Executive 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
1.409A3(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.
IN WITNESS WHEREOF, this Transition and Separation Release has
been duly executed as of the Effective Date.
/s/ K. Xxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ----------------------------
K. Xxxxxx Xxxxx Xxxxxxxx & Struggles
International, Inc.
By: Xxxxxxx X. Xxxxxxx
Title: Chief Human Resources
Officer
Exhibit A
---------
GENERAL RELEASE AND WAIVER
--------------------------
1. This document (the "Release") is attached to, is
incorporated into, and forms a part of, a Transition and Separation
Agreement and General Release, dated August 2010 (the "Agreement") by
and between Xxxxxxxx & Struggles International, Inc. (the "Company")
and K. Xxxxxx Xxxxx (the "Executive"). 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 By-Laws, the Executive, on behalf of
himself and the other Executive 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 Executive now has or
claims, or might hereafter have or claim, whether known or unknown,
suspected or unsuspected (or the other Executive Releasors may have,
to the extent that it is derived from a Claim which the Executive 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 Executive'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 June 7, 2005, Claims arising out of or related to the
Executive's separation of employment from the Company, 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; (1) 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 Executive further represents that,
except as set forth in the following sentence, the Executive has not,
and never will, institute against the Company or any of the Company
Releases 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 Executive is, however, waiving the
Executive's right to any monetary recovery should any such agency
(such as the Equal Employment Opportunity Commission) pursue any
claims on the Executive's behalf. If the Executive institutes a claim
that is not permitted by the foregoing, the Executive 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 "Executive Releasors" shall include the
Executive, and the Executive's family, heirs, executors,
representatives, agents, insurers, administrators, successors,
assigns, and any other person claiming through the Executive.
3. The Executive acknowledges that: (a) the Executive has read
and understands this Release and the Agreement in their entirety; (b)
the payments and other benefits provided to the Executive under the
Agreement exceed the nature and scope of that to which the Executive
would otherwise have been entitled to receive from the Company; (c)
the Executive 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 Executive has been given twenty-one (21)
days to consider this Release and the Agreement before signing; (e)
the Executive 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 15(d) of the
Agreement, and that this Release shall not become effective until that
seven-day revocation period has expired; and (f) the Executive 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/ K. Xxxxxx Xxxxx
------------------------------
K. Xxxxxx Xxxxx
Date: August 31, 2010
