Exhibit
10.1
November 1, 2005
Mr. L. Kevin Kelly
Woodcote House
14a Fairmile Avenue
Cobham
Surrey
KT11 2JB
Dear Kevin:
On behalf of Heidrick & Struggles
International, Inc. (the “Company”), I am pleased to
confirm the terms of your employment arrangement in this letter
agreement (the “Agreement”).
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1.
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Term .
Your employment under this Agreement shall have the effective
commencement date of July 1, 2005 (the “Effective
Date”) and shall continue for twenty-four (24) months,
expiring on July 1, 2007 (the “Initial Term”),
unless further extended or sooner terminated as provided in this
Agreement. The term of this Agreement will be extended
automatically for successive one (1) year periods after the
expiration of the Initial Term, on the same terms and conditions
set forth in this Agreement, or on such terms and conditions to
which parties hereto may agree in writing, unless either party
notifies the other in writing not less than one month prior to the
end of the Initial Term, or of any extension thereof, of its or his
desire to terminate this Agreement upon the conclusion of the
Initial Term or extension thereof of this Agreement. The Initial
Term together with any extensions shall be defined as the
“Term” of this Agreement.
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2.
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Title and
Duties . During the term
of this Agreement, you will serve as President Europe, Middle East
and Africa (“EMEA”) of Heidrick & Struggles
International, Inc., reporting to the Chief Executive Officer of
the Company, with such duties and responsibilities as are
customarily assigned to such position, and such other duties and
responsibilities not inconsistent therewith as may from time to
time be assigned to you by the Chief Executive Officer. You agree
that you will devote your full time, energy, and skill to the
business of the Company and to the promotion of the Company’s
best interest, and shall not work or perform services for any other
employer as an employee, consultant or otherwise during the
Term.
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(a)
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Base
Salary . You will receive
a monthly Base Salary (Fee/SOB salary) of $25,000.00, which is
$300,000.00 annually, inclusive of an annual cash car allowance of
$14,500.00. Your base salary is subject to review after 24
months.
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(b)
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Management
Salary . In addition to
your Base Salary, you will be entitled to an annual Management
Salary of $425,000.000, payable in twelve equal monthly
installments at the end of each month, minus deductions required by
law. Your management salary is distinct from your base salary and
is not applied against the relevant Fee/SOB tiers.
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(c)
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Target
Management Bonus . You
will be eligible for an annual Management Bonus of $425,000.00. You
will also participate in the Company’s Management Incentive
Plan (Tier I).
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(d)
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Target
Fee/SOB Bonus . You will
be eligible for an annual Fee/SOB Bonus of $550,000.
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(e)
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Guaranteed
Annual Compensation . For
the financial year 2005, you are guaranteed that your combined Base
Salary (Fee/SOB salary), Management Salary, Fee/SOB Bonus, and
Management Bonus will be at least $1,750,000.00. For the financial
year 2006, you are guaranteed that your combined Base Salary
(Fee/SOB salary), Management Salary, Fee/SOB Bonus and Management
Bonus will be at least $1,500,000.00.
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(f)
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General
Provisions Regarding Bonuses. Except as explicitly set forth herein, all
bonuses, including the Management Bonus and Fee/SOB Bonus, are
discretionary and are not earned until approved by the Compensation
Committee and/or Board of Directors of the Company. Bonuses will be
payable only if you are in the Company’s employ and not on
notice on the regular bonus payment date.
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(g)
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Incentive
Compensation and Other Plans . You will be entitled to participate in other
management compensation plans, including the Management Stock
Option Plan, the Change in Control Severance Plan at Tier I and the
Severance Pay Plan as a Top Employee, as such plans may be amended
from time to time.
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4.
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Benefits . You will be eligible to participate in the
Company’s benefit programs at the same level as other senior
executives of the Company on your effective date. Our benefits
program includes group health, dental, vision, life/AD&D,
long-term disability, short-term disability salary continuation,
paid holidays, Flexible Spending Account, and the
Heidrick & Struggles, Inc. 401(k) Profit-Sharing and
Retirement Plan. You will also be eligible to participate in the
Company’s Physical Examination and Financial Planning
Program. Your eligibility for all such programs and plans is
determined under the terms of those programs/plans. Any discrepancy
between this summary and the company’s plan documents will be
resolved in favor of the plan documents. Our benefits program,
compensation programs, and policies are reviewed from time to time
by Company management and may be modified, amended, or terminated
at any time.
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5.
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Expenses . The Company will reimburse you for your
business expenses in accordance with its policies.
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6.
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Secondment . You will be assigned to work in the
Company’s office in London, England, though the Company
reserves the right to require you to work from another location on
a temporary basis or to
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transfer you to another office or to
an affiliated company. Your assignment is expected to continue for
a maximum of two years unless we otherwise mutually agree. At the
conclusion of your assignment, the Company will make reasonable
efforts to assign you to a mutually agreeable position within the
Company and its related Companies. The Company will provide you
with relocation benefits per Company policy for whatever that next
assignment might be should it be outside the United Kingdom. If no
mutually agreeable position is found, the Company will provide you
with severance pursuant to Company policy as then in effect, and
pay for you to relocate back to the United States according to the
company relocation policy in operation at that time. In addition to
your regular compensation, as set forth in Section 3 of this
Agreement, during the time you are assigned to the Company’s
London office you will be eligible for the following expatriot
benefits:
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(a)
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Relocation
Expenses. The Company
will reimburse you for the following expenses related to your
relocation:
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Reasonable
moving expenses for normal household goods from Tokyo to London,
including the cost of moving two vehicles.
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Reasonable
necessary additional fit-out costs for your
accommodation.
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Business class
flights for you and those family members who will be relocating
with you.
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It is anticipated that the total
cost will be no more than £20,000 and will be reimbursed to
you subject to the provision of actual expenses
invoiced.
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(b)
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Housing
Expenses. The Company
will rent or lease on your behalf accommodation of your choice
within commuting distance of London and will contribute up to a
maximum value of £6,890 per calendar month towards your
housing costs (covering rent, management fees, government rates and
utilities). The Company will recover from you on a monthly basis
any amount that it spends on your behalf over and above this
figure. The Company will also cover any realtor brokerage costs and
deposit requirements related to your housing.
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During the period before you locate
permanent housing, the Company will provide appropriate
transitional accommodation in either a hotel or serviced apartment
for a period estimated to be one month. Other than as set forth
herein, the costs associated with providing you housing will not be
deducted from your compensation.
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(c)
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Education
Expenses. The Company
will reimburse you for incremental school fees for your children,
over and above those fees you would otherwise have incurred in the
United States had you not moved to London, up to a maximum of
£50,000 per year for all of your children.
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(d)
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Home
Leave/Emergency Leave. For every 12-month period during the term of
your assignment the Company will provide you with one round trip
business class airline ticket for each member of your immediate
family that relocated with you for the purposes of home leave to
the United States.
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You will be allowed reasonable time
off to attend to personal emergencies, such as death or critical
illness of a family member.
The Company will cover the cost of
transportation in certain situations of personal emergencies,
including individual medical crises that require US
treatment.
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(e)
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Income and
Ward Tax Reimbursement. The Company will reimburse you for any tax or
social charge liabilities that may arise in respect to the
expatriot benefits provided hereunder. In addition,
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the Company agrees to pay the 2004
Ward Tax that was required as a result of the timing of your
relocation from Tokyo. The Company will also pay for its tax
advisors to complete your annual income tax returns for the period
of your secondment.
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(f)
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During your
secondment, you may elect to have some or all of your base
salar
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