Exhibit 99.1
October 28, 2008
Mr. Kevin R.
Davis,
At the address on file with the
Company.
Re: Transition
Arrangements
Dear Kevin:
The Board of Directors of MF Global
Ltd. (the “ Company ”) appreciates your efforts
and contributions to the Company as Chief Executive Officer for
nearly nine years. On behalf of the Company, we are proposing the
following transition arrangements in recognition of over seventeen
years of service to the Company and the Company’s former
parent.
1. Acceptance of
Resignation
We accept your resignation from the
Company, effective October 28, 2008 (your “
Transition Date ”). Effective on the close of business
on your Transition Date, you have resigned from your positions as
Chief Executive Officer and a director of the Company, as well as
from all other positions as a director, officer or employee of the
Company and its affiliates (together, the “ MFG
Companies ”) and all other trusteeships, committee
memberships and fiduciary capacities held with or on behalf of the
MFG Companies or any employee benefit plan of the MFG Companies.
You understand that your resignation is irrevocable, that no other
action is required for it to become effective and that this
Agreement will serve as written notice of your resignation for
purposes of the preceding.
2. Compensation
Matters
(a) Transition Payment . In
connection with your transition, the Company will pay you a
transition payment of $7.5 million on the first regular payment
date following the six month anniversary of your Transition
Date.
(b) Equity Compensation
Awards . As of the date of this Agreement, you beneficially
owned unvested restricted share units in respect of a total of
808,333 Company shares (your “ RSUs ”) and
options to purchase 983,333 Company shares (your “
Options ”), 327,777 of which Options were vested and
655,556 of which Options were unvested. In consideration of your
execution of this Agreement, your RSUs will remain outstanding and
vest and will be payable in accordance with your award agreement
with the Company without regard to any continued employment
obligation and with the restrictive covenants being adjusted in
accordance with Section 3 hereof; all of your Options
(including any Options held in trusts) will be forfeited. The
Company acknowledges that 40,000 of the shares subject to your RSUs
are held in two trusts.
(c) Continued Benefits . You
will be deemed to have elected continuation of your health coverage
for yourself (and your covered eligible dependents as of the date
of this Agreement) under the Company’s plans. The Company
will provide such continuation coverage at no premium cost to you
(although you will be required to pay any deductibles and other
co-payments or other out-of-pocket expenses in accordance with the
terms of the plans) until the earlier of the 24-month anniversary
of your Transition Date or the date you become eligible for
coverage under the plans of another employer (the “
Continuation Period ”). (You agree to notify the
Company of your eligibility for coverage from another employer
within 30 days of such eligibility.) The Continuation Period shall
run concurrently with the continuation period under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) and benefits provided pursuant to this
Section 2(c) shall reduce and count against your rights under
COBRA.
(d) Other Vested Benefits .
In addition to the other compensation and benefits provided in this
Section 2, the Company will pay you any unpaid Accrued
Compensation through your Transition Date and provide you any
vested Other Benefits. The terms “Accrued Compensation”
and “Other Benefits” are defined in your Employment
Agreement, dated March 29, 2007, with the Company (your
“ Employment Agreement ”) and will be paid as
provided in that Agreement.
(e) Administrative Assistant
. The Company will make your current administrative assistant
available to you on a part-time basis during regular business hours
until December 31, 2008.
3. Continuing
Covenants
(a) Indemnification . The
Company confirms its continuing indemnification obligations under,
and agrees to comply with, Section 6(d) of your Employment
Agreement.
(b) Proprietary Information .
You confirm your continuing obligations with respect to Proprietary
Information under, and agree to comply with, Section 8 of your
Employment Agreement.
2
(c) Non-Competition and
Non-Solicitation . You confirm your obligations with respect to
non-competition and non-solicitation under, and agree to comply
with, Sections 9(d), (e) and (f) of your Employment
Agreement (including, for the avoidance of doubt, Sections 9(a) and
(b) of the Employment Agreement to the extent relevant
thereto), except that the one-year period shall be reduced to an
eleven-month period. For the avoidance of doubt, the applicable
eleven-month period will commence on the Transition Date and end on
September 30, 2009. Notwithstanding the preceding, it is
agreed that you may solicit and employ your current administrative
assistant without violation of your non-solicitation obligations to
the MFG Companies.
(d) Non-Disparagement . You
will not, directly or indirectly, make or publish (orally or in
writing) any public statement or statement that reasonably could be
expected to become publicly known that would libel, slander or
disparage (whether or not the disparagement legally constitutes
libel or slander) any member of the MFG Companies or any of their
respective past or present officers, directors, employees or agents
(or instigate or participate in the making or publishing of any
such statement). The Company will not, directly or indirectly, make
or publish (orally or in writing) any public statement that
reasonably could be expected to become publicly known that would
libel, slander or disparage (whether or not the disparagement
legally constitutes libel or slander) you (or instigate or
participate in the making or publishing of any such statement).
However, nothing in this Section 3(d) is intended to interfere
with any official investigation by a governmental or regulatory
authority, and any cooperation you, the MFG Companies or any
officer or director are requested to provide to governmental or
regulatory authorities will not violate this Section 3(d).
Furthermore, nothing in this Agreement prohibits any person from
providing truthful information to governmental, regulatory or
self-regulatory authorities.
(e) Public Disclosure . You
and the Company will reasonably agree on the language of the press
release by the Company relating to the matters hereof and the
related Form 8-K disclosure, subject to the Company’s
requirements under applicable law.
(f) Cooperation . You agree
that, at all times after the Transition Date, you will make
yourself reasonably available and cooperate with reasonable
requests from the MFG Companies (subject to your business and
personal schedule) for information concerning any business or legal
matters involving facts or events relating to the MFG Companies
that may be within your knowledge as a result of your services. The
Company shall promptly pay all of your reasonable, pre-approved
expenses, including travel and legal expenses, incurred in
connection with said cooperation.
4. Release
(a)
