EXHIBIT 10.05
TRANSLATION
FINAL
012599
SETTLEMENT AGREEMENT
BETWEEN THE UNDERSIGNED
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XXXXXXXX & STRUGGLES INTERNATIONAL, INC.
whose registered office is at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, X.X.X.
represented by [Xxxxxx X. Xxxxxx]
acting as Branch Manager
hereafter referred to as "the Company"
ON THE ONE HAND
AND
Xx. Xxxxxx XXXXX-XXXXX
residing at 00, xxxxxxxxx Xxxxxxxxxxx
00000 Xxxxx, XXXXXX
ON THE OTHER HAND
WHEREAS
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Xx. Xxxxxx XXXXX-XXXXX was hired by the Company on February 1, 1978, as Manager
of the Paris branch of the Company.
Xx. Xxxxxx XXXXX-XXXXX subsequently exercised the functions, effective June 18,
1980, of "President Europe" - a post which he held ever since that date on the
basis of the above-mentioned employment contract.
During the course of a collaboration which exceeds 20 years, Xx. Xxxxxx
XXXXX-XXXXX contributed largely to the development of the activities, the
results, and the notoriety of the Company in France as well as in the other
European countries.
Xx. Xxxxxx XXXXX-XXXXX demonstrated in this regard a total commitment to the
exercise of responsibilities which had been entrusted upon him by the Company,
as well as an attachment and an absolute loyalty towards said Company.
However, the Board of Directors of the Company decided, during the course of
1998, to define and implement a new strategy.
Xx. Xxxxxx XXXXX-XXXXX communicated to the Company his personal observations and
opinions regarding the commercial strategy defined by the new management.
The behavior thus adopted by Xx. Xxxxxx XXXXX-XXXXX was justified according to
him by his willingness to formulate any useful proposition regarding the best
way in which the market could be developed and, in particular, the French
market.
For its part, the Company considered that the attitude of Xx. Xxxxxx XXXXX-XXXXX
could in no way be considered as constructive, given, in particular, the high
level of responsibilities of Xx. Xxxxxx XXXXX-XXXXX.
Quite to the contrary, the Company, in particular through the person of Xx.
Xxxxxxx Xxxxxxx, considered that the critical attitude adopted by Xx. Xxxxxx
XXXXX-XXXXX towards the policies decided by the Board of Directors was
reflective of the refusal by Xx. Xxxxxx XXXXX-XXXXX to conform himself to the
directives that had been communicated to him, which attitude could only impair
the proper functioning of the business.
The Company, therefore, considered that a loss of irretrievable trust had
developed which would render impossible the continuation of the employment
relationship.
Accordingly, the Company decided to initiate against Xx. Xxxxxx XXXXX-XXXXX a
procedure of dismissal.
By registered letter, return receipt requested dated November 16, 1998, the
Company informed Xx. Xxxxxx XXXXX-XXXXX that it was considering a procedure of
dismissal and, for this purpose, called him to a predismissal meeting in order
to discuss such measure on Tuesday, November 24, 1998, at 2:00 p.m.
By registered letter, return receipt requested dated November 26, 1998, the
Company notified Xx. Xxxxxx XXXXX-XXXXX of his dismissal for the reasons
indicated above.
The contractual term of advance notice which started on the first date of the
presentation of this letter, namely November 27, 1998, was set at 12 months.
According to the terms of the letter of dismissal, Xx. Xxxxxx XXXXX-XXXXX was
relieved from the duty to perform any task during said advance notice of 12
months.
Xx. Xxxxxx XXXXX-XXXXX vigorously protested the decision of dismissal that had
been taken against him.
Xx. Xxxxxx XXXXX-XXXXX considered that his dismissal was not based on any real
and serious cause.
Specifically, Xx. Xxxxxx XXXXX-XXXXX considered that, after 20 years of a
collaboration accomplished on the basis of the greatest professional conscience,
a dismissal predicated on only a divergence of views, which is in no way
supported by legitimate reasons, does not justify a
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severance of the employment relationship in as brutal and untimely a manner as
has just occurred.
In this regard, Xx. Xxxxxx XXXXX-XXXXX considered that he had incurred, as a
result of these allegations, a moral and professional harm which, on a personal
level, are absolutely incontestable and which are of a nature that will produce,
for professional purposes, extremely grave consequences adversely impacting his
personal and professional notoriery as well as to his honor.
Moreover, Xx. Xxxxxx XXXXX-XXXXX stressed the particular harm that the severance
of the employment relationship has caused, as a result among other things, of
his age, the loss of his social status that such severance implies given the
level of responsibility that had been entrusted to him as well as the tainting
of his professional image that would ensue, particularly in regard to the brutal
departure that had been imposed on him as a result of the release of activities
during the term of his advance notice.
As a result, Xx. Xxxxxx XXXXX-XXXXX communicated to the Company his intention to
initiate additional proceedings against the Company in order to obtain the
condemnation of the Company to the payment of the sum of 10 million Francs.
In the light of the foregoing, and in order to put a definitive end to any
litigation that could arise from this situation, the parties came together and,
on the basis of reciprocal concessions, have decided to agree on the following
settlement.
ARTICLE 1
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The Company shall pay to Xx. Xxxxxx XXXXX-XXXXX, on December 17, 1998:
- The sum of FF 2,716,796 (two million seven hundred sixteen thousand seven
hundred ninety-six francs) as an indemnity in lieu of the contractual
advance notice term of 12 months involving a dispensation from work,
payable in two wire bank accounts, namely FF 2,343,200 (two million three
hundred forty three thousand and two hundred francs) on December 17, 1998,
and FF 373,596 (three hundred seventy three thousand five hundred ninety
six francs) on January 4, 1999;
- The sum of FF 543,400 (five hundred forty-three thousand four hundred
francs) as an indemnity in lieu of accrued vacation payable by wire bank
transfer on January 4, 1999.
The sum of FF 1,572,219.93 (one million five hundred seventy-two thousand two
hundred nineteen francs and ninety three cents) as a severance indemnity in
accordance with the applicable collective labor agreement by wire bank transfer
on December 17, 1998.
From the sums hereabove identified, with the exception of the severance
indemnity pursuant to the applicable collective labor agreement, shall be
deducted the social charges at the rates currently in effect.
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ARTICLE 2
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After having taken into account the moral and professional harm claimed by Xx.
Xxxxxx XXXXX-XXXXX, the Company undertakes to remit by bank wire to Xx. Xxxxxx
XXXXX-XXXXX on the basis of an indemnity for abusive termination the global,
definitive and lump-sum amount of FF 2,943,200 (two million nine hundred forty
three thousand and two hundred francs), which amount includes all monetary
damages for any reason as well as any indemnity relating to the severance of the
employment contract with the Company as well as the cessation of any functions
which he occupied within the Company.
The transfers relating to the foregoing sum shall be effected according to the
following schedule:
. 735,800 francs on March 31, 1999;
. 735,800 francs on June 30, 1999;
. 735,800 francs on September 30, 1999;
. 735,800 francs on November 30, 1999;
From the amount indicated in the prior paragraph shall be deducted the amount of
the generalized social contribution (CGS) and the contribution to the
reimbursement of the social debt (CRDS).
ARTICLE 3
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Xx. Xxxxxx XXXXX-XXXXX undertakes moreover, after his departure from the
Company, not to take any action that could taint the image of the Company or
that of its principal shareholder, XXXXXXXX & STRUGGLES, INC. ("H&S"), or which
would be likely to discredit the Company, its activities, its management or its
personnel.
The Company, for its part, undertakes irrevocably a reciprocal engagement of
non-denigration.
On the basis of the foregoing commitment, the Company undertakes, in particular,
to refrain from any verbal or written declaration that could taint or harm,
directly or indirectly, Xx. Xxxxxx XXXXX-XXXXX, or, in a general manner, to make
any statement or adopt any attitude under whatever form which would be likely to
taint or cause harm to Xx. Xxxxxx XXXXX-XXXXX.
ARTICLE 4
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Xx. Xxxxxx XXXXX-XXXXX acknowledges that he will return to the Company, no later
than December 15, 1998, all documents materials and equipment belonging to the
Company, H&S or a subsidiary of the Company or H&S, and, in particular, any
documents (including correspondence) whatever the nature relating to the
activities, the services, the customers or the members of the personnel of the
Company.
Xx. Xxxxxx XXXXX-XXXXX undertakes moreover to maintain strictly confidential any
information of which he has had knowledge during his employment, regarding the
Company,
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H&S, or a subsidiary of the Company or H&S, including the clients, business and
operations of the Company, H&S, or a subsidiary of the Company or H&S, and shall
not disclose or communicate, directly or indirectly, to any third party, firm,
association or company, without the prior written approval of a legal
representative of the Company.
ARTICLE 5
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The Company, having requested Xx. Xxxxxx XXXXX-XXXXX to accept a limitation on
his freedom to engage into professional activities, accepts to pay to Xx.
Xxxxxx XXXXX-XXXXX the sum of 4,924,417 francs according to the following
payment schedule:
- 187,289 francs on January 5, 1999;
- 430,648 francs to be paid the first day of each month, from February 1,
1999 until December 1, 1999.
From the sums hereabove identified shall be deducted the social charges at the
rates currently in effect.
The limitations placed on the freedom of Xx. Xxxxxx XXXXX-XXXXX are as follows:
5.1 Xx. Xxxxxx XXXXX-XXXXX undertakes not to solicit any employees from the
Company, H&S, or the subsidiaries of the Company or H&S.
5.2 Xxxxxx XXXXX-XXXXX undertakes to prohibit himself from lending a personal
hand to the hiring of employees of the Company, H&S, or the subsidiaries of
the Company or H&S in order for same to join the ranks of a company
exercising a competing activity. The employees identified in the foregoing
two paragraphs are those who are present on the date of signature of this
Agreement, as well as any employees who are hired by the Company, H&S or
any subsidiaries of the Company or H&S prior to January 1, 2001.
5.3 Xx. Xxxxxx XXXXX-XXXXX undertakes not to join, directly or indirectly, by
means of affiliation or by means of an employment agreement, the operations
of Korn/Ferry International, Xxxxxxx Xxxxxx Associates, Xxxxxxx Xxxxxxxx
and Xxxx Xxxxxx either in France or outside France. The foregoing
prohibition covers also any assistance or consultation provided by Xx.
Xxxxxx XXXXX-XXXXX to Korn/Ferry International, Xxxxxxx Xxxxxx Associates,
Xxxxxxx Xxxxxxxx and Xxxx Xxxxxx.
The commitments undertaken under items 5.1, 5.2 and 5.3 above will take effect
on the date of signature of the present Agreement and will end on December 31,
2000.
The foregoing monthly payment shall be suspended in the case Xx. Xxxxxx
XXXXX-XXXXX were not to respect the commitments under items 5.1 and 5.2 above.
The foregoing suspension may take effect only upon the following conditions
being met.
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The Company shall as soon as it is in a position to assess in good faith that
Xx. Xxxxxx XXXXX-XXXXX did not respect any of his commitments under this
Article, formally summon him by registered mail (return receipt requested) to
provide an explanation in regard to the precise facts expressly invoked by the
Company. Should Xx. Xxxxxx XXXXX-XXXXX fail to respond within the foregoing
thirty (30) day period, or should his explanations prove totally insufficient,
the parties agree to put the matter in the hands of the persons who, according
to the Company, would have been the object of the solicitation under review.
The Company shall, upon the expiration of the foregoing deadline, take the
initiative in regard to the interrogation of said persons by registered mail
(return receipt requested), with copy thereof addressed on the same date and
under the same form to Xx. Xxxxxx XXXXX-XXXXX.
The attestation upon one's honor of the persons under review, according to which
they have not been the object of a solicitation, shall constitute proof that Xx.
Xxxxxx XXXXX-XXXXX has respected his commitments contemplated under items 5.1
and 5.2, provided that this attestation is obtained in writing no later than
thirty (30) days after receipt by said persons of the letter mentioned in the
foregoing paragraph.
The sums paid to Xx. Xxxxxx XXXXX-XXXXX prior to the date of the suspension,
which notified by registered letter return receipt requested shall have released
Xx. Xxxxxx XXXXX-XXXXX from the commitments contemplated under items 5.1 and
5.2, shall remain definitively due, pro rata temporis, over the period of 24
months starting January 1, 1999.
If Xx. Xxxxxx XXXXX-XXXXX joins the ranks of the companies identified under item
5.3 above during the course of the first semester of the year 1999, he shall
definitively lose the right of benefit to the payments provided under the
present article.
If Xx. Xxxxxx XXXXX-XXXXX rejoins the ranks of said firms between July 1, 1999
and December 31, 2000, the sums due under the present article shall be computed,
pro rata temporis, over the period of 24 months having started January 1, 1999.
In the event of disagreement between the parties, only a court decision is no
longer appealable may definitively determine the amount of sums due to Xx.
Xxxxxx XXXXX-XXXXX by application of the present article.
ARTICLE 6
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Xx. Xxxxxx XXXXX-XXXXX having received all of the sums to which he could claim
as a result of the totality of his collaboration within the Company, including
any salaries whatever their title or characterization, premiums and various
indemnities, as well as the reimbursement of expenses that he has incurred for
said collaboration and, in light of the payments identified in Articles 1 and 2
above, acknowledges that said payments extinguish all of his rights relating to
the performance and the cessation of his employment contract;
Xx. Xxxxxx XXXXX-XXXXX declares his irrevocable renunciation to claiming from
the Company any other benefits in kind or in cash of any nature whatsoever
(salaries whatever their
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name or characterization, premiums and various participations, reimbursements,
indemnities of any nature in lieu of advance notice and accrued vacation,
indemnities for non-observation procedures required by law or applicable
collective labor agreement or for termination which is not founded on a real and
serious cause) as they relate to the performance and the termination of his
employment;
The Company declares, irrevocably, its renunciation to bringing directly or
indirectly, by its intermediary, that of its shareholders or that of any of its
affiliates, any action whatever the nature against Xx. Xxxxxx XXXXX-XXXXX on any
theory or under any form whatsoever given the fact that all of the disputes
between the parties that arose or are likely to arise as a result of the
relationship between said party, whatever the nature or the reason, that have
taken place between Xx. Xxxxxx XXXXX-XXXXX, the Company, its shareholders or its
affiliates are definitively extinguished.
ARTICLE 7
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It is expressly agreed between the parties that one may derogate from the
principle of confidentiality attached to the present settlement in connection
with the formalities imposed under the procedures in effect for the introduction
on the market of the Company, as well as vis-a-vis the tax administration, the
social security administration and the courts which may be entitled to have
knowledge of such agreement.
ARTICLE 8
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As a result of the present settlement, the undersigned parties acknowledge that
they are free and release one towards the other, any amounts due having been
definitively settled and extinguished between themselves for any reason
whatsoever.
Each of the parties undertakes to perform in good faith the present settlement
which has been drawn up in accordance with the provisions of Articles 2044 and
following of the Civil Code.
Executed in two (2) originals
on December 23, 1998
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XXXXXXXX & STRUGGLES INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxx-Xxxxx
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XXXXXX XXXXX-XXXXX
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