Employment Agreement - Heidrick & Struggles Inc. and Stephanie W. Abramson
[Letterhead of Heidrick & Struggles, Inc.]
April 2, 2002
Stephanie W. Abramson
101 Central Park West
New York, New York 10023
Dear Stephanie:
On behalf of Heidrick & Struggles, Inc. (the "Company"), I am
writing to confirm amendments to the terms of your employment which
were set forth in the letter, dated December 28, 2000, addressed to
you (the "December 28 Agreement"). Terms not expressly defined
herein shall have the meanings ascribed to them in the December 28
Agreement.
1. Resignation for "Good Reason." Based upon changes in the Company's needs
and resources, as of January 1, 2002, the Company has eliminated the job of
Chief Corporate Development Officer, thereby diminishing substantially your
responsibilities. You and the Company have agreed that this action by the
Company constitutes "Good Reason" under the December 28 Agreement and
therefore you are entitled to resign for "Good Reason" as of the date of
such actions pursuant to the terms of the December 28 Agreement.
2. Severance Amount: Pursuant to the terms of the December 28 Agreement, the
Company is obligated to pay to you as soon as administratively feasible
after the date you resign for Good Reason in a lump sum an amount equal to
one year of base salary ($550,000) and one year of target bonus ($550,000)
(the "Severance Amount").
3. Loan Forgiveness: Pursuant to the terms of the December 28 Agreement, at
the time you resign for Good Reason, the entire principal amount of the
Note ($925,000) evidencing a non-interest bearing loan made to you by the
Company is to be forgiven in full.
4. Employment continuation period: The Company confirms that you do not have
an obligation to continue in its employ and that you are entitled to
terminate your employment for Good Reason and to collect the Severance
Amount and have the principal amount of the Note forgiven. However, the
Company has requested that, as an accommodation to it, you agree to be
employed on a full-time basis through June 30, 2002 (the period between
January 1, 2002 and June 30, 2002 hereinafter referred to as the
"Employment Continuation Period"). You have agreed to be employed during
the Employment Continuation Period pursuant to the following conditions:
5. (a) Title: You shall continue to have the titles "Chief Legal Officer,"
"Chief Corporate Development Officer" and "Corporate Secretary" and shall
continue to be a member of the Global Operating Committee and to attend the
meetings thereof. You shall continue to have your place of employment in
New York City and to have the support of an executive assistant.
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(b) Base salary: Your base salary will continue at the rate of $550,000 per
annum and will be payable in accordance with the Company's usual payroll
practices.
(c) Bonus compensation: The Company hereby guarantees that it will pay you
a bonus amount with respect to the Employment Continuation Period equal to
the product of (x) $550,000 and (y) a fraction the numerator of which is
the number of months you have worked in 2002 and the denominator of which
is 12 (the "Guaranteed Bonus").
(d) Benefits: You will continue to participate in the benefits provided to
senior management generally and to receive the other benefits set forth in
the December 28 Agreement.
(e) Change in Control Severance Plan: You will continue to be a participant
in the Company's Change in Control Severance Plan in Tier One until the
earlier of June 30, 2002, and the date on which you cease to be employed by
the Company. You hereby waive the provisions of the December 28 Agreement
relating to the consequences of termination of your employment in
connection with a Change in Control.
(f) Severance Pay, Guaranteed Bonus, and Note forgiveness: You agree to
defer collection of the Severance Amount, the Guaranteed Bonus and
forgiveness of the Note until the earlier of June 30, 2002, and the date on
which you cease to be employed by the Company. Accordingly, the Company
will pay to you on the earlier of June 30, 2002, and the date of
termination of your employment all base salary earned but not yet paid, the
Severance Amount and the Guaranteed Bonus and will forgive the principal
amount of the Note on such date.
(g) Termination of employment during the Employment Continuation Period:
You shall have the right to resign, and the Company shall have the right to
terminate your employment, for any reason during the Employment
Continuation Period. If the Company terminates your employment other than
for Cause, you resign for Good Reason, or your employment ceases as a
result of your death or permanent disability, in each case prior to June
30, 2002, in addition to its obligations hereunder with respect to the
Severance Amount and the Note, the Company will pay you (1) base salary
through June 30, 2002, and (2) the Guaranteed Bonus calculated as if your
employment terminated on June 30, 2002. If you should resign voluntarily
from employment other than for Good Reason prior to June 30, 2002, in
addition to its obligations hereunder with respect to the Severance Amount
and the Note, the Company will pay you (1) base salary through the date of
termination; and (2) the Guaranteed Bonus calculated as if the date of
termination of employment were April 30, 2002. If the Company terminates
your employment for Cause prior to June 30, 2002, in addition to its
obligations hereunder with respect to the Severance Amount and the Note,
the Company will pay you (1) base salary through the date of termination,
and (2) the Guaranteed Bonus calculated based on the date of termination.
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6. Other provisions of the December 28 Agreement to continue: Unless modified
hereby, the other provisions of the December 28 Agreement (including the
Company's reimbursement of dues for two club memberships) shall continue in
effect during the Employment Continuation Period until the date your
employment terminates.
7. Announcements: Any announcement by the Company regarding the termination of
your employment with the Company, the December 28 Agreement or this letter
agreement shall be subject to your review and agreement with the Company.
Very truly yours,
/s/ Piers Marmion
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Piers Marmion, Chairman and Chief Executive Officer
Accepted and Agreed:
/s/ Stephanie W. Abramson
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Stephanie W. Abramson
Date: April 12, 2002