EXHIBIT 10.16
EMPLOYMENT AGREEMENT
AGREEMENT, dated this lst day of January, 2002 (the "Agreement"),
between Xxxxxxxx & Struggles International, Inc., a Delaware corporation, and
any successor (the "Employer") and Xxxxx Xxxxxxx (the "Employee"). The parties
hereby agree, as follows:
1. Employment. The Employer shall employ the Employee as Chairman and
Chief Executive Officer and the Employee hereby accepts such position and agrees
to serve the Employer in such capacity during the employment period fixed by
Section 3 hereof (the "Employment Period"). The Employee shall report to the
Board of Directors of the Employer (the "Board"). The Employee's duties and
responsibilities shall be such duties and responsibilities as are consistent
with the position of Chairman and Chief Executive Officer of the Employer. The
Employee shall devote substantially all of his business time and attention to
the performance of his duties and responsibilities hereunder.
If the Employee determines that it is advisable in connection with the
performance of his duties pursuant to Section 1 of this Agreement, he may elect
to relocate to the United States together with his spouse and children with such
financial assistance as may be deemed appropriate by the Compensation Committee
of the Board for the Chief Executive Officer. The Employee shall not make this
election after the second anniversary of the date of this Agreement without the
consent of the Employer.
2. Compensation.
(a) Annual Base Salary. The Employer shall pay the Employee, pursuant to
the Employer's normal and customary payroll procedures, a base salary of
$650,000 per annum (the "Annual Base Salary").
(b) Annual Bonus. In addition to the Annual Base Salary, during the
Employment Period, the Employee may receive an annual bonus (the "Annual
Bonus"), based on the achievement of performance objectives, which shall be
determined by the Compensation Committee of the Board.
(c) Incentive Compensation; Benefit Plans. Commencing in January 2002,
the Employee shall participate in the Employer's Annual Bonus Plan, Performance
Share Plan, Management Stock Option Plan, Change in Control Severance Plan,
Deferred Compensation Plan and the Severance Plan. In addition, during the
Employment Period, (i) the Employee shall be entitled to participate in all
other savings and retirement plans, practices, policies and programs of the
Employer which are made available generally to other employees of the
-1-
Employer; provided, however, that the Employee shall be entitled to participate
in bonus, incentive compensation or stock-based plans and programs only to the
extent determined by the Compensation Committee of the Board; and (ii) the
Employee and/or the Employee's family, as the case may be, shall be eligible for
participation in, and shall receive all benefits under, all welfare benefit
plans, practices, policies and programs provided by the Employer (including,
without limitation, vacation, medical, prescription, dental, disability, life
insurance, group life insurance, accidental death and travel accident insurance
plans and programs, together the "Benefit Plans") which are made available
generally to other employees of the Employer.
The Employer shall contribute to the Employee's Inland Revenue approved
personal pension plan up to the maximum cap allowable under Inland Revenue
Rules. The Employee will be eligible to join the Employer's scheme which
currently provides life insurance coverage of four times basic salary subject to
the Plan's rules together with permanent health insurance including earnings
related sick pay in case of long term sickness and disability and this may
require the Employee to have a medical examination.
The Employee will be eligible to become a member of the Employer's
scheme providing medical insurance coverage for the Employee and his family
through BUPA. The premiums are currently paid by the Employer and this
represents a taxable benefit to the Employee. The Employee and his family will
also be eligible for medical insurance coverage in the United States through
Xxxxxxxx & Struggles, Inc.'s employee plans.
The terms of the Employer's insurance schemes shall be at the
Employer's discretion and the schemes are subject to modification and/or
termination at the Employer's discretion.
All payments under the permanent health insurance scheme ("PHI Scheme")
will be subject to such deductions as may be required by law and also a sum
equivalent to any employer's national insurance contributions which are payable
by the Employer in respect of any payment under the PHI Scheme. Where payments
are made under the PHI Scheme, all other benefits provided to or in respect of
Employee by the Employer will cease immediately (if they have not done so
already) except those benefits for which the Employer receives, from the insurer
under the PHI Scheme, reimbursement in full of the total cost to the Employer of
the benefit.
(d) Sign-on Loan. The Employer shall forgive the outstanding aggregate
principal amount ((pound)1,053,881) of the loans made to the Employee pursuant
to the Employee's employment agreement, dated July 7, 2000, on December 31,
2004, subject to the next sentence.
The Employee shall pay the outstanding principal amounts of the loans
on the date his employment terminates if (i) the Employee resigns from the
Employer's employ prior to December 31, 2004, except for Good Reason (as defined
below), or (ii) if the Employer terminates his employment for Cause.
-2-
3. Employment Period.
The Employment Period shall commence on January 1, 2002 (the "Effective
Date"), and shall end on the day preceding the third anniversary of the
Effective Date. Notwithstanding the foregoing, the Employee's employment
hereunder may be terminated during the Employment Period upon the earliest to
occur of the following events:
(a) Death. The Employee's employment hereunder shall terminate
immediately upon his death.
(b) Disability. The Employer may terminate the Employee's employment
hereunder for "Disability," which shall mean (i) a physical or mental incapacity
of the Employee which entitles the Employee to benefits under the long-term
disability plan applicable to the Employee and maintained by the Employer; or
(ii) in the event that no such long-term disability plan is maintained by the
Employer, the Employee has been unable to perform his duties hereunder for a
period of 180 days within any twelve-month period as a result of the Employee's
incapacity due to physical or mental illness.
(c) Cause. The Employer may terminate the Employee's employment
hereunder for Cause. For purposes of this Agreement, the term "Cause" shall mean
(i) fraud, or the embezzlement or misappropriation of funds or property of the
Employer or any of its affiliates by the Employee, the conviction of, or the
entrance of a plea of guilty or nolo contendere by the Employee, to a felony, or
a crime involving moral turpitude; (ii) neglect, misconduct or willful
malfeasance by the Employee which is materially injurious to the Employer or any
of its affiliates; or (iii) willful failure or refusal to perform the Employee's
duties, or a willful, material breach of contract. If, subsequent to the
Employee's termination of services hereunder for other than Cause, it is
discovered that the Employee's services could have been terminated for Cause,
the Employee's services shall, at the election of the Employer, be deemed to
have been terminated for Cause retroactively to the date the events giving rise
to Cause occurred.
(d) Good Reason. The Employee may terminate his employment hereunder for
Good Reason (and such termination shall be treated as if it were a termination
by the Employer without Cause, and not a voluntary termination by the Employee).
"Good Reason" shall mean the occurrence of any of the following events during
the Employment Period:
(i) The assignment to the Employee of any duties
materially inconsistent with, or the reduction of
powers, responsibilities or functions associated
with, the Employee's positions and status with the
Employer, or any removal of the Employee from, or
any failure to reelect the Employee to, membership
on the Board and Chief Executive Officer with the
Employer, except in connection with the
termination of the Employee's employment by the
Employer for Cause or on account
-3-
of Disability pursuant to the terms of this Agreement;
(ii) A reduction by the Employer of the Annual Base
Salary except in connection with the termination
of the Employee's employment by the Employer for
Cause or on account of Disability pursuant to the
terms of this Agreement;
(iii) The failure by the Employer to pay the Employee
any portion of his current compensation, or any
portion of his compensation deferred under any
plan, agreement or arrangement of or with the
Employer within seven (7) days of the date such
compensation is due.
Notwithstanding the foregoing, an isolated and inadvertent action
taken in good faith and which is remedied by the Employer within 30 days after
receipt of written notice thereof given by the Employee shall not constitute
Good Reason.
(e) Without Cause. The Employer may terminate the Employee's employment
hereunder without Cause.
(f) Without Good Reason. The Employee may terminate his employment
hereunder without Good Reason, provided that the Employee provides the Employer
with notice of his intent to terminate his employment without Good Reason at
least six (6) months in advance of the Date of Termination; provided, however,
that the Employer may treat such notice as a resignation and accept it prior to
the expiration of six (6) months at the Employer's sole discretion.
4. Expense Reimbursement. During the Employment Period, the Employer shall
reimburse the Employee for all reasonable business expenses including, without
limitation, the reasonable use of a car and driver for business purposes, upon
the presentation of statements of such expenses in accordance with the
Employer's policies and procedures now in force or as such policies and
procedures may be modified with respect to all employees of the Employer. The
Employer shall pay or reimburse the Employee for business class travel and
accommodation expenses for his spouse and children at times the Employee is
required to be away from home for up to six round trips for his spouse and three
round trips for his children per year.
5. Termination Payments.
A. In the event of termination of the Employee's employment during the
Employment Period:
(i) by the Employer without Cause (pursuant to Section 3(e));
-4-
(ii) by the Employee for Good Reason (pursuant to Section 3(d)); or
(iii) on the day prior to the third anniversary of the Effective
Date (and not prior thereto) and no renewal of the Employment
Period has taken place as of such date by amendment of this
Agreement or pursuant to a new agreement between the Employer
and the Employee
then, the Employee shall be entitled to the following payments:
(a) Annual Base Salary through the Date of Termination (to the
extent not paid) within 10 days following the Date of
Termination;
(b) Earned but unpaid Annual Bonus in respect of the year ended
prior to the Date of Termination;
(c) A pro rata portion of his target Annual Bonus based upon the
number of months worked in the year in which the Date of
Termination occurs;
(d) Severance pay pursuant to the Severance Plan;
(e) Amounts under the terms of Benefits Plans in which he is a
participant under the terms thereof; and
(f) Unreimbursed expenses under Section 4 of this Agreement
B. The Employee shall not be entitled to any further payments or
benefits under this Agreement in respect of any termination of the Employee's
employment during the Employment Period by the Employer without Cause (pursuant
to Section 3(e)) or by the Employee for Good Reason (pursuant to Section 3(d))
or for expiration without renewal (pursuant to this Section 5A(iii)). The
payments and benefits provided in this Section 5A(a), (b), (c) and (d) are
subject to and conditioned upon the Employee's compliance with the restrictive
covenants provided in Section 7 and shall be subject to and conditioned upon the
Employee executing a valid general release and waiver, waiving all claims the
Employee may have against the Employer, its successors, assigns, affiliates,
employees, officers and directors.
C. If the Employee's employment is terminated during the Employment
Period by the Employer for Cause, by the Employee without Good Reason, or as a
result of the Employee's death or Disability pursuant to Sections 3(c), 3(f),
3(a) and 3(b), respectively, the Employer shall pay the amounts referred to in
Section 5A(a) , (b), (c) and (d) to the Employee (or the Employee's estate or
legal representative in the event of the Employee's death) within thirty (30)
days following the Date of Termination and the Employee shall not be entitled to
any further payments or benefits under this Agreement.
-5-
6. Non-Exclusivity of Rights. Any vested benefits and other amounts
that the Employee is otherwise entitled to receive under any Benefit Plan or
other employee benefit plan, policy, practice or program of the Employer shall
be payable in accordance with such Benefit Plan or other employee benefit plan,
policy, practice or program as the case may be, except as explicitly modified by
this Agreement.
7. Confidentiality of Information; Duty of Non-Disclosure; Non-
Competition; Non-Solicitation.
(a) Confidential Information; Duty of Non-Disclosure. The Employee's
employment under this Agreement necessarily involves his access to and
understanding of certain trade secrets and confidential information pertaining
to the business of the Employer and its affiliates. During the Employment Period
and thereafter, he will not, directly or indirectly, without the prior written
consent of the Employer, disclose or use for the benefit of any person,
corporation or other entity, or for himself any and all files, trade secrets or
other confidential information concerning the internal affairs of the Employer
or its affiliates, including, but not limited to, information pertaining to its
clients, services, products, earnings, finances, operations, methods or other
activities; provided, however, that the foregoing shall not apply to information
which is of public record or is generally known, disclosed or available to the
general public or the industry generally (other than as a result of the
Employee's breach of this Section 7(a)). Notwithstanding the foregoing, the
Employee may disclose such information as is required by law during any legal
proceeding or to the Employee's personal representatives and professional
advisers and, with respect to such personal representatives and professional
advisers, the Employee shall inform them of his obligations hereunder and take
all reasonable steps to ensure that such professional advisers do not disclose
the existence or substance thereof. Further, the Employee shall not, directly or
indirectly, remove or retain, without the express prior written consent of the
Employer, and upon termination of employment for any reason shall return to the
Employer, any records, computer disks, computer printouts, business plans or any
copies or reproductions thereof, or any information or instruments derived
therefrom, arising out of or relating to the business of the Employer and its
affiliates or obtained as a result of his employment.
(b) Non-Competition. During the Employment Period and for a period
of six (6) months after the termination of the Employee's employment with the
Employer, the Employee shall not work for or provide services to a principal
competitor of the Employer and its affiliates in a substantially similar
function as the Employee held with the Employer during the two-year period prior
to the Employee's termination of employment with the Employer.
(c) Non-Solicitation. During the Employment Period and for a period
of one (1) year after the termination of the Employee's employment with the
Employer, the Employee shall not: (i) work on the account of any client of the
Employer and its affiliates with whom such Employee had a direct relationship or
as to which the Employee had a significant supervisory responsibility or
otherwise was significantly involved at any time during the two (2) years prior
to such termination; (ii) hire, solicit for hire, or assist any other person in
soliciting or hiring any
-6-
employment candidate with whom the Employee has had contact while at the
Employer during the two (2) years prior to such termination; or (iii) directly
or indirectly solicit or hire, or assist any other person in soliciting or
hiring, any employee of the Employer and its affiliates (as of the Employee's
termination of employment) or any person who, as of such date, was in the
process of being recruited by the Employer and its affiliates, or induce any
such employee to terminate his or her employment with the Employer and its
affiliates.
(d) Remedies. The parties hereto hereby agree that it is impossible
to measure in money the damages which will accrue to the Employer by reason of a
failure by the Employee to perform any of his obligations under this Section 7
and the Employee acknowledges that such obligations are a material condition to
the Employer's decision to enter into this Agreement. Accordingly, if the
Employer institutes any action or proceeding to enforce the provisions hereof,
to the extent permitted by applicable law, the Employee hereby waives the claim
or defense that the Employer has an adequate remedy at law, and the Employee
shall not urge in any such action or proceeding the defense that any such remedy
exists at law. The restrictive covenants in this Section 7 are in addition to
any rights the Employer may have in law or at equity or under any other
agreement. In the event that a court of competent jurisdiction finds the
Employee to be in violation of the provisions of Sections 7(b) or 7(c), the
non-competition and/or non-solicitation period shall be extended by the period
of time during which such court found the Employee to have been in such
violation. The foregoing shall not prejudice the Employer's right to require the
Employee to account for and pay over to the Employer any profit obtained by the
Employee as a result of any transaction constituting a breach of this Section 7.
(e) Survival of Covenants. This Section 7 shall survive the
termination of the Employment Period.
8. Arbitration. Any controversy or claim arising out of or relating
to this Agreement or for the breach thereof, or Employee's employment, including
without limitation any statutory claims (for example, claims for discrimination
including but not limited to discrimination based on race, sex, sexual
orientation, religion, national origin, age, marital status, handicap or
disability; and claims relating to leaves of absence mandated by state or
federal law), breach of any contract or covenant (express or implied), tort
claims, violation of public policy or any other alleged violation of statutory,
contractual or common law rights (and including claims against officers,
directors, employees or agents of the Employer) if not otherwise settled between
the parties, shall be conclusively settled by arbitration to be held in New
York, New York, in accordance with the American Arbitration Association's
Employment Dispute Resolution Rules (the "Rules"). Arbitration shall be the
parties' exclusive remedy for any such controversies, claims or breaches. The
parties agree they shall not seek any award for punitive damages for any claims
they may have under this Agreement. The parties also consent to personal
jurisdiction in New York, New York with respect to such arbitration. The award
resulting from such arbitration shall be final and binding upon both parties.
Judgment upon said award may be entered in any court having jurisdiction.
-7-
Employee and the Employer hereby waive the right to pursue any
claims, including but not limited to employment termination - related claims,
through civil litigation outside the arbitration procedures of this provision,
unless otherwise required by law. Employee and the Employer each have the right
to be represented by counsel with respect to arbitration of any dispute pursuant
to this paragraph. The arbitrator shall be selected by agreement between the
parties, but if they do not agree on the selection of an arbitrator within 30
days after the date of the request for arbitration, the arbitrator shall be
selected pursuant to the Rules.
In the event of any arbitration hereunder, the parties agree each
shall bear its or his own attorneys' fees and costs associated with or arising
from such arbitration or other proceeding.
9. Miscellaneous.
(a) Notices. Any notice to be given hereunder shall be given in
writing. Notice shall be deemed to be given when delivered by hand, or three (3)
days after being mailed, postage prepaid, registered with return receipt
requested, addressed as follows.
If to the Employer:
Xxxxxxxx & Struggles, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Legal Officer
If to the Employee:
Xxxxx Xxxxxxx
Copse Stile House
Spring Lane, Aston Xxxxxxx
Xxxxxx, Xxxx XX00 0XX
Xxxxxx Xxxxxxx
or to such other address as any party hereto may designate by notice to the
others, and shall be deemed to have been given upon receipt.
(b) Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the Employee's employment.
The Employee expressly acknowledges that no promises or commitments have been
made to him that are not set forth in this Agreement. This Agreement expressly
supersedes the Agreement, dated July 7, 2000, between the Employer and the
Employee and shall be of no further force and effect.
-8-
(c) Modification or Amendment; Waiver. This Agreement may be amended
only by an instrument in writing signed by the parties hereto, and any provision
hereof may be waived only by an instrument in writing signed by the party or
parties against whom or which enforcement of such waiver is sought. The failure
of any party hereto at any time to require the performance by any other party
hereto of any provision hereof shall in no way affect the full right to require
such performance at any time thereafter, nor shall the waiver by any party
hereto of a breach of any provision hereof be taken or held to be a waiver of
any succeeding breach of such provision or a waiver of the provision itself or a
waiver of any other provision of this Agreement.
(d) Successors. This Agreement is binding on and is for the benefit
of the parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. Neither this Agreement nor any
right or obligation hereunder may be assigned by the Employer or by the
Employee.
(e) Severability. Each provision hereof is severable from this
Agreement, and if one or more provisions hereof are declared invalid, the
remaining provisions shall nevertheless remain in full force and effect. If any
provision of this Agreement or portion thereof is so broad, in scope or duration
or otherwise, as to be unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.
(f) Tax Withholding. The Employer may withhold from any amounts
payable to the Employee hereunder all federal, state, city or other taxes that
the Employer may reasonably determine are required to be withheld pursuant to
any applicable law or regulation.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without reference to its
principles of conflicts of law.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(i) Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Xxxxxxxx & Struggles International, Inc.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Chief Legal Officer
/s/ Xxxxx Xxxxxxx
---------------------------
Xxxxx Xxxxxxx
-9-
