Separation
and Release of Claims Agreement
This
Separation and Release of Claims Agreement
(“Agreement”), dated as of May 12, 2008, is made
by and between BearingPoint, Inc. (“BearingPoint” or
the “Company”), and Judy Ethell
(“Employee”) (collectively, the
“Parties”).
1. Employee
is presently employed by BearingPoint and serves as Managing
Director, Executive Vice President and Chief Financial
Officer.
2. The
Parties desire for Employee to separate from her employment with
BearingPoint and to set forth the mutually agreed terms and
conditions of Employee’s separation.
In
consideration of the mutual acts, payments and promises set forth
in this Agreement, BearingPoint and Employee agree as
follows:
1.
Separation from Employment . Effective July 31, 2008
(the “Separation Date”), Employee shall separate from
employment with the Company and terminate all employment positions
and titles she may hold with BearingPoint and its affiliates,
including, without limitation, her positions as Managing Director,
Executive Vice President, Chief Financial Officer and/or Chief
Accounting Officer of BearingPoint. The parties waive any
contractual notice obligations that may otherwise exist in
connection with the Separation Date.
2.
Scope of Duties Prior to Separation Date . Employee will
continue to serve in her current role as Chief Financial Officer
until the earlier of (a) the date when another person assumes
the position of Chief Financial Officer, or (b) July 1,
2008 (in either case, the “Transition Date”). At such
time, Employee shall serve in a non-executive officer position
through the Separation Date. As of the Transition Date, Employee
shall also resign from all other executive officer positions she
holds with the Company, including that of Chief Accounting Officer,
or any of its subsidiaries or affiliates. Subject to the foregoing,
through the Separation Date, Employee will work at the direction
of, and report to, Ed Harbach and perform such duties as may be
assigned by him. Employee shall complete and/or relinquish her
assignments in a cooperative and orderly manner as may be requested
by the Company and diligently assist with the transition of those
duties and matters for which she is presently responsible. From the
date hereof through the Separation Date, the Company shall ensure
that Employee has access to such information as is necessary or
advisable for her to perform her duties and obligations hereunder.
Notwithstanding the foregoing, the Company acknowledges and agrees
that Employee will be telecommuting during the
month of July 2008
and she will not be required to work out of the Company’s
offices in July 2008 except for the first one-week period in
July 2008, during which week Employee shall, at the
Company’s discretion, either engage in business travel as
directed by the Company or work at one of the Company’s
offices.
3.
Payment of Salary and Expenses; Benefits . Through the
Separation Date, BearingPoint shall continue to pay Employee her
salary at its current level and provide her with the benefits which
she currently receives. BearingPoint shall pay to Employee any
earned, but unpaid portion of her salary, as of the Separation
Date, no later than the date on which such salary would normally be
paid. Any outstanding reimbursable expenses as of the Separation
Date will be paid to Employee upon submission and approval of those
expenses in accordance with the Company’s policies and
customary practices (with such approval to not be unreasonably
withheld). Except as otherwise specified in this Agreement, all
compensation and benefits shall cease as of the Separation
Date.
4.
Annual Bonus . On or before July 15, 2008, BearingPoint
shall pay to Employee a lump sum amount of TWO HUNDRED SIXTY
THOUSAND AND FORTY-SEVEN AND 00/100 DOLLARS ($260,047.00), less
required and authorized withholdings and deductions, representing
Employee’s 2007 annual bonus; provided, however, that in the
event the Company pays 2007 bonuses to other employees in the
Company prior to that time, Employee shall be paid her bonus at
such earlier date.
5.
Vacation and Personal Days . No later than the date of
Employee’s final salary payment following the Separation
Date, BearingPoint shall pay to Employee the sum of SEVENTY
THOUSAND AND 00/100 DOLLARS ($70,000.00), in settlement of
Employee’s personal and vacation days that may remain accrued
but unused as of the Separation Date.
6.
Severance Payment . Subject to and contingent upon
Employee’s execution of a supplemental release of claims on
or immediately following the Separation Date in the form attached
hereto as Exhibit A (the “Supplemental Release”),
on February 2, 2009, BearingPoint shall pay to Employee a lump
sum cash amount of ONE MILLION AND FORTY THOUSAND AND 00/100
($1,040,000.00), less required and authorized withholdings and
deductions, representing the sum of Employee’s annual base
salary and current Target Bonus (“Severance Payment”).
In connection therewith, the Company shall also execute the
Supplemental Release on or immediately following the Separation
Date.
7.
COBRA . For a period of up to eighteen (18) months
following the Separation Date, BearingPoint shall provide Employee
and her spouse continued coverage under the Company’s group
health plan without any premium cost to Employee or her spouse,
which continued coverage will count towards and be treated in
satisfaction of BearingPoint’s obligation to
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Separation and Release of
Claims Agreement
provide Employee and her
spouse with continuation health care coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”); provided, however, that BearingPoint’s
obligations under this Paragraph 7 with respect to
Employee and/or her spouse, as applicable, shall cease at such time
as Employee and/or her spouse, as applicable, obtain other
employer-sponsored health insurance coverage, except that to the
extent required by COBRA, Employee and/or her spouse, as
applicable, shall be entitled to elect to continue coverage at
their own expense under the Company’s group health plan
pursuant to COBRA for the remainder of the eighteen (18) month
period prescribed by this Paragraph 7 (or such other
period of time as prescribed by COBRA). Employee agrees to notify
BearingPoint in a prompt and timely manner of the commencement date
of such other employer-sponsored health insurance coverage. For
clarification, if Employee’s spouse obtains
employer-sponsored health insurance coverage, the Company shall no
longer be obligated to provide coverage to the Employee’s
spouse under the Company’s group health plan but it shall
remain obligated to continue to provide coverage to Employee until
such time as Employee obtains other employer-sponsored health
coverage and vice versa.
8.
Restricted Stock Units and Stock Options .
a.
Restricted Stock Units (“RSUs”) . The Parties
agree that, notwithstanding anything contained in either of the RSU
Agreements between the Company and Employee dated
September 19, 2006 (the “RSU Agreements”),
Employee shall vest, on July 1, 2008, in the RSUs otherwise
scheduled to vest on July 1, 2009 and shall therefore, as of
July 31, 2008, be vested in all 386,000 RSUs granted in
Employee’s two RSU Agreements. With respect to
Employee’s 52,700 RSUs scheduled for settlement on
July 1, 2008, the Parties agree that the Company’s tax
withholding obligations in connection therewith shall be satisfied
by the withholding of such number of whole shares of Common Stock
otherwise deliverable to Employee in settlement of such RSUs having
a fair market value, as determined by the Company as of
July 1, 2008, not in excess of the amount of such tax
withholding obligations determined by the applicable minimum
statutory withholding rate (“Net-Share Delivery”). With
respect to all Employee’s RSUs scheduled for settlement after
July 1, 2008, the Parties agree that such RSUs shall be
settled on such dates as the RSU Agreements prescribe, as modified
below, and the tax withholding obligations for such RSUs will not
be subject to Net-Share Delivery but instead must be satisfied by
Employee either (i) by advance payment in cash to the Company
of such withholding taxes or (ii) through the Company’s
“sell-to-cover” program with Morgan Stanley. Employee
acknowledges and agrees that, notwithstanding any provision of the
RSU Agreements to the contrary, all RSUs vested but not yet settled
as of the Separation Date shall be settled in the Company’s
next available quarterly RSU liquidity window following each
settlement
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Separation and Release of
Claims Agreement
date set forth in
paragraph 5(b) of the RSU Agreements. The Parties agree that
Employee shall not be deemed subject to the restrictions set forth
in paragraph 5(d) of Employee’s RSU Agreements. The Parties
further agree that paragraph 5(e) of the RSU Agreements shall
remain in effect without modification until August 31, 2008,
and consistent with the Company’s insider trading policy,
until that date, Employee shall not be entitled to sell or transfer
any shares of Common Stock acquired pursuant to the RSU Agreements
without the Company’s prior written approval. Thereafter,
Employee may, during the Company’s quarterly RSU liquidity
windows (whether or not during a blackout period), and subject to
Employee’s compliance with applicable law, sell or transfer
shares of Common Stock received upon the settlement of RSUs
pursuant to Section 5(a) of the RSU Agreements without the
necessity of further approval by the Company in the same manner and
to the same extent as other holders of the Company’s RSUs.
The Company agrees to cooperate in good faith to have any
restrictive legend removed from any certificate representing such
shares of Common Stock at such time as such shares of Common Stock
may be sold without registration by a non-affiliate pursuant to
paragraph (b) of Rule 144 under the Securities Act of
1933, as amended. Paragraph 6(c) of the RSU Agreements is hereby
deleted and of no further force or effect; provided, however, that
if the Company offers the “sell-to-cover” program with
Morgan Stanley or similar transaction program for holders of its
RSUs generally, then Employee shall be permitted to participate on
the same basis and subject to the same terms as all other holders
of RSUs. Except as set forth herein, the terms and conditions of
the RSU Agreements shall continue to apply following the Separation
Date.
b.
Stock Options . The Parties agree that Employee shall vest,
on July 1, 2008, in 150,000 stock options otherwise scheduled
to vest on July 1, 2009 pursuant to the BearingPoint Stock
Option Agreement and the terms of Employee’s
September 19, 2006 Award Notice and shall thereafter be
exercisable until the expiration of three (3) months following
the Separation Date, or October 31, 2008. Except as set forth
herein, the terms and conditions contained in the Stock Option
Agreement and the September 19, 2006 Award Notice shall
continue to apply following the Separation Date.
9.
Further Consideration . In consideration of Employee’s
continued service through July 31, 2008, her assistance in the
orderly transition of her responsibilities, the termination of the
Special Termination Agreement, the covenants set forth in
Paragraphs 17 and 18 and the release of claims in
Paragraph 15, and subject to Employee’s execution
of the Supplemental Release, BearingPoint shall provide Employee
with the further consideration set forth in this
Paragraph 9 that exceeds anything of value to which she
is currently entitled.
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Separation and Release of
Claims Agreement
a.
Additional Consideration Payment . On February 2, 2009,
BearingPoint shall pay to Employee an additional lump sum payment
in the amount of SEVEN HUNDRED THOUSAND AND 00/100 DOLLARS
($700,000.00), less required and authorized withholdings and
deductions (The “Additional Consideration
Payment”).
b.
Special Termination Agreement . The parties stipulate and
agree that the July 2005 Special Termination Agreement between
BearingPoint and Employee (the “Special Termination
Agreement”) is hereby terminated in its entirety and of no
further force and effect.
c.
Change of Control . In the event a Change of Control (as
defined below) shall have occurred on or before January 31,
2009, BearingPoint shall, on (A) February 2, 2009 or
(B) within ten (10) business days following the date on which
the Change of Control is deemed to have occurred, whichever is
later, pay to Employee an additional lump sum amount of ONE MILLION
FOUR HUNDRED THOUSAND AND 00/100 DOLLARS
($1,400,000.00).
For purposes of this
Agreement, a “Change of Control” of the Company shall
have occurred if any of the following events occur:
i.
a consolidation, merger or other reorganization of the Company in
which the Company is merged, consolidated or reorganized into or
with another corporation or other legal person or pursuant to which
shares of the Company’s stock are converted into cash,
securities or other property, other than a merger of the Company in
which the holders of the Company’s common stock immediately
prior to the merger own more than 50.1% of the common stock of the
surviving corporation or its ultimate parent immediately after the
merger;
ii.
any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of
the assets of the Company, where the holders of the Company’s
common stock immediately prior to the transaction own less than
50.1% of the common stock of such transferee or its ultimate parent
immediately after such transaction;
iii.
any liquidation or dissolution of the Company or any approval by
the stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;
iv.
any person (including any “person” as such term is used
in Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934 but not including the Company, any subsidiary
of the Company, any employee benefit plan of the
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Separation and Release of
Claims Agreement
Company or any subsidiary
of the Company, or any person holding the Company’s common
stock for or pursuant to the terms of any such plan) has become the
beneficial owner of 20% or more of the Company’s outstanding
common stock;
v.
if at any time the directors who either serve on the
Company’s board of directors on the date of this Agreement or
subsequently become directors with the approval of at least
two-thirds of the directors serving on the board of directors on
the date of this Agreement, cease for any reason to constitute at
least a majority thereof; or
vi.
any occurrence that would be required to be reported in response to
Item 6 of Schedule 14A of Regulation 14A under the
Securities Exchange Act of 1934 or any successor rule or
regulation;
provided, however, that a
Change of Control of the Company shall not be deemed to have
occurred as a result of any transaction having one or more of the
effects specified in clauses (i)-(vi) above if such transaction is
proposed by, and includes a significant equity participation {
i.e., an aggregate of at least 25% of the outstanding common
equity securities of the Company immediately after such transaction
which are entitled to vote to elect any class of directors) of, the
executive officers of the Company as constituted immediately prior
to the occurrence of the transaction or any Company employee stock
ownership plan or pension plan.
d.
Covenants . The Parties hereby amend the Managing Director
Agreement between BearingPoint and Employee dated July 1, 2005
(the “Managing Director Agreement”) by modifying the
definition of “Competing Entity” as follows:
“Competing
Entity” means any of the following entities, their
affiliates, subsidiaries, and successors: Accenture, IBM,
Answerthink, Anteon, Booz Allen, Bain, Cambridge Technology
Partners, Fujitsu, Maximus, Unisys, US Web and Lucent
Technologies.
The Parties agree that
Employee shall not be entitled to payment of severance pursuant to
paragraph 6 of the Managing Director Agreement.
10.
Provisions Relating to Payments .
a.
Manner of Payment . All payments to be made hereunder by
BearingPoint shall be delivered pursuant to the direct deposit
instructions currently on file with the Company. In the event
of
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Separation and Release of
Claims Agreement
Employee’s death
prior to the payment of any amounts due hereunder, the Company
shall pay all such amounts to Employee’s estate upon the
estate’s execution of a release, if applicable.
b.
Repayment . Except as to claims asserted under the Age
Discrimination in Employment Act of 1967, as amended, Employee
agrees that, sh
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