Settlement, Release, Covenant Not to Sue, Waiver and Non-Disclosure Agreement - Instinet Group Inc. and Kenneth K. Marshall
SETTLEMENT, RELEASE, COVENANT NOT
TO SUE, WAIVER AND NON-DISCLOSURE AGREEMENT
WHEREAS, KENNETH K. MARSHALL, individually and on behalf of all his
successors, heirs, executors, administrators, legal representatives, and assigns
(hereinafter referred to collectively as "Marshall"), and INSTINET GROUP
INCORPORATED, on behalf of its parents, subsidiaries, divisions and affiliates,
and their respective predecessors, successors, assigns, representatives,
officers, directors, shareholders, agents, employees and attorneys (hereinafter
referred to collectively as "Instinet"), have reached agreement with respect to
all matters arising out of Marshall's employment with Instinet and the
termination thereof;
NOW, THEREFORE, in consideration of the mutual convenants and
undertakings set forth herein, Marshall and Instinet agree as follows:
1. Termination of Employment. By mutual agreement between the parties,
Marshall's employment with Instinet shall terminate on April 30, 2002
("Termination Date"). Through the Termination Date, Instinet will continue to
pay Marshall at his current base salary of $350,000 per annum, with continuation
of Instinet's benefit programs through such date. Marshall has determined to
retire and hereby resigns from each of his employment and director positions
with Instinet and its affiliates, effective as of the Termination Date. Marshall
shall execute and deliver such documents evidencing such resignations as
Instinet may reasonably request from time to time.
2. Vested Payments and Benefits. Neither Marshall's separation from
Instinet nor this Agreement shall alter or affect in any way Marshall's vested
rights, if any, to payments and benefits pursuant to the Instinet 401(k) Plan,
SERP Plan, Deferred Bonus Plan, or ESPP Plan as of the Termination Date.
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3. Separation Payments and Benefits. Instinet will pay Marshall the
amounts described below, subject to the provisions of this Agreement. The
payments to be provided by Paragraphs 2 and 3 of this Agreement are in place of,
and not in addition to, payments Marshall would otherwise be entitled to
pursuant to any policy or practice of Instinet. All payments made pursuant to
this paragraph will be reduced by any and all applicable payroll deductions
including, but not limited to, federal, state and local tax withholdings.
(a) Severance Payments. Marshall will be entitled to receive
severance payments for a 2-year period (the "Severance Period") at the rate of
$350,000 per annum from the Termination Date through April 30, 2004. During the
Severance Period, Marshall will be eligible to continue his current health and
dental coverage for himself and his family, but will not be eligible for life
insurance, long-term disability insurance, 401(k) contributions or any other
benefits. At any time during the Severance Period, Marshall may elect to have
Instinet accelerate the severance payments and to receive all remaining payments
in a lump sum. All health and dental benefits will terminate, however, upon such
lump sum payment.
(b) 2002 Pro Rata Bonus. Instinet will pay Marshall $361,644
as a pro rata bonus for calendar year 2002. This payment will be made in
February 2003.
(c) 200% of Average Annual Bonus. Instinet agrees to pay
Marshall two equal installments of $707,750 each, the first such installment to
be paid in February 2003 and the second such installment to be paid in May 2003.
(d) Ex Gratia Payment. Instinet agrees to make a one-time ex
gratia payment to Marshall of an additional $76,000 concurrently with his final
severance payment.
(e) Reuters 401(k) Plan. Instinet agrees that, in that
Marshall has attained the Normal Retirement Age pursuant to the Reuters 401(k)
Plan, Marshall shall be 100% vested in his 401(k) account and shall receive the
2002 Discretionary Contribution to be made by Instinet
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at the same time and on the same basis as shall full-time active employees of
Instinet. (All capitalized terms used in this paragraph and not otherwise
defined shall have the meanings ascribed to such terms in the Reuters 401(k)
Plan.)
4. Return of Instinet Property. Marshall agrees to return to Instinet
by no later than the December 31, 2002, any and all property (including but not
limited to files, records, computer software, computer access codes, cellular
phones, fax machines, company IDs, business credit cards, proprietary and
confidential information) which belongs to Instinet, and shall not retain any
copies, duplicates or excerpts thereof. The foregoing sentence notwithstanding,
Marshall may keep his Instinet-provided home computer at no charge to him.
5. Outplacement Services. At the request of Marshall, Instinet will
make available executive outplacement services to Marshall for a period of up to
six months by an outplacement firm to be mutually agreed by and between Marshall
and Instinet's Director of Human Resources. These services will include the
provision of an office and telephone for Marshall to use during the outplacement
period.
6. Instinet Options. Instinet agrees that all options granted by
Instinet to Marshall under the Instinet 2000 Stock Option Plan (including those
granted prior to March 2, 2001) will be treated under the Qualifying Retirement
rules applicable to options granted on and after March 2, 2001. Specifically,
all Outstanding Options will continue to vest until the third anniversary (April
30, 2005) of Marshall's termination and shall remain outstanding until, and
expire upon, the 30th day following the third anniversary of such termination
(May 30, 2005). With the exception of the difference described above in the
treatment of Marshall's Outstanding Options in the context of a Qualifying
Retirement, all other terms and conditions provided in the Instinet 2000 Stock
Option Plan and the relevant option agreements remain in force and effect. (All
capitalized terms used in this paragraph and not otherwise defined shall have
the meanings ascribed to such terms in the Instinet 2000 Stock Option Plan.)
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7. Full Satisfaction. Marshall, by entering into this Agreement,
accepts the benefits to be conferred on his hereunder in full and complete
satisfaction of any and all asserted and unasserted claims of any kind or
description against Instinet as of the date of this Agreement, including, but
not limited to, claims arising under any federal, state and local fair
employment practice law, workers' compensation law, and any other employee
relations statute, executive order, law and ordinance, including, but not
limited to, Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act of 1967, as amended, the Rehabilitation Act of
1973, as amended, the Family and Medical Leave Act, the Americans With
Disabilities Act of 1990, as amended, the Civil Rights Acts of 1866 and 1871,
and, except as otherwise expressly set forth herein, of any other duty and/or
other employment related obligation (all of which are hereinafter referred to as
"employment relations laws"), as well as any claims arising from his Employment
Agreement with Instinet dated April 2, 2001, tort, tortious course of conduct,
contract, obligations of "good faith," public policy, statute, common law,
equity, and all claims for wages and benefits, monetary and equitable relief,
punitive and compensatory relief, and attorneys' fees and costs.
8. Release By Marshall. Marshall releases and discharges Instinet from
any and all liability, and waives any and all rights of any kind and description
that he has or may have against Instinet as of the date of this Agreement,
including, but not limited to, any asserted and unasserted claims arising from
any employment relations laws, tort, tortious course of conduct, contract
(including without limitation Marshall's Employment Agreement with Instinet
dated April 2, 2001, and any other employment agreements or contracts), public
policy, statute, common law, and equity, and claims for wages and benefits,
monetary and equitable relief, punitive and compensatory relief, and attorneys'
fees and costs. The foregoing notwithstanding, Marshall's release and waiver do
not apply to: (a) his rights arising out of this Agreement; (b) any rights that
Marshall and any covered dependents may have to purchase health benefit
continuation coverage under federal law commonly known as COBRA; (c) any accrued
benefits
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which have vested under the terms of the qualified retirement plans maintained
by Instinet as such plans may be amended from time to time; or (d) any rights
that Marshall may have to indemnification under Instinet's general corporate
indemnity (including reasonable attorneys fees where appropriate) for acts
undertaken by Marshall within the scope of his duties while employed at
Instinet.
9. Non-Competition Covenant. Marshall agrees that he will not, through
April 30, 2003, directly or indirectly, engage as officer, employee, agent,
partner, director, or substantial stockholder of, or in any other manner or
capacity, whatsoever, with any ECN competitor of Instinet's, including but not
limited to, any of the following companies or their current subsidiaries: Island
ECN; MarketXT; Archipelago Holdings L.L.C. - Redi-Book, Terra Nova or Townsend
Analytics, Inc.; Strike; Ecross Net; Brass Holdings, Brut ECN or Sungard;
Bloomberg; Optimark; ITG; Primex; Cybercorp; Tradescape; Knight Securities; New
York Stock Exchange, Inc., the Nasdaq Stock Market, the American Stock Exchange;
or the electronic trading division or unit of any US financial services firm.
10. Non-Solicitation Covenant. Marshall further agrees that he will not
(i) through April 30, 2003, directly or indirectly solicit any employee of
Instinet to leave the employ of Instinet, or (ii) through April 30, 2003,
directly or indirectly initiate contact with any client to transact with any
other company business in which Instinet is engaged, including but not limited
to institutional equities, fixed income, clearing and after-hours trading, or to
reduce or refrain from doing any business with Instinet. The term "client" means
any client of Instinet with whom Marshall had personal contact, or for whom he
personally transacted business, and whose identity became known to him in
connection with his relationship with or employment by Instinet.
11. Non-Disparagement. Marshall and Instinet each agree that except,
for truthful statements in any proceeding to enforce this Agreement or pursuant
to a valid Subpoena or Court
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Order, neither will make or publish any statement (orally or in writing) that
becomes or reasonably could be expected to become publicly known, or instigate,
assist or participate in the making or publication of any such statement, which
would libel, slander or disparage (whether or not such disparagement legally
constitutes libel or slander) the other or, with respect to Instinet, any of its
affiliates or any other entity or person within Instinet or its affiliates, any
of their affairs or operations, or the reputations of any of their past or
present officers, directors, agents, representatives and employees.
12. Rights To Intellectual Property. Marshall acknowledges and agrees
that Instinet is the sole and exclusive owner of all right, title and interest
in and to all trademarks, copyrights and all other rights in and to all
software, computer programs, works of authorship, writings (whether or not
copyrightable), inventions (whether or not patentable), discoveries, methods,
improvements, processes, ideas, systems, know-how, data, and any other
intellectual creations of any nature whatsoever that Marshall developed, or
assisted in the development of, in the course of his employment by Instinet
(collectively, the "Instinet Intellectual Property"). All Instinet Intellectual
Property is deemed to be "work made for hire" pursuant to the United States
Copyright Act of 1976 (the "Act") and Instinet thereby owns all right, title and
interest in all Instinet Intellectual Property. To the extent that the Instinet
Intellectual Property or any part thereof is deemed by any court of competent
jurisdiction or any governmental or regulatory agency not to be a "work made for
hire" within the meaning of the Act, the provisions of this section will still
control and, for the consideration set forth herein, Marshall hereby irrevocably
and absolutely assigns, sets over and grants to Instinet the Instinet
Intellectual Property and all of his rights therein. Marshall further agrees to
deliver or execute such documents and to do or refrain from doing such acts as
Instinet or its nominee may reasonably request to protect its rights in the
Instinet Intellectual Property.
13. Consultation and Cooperation By Marshall. Marshall agrees to make
himself reasonably available to Instinet during the Severance Period to respond
to requests by Instinet for
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information concerning facts or events relating to Instinet that may be within
his knowledge. Marshall will cooperate fully with Instinet in connection with
any or all future litigation or regulatory proceedings brought by or against
Instinet to the extent Instinet reasonably deems Marshall's cooperation either
necessary or helpful. In the event that Instinet requires Marshall's
cooperation, Instinet agrees to pay any of Marshall's reasonable expenses in
providing such cooperation (such as travel and accommodations). With due regard
to Marshall's other commitments, Instinet agrees that, should Marshall need to
devote more than minimal time to consultation and cooperation pursuant to this
paragraph, the parties will agree a reasonable per diem fee to compensate
Marshall for his time and efforts.
14. No Admission of Liability. By entering into this Agreement, the
parties do not admit to any liability, wrongdoing, breach of any contract,
commission of any tort or the violation of any statute or law alleged by the
other to have been violated or otherwise.
15. Entire Agreement and Severability. This Agreement constitutes the
complete settlement of all issues and disputes existing between Marshall and
Instinet as of the date hereof, and may not be modified except by a suitable
writing signed by both Marshall and Instinet. This Agreement has been entered
into by Marshall and Instinet voluntarily, knowingly, and upon advice of
counsel. If any provision of this Agreement is held to be invalid, the remaining
provisions shall remain in full force and effect.
16. Injunctive Relief. Marshall acknowledges that a violation on
Marshall's part of this Agreement, including in particular violation of the
provisions of paragraphs 10, 11, and 12 would cause irreparable damage to
Instinet. Accordingly, Marshall agrees that Instinet is entitled to injunctive
relief from any court of competent jurisdiction for any actual or threatened
violation of this Agreement in addition to any other remedies it may have.
17. Challenge to Release. Marshall agrees that, without limiting
Instinet's remedies, should he commence, continue, join in, or in any other
manner attempt to assert through
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litigation or proceeding (a "Release Challenge") any claim released in
connection herewith, Instinet shall not be required to make any further payments
to Marshall pursuant to this Agreement and that Instinet shall be entitled to
recover all payments already made by it (including interest thereon) pursuant to
paragraph 3 hereof, in addition to all damages, attorney's fees and costs,
Instinet incurs in connection with the Marshall's Release Challenge. Marshall
further agrees that Instinet shall be entitled to the repayments and recovery of
damages described above, in connection with such Release Challenge, without
waiver of or prejudice to the release granted by him in connection with this
Agreement.
18. Attorney Fees. The parties agree that, in any suit brought by
either party for breach of this Agreement by the other, the non-prevailing party
will be liable for the reasonable attorneys fees of the prevailing party.
19. Execution.
a. Marshall acknowledges that he has had a reasonable and
adequate opportunity from his receipt of this document to review it. Upon
execution, Marshall or his attorney must promptly send this document by
overnight mail to the General Counsel at Instinet. A copy may be retained by
Marshall.
b. Following his signing of the Agreement, Marshall has the
right to revoke the Agreement at any time within seven (7) calendar days of his
signing it, not including the date of his signing (the "Revocation Period").
Notice of Revocation shall be given in writing and sent by overnight mail no
later than the seventh day following the date Marshall signs this Agreement to
General Counsel, Instinet Corporation, 3 Times Square, New York, NY 10036. If
Marshall does not revoke the Agreement, this Agreement shall be deemed to be
effective and to be enforceable as of the last date set forth opposite any
signature hereto. If Marshall gives Notice of Revocation during the Revocation
Period in the manner specified above, this Agreement shall
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become null and void and all rights and claims of the parties which would have
existed, but for the execution of this Agreement shall be restored.
20. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the law of the State of New York. An action for
breach of this Agreement may be brought in any court of competent jurisdiction
located in New York.
21. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the heirs, successors and assigns of the parties
hereto.
THE UNDERSIGNED, intending to be legally bound, have executed this
Agreement on this 3rd day of May, 2002.
KENNETH K. MARSHALL INSTINET GROUP INCORPORATED
/s/ Kenneth K. Marshall /s/ Mark D. Nienstedt
__________________________ By: _____________________________
Mark D. Nienstedt
Acting President and CEO
STATEMENT BY THE EMPLOYEE WHO IS SIGNING BELOW: INSTINET HAS ADVISED ME IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE. I HAVE
CAREFULLY READ AND FULLY UNDERSTAND THE PROVISIONS OF THIS RELEASE AND HAVE HAD
SUFFICIENT TIME AND OPPORTUNITY TO CONSULT WITH MY PERSONAL TAX, FINANCIAL AND
LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT, AND I INTEND TO BE LEGALLY
BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE THIS RELEASE WITHIN SEVEN (7)
DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL NOT BECOME ENFORCEABLE OR
EFFECTIVE UNTIL THAT SEVEN (7) DAY PERIOD HAS EXPIRED.
KENNETH K. MARSHALL
/s/ Kenneth K. Marshall
Signed: __________________________
THIS IS A RELEASE. READ CAREFULLY BEFORE SIGNING.
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