Separation and Release of Claims Agreement
Exhibit 99.1
This
Separation and Release of Claims Agreement (“Agreement”), dated as of October 8,
2007, is made by and between BearingPoint, Inc. (“BearingPoint” or the “Company”), and Xxxxxx X.
Xxxxx (“Employee”) (collectively, the “Parties”).
Recitals
1. WHEREAS, Employee is presently employed by BearingPoint and serves as Managing Director and
Executive Vice President.
2. WHEREAS, Employee and BearingPoint desire fully and finally to resolve any existing or
potential disputes arising out of Employee’s employment relationship with BearingPoint and
Employee’s separation from employment with the Company.
NOW, THEREFORE, in consideration of the mutual acts, payments and promises made herein,
BearingPoint and Employee hereby agree as follows:
Agreement and Releases
1. Termination of Employment. Effective October 31, 2007 (the “Termination
Date”), Employee’s employment with the Company shall terminate and he shall separate from all
employment positions and titles he holds with BearingPoint, including without limitation, his
position as Managing Director and Executive Vice President.
2. Scope of Duties Prior to Termination Date. Prior to the Termination Date,
Employee’s remaining time will be spent working at the direction of Xx Xxxxxxx and assisting with
the transition of duties and matters for which he is presently responsible; provided, however,
Employee may participate in continuing education programs (“CE”), not to exceed a cumulative total
of three (3) business days, and may use any accrued, but unused personal leave (“paid time off” or
“PTO”) prior to the Termination Date.
From time to time, prior to the Termination Date, it may be necessary for BearingPoint
employees to contact Employee regarding matters about which Employee has relevant information or
knowledge acquired during his employment with BearingPoint. Employee agrees to make himself
available and cooperate with the Company’s reasonable requests for assistance regarding such
matters.
3. Payment of Salary and Expenses. BearingPoint shall pay to Employee any earned, but
unpaid portion of his salary, as of the Termination Date, no later than the date on which
such salary would normally be paid. Any outstanding reimbursable expenses as of the
Termination Date will be paid to Employee upon submission and approval of those expenses in
accordance with the Company’s policies and customary practices.
4. Restricted Stock Units (“RSUs”). Subject to, and in consideration of Employee’s
release of claims in Xxxxxxxxx 0, XxxxxxxXxxxx agrees that on the Termination Date,
Employee, in accordance with the proviso in the first sentence of Section 3 of Employee’s RSU
Agreement (exclusive of any reference to “Good Reason”), shall vest in the 30,000 RSUs otherwise
scheduled to vest on August 22, 2008, thereby bringing Employee’s total number of vested RSUs, as
of October 31, 2007, to 270,000. Effective October 31, 2007, Employee shall forfeit the remaining
30,000 RSUs of his original RSU Award. The terms, conditions and restrictions set forth in
Employee’s RSU Agreement, including, but not limited to, the terms, conditions and restrictions
relating to vesting, termination, forfeiture, settlement, sale, taxation and change in control,
shall continue to apply after the Termination Date.
5. Additional Consideration. Employee specifically acknowledges and agrees that the
consideration set forth in this Paragraph 5 exceeds anything of value to which he is
currently entitled.
| x. | Xxxxxxxxx Pay. Subject to, and in consideration of Employee’s release of claims in Xxxxxxxxx 0, XxxxxxxXxxxx shall remit a severance payment to Employee, on or before October 31, 2007, but in no event prior to expiration of the Revocation Period set forth in Paragraph 10, in the total amount of ONE MILLION DOLLARS AND 00/100 ($1,000,000.00) (the “Payment”), less required and authorized withholdings and deductions. The Payment shall be made as a one-time, lump sum payment through the normal payroll cycle for October 31, 2007. The Payment shall be inclusive of any compensation owed to Employee for accrued but unused personal leave (“paid time off” or “PTO”) as of the Termination Date. |
| i. | BearingPoint will issue one Form W-2 to Employee for the 2007 tax year which shall include, among other sums, the Payment amount of ONE MILLION DOLLARS AND 00/100 ($1,000,000.00). |
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| ii. | The Payment shall be delivered pursuant to the direct deposit instructions currently on file with the Company. In the event of Employee’s death prior to the date on which the Payment is scheduled to be made, BearingPoint agrees the Payment shall be remitted to Employee’s estate. | ||
| iii. | Employee agrees and acknowledges this Payment constitutes full and final satisfaction of any and all actual or potential disputes arising out of Employee’s employment relationship with the Company and the termination of that relationship. | ||
| iv. | In the event Employee should contend in any litigation, arbitration or other adversary proceeding that this Agreement, or any portion of it, is invalid or unenforceable, then as a precondition to making such contention, Employee hereby agrees to first refund in full to the Company all amounts received under this Paragraph 5. |
| b. | Covenants. Subject to, and in further consideration of Employee’s release of claims in Xxxxxxxxx 0, XxxxxxxXxxxx hereby agrees to release Employee from those obligations set forth in Paragraphs 3(a) through 3(c) of Employee’s Managing Director Agreement. BearingPoint further agrees to release Employee from any obligation not to solicit for employment or hire, Employee’s spouse (Xxxx Xxxxxx), or otherwise cause the termination of her employment with BearingPoint. Any and all remaining obligations of Employee set forth in Paragraph 3(d) of the Managing Director Agreement, and any related remedies, shall remain unchanged by this Agreement. |
6. Taxes. All amounts paid to Employee pursuant to this Agreement (other than
reimbursed expenses) and all amounts withheld by BearingPoint for the account of Employee, pursuant
to the next sentence, will, for income tax purposes, be includible in the gross taxable income of
Employee for the appropriate tax year. To the extent required by applicable law, BearingPoint
shall withhold or cause to be withheld from the Payment the amount of any applicable federal, state
or local taxes. Employee will be solely responsible for all personal taxes, interest and
penalties, if any, which are or may become due on amounts paid to him under this Agreement and
agrees to defend, indemnify and hold BearingPoint harmless for any tax claims due on such amounts
as a result of any action, inaction or omission by Employee.
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7. Costs. The Parties shall each bear their own costs and attorneys’ fees incurred in
connection with this Agreement.
8. No Further Compensation. Employee acknowledges and agrees he is not entitled to
receive any further monetary compensation, in the form of cash, equity or otherwise, from the
Company and that the only future payments, equity and benefits he is entitled to receive from the
Company are those specified in this Agreement.
9. Complete Release of Claims. The Parties agree the consideration provided for
herein represents settlement in full of all outstanding obligations that are, or could be argued to
be, owed by one Party to the other Party. Employee, on behalf of himself and his respective heirs,
family members, executors and assigns, and BearingPoint, including its present and future officers,
employees, agents, directors, executives, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, parents, assigns, predecessor and successor corporations, hereby fully and
forever release each other from any and all claims, whether presently known or unknown, suspected
or unsuspected, they may possess arising from any omissions, acts, events or facts that have
occurred up until and including the date on which the Parties execute this Agreement including,
without limitation:
| a. | any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship; | ||
| b. | any and all claims, including any potential benefits or compensation related thereto, that Employee is entitled or has grounds to terminate employment for “Good Reason,” as that term is defined in his Employment Letter dated August 22, 2005; | ||
| c. | any and all claims of wrongful discharge of employment; constructive discharge, termination for “good reason;” termination of employment following a change in control; termination of employment in anticipation of a change in control; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of the covenant of good faith and fair dealing; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal |
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| injury; assault; battery; invasion of privacy; false imprisonment; conversion, and any other claim for tort or wrongful treatment; | |||
| d. | any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act of 1990 (“ADA”), the Rehabilitation Act of 1973, the Employee Retirement Income Security Act of 1974 (“ERISA”), the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”), any federal or state False Claims Act, the Xxxxxxxx-Xxxxx Act of 2002, the Worker Adjustment and Retraining Notification Act (“WARN”), and all amendments to each Act as well as the regulations issued thereunder; | ||
| e. | any and all claims arising out of any other federal, state or local laws and regulations relating to employment or employment discrimination; | ||
| f. | any and all claims relating to, or arising from, Employee’s right to receive or purchase, or actual receipt or purchase, of shares of stock of the Company, including, without limitation, any claims of fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; | ||
| g. | any and claims for violation of the federal, or any state, constitution; and | ||
| h. | any and all claims for attorneys’ fees and costs. |
The Parties agree the release set forth in this Paragraph 9 shall remain in effect in
all respects as a complete general release as to the matters released herein. Further, the Parties
agree this release does not extend to: (i) any claims related to breach of this Agreement, (ii) any
claims BearingPoint and Employee’s spouse (Xxxx Xxxxxx), in her personal and individual capacity,
may have against each other, or (iii) any obligations of Employee or the Company pursuant to his
Managing Director Agreement or RSU Agreement, not modified by this Agreement, that govern the
employment relationship through the Termination Date or otherwise survive termination of
Employee’s employment with the Company.
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10. Acknowledgement of Waiver of Claims under ADEA. Employee expressly acknowledges
he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act
of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Employee acknowledges
the consideration given for this waiver of claims under the ADEA is in
addition to anything of value to which he was already entitled. Employee further
acknowledges: (a) he has been by this writing that he should consult with an attorney prior to
executing this Agreement; (b) he has carefully read and fully understands all of the provisions of
this Agreement; (c) he is, through this Agreement, releasing the Company from any and all claims he
may have against it; (d) he understands and agrees that this waiver and release does not apply to
any claims that may arise under the ADEA after the date he executes this Agreement; (e) he has at
least twenty-one (21) days within which to consider this Agreement; (f) he has seven (7) days
following his execution of this Agreement to revoke the Agreement (the “Revocation
Period”); and (g) this Agreement shall not be effective until the Revocation Period has
expired. Any revocation should be in writing and delivered to the attention of: Xxxxxxx X. Xxxx,
BearingPoint, Inc., X’Xxxx Plaza, 0000 X. Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx, 00000.
11. Covenant Not to Xxx. Employee agrees and covenants not to directly or indirectly
institute, file, solicit, advise, or participate in the commencement and/or prosecution of any
lawsuit, charge or complaint against BearingPoint, in any court or administrative agency, with
regard to any claims, demands, liabilities or obligations: (i) arising out of his employment with
BearingPoint, his separation therefrom, or (ii) arising from acts or omissions taken or made prior
to the date of this Agreement. Employee further agrees that except as required by law, he will not
either directly or indirectly assist in, cooperate or consult with, or encourage any other parties
or their attorneys to commence or prosecute any present or future lawsuit against BearingPoint in
connection with any claims released herein.
Nothing in this Agreement shall be construed to prohibit Employee from filing a charge with,
or participating in any investigation or proceeding conducted by, the Equal Employment Opportunity
Commission (“EEOC”) or a comparable state or local agency. Notwithstanding the foregoing, Employee
agrees to waive his right to recover monetary damages in any charge, complaint or lawsuit filed by
Employee or anyone else on his behalf.
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12. Confidential Information. (a) Employee acknowledges that he has learned and may
continue to learn “Confidential Information” (as defined below) relating to BearingPoint.
In consideration of this Agreement, Employee agrees he will not disclose or use, or authorize any
third party to disclose or use, any such Confidential Information, without prior written
approval of the Company. As used in this Paragraph 12 and throughout this Agreement,
“Confidential Information” shall mean information, including trade secrets, disclosed or
known to Employee during his employment with the Company, about BearingPoint and/or its affiliates,
the Company’s methods, business plans, operations, products, processes and services, including, but
not limited to, information relating to research, development, inventions, programs, systems,
finances and financial statements, marketing plans and strategies, merchandising, pricing
strategies, merchandise sources, clients sources, system designs, procedure manuals, automated data
programs, financial projections, computer software, terms and conditions of business arrangements
with clients or suppliers, personnel procedures, supply and service resources, names and addresses
of clients, names of professional advisors, and all other information pertaining to clients and
suppliers of the Company, including, but not limited to assets, business interests, personal data
and all other information pertaining to the Company, clients or suppliers whatsoever, including all
accompanying documentation therefor. All information disclosed to Employee, or to which Employee
had access or will have access during the period of his employment with the Company, for which
there is any reasonable basis to believe is, or which appears to be treated by the Company as
Confidential Information, shall be presumed to be Confidential Information
hereunder. The provisions of this Paragraph 12 shall not apply to a particular portion of
the Confidential Information when: (a) it enters the public domain through no fault of
Employee, (b) it is in Employee’s possession free of any confidentiality obligation, or (c) it was
developed independently of and without reference to any Confidential Information or other
information disclosed in confidence to any third party.
(b) Employee agrees that all documents of any nature pertaining to activities of the Company
or its affiliates, or that include any Confidential Information, in his possession now or
at any time during the terms of his employment with the Company, including without limitation,
memoranda, notebooks, notes, data sheets, records and computer programs (however stored), are and
shall be the property of the Company (“BearingPoint Property”).
(c) The Company acknowledges and agrees that Employee has been in the consulting business for
over 25 years, including over 22 years in the business prior to joining the Company, and as a
result, Employee has accumulated information and knowledge regarding the consulting industry.
Therefore, for clarification, nothing in this Agreement shall restrict Employee
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from using
information or knowledge regarding the consulting industry that Employee possessed prior to his
employment with the Company and nothing in
this Agreement shall restrict Employee
from using the “residuals” from the Confidential
Information so long as he maintains the confidentiality of the Confidential Information
as required herein. The term “residuals” means Confidential Information in non-tangible
form (i.e., ideas, know-how or techniques that are not written or in other documentary form such as
tape or disk) which may be retained by Employee as a result of his access to the Confidential
Information during his employment with the Company. Nothing contained in this Agreement shall
preclude or limit Employee from performing services which may be similar to those performed by
Employee on behalf of the Company without reliance on the Company’s Confidential
Information.
13. Remedies for Breach. Employee hereby acknowledges that a violation of any of the
covenants set forth in Paragraphs 11 or 12 of this Agreement will cause
irreparable damage to BearingPoint and, accordingly, agrees BearingPoint, in addition to liquidated
damages in an amount equal to ten (10) percent of the amount of the payments made pursuant to
Paragraph 5(a) above, for each occurrence of a proven breach, shall be entitled
as a matter of right to an injunction, issued by any court of competent jurisdiction, restraining
any violation or further violation of such covenants by Employee; such right to an injunction,
however, shall be in addition to the liquidated damages provided for above; provided, however,
under no circumstances shall the total damages required to be paid under this Paragraph 13 exceed
one hundred percent (100%) of the total amount received by Employee under Paragraph 5(a) above.
14. Return of BearingPoint Property. Employee agrees he will return all
Confidential Information to the Company prior to the Termination Date (including
all copies of Confidential Information no matter how stored), and all other property of the
Company, including, but not limited to, keys, access cards, computers, electronic equipment,
notebooks, files, policies, papers, furniture and corporate credit cards.
15. No Admission. Each of Employee and the Company understands and acknowledges that
by entering into this Agreement, neither Employee nor the Company admits to any unlawful conduct or
wrongdoing in connection with Employee’s employment by the Company or the termination thereof.
16. No Pending Lawsuits. Employee represents he has no lawsuits, claims, complaints,
charges, actions, or administrative filings pending in his name, or on behalf of any other person
or entity, against BearingPoint or any other person or entity referred to herein.
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17. Nature of Agreement. This Agreement and all its provisions are contractual, not
mere recitals, and shall continue in permanent force and effect unless revoked as provided herein.
18. Cooperation. Following the Termination Date, Employee agrees to make
himself available and cooperate with the Company’s reasonable requests for assistance regarding
matters about which Employee has relevant personal information or knowledge acquired during his
employment with BearingPoint.
19. No Right to Future Employment. Employee agrees not to seek further employment or
any other working relationship with BearingPoint and acknowledges he does not possess any rights or
claims to any future employment with the Company.
20. Notices. Any notice, demand or request required or permitted to be given or made
under this Agreement shall be in writing and shall be deemed to be given or made when delivered in
person, when sent by United States registered or certified mail, or postage prepaid, or when faxed
or emailed to a party at the address, facsimile number or email address specified below:
If to the Company:
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BearingPoint, Inc. Attention: Xxxxxxx X. Xxxx X’Xxxx Plaza 0000 X. Xxxxxxx Xxxx Xxxxxxx, XX 00000 Fax Number: (000) 000-0000 Email: xxxxxxx.xxxx@xxxxxxxxxxxx.xxx |
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If to Employee:
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Xxxxxx X. Xxxxx [address redacted] |
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| Fax Number: [redacted] Email: [redacted] |
Either Party may change the notice address by providing notice to the other Party in
accordance with the terms of this Paragraph.
21. Paragraph Headings. All Paragraph headings are for convenience only and do not
modify or restrict any terms or conditions set forth in this Agreement.
22. Governing Law. This Agreement shall be governed by the laws of the Commonwealth
of Virginia, without regard to conflicts of law principles.
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23. Drafter of Agreement. This Agreement shall be construed without respect to its
drafter, and shall be construed as though the Parties both participated equally in the drafting of
this Agreement.
24. Assignment. The obligations and duties of the Parties set forth in this Agreement
may not be assigned or delegated; provided however, that nothing in this Agreement shall preclude
the Company from consolidating or merging with, or transferring all or substantially all assets to,
another corporation, person or entity (“Entity”). The obligations and duties of Employee
hereunder shall be personal and not assignable or delegable by Employee in any manner whatsoever.
Notwithstanding the foregoing, the Company shall have the right to assign its rights under this
Agreement to any Entity which may acquire any part or all of the Company’s business
(whether by asset purchase, stock sale, merger, or otherwise).
25. Entire Agreement. This Agreement constitutes the entire and final agreement and
understanding between the Parties on the subject matters hereof and supersedes or negates all prior
or other written and/or verbal agreements, representations, statements, inducements or
understandings pertaining to this Agreement and/or the subject matters hereof. Notwithstanding any
rule of law to the contrary, this Agreement shall not be — and shall not otherwise be deemed to be
— amended, supplemented, revised, altered or modified in any other way, whether orally, by
conduct, through informal writings, or by any combination thereof. This Agreement may be amended,
supplemented, revised, altered or modified only as set forth in Paragraph 26 of
this Agreement. In the event the terms of this Agreement are inconsistent or conflict with the
terms of any other writing regarding the subject matter hereof, the terms of this Agreement shall
control.
26. Amendments. This Agreement may not be orally modified. This Agreement may only
be modified in a writing signed by both Parties. As to BearingPoint, only its General Counsel is
authorized to modify this Agreement.
27. No Representations. By executing this Agreement, Employee represents and
acknowledges he does not rely, and has not relied, upon any representation or statement not set
forth in this Agreement with regard to the subject matter, basis, or effect of this Agreement or
otherwise.
28. Severability. Should it be determined that any provision or part of this
Agreement or any documents executed in connection herewith is invalid or unenforceable, then such
invalidity or unenforceability shall not affect the validity or enforceability of any other
provision or part of this Agreement or the documents attendant to same.
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29. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed as effective as the signed original. Photographic or facsimile copies of
such signed counterparts may be used in lieu of the originals and shall have the same effect as the
original for all purposes.
30. Authority to Execute. The Parties agree the undersigned are fully authorized to
execute this Agreement. Employee represents and warrants he has the capacity to act on his own
behalf and on behalf of all who might claim through Employee to bind them to the terms and
conditions of this Agreement. BearingPoint represents and warrants that all corporate formalities
attendant to the execution of this Agreement have been satisfied.
31. Voluntary Execution of Agreement. The Parties acknowledge they have carefully
read and fully understand all of the terms of this Agreement, including the releases contained
herein, have had sufficient time to consult with counsel of their choice, and that they enter into
this Agreement voluntarily and without any duress or undue influence on the part or behalf of the
Parties hereto, with the full intent of releasing all claims.
EMPLOYEE AFFIRMS HE HAS CONSULTED WITH HIS ATTORNEY, OR HAD AN OPPORTUNITY TO DO SO, PRIOR TO
SIGNING THIS AGREEMENT AND THAT HE IS EXECUTING THE AGREEMENT VOLUNTARILY AND WITH FULL
UNDERSTANDING OF ITS CONSEQUENCES.
SIGNATURES CONTAINED ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below:
BearingPoint, Inc.:
By:
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/s/ F. Xxxxx Xxxxxxx | Dated: | 10/8/07 | |||
| (Signature) | ||||||
| F. Xxxxx Xxxxxxx | ||||||
| (Print Name) | ||||||
Title:
|
President | |||||
Xxxxxx Xxxxx:
/s/
Xxxxxx X. Xxxxx
|
Dated: | 10/8/07 | ||
(Signature) |
||||
Xxxxxx
X. Xxxxx |
||||
(Print Name) |
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