Exhibit 10.1
SETTLEMENT AND RELEASE AGREEMENT
* * * * * *
This Settlement and Release Agreement dated November 22, 2005 (the
"Agreement") by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Company") and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (the "Executive") sets forth the agreement reached concerning the
termination of Executive's employment with the Company.
NOW, THEREFORE, the Company and the Executive hereby agree as
follows:
1. Employment Termination. Effective as of the close of business on
April 1, 2005 (the "Termination Date"), the Executive's employment with the
Company terminated and Executive ceased to hold all positions then held as an
employee, officer or member of the board of directors of the Company and any
of the Company's parents, subsidiaries and/or affiliates, and each of their
predecessors and successors (collectively, the "Affiliated Entities").
2. Release Payments and Benefits. In consideration for signing this
Agreement and in exchange for the promises, covenants and waivers set forth
herein, the Company will, provided the Executive has not breached his
non-competition and non-solicitation obligations contained in Section 9 or
revoked this Agreement as set forth below, provide Executive with the
following: (a) the Company shall pay the Executive or the Executive's estate
(upon proper letters testamentary), as the case may be, the sum of Seventeen
Million Three Hundred Fifty-Seven Thousand and Nine Hundred Forty-Five Dollars
and no cents ($17,357,945.00), less applicable withholdings permitted by
Section 18, no later than January 31,2006 or within ten business days
thereafter. It is further understood and agreed that the payment set forth in
this Section 2(a) is designed, among other things, to protect the Company's and
its
Affiliated Entities' interests in non-public, confidential and/or proprietary
information, trade secrets, customer relationships, and other legitimate
business interests, and to ensure an orderly transition of responsibilities.
Accordingly, in the event that the Executive breaches his non-competition
and/or non-solicitation obligations contained in Section 9, subject to the
cure provisions of Section 20(b), neither the Executive nor his estate shall
be entitled to receive any of the amounts payable under this Section 2(a) to
the extent not paid and, if applicable, he or his estate shall be required to
return all amounts previously paid to the Executive or his estate under this
Section 2(a);
(b) Executive shall be eligible to receive continuation of his
current medical benefits under the Company's medical plan through June 30,
2006, in accordance with the terms and conditions of the applicable plan
document;
(c) Effective July 1, 2006, the Executive will be provided with
retiree medical benefits pursuant to the terms of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Retiree
Medical Plan as may be in effect from time to time and in the event the
Company shall provide additional retiree medical benefits to former members of
the management committee (or its successor) of the Company generally pursuant
to the terms of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Retiree Medical Plan as may be in effect
from time to time, the Executive will be provided with such benefits in
accordance with the terms of such Plan;
(d) Executive has submitted for reimbursement his legal fees
and out of pocket expenses in connection with the negotiation and execution of
this Agreement and the Company has agreed to reimburse Executive for such
previously submitted fees and out of pocket expenses;
2
(e) The Company shall reimburse the Executive for the costs of
appropriate office, secretarial and administrative support through June 30,
2006, or such earlier date, if any, on which the Executive becomes
re-employed, up to a maximum of $100,000.00, upon submission of the
appropriate documentation to the Company; and
(f) For purposes of any agreement or award governing any Stock
Incentive (as defined in Section 6 hereof) and the applicable plan governing
such Stock Incentive, the Executive will be treated as a full career employee
who has been involuntarily terminated. Except as otherwise specifically
provided herein, the terms and conditions of the Stock Incentive awards shall
remain unmodified by this Agreement.
3. The Company confirms that the Executive is fully vested in the
accounts credited to him under the Pre-tax Incentive Plans ("PTIPs"), the
Capital Accumulation Plan ("CAP"), the Select Employees' Capital Accumulation
Plan ("SECAP") and the Owners and Select Earners Program ("OSEP") and payment
to him shall be made in accordance with the terms of those plans. The Company
also confirms the Executive is a participant in the Company's Supplemental
Employee Retirement Plan ("SERP"). Except as specifically provided herein,
continuation or cessation of the Executive's participation in the employee
benefit plans of the Company and its Affiliated Entities shall be determined
in accordance with the terms of those plans. The Company confirms that the
Executive is fully vested in the accounts credited to him under the Company's
401(k) Plan ("401(k) Plan") and Employee Stock Ownership Plan ("ESOP") and
payment to him shall be made in accordance with the terms of those plans.
4. Reimbursement of Expenses. The Company shall reimburse the
Executive for out-of-pocket expenses incurred by him on or before the
Termination Date in connection with
3
his employment, upon submission by him of appropriate documentation and in
accordance with the Company's customary practices and policies. The Executive
represents that all such reimbursable expenses have been submitted to the
Company for reimbursement.
5. Accrued, Unused Vacation Days. In lieu of Executive's accrued,
unused vacation days, the Executive shall receive his base salary compensation
for 6 days, less applicable withholdings permitted by Section 18.
6. Equity and Performance Awards. Exhibit A hereto sets forth a
complete list of all of the Executive's currently outstanding stock options
(the "Stock Options") and other equity awards (together, "Stock Incentives").
Stock unit awards made to the Executive with respect to 2001, 2002 and 2003
shall have a conversion date on the last trading date of the month in which
the first anniversary of the Termination Date occurs, but shall in all other
events be subject to their terms, except as otherwise expressly provided
herein.
7. Mutual Nondisparagement. (a) For the 36 month period commencing
on the Execution Date (as defined in Section 10 hereof), the Executive shall
not knowingly make any Public Statements, written or oral, which disparage or
defame the Company or its Affiliated Entities or their present, former or
future directors, executive officers, or employees, or their representatives
or advisors in their capacity as representatives and advisors to the Company
and/or its Affiliated Entities.
(b) For the 36 month period commencing on the Execution Date,
the Company shall not make and shall instruct its Management Committee
members, Section 16 officers and the Board of Directors (collectively "Covered
Individuals") not to knowingly make any Public Statements, written or oral,
which disparage or defame the Executive.
4
(c) For purposes of this Section 7, (i) the term "Public
Statement" shall mean any statement that the person who makes it intends, or
could reasonably expect, to become public, and (ii) no Public Statement shall
be attributed to the Company unless it is made by a Covered Individual or an
advisor in an official statement or is in the form of a press release or other
similar public statement on behalf of the Company or any business unit of the
Company. Notwithstanding the foregoing, nothing in this Section 7 shall
prevent any person from (i) responding publicly to incorrect, disparaging or
derogatory Public Statements made after the Execution Date to the extent
reasonably necessary to correct or refute such Public Statements or (ii)
making any truthful statement to the extent (x) required by law or by any
court, arbitrator, mediator or administrative or legislative body (including
any committee thereof) with actual or apparent jurisdiction to order such
person to disclose or make accessible such information or (y) necessary in any
litigation or other proceeding between the parties including, without
limitation, in connection with this Agreement or its enforcement.
8. Confidentiality. The Executive shall hold in a fiduciary capacity
for the benefit of the Company and/or its Affiliated Entities all secret,
proprietary and/or confidential information, knowledge or data relating to the
Company and/or its Affiliated Entities and their respective businesses that he
has obtained that is not public knowledge (other than as a result of the
Executive's violation of this Section 8) including, without limitation, any
and all proprietary, trade secret and confidential information of the Company
and/or its Affiliated Entities, the unauthorized disclosure or use of which
would reduce the value of such information to the Company and/or its
Affiliated Entities ("Confidential Information"). Such information includes,
without limitation, the Company's and/or its Affiliated Entities' client
lists, its trade secrets, any confidential information about (or provided by)
any client or prospective or former client of the
5
Company and/or its Affiliated Entities, information concerning the Company's
and/or its Affiliated Entities' business or financial affairs, including its
books and records, commitments, procedures, plans and prospects, or current or
prospective transactions or business of the Company and/or its Affiliated
Entities and any "inside information" within the meaning of the federal
securities laws. For purposes of this Agreement, "Confidential Information"
shall not include information which is or becomes generally known to the
public or in the trade or industry, other than due to the Executive's
violation of this Section 8. The Executive shall not communicate, divulge or
disseminate nor use for his benefit or the benefit of any other person or
entity Confidential Information at any time, except with the prior written
consent of the Company or as otherwise required by law or legal process or
necessary to the assertion of the Executive's entitlements (including any
defense with respect to any claim in connection with any litigation or other
proceedings), or in the carrying out of his duties under Section 11.
9. Non-Competition and Non-Solicitation Obligations. The Executive
agrees that at all times up to and including June 30, 2006, he shall not: (a)
engage in any "Competitive Activity"; (b) directly or indirectly hire or
attempt to hire any person who is, or during the period January 1, 2005 to
June 30, 2006 was, employed by the Company or its Affiliated Entities; or (c)
solicit any business of any person or entity who is or was a customer or
client of the Company or its Affiliated Entities, or works for, or on behalf
of, any such customer or client with respect to any line of business engaged
in by the Company or its Affiliated Entities. As used herein, "Competitive
Activity" means entering into any arrangement, as an employee, officer,
partner, director, independent contractor, consultant, advisor or agent of,
serving in any similar position or capacity with, or either alone or in concert
with others, acquiring beneficial ownership (within the meaning of Section
13(d) of the Exchange Act) of 5% or more of any class of equity
6
securities of a "Competitor" as defined in sections 20(h)(1) and 20(h)(2) of
the Executive's 2004 Discretionary Retention Award.
10. Releases. (a) In consideration of the payments and benefits set
forth in Section 2 of this Agreement, except for the rights expressly provided
herein, the Executive for himself, his heirs, administrators, representatives,
executors, successors and assigns (collectively "Releasors") does hereby
irrevocably and unconditionally release, acquit and forever discharge the
Company, its Affiliated Entities, partnerships and joint ventures and their
respective current and former officers, directors, employees, representatives,
agents, attorneys, shareholders, both individually and in their official
capacities including, without limitation, all persons acting by, through,
under or in concert with any of them (collectively, "Releasees"), and each of
them from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, remedies, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs) of any nature whatsoever arising out of or relating
to his employment relationship, or the termination of that relationship, with
the Company, its Affiliated Entities, partnerships, and/or joint ventures,
known or unknown, whether in law or equity and whether arising under federal,
state or local law including, without limitation, any such claim under the
Corporate and Criminal Fraud Accountability Act of 2002, also known as the
Sarbanes Oxley Act; any claim for discrimination based upon race, color,
ethnicity, sex, age (including under the Age Discrimination in Employment Act
of 1967 (the "ADEA") and the Older Workers Benefit Protection Act of 1990),
national origin, religion, disability, retaliation, or any other unlawful
criterion or circumstance, the New York State Human Rights Law; the New York
City Human Rights Law; and any other federal, state or local laws, rules or
regulations, whether equal employment opportunity laws, rules or regulations or
7
otherwise, any claims under the Equal Pay ▇▇▇ ▇▇▇▇, the Sex Discrimination ▇▇▇
▇▇▇▇, the Race Relations ▇▇▇ ▇▇▇▇, the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (including without limitation an award under
those regulations in respect of any failure by the Company to inform and/or
consult with employee representatives), the Trade Union and Labour Relations
(Consolidation) ▇▇▇ ▇▇▇▇ (including, without limitation, any Protective Award
for failure to consult with employee representatives under this Act and any
regulations made under it), the Disability Discrimination ▇▇▇ ▇▇▇▇, the
Employment Rights ▇▇▇ ▇▇▇▇ (including, without limitation, any claim of unfair
dismissal), the Working Time Regulations 1998 (and any holiday pay otherwise
due to the Employee under those Regulations), the National Minimum Wage ▇▇▇
▇▇▇▇, the Employment Relations ▇▇▇ ▇▇▇▇, the Transnational Information and
Consultation of Employees Regulations 1999, the Part-Time Workers (Prevention
of Less Favourable Treatment) Regulations 2000, the Fixed-Term Employees
(Prevention of Less Favourable Treatment) Regulations 2002, the Flexible
Working (Procedural Requirements) Regulations 2002, the Employment Equality
(Sexual Orientation) Regulations 2003, the Employment Equality (Religion or
Belief) Regulations 2003, Part VIII of the Information and Consultation of
Employees Regulations 2004, any claim in respect of which a Conciliation
Officer is authorised to act and any claim under the Executive's contract of
employment (including, without limitation, any claim for notice, discretionary
bonus, profit share or otherwise) which the Executive and the other Releasors
had, now have, or may have in the future against each or any of the Company,
the Affiliated Entities or any other Releasees from the beginning of the world
until the date the Executive signed this Agreement (the "Execution
Date") relating to the Executive's employment with the Company, its Affiliated
Entities, partnerships, and/or joint ventures. Anything herein to the contrary
notwithstanding, nothing
8
herein shall release the Company, the Affiliated Entities or any other
Releasees from any claims or damages based on: (i) any right or claim that
arises after the Execution Date, (ii) any right, including a right to a
payment or benefit, the Executive may have under this Agreement or for vested
benefits and Stock Incentives pursuant to the terms and conditions of the
applicable plan document, as modified by this Agreement, (iii) Executive's
eligibility for indemnification, as described in Section 21 of this Agreement,
in accordance with applicable laws or the certificate of incorporation or
by-laws of the Company, or under any applicable insurance policy, with respect
to any liability the Executive incurs or has incurred as a director, officer
or employee of the Company, its Affiliated Entities, partnerships and/or joint
ventures, (iv) any right the Executive may have to obtain contribution as
permitted by law in the event of entry of judgment against him as a result of
any act or failure to act for which he and the Company, its Affiliated
Entities, partnerships and/or joint ventures are jointly liable or (v) any
claim in respect of any brokerage account, personal card account or other
personal or business relationship with the Company, its Affiliated Entities,
partnerships and/or joint ventures outside of the employment relationship.
This Section 10(a) shall not apply to any act by the Company, its Affiliated
Entities, partnerships and/or joint ventures that constitutes a criminal act
under any Federal, state or local law (other than due to the fault of the
Executive) during the course of Executive's employment with the Company or
thereafter prior to the Execution Date.
(b) The Executive acknowledges that: (i) this entire Agreement
is written in a manner calculated to be understood by him; (ii) he has been
advised to consult, and has consulted with, an attorney before executing this
Agreement; (iii) he was given a period of twenty-one (21) days within which to
consider this Agreement; and (iv) to the extent he executes this Agreement
before the expiration of the twenty-one-day period, he
9
does so knowingly and voluntarily and only after consulting his attorney. The
Executive shall have the right to cancel and revoke this Agreement during a
period of seven (7) days following the Execution Date, and this Agreement
shall not become effective, and no money shall be paid hereunder prior to the
expiration of such seven-day period (the "Revocation Date"). The seven-day
period of revocation shall commence upon the Execution Date. In order to
revoke this Agreement, the Executive shall deliver to the Company's Chief
Legal Officer, prior to the expiration of said seven-day period, a written
notice of revocation. Upon such revocation, this Agreement shall be null and
void and of no further force or effect on either party. Executive received
this Agreement on November 21, 2005.
(c) The Executive acknowledges and agrees that it is a
condition of this Agreement that the Executive has received independent legal
advice from a qualified legal adviser acting in his or her professional
capacity and who holds a current practising certificate as to the terms and
effect of this Agreement and, in particular, its effect on the Executive's
ability to pursue his rights before an Employment Tribunal in the United
Kingdom and that there was in force at the time such advice was given a policy
of insurance covering claims in respect of loss arising in consequence of the
advice, as required by section 203 of the Employment Rights Act 1996 (the
"Act").
(d) The Executive confirms that he has been advised that the
conditions regulating compromise agreements in section 203 of the Act and
under the Equal Pay ▇▇▇ ▇▇▇▇, the Sex Discrimination ▇▇▇ ▇▇▇▇, the Race
Relations ▇▇▇ ▇▇▇▇, the Transfer of Undertakings (Protection of Employment)
Regulations 1981, the Trade Union and Labour Relations (Consolidation) ▇▇▇
▇▇▇▇, the Disability Discrimination ▇▇▇ ▇▇▇▇, the Working Time Regulations
1998, the National Minimum Wage ▇▇▇ ▇▇▇▇, the Employment Relations
10
▇▇▇ ▇▇▇▇, the Transnational Information and Consultation of Employees
Regulations 1999, the Part-time Workers (Prevention of Less Favourable
Treatment) Regulations 2000, the Fixed-term Employees (Prevention of Less
Favourable Treatment) Regulations 2002, the Flexible Working (Procedural
Requirements) Regulations 2002, the Employment Equality (Sexual Orientation)
Regulations 2003, the Employment Equality (Religion or Belief) Regulations
2003 and sub-paragraphs (a) - (e) of section 40(4) of the Information and
Consultation of Employees Regulations 2004 are satisfied in relation to this
Agreement.
(e) By signing the letter in the form attached as Schedule 1
the Executive's legal adviser confirms to the Company that the statement set
out at Section 10(d) above is correct.
(f) The Executive acknowledges and agrees that the
consideration provided to him under Section 2 of this Agreement exceeds
anything to which he is otherwise entitled and that he is owed no wages,
commissions, bonuses, finder's fees, equity or incentive awards, severance
pay, vacation pay or any other compensation or vested benefits or payments or
remuneration of any kind or nature other than as specifically provided for in
this Agreement. If Executive should hereafter make any claim or demand or
commence or threaten to commence any action, claim or proceeding against the
Company, the Affiliated Entities or any other Releasees with respect to any
cause, matter or thing which is the subject of the Executive's release under
this Section 10, this Agreement may be raised as a complete bar to any such
action, claim or proceeding, and the Company, the Affiliated Entities or any
other Releasees, as applicable may recover from the Executive all costs
incurred in connection with such action, claim or proceeding, including
attorneys' fees.
11
(g) The Executive represents and agrees that he has notified
the Company of all complaints and claims of which he is aware that he may have
against it and/or the Company, the Affiliated Entities or any other Releasees
relating to his employment with the Company and/or the Affiliated Entities
(together the "Claims"). The Executive further represents and agrees that he
is not aware of any Claims other than those that he has notified to the
Company. Executive represents and agrees that he has not filed any lawsuits
against any of the Company, the Affiliated Entities or any other Releasees, or
filed or caused to be filed any charges or complaints against the Company, the
Affiliated Entities or any other Releasees with any municipal, state or
federal agency charged with the enforcement of any law. Pursuant to and as a
part of the Executive's release and discharge of the Company, the Affiliated
Entities or any other Releasees, as set forth herein, the Executive agrees to
the fullest extent permitted by law, not to ▇▇▇ or file a charge, complaint,
grievance or demand for arbitration against the Company, the Affiliated
Entities or any other Releasees in any forum with respect to any matter which
is the subject of Executive's release under this Section 10 or assist or
otherwise participate willingly or voluntarily in any claim, arbitration,
suit, action, investigation or other proceeding of any kind which relates to
any matter that involves the Company, the Affiliated Entities or any other
Releasees, and that occurred up to and including the Execution Date, unless
required to do so by court order, subpoena or other directive by a court,
administrative agency, arbitration panel or legislative body, or unless
required to enforce this Agreement. To the extent any such action may be
brought by a third party, the Executive expressly waives any claim to any form
of monetary or other damages, or any other form of recovery or relief in
connection with any such action. The fourth sentence of this Section 10(g)
shall not apply to (i) those items referenced in Sections 10(a)(i)
12
through 10(a)(v); (ii) the Executive's right to bring a proceeding pursuant to
the Older Workers Benefit Protection Act to challenge the validity of the
Executive's release of claims pursuant to the Age Discrimination in Employment
Act; or (iii) Executive's right to ▇▇▇ or file a charge, complaint, grievance
or demand for arbitration against the Company, the Affiliated Entities or any
other Releasees with respect to any matter that is not the subject of the
Executive's release under this Section 10.
(h) The Company, on behalf of itself, the Affiliated Entities
and the other Releasees, also agrees that, subject to this Agreement becoming
effective, they hereby irrevocably and unconditionally release, acquit and
forever discharge the Executive from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages,
remedies, actions, causes of action, suits, rights, demands, costs, losses,
debts and expenses (including attorneys' fees and costs) of any nature
whatsoever, known or unknown, whether in law or equity and whether arising
under federal, state or local law that any Releasee had, now has, or may have
in the future against the Executive and the other Releasors from the beginning
of the world until the Execution Date arising out of or relating to the
Executive's employment relationship or the termination of that relationship
with the Company and/or its Affiliated Entities, except that this paragraph
shall not apply to: (i) any act that constitutes a criminal act under any
Federal, state or local law committed or perpetuated by the Executive during
the course of the Executive's employment with the Company or its affiliates or
thereafter prior to the Execution Date (including any criminal act of fraud,
misappropriation of funds or embezzlement or any other criminal action); (ii)
any act of fraud or theft committed by Executive in connection with his
employment with the Company or thereafter prior to the Execution Date; or
(iii) Executive's obligations under this
13
Agreement. Executive represents to the Company that he has not engaged in or
concealed any conduct as encompassed within clause (i) or (ii) of this Section
10(h).
(i) None of the foregoing provisions of this Section 10 shall
be considered as releasing the Company, the Affiliated Entities or any other
Releasees' or the Executive's or any other Releasors entitlements, rights, or
obligations with respect to any Stock Incentives or as otherwise modifying the
terms, conditions or limitations of, any Stock Incentives.
11. The Executive's Covenants. (a) Cooperation. For the period
ending 36 months after the Execution Date, the Executive shall make himself
available to the Company following the Execution Date to assist the Company
and/or the Affiliated Entities, as may be requested by the Company at mutually
convenient times and places, with respect to pending and future litigations,
arbitrations, governmental investigations or other dispute resolutions
relating to or in connection with matters that arose during the Executive's
employment with the Company provided that in no event shall the Executive be
required to provide any cooperation if such cooperation is materially adverse
to his legal interests. To the extent possible, the Company will try to limit
the Executive's participation to regular business hours. In any event, (i) in
any matter subject to this Section 11(a), the Executive shall not be required
to act against the best interests of any new employer or new business venture
in which he is a partner or active participant where the interests of the
Executive's new employer or new business venture are adverse to the interests
of the Company and/or its Affiliated Entities, and (ii) any request for such
cooperation shall take into account (A) the significance of the matters at
issue in the litigation, arbitration, proceeding or investigation and (B) the
Executive's other personal and business commitments. The Company agrees to
provide the Executive reasonable notice, to the extent practicable, in the
14
event his assistance is required. The Company will reimburse the Executive for
the reasonable expenses and costs actually incurred by him as a result of
providing such assistance, upon the submission of the appropriate
documentation to the Company. Such expenses and costs shall include, without
limitation, demonstrably lost wages, travel costs and legal fees to the extent
the Executive reasonably believes that separate representation is warranted,
provided the Company is notified in advance of the amount of such lost wages,
costs and fees. The Executive's entitlement to reimbursement of such expenses
and costs, including legal fees, pursuant to this Section 11(a), shall in no
way affect the Executive's rights to be indemnified and/or advanced expenses
in accordance with the Company's corporate documents, any applicable insurance
policy, and/or in accordance with this Agreement.
(b) For the period ending 36 months after the Execution Date,
the Executive agrees that he shall not offer assistance or testimony in any
action against the Company, the Affiliated Entities or any other Releasees
(other than an action against the Company, the Affiliated Entities or any
other Releasee and the Executive jointly) brought by any other entity,
individual or individuals, unless ordered to do so by a court, agency or
regulatory authority, and then only after the Executive has given the
Company's Chief Legal Officer written notice, together with all supporting
legal papers or documents served upon him, as promptly as practicable
following his receipt of such notice.
(c) Cooperation with Government and Regulatory Authorities. Any
non-disclosure provision in this Agreement does not prohibit or restrict the
Executive or his attorneys from responding to any inquiry about this Agreement
or its underlying facts and circumstances by the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any other
self-regulatory organization. Nothing in this Agreement
15
prohibits or restricts the Executive from testifying or providing information
to or assisting in an investigation or proceeding brought by any governmental
or regulatory body or official(s), or from testifying, participating in or
otherwise assisting in a proceeding relating to an alleged violation of any
Federal or state law relating to fraud or to any rule or regulation of the
Securities and Exchange Commission or to any self regulatory organization, and
the notice provisions in the preceding paragraph shall not apply in connection
with any such investigation or proceeding.
(d) Remedies. The Executive acknowledges and agrees that
because of the nature of the business in which the Company and its Affiliated
Entities are engaged and because of the nature of the Confidential Information
to which the Executive has had access during his employment, a breach or
threatened breach of any provision of Section 7, 8 and/or 9 of this Agreement
would result in immediate, substantial and irreparable harm to the Company and
its Affiliated Entities for which money damages do not provide an adequate
remedy. The Executive also acknowledges and agrees that it would be
impractical and excessively difficult to determine the actual damages of the
Company and its Affiliated Entities in the event the Executive breached or
threatened to breach any of the covenants of Section 7, 8 or 9, and remedies
at law (such as monetary damages) for any breach of the Executive's covenants
under Section 7, 8 or 9 would be inadequate. The Company acknowledges and
agrees that a breach or threatened breach of any provision of Section 7 would
result in immediate, substantial and irreparable harm to the Executive for
which money damages do not provide an adequate remedy. The Company also
acknowledges and agrees that it would be impractical and excessively difficult
to determine the actual damages of the Executive in the event the Company
breached or threatened to breach any of the
16
covenants of Section 7, and remedies at law (such as monetary damages) for any
breach of the Company's covenants under Section 7 would be inadequate. The
parties therefore agree and consent that if either of them commits any such
breach or threatens to commit any such breach, the other party shall have the
right (in addition to, and not in lieu of, any other right or remedy that may
be available to it) to temporary and permanent injunctive relief from a court
of competent jurisdiction, without posting any bond or other security and
without the necessity of proof of actual damage. With respect to any provision
of Sections 7, 8 or 9 that is finally determined to be unenforceable, the
Executive and the Company hereby agree that this Agreement or any provision
hereof may be reformed so that it is enforceable to the maximum extent
permitted by law. If any of the covenants of Sections 7, 8 or 9 is determined
to be wholly or partially unenforceable in any jurisdiction, such
determination shall not be a bar to or in any way diminish the Company's right
to enforce any such covenant in any other jurisdiction.
12. Return of Property. By the Termination Date (or shortly
thereafter) the Executive represents that he returned to the Company any and
all property of the Company and/or its Affiliated Entities in the Executive's
possession (including property embodying Confidential Information) including,
without limitation, any and all records, manuals, customer lists, notebooks,
computers, computer programs, cellular phones, files, papers, electronically
stored information and documents, and all copies thereof, kept or made by the
Executive in connection with the Executive's employment. Anything to the
contrary notwithstanding, and in all cases regardless of whether the
information is retained in original form, as a copy, electronically or
otherwise, the Executive shall be entitled to retain (A) papers and other
materials of a personal nature, including, without limitation, personal
photographs,
17
correspondence, diaries, calendars and rolodexes, files relating to his
personal affairs and personal phone books, (B) information showing his
compensation or relating to reimbursement of expenses, (C) information he
reasonably believes may be needed for his personal tax purposes and (D) copies
of plans, programs and agreements relating to his employment, or termination
thereof, with the Company.
13. Entire Agreement; Other Benefits. This Agreement sets forth the
entire agreement between the Company and its Affiliated Entities and the
Executive with respect to the subject matter hereof and supersedes and cancels
all prior and contemporaneous written and oral agreements between the Company
and its Affiliated Entities and Executive with respect to the subject matter
hereof, and supersedes any severance plan, policy or arrangement of the
Company and its Affiliated Entities. Notwithstanding the foregoing, nothing
contained in this Section 13 is intended to limit any right, including any
right to a payment or vested benefit, the Executive may have to vested
benefits and Stock Incentives pursuant to the terms and conditions of the
applicable plan documents, as modified by this Agreement, including, without
limitation, the plans referred in Sections 2, 3 and 6. In the event that any
term or provision of this Agreement is inconsistent with any other agreement,
plan, program, policy or other arrangement of the Company or its Affiliated
Entities, or any term of provision thereof, this Agreement, and any such term
or provision hereof, shall prevail. Without limiting the generality of the
foregoing, the Executive expressly acknowledges and agrees that except as
specifically set forth in this Agreement, he is not entitled to receive any
severance pay, severance benefits, compensation, incentive compensation,
Stock Incentives or employee benefits of any kind whatsoever from the Company
or its Affiliated Entities.
18
14. Successors. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives and designated beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the Company and its successors. In the
event of a change of control of the Company, this Agreement will inure to the
benefit of and become an obligation of the successor to the Company or the
acquirer of all or substantially all of its assets.
15. Amendment. This Agreement may be amended, modified or changed
only by a written instrument executed by the Executive and the Company. Any
waiver to be effective must be in writing and signed by the party against whom
it is being enforced.
16. Governing Law; Headings; Arbitration. (a) This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without reference to principles of conflict of laws.
(b) The headings of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) Any disputes, controversies and claims arising out of or
relating to this Agreement shall be determined by an arbitral tribunal of
three arbitrators under the rules of the American Arbitration Association in
New York, New York. Each party shall bear its own expenses in the arbitration.
This paragraph shall not, however, be deemed a waiver of either party's right
to injunctive relief as provided in Section 11(d).
19
17. Notices. All notices and other communications hereunder shall be
in writing; shall be delivered by hand delivery to the other party or mailed
by overnight mail or registered or certified mail, return receipt requested,
postage prepaid; shall be deemed delivered upon actual receipt; and shall be
addressed as follows:
If to the Executive:
--------------------
At the last address on
File with the Company
With a copy to:
---------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
The Bachelder Law Firm
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company:
------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
20
18. Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement, or any other benefits received pursuant hereto, such Federal, state
and/or local taxes as shall be required to be withheld under any applicable
law or regulation.
19. No Mitigation; No Offset. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable under this Agreement. There shall be no
offset by the Company against the Executive's entitlements under this
Agreement for any compensation or other amounts that he earns from subsequent
employment or engagement of his services or on account of any claim that the
Company may have against him. In no event shall the Company have a right of
offset against any account that the Executive maintains with the Company,
including without limitation, his brokerage account, on account of any claims
arising under this Agreement.
20. Company Representation. The Company represents and warrants to
the Executive that (i) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized on behalf of the Company by its Board of
Directors or a committee thereof and that all corporate action required to be
taken by the Company for the execution, delivery and performance of this
Agreement has been or promptly shall be duly and effectively taken; (ii) the
officer signing this Agreement on behalf of the Company is duly authorized to
do so; (iii) the execution, delivery and performance of this Agreement by the
Company does not violate any applicable law, regulation, order, judgment or
decree or any agreement, plan or corporate governance document to which the
Company is a party or by which it is bound; and (iv) upon execution and
delivery of this Agreement by the parties, and unless this Agreement is revoked
by the Executive within
21
seven (7) days after the Execution Date, it shall be a valid and binding
obligation of the Company enforceable against it in accordance with its terms,
except: (a) to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally; or (b) in the event that Executive materially breaches a
material provision of the Agreement which is not fully cured (if curable)
within 15 days after receipt of notice from the Company specifying the nature
of such breach.
21. Indemnification and Insurance. The Company's certificate of
incorporation and bylaws provide that the Company will indemnify, to the
fullest extent permitted by the General Corporation Law of the State of
Delaware (the "DGCL"), each person who was, is or is threatened to be involved
in any threatened, pending or completed action, suit or proceeding by reason
of the fact that he or she is or was a director or officer of the Company or a
director or elected officer of a majority-owned subsidiary of the Company. In
addition, the Company's bylaws provide that the Company will pay to such
persons expenses that are incurred in defense of a proceeding in advance of
the final disposition of the proceeding upon receipt of an undertaking by or
on behalf of such person to repay the amount if it is ultimately determined
that such person is not entitled to indemnification. The Company's directors
and officers liability insurance policy provides, subject to certain
limitations, for reimbursement of any person who serves or served as a
director or officer of the Company for loss incurred by such person resulting
from any claim first made against such person during the policy period for a
wrongful act, except where indemnified by the Company. Nothing in this
Agreement shall be construed to alter (a) the provisions regarding directors'
liability, indemnification and advancement of expenses contained in the
Company's certificate of incorporation and bylaws (including the DGCL
requirement that any Company-provided indemnification must be
22
authorized upon a determination that the person seeking indemnification has
met applicable statutorily mandated standards of conduct) or (b) the
provisions contained in the Company's directors and officers insurance policy,
in each case as they would relate to the Executive.
22. This Agreement may be executed in counterparts by facsimile
signatures.
THE EXECUTIVE EXPRESSLY ACKNOWLEDGES, REPRESENTS, AND WARRANTS THAT HE HAS
READ THIS AGREEMENT CAREFULLY; THAT HE FULLY UNDERSTANDS THE TERMS,
CONDITIONS, AND SIGNIFICANCE OF THIS AGREEMENT; THAT THE COMPANY HAS ADVISED
HIM TO CONSULT WITH AN ATTORNEY CONCERNING THIS AGREEMENT; THAT HE HAS HAD A
FULL OPPORTUNITY TO REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT HE
UNDERSTANDS THAT THIS AGREEMENT HAS BINDING LEGAL EFFECT; AND THAT HE HAS
EXECUTED THIS AGREEMENT FREELY, KNOWINGLY AND VOLUNTARILY.
PLEASE READ CAREFULLY. THIS AGREEMENT HAS IMPORTANT LEGAL
CONSEQUENCES.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Agreement as set forth below:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Date: November 22, 2005
23
I agree to the terms set out in this Agreement and confirm that I have been
advised that the conditions regulating compromise agreements under section 203
of the Employment Rights ▇▇▇ ▇▇▇▇ and under the Equal Pay ▇▇▇ ▇▇▇▇, the Sex
Discrimination ▇▇▇ ▇▇▇▇, the Race Relations ▇▇▇ ▇▇▇▇, the Transfer of
Undertakings (Protection of Employment) Regulations 1981, the Trade Union and
Labour Relations (Consolidation) ▇▇▇ ▇▇▇▇, the Disability Discrimination ▇▇▇
▇▇▇▇, the Working Time Regulations 1998, the National Minimum Wage ▇▇▇ ▇▇▇▇,
the Employment Relations ▇▇▇ ▇▇▇▇, the Transnational Information and
Consultation of Employees Regulations 1999, the Part-time Workers (Prevention
of Less Favourable Treatment) Regulations 2000, the Fixed-term Employees
(Prevention of Less Favourable Treatment) Regulations 2002, the Flexible
Working (Procedural Requirements) Regulations 2002, the Employment Equality
(Sexual Orientation) Regulations 2003, the Employment Equality (Religion or
Belief) Regulations 2003 and the Information and Consultation of Employees
Regulations 2004 have been satisfied. I confirm that I have taken independent
legal advice from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇ as to the terms and effect of
this Agreement and its effect on my ability to pursue my rights against the
Company and any Affiliated Entity before an Employment Tribunal. On the basis
of that advice, I accept the terms set out in this Agreement. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
has confirmed to me that she is a qualified legal adviser holding a current
practising certificate and that her firm has an insurance policy in force
covering the risk of a claim by me in respect of any loss arising in
consequence of her advice.
Signature: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Date: November 22, 2005
24
SCHEDULE 1
FORM OF SOLICITOR'S LETTER
I, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇ refer to the Agreement dated November
22, 2005 between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("the Company") and ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇. I am a
qualified solicitor in England and Wales holding a current practising
certificate and a partner in the firm of ▇▇▇▇▇▇▇▇. The firm has an insurance
policy in force covering the risk of a claim by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in respect
of any loss arising in consequence of my advice. I have given independent
legal advice to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as to this terms of this Agreement and its
effect on his ability to pursue his rights against the Company or any
Affiliated Entity before an Employment Tribunal.
I also confirm that the statement set out at clause 10(d) of the Agreement is
correct.
Signed: _____________________________________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Dated: _______________________________________________________________________
Name of Legal Adviser: _______________________________________________________
Name of Firm: ________________________________________________________________
Address of Firm: _____________________________________________________________
25
Exhibit A
As of 10/18/2005
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------
Units
Original Vested Unvested Value of Value of
Amount Held Held Canceled Vested(a) Unvested(a)
------------------------------------------------------------------------------------------
IIUSD 2001 EICP Year-end 70,582.00 70,582.00 0.00 0.00 $3,714,024.84 $0.00
IIUSD 2002 EICP Year-end 67,163.00 67,163.00 0.00 0.00 $3,534,117.06 $0.00
IIUSD 2003 EICP Year-end 69,585.00 69,585.00 0.00 0.00 $3,661,562.70 $0.00
IIUSD 2004 EICMC Year-end 171,402.00 171,402.00 0.00 0.00 $9,019,173.24 $0.00
------------------------------------------------------------------------------------------
378,732.00 378,732.00 0.00 0.00 $19,928,877.84 $0.00
Units
Value of Conversion
Canceled(a) Date(b)
-----------------------------------
IIUSD 2001 EICP Year-end $0.00 Apr 30,2006 or Sep 8, 2006
IIUSD 2002 EICP Year-end $0.00 Apr 30,2006 or Sep 10, 2007
IIUSD 2003 EICP Year-end $0.00 Apr 30,2006 or Sep 8, 2008
IIUSD 2004 EICMC Year-end $0.00 Sep 8, 2009 FC Conv. choice not written into terms due to Jobs Act
-----------
$0.00
Options
Original Vested Unvested Value of Value of
Amount Held Held Canceled Vested(a) Unvested(a)
------------------------------------------------------------------------------------------
MSCO 1997 EICP Restore options 44,726.00 44,726.00 0.00 0.00 $157,882.78 $0.00
to another award
MSCO 1998 EICP Restore options 83,898.00 83,898.00 0.00 0.00 $296,159.94 $0.00
to another award
MSCO 1999 EICP Year-end 83,556.00 83,556.00 0.00 0.00 $0.00 $0.00
MSCO 2000 EICP Year-end 122,823.00 122,823.00 0.00 0.00 $0.00 $0.00
IIUSD 2001 EICP Year-end 158,809.00 158,809.00 0.00 0.00 $0.00 $0.00
IIUSD 2002 EICP Year-end 151,117.00 151,117.00 0.00 0.00 $1,520,554.37 $0.00
IIUSD 2003 EICP Year-end 156,567.00 156,567.00 0.00 0.00 $0.00 $0.00
------------------------------------------------------------------------------------------
801,496.00 801,496.00 0.00 0.00 $1,974,597.09 $0.00
Options
Value of Restriction Strike Expiration
Canceled(a) Lift(b) Price Date(b)
----------------------------------------------------------
MSCO 1997 EICP Restore options $0.00 Jan 2,2003 $49.0900 Jan 2, 2008 Full life of vested options
to another award
MSCO 1998 EICP Restore options $0.00 Jan 2,2004 $49.0900 Jan 2, 2009 Full life of vested options
to another award
MSCO 1999 EICP Year-end $0.00 Jan 2,2005 $60.1384 Jan 2, 2010 Full life of options per FC
MSCO 2000 EICP Year-end $0.00 Jan 2,2006 $65.3375 Jan 2, 2011 Full life of options per FC
IIUSD 2001 EICP Year-end $0.00 Apr 30,2006 $57.0258 Jan 2, 2012 Full life of options per FC
IIUSD 2002 EICP Year-end $0.00 Apr 30,2006 $42.5579 Jan 2, 2013 Full life of options per FC
IIUSD 2003 EICP Year-end $0.00 Apr 30,2006 $55.4472 Jan 2, 2014 Full life of options per FC
----------
$0.00
a) Based on the fair market value of MWD stock of $52.6200 on October 17,
2005.
b) For the 2001, 2002 and 2003 unit awards, Full Career employees can choose
to convert one year after termination or on schedule. Dates are subject
to change by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Board of Director's Compensation
Committee.
FC = Full Career
--------------------------------------------------------------------------------
This is a highly abbreviated general description of the estimated amount of
your awards that would be subject to cancellation under various scenarios.
This summary does not address all features of your awards and is not a
complete description of the relevant cancellation provisions. Please see the
terms and conditions set forth in your award certificates for important
details, which may differ from the description in this summary. If there is
any conflict between the terms, conditions or amounts subject to cancellation
described in this summary and in your award certificates, the latter will
control. As described in your award certificates, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ reserves the
right to modify the terms of awards to the extent necessary or advisable in
order to comply with the American Jobs Creation Act of 2004, including,
without limitation, the payment provisions applicable to stock units.
--------------------------------------------------------------------------------