SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Settlement Agreement and General Release (hereinafter referred to
as the "Agreement") is made as of February 7, 2000 by and between Kenneth R.
Leibler and Liberty Financial Companies, Inc.
In this Agreement, "Leibler" refers to Kenneth R. Leibler; "Company"
refers to Liberty Financial Companies, Inc., its subsidiaries and affiliates, as
well as their current and former officers, directors, agents and employees in
such capacities. For purposes of Paragraphs 8 through 22, inclusive, of this
Agreement, the term Company shall also include Liberty Mutual Insurance Company
and Liberty Mutual Fire Insurance Company, their subsidiaries and affiliates, as
well as their current and former officers, directors, agents and employees in
such capacities.
WHEREAS, Leibler served as an employee-at-will of the Company in the
position of President and Chief Executive Officer and also served as a Director
until his resignation, which was effective on January 13, 2000; and
WHEREAS, the parties have mutually agreed to resolve any and all
disagreements arising out of such employment relationship and the termination of
Leibler's employment and his resignation as Director;
NOW, THEREFORE, in consideration of the mutual covenants to be
performed by each of the parties hereto, and set forth in their entirety herein,
the parties to this Agreement agree as follows:
1.The Company shall pay Leibler salary and benefits accrued through
January 13, 2000, including payment for any accrued but unused vacation,
personal or other flexible time off program. The Company shall also reimburse
Leibler for expenses incurred by him in the ordinary course of his employment
prior to January 13, 2000.
2.Leibler is no longer an employee of the Company and therefore not
eligible to receive any payment of any bonus, salary or benefit of whatever
nature or amount, other than as provided in Paragraph 1 or elsewhere in this
Agreement. The Company agrees to pay Leibler separation payments in the
aggregate amount of $3,480,000, less all applicable withholdings for state and
federal income taxes and payroll taxes, which shall be paid as follows: (a)
$1,200,000 after expiration of the time periods described in Paragraphs 18 and
19, but in no event later than March 1, 2000; (b) $1,140,000 over a period of 18
months in accordance with the Company's regular payroll schedule of two payments
per month, commencing February 15, 2000, resulting in 36 payments in the gross
amount of $31,666.67, and (c) $1,140,000 on August 15, 2001. The Company shall
not be obligated to fund benefits of any nature or in any amount for Leibler
during this period such as 401(k) matches, health plans, or retirement plans
after January 13, 2000, except as expressly provided herein.
3.The Company shall make all payments to health plans, dental plans and
vision plans pursuant to the COBRA benefit selected by Leibler for a period of
eighteen months from January 13, 2000. The Company will pay for the current
plans and coverage selection elected by Leibler. The Company shall also continue
to pay for Leibler's financial planning and tax preparation service from AYCO
for calendar year 2000, including preparation of Leibler's 1999 and 2000 income
tax filings. Payments for the foregoing benefits shall be made on the same
basis as during Leibler's tenure as an employee of the Company, and the Company
accordingly shall (a) gross up the payments for the AYCO benefit to eliminate
any after tax cost to Leibler, and (b) deduct Leibler's contribution to the
benefits described in the first sentence of this paragraph (calculated as if he
had remained an employee) from the payments described in Paragraph 2(b) above.
The Company shall also continue to pay the premium on Leibler's two $1 million
term life insurance policies until the earlier of one year from the date of this
Agreement or the commencement by Leibler of full-time employment (other than
self-employment). Leibler shall be obligated to inform the Company promptly of
his commencement of full- time employment (other than self-employment).
4.Leibler may exercise, through April 12, 2000, any vested stock
options pursuant to the Company's 1990 Stock Option Plan and 1995 Stock
Incentive Plan in accordance with the provisions of the award grants and the
underlying plans. Leibler shall only be entitled to exercise such options or
other rights as are vested as of January 13, 2000 pursuant to the terms of the
plans and grants. Notwithstanding the foregoing, the Company and Leibler agree
that the vested stock options granted to Leibler in 1995 and 1996 are hereby
cancelled. Any unvested options and restricted stock or other grants as of
January 13, 2000 shall be forfeited.
5.The Company shall provide Leibler, at the Company's expense, with
senior executive outplacement assistance by a firm of his choice, subject to the
reasonable approval of the Company, such service to run until the date Leibler
commences full-time employment or permanent full-time self-employment. Leibler
shall be obligated to inform the Company promptly of his commencement of
full-time employment or permanent full-time self-employment.
6.Leibler shall be entitled to payment, distribution, or other
appropriate treatment of Leibler's vested or accrued benefits as of January 13,
2000 under all of the Company's benefit plans in which Leibler participated
prior to January 13, 2000 (including, without limitation, as applicable, the
Company's Savings and Investment Plan, Pension Plan, Supplemental Savings Plan
and Supplemental Pension Plan) in accordance with the applicable terms and
conditions of such benefit plans.
7.Leibler acknowledges and agrees that the aforesaid payments and
agreements are made by the Company in consideration for the promises made by
Leibler in this Agreement. Leibler further acknowledges and agrees that he is
not otherwise entitled to receive said monies under any Company benefit plan,
policy or procedure, or otherwise. The Company's payment of these amounts shall
not restore Leibler's employment status or any of his Company employment
benefits.
8.Leibler states that he has not previously filed or joined in any
complaints, charges or lawsuits against the Company before any governmental
agency or court of law. Leibler further represents that he has not given or sold
any portion of any claim discussed in this Agreement to anyone else.
9.Leibler agrees to release, and hereby releases, the Company from all
claims or demands of whatever nature which Leibler currently may have based on
his employment with the Company, his service as Director, or his separation from
that employment or resignation as Director, whether known or unknown, and
whether asserted or not. This includes a release of any rights or claims Leibler
may have under the Age Discrimination in Employment Act and the Older Worker
Benefit Protection Act, which prohibit age discrimination in employment; Title
VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991, which
prohibit discrimination in employment based on race, sex, color, national
origin, or religion; the Americans With Disabilities Act, which prohibits
discrimination against persons with disabilities; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; any claims under the
Employee Retirement Income Security Act, which regulates the
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administration of retirement and other employee benefit plans; any state law
relating to employment benefits; the Massachusetts Law Against Discrimination,
codified at Section 151B et seq. of Massachusetts General Laws; any Company
management incentive plan, stock option plan, phantom or restricted stock plan
or other equity or benefit plan, Short-Term Disability or Long-Term Disability
Plans, except as provided elsewhere in this Agreement; and any other federal,
state or local statutory or common law claims affecting or relating to the
claims or rights of employees. This release also includes a release by Leibler
of any claims for wrongful discharge, breach of implied or express contract or
claims that the Company has dealt with Leibler unfairly or in bad faith.
This does not include a release of (a) any claims Leibler may have in
the future for breach by the Company of its obligations under this Agreement, or
(b) any rights Leibler may have to indemnification or under any directors and
officers liability insurance policy for claims arising from his service as a
director or officer of the Company or as fiduciary of any Company benefit plan
under applicable law and/or the charter documents of the Company or other
applicable documents.
10. The Company agrees to release, and hereby releases, Leibler and his
executors, administrators, successors and assigns, from all claims or demands of
whatever nature which the Company currently may have based on Leibler's
employment with the Company or his service as a Director, whether known or
unknown, and whether asserted or not. This release does not include a release of
any claims the Company may have in the future for breach by Leibler of his
obligations under this Agreement.
11. Leibler promises never to file, join or participate in any capacity
in a complaint, charge or lawsuit asserting any claims that are released in
Paragraph 9, provided, however, that the foregoing shall not apply to class
actions if Leibler opts out at the first opportunity provided. Leibler further
agrees not to voluntarily encourage or voluntarily offer any information to any
individual or entity or otherwise participate in the pursuit of any potential or
actual complaints, charges or lawsuits against the Company, including but not
limited to any and all complaints or lawsuits alleging employment discrimination
or wrongful discharge, arising or based upon facts or circumstances during
Leibler's active tenure at the Company. However, this provision shall not
interfere with Leibler's ability to communicate with public agencies if required
to do so under applicable law or legal process. If Leibler is so required under
applicable law or legal process, he shall provide prompt written notice to the
Company prior to compliance with such request, such written notice to include a
copy of any court or administrative order or other notice or document received
by Leibler together with all enclosures or attachments thereto.
12. The Company makes this Agreement to avoid the cost of defending
against any possible legal and/or administrative action of any nature
whatsoever. By making this Agreement, the Company does not admit that it has
violated any federal, state, or local law, rule or regulation or that any action
taken with respect to Leibler was wrongful or unlawful or that the Company
breached any of its policies or procedures. The parties agree that this
Agreement may not be used as evidence in any subsequent proceeding of any kind
except one in which either of the parties or Company alleges a breach of this
Agreement or one in which any of the parties or Company elects to use the
Agreement as a defense to any claim.
13. Except to comply with legal process, Leibler agrees to keep the
terms, amount and fact of this Agreement completely confidential and that he
will not disclose any information concerning this Agreement to anyone other than
his immediate family, attorney and financial and tax advisors, and shall be
responsible for any breach by them of this non-disclosure provision. The Company
likewise agrees to keep the terms, amount and fact of this Agreement completely
confidential and, except as required by law, will not disclose any information
concerning this Agreement other than to its employees on a need-to-know basis,
and to its legal,
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accounting and tax advisors, and shall be responsible for any breach by them of
this non-disclosure provision. The agreements of the parties in this paragraph
shall be of no further force and effect if and when this Agreement is disclosed
publicly by the Company pursuant to the disclosure requirements of the federal
securities laws.
14. Leibler acknowledges that he had access to proprietary and/or
confidential information regarding the Company's customers, employees, and
business during his employment with the Company. Leibler acknowledges and agrees
that all such proprietary and/or confidential information, including but not
limited to documents, computer software, electronic information or copies
thereof, is and shall remain the property of the Company. Leibler warrants and
represents that he has returned to the Company any originals and/or copies of
all such proprietary and/or confidential information whether in written or
electronic form. Furthermore, Leibler acknowledges and reaffirms his continuing
obligation to preserve as confidential all such information obtained by him
during, or by reason of, his employment with the Company and agrees that it will
not be disclosed by him to any person, firm or corporation or otherwise utilized
by him, except as may be required by law or legal process. If Leibler is so
required under applicable law or legal process, he shall provide prompt written
notice to the Company prior to the compliance with such request, such written
notice to include a copy of any court or administrative order or other notice or
document received by Leibler together with all enclosures or attachments
thereto.
15. Leibler covenants that he will not, with any reasonable expectation
of public disclosure, intentionally make any disparaging comment, statement or
communication of any kind, whether written or oral, about the Company or any
affiliated companies or any officer, director, agent, successor or assign in
such capacity, and that he shall refrain from making any harassing or
disparaging statement concerning the Company or the above entities or persons in
any public forum including, but not limited to, any interview, lecture, news
conference or other public audience or any form of media including, but not
limited to, radio, television, newspapers, magazines, the internet, or any
private forum where a fee or gratuity of any kind is being paid or make any
disclosure that is reasonably intended to become a public communication.
For purposes of this Paragraph 15 and the following Paragraph
16, disparaging and/or harassing conduct, comment, statement or communications
includes, but is not limited to, any conduct, comment, statement or
communication that discredits, belittles, defames or is untrue or misleading and
is made to negatively influence, tends to negatively influence or negatively
influences or prejudices the reputation, business or image of the other party or
any affiliated companies or any current or former officer, director, agent,
successor or assign.
16. The Company covenants that it will not, with any reasonable
expectation of public disclosure, intentionally make any disparaging comment,
statement or communication of any kind, whether written or oral, about Leibler
or any successor or assign in such capacity, and that it shall refrain from
making any harassing or disparaging statement concerning Leibler or the above
persons in any public forum including, but not limited to, any interview,
lecture, news conference or other public audience or any form of media
including, but not limited to, radio, television, newspapers, magazines, the
internet, or any private forum where a fee or gratuity of any kind is being paid
or make any disclosure that is reasonably intended to become a public
communication.
17. The prevailing party in any lawsuit or other action or proceeding
for breach of this Agreement shall be entitled to be paid by the other party, in
addition to any costs and disbursements provided by law, reasonable attorneys
fees and other expenses of litigation if deemed appropriate by the court or
other forum of such action or proceeding.
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The parties further agree that, if they file or join in a
complaint, charge, or lawsuit based on claims which it is finally determined
that such party has released (other than a class action from which a party opts
out at the first opportunity provided), such party will pay for all costs
incurred by the other party, any related companies or the directors or employees
of any of them, including reasonable attorneys fees, incurred in defending
against such a released claim.
18. Leibler was first provided with this Agreement on January 26, 2000.
Leibler will be afforded at least 21 days from that date to consider the meaning
and effect of this Agreement. Leibler acknowledges that he has had the
opportunity to consult with an attorney. Leibler agrees that any modification,
material or otherwise, to this Agreement does not restart or affect in any
manner the original 21 day consideration period for this separation proposal
made to Leibler.
19. Leibler may revoke this Agreement for a period of seven (7) days
following the day Leibler executes this Agreement. Any revocation within this
period must be submitted in writing, to Frank Faggiano, Senior Vice President,
Human Resources of the Company and state, "I hereby revoke my acceptance of the
Settlement Agreement and General Release dated February 7, 2000." The revocation
must be personally delivered to Mr. Faggiano, or his designee, or mailed to
Frank Faggiano, Senior Vice President, Human Resources, Liberty Financial
Companies, Inc., Federal Reserve Plaza, 600 Atlantic Avenue, Boston, MA
02210-2214, and postmarked within seven (7) days of execution of this Agreement.
This Agreement shall not become effective or enforceable until the revocation
period has expired. If the last day of the revocation period is a Saturday,
Sunday, or legal holiday in Massachusetts, then the revocation period shall not
expire until the next following day which is not a Saturday, Sunday, or legal
holiday.
20. Leibler acknowledges that he has had the opportunity to consult
with an attorney before signing this Agreement and that he understood that it
was his decision whether or not to do so. Leibler agrees that the Company shall
not be required to pay any of his attorneys' fees in this or any related matter
or lawsuit, now or later, except as provided in Paragraph 17, and that the
payments provided for this Agreement are in complete settlement of all matters
between Leibler and the Company, including but not limited to attorneys fees and
costs. This Agreement shall be interpreted in accordance with the laws of the
Commonwealth of Massachusetts.
21. All notices or other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given when
actually received. Notices for the Company shall be sent to:
Liberty Financial Companies, Inc.
600 Atlantic Avenue
Boston, Massachusetts 02210-2214
Attention: Robert A. Licht, General Counsel
Fax: 617-742-7338
Notices to Leibler shall be sent to:
Kenneth R. Leibler
386 Commonwealth Ave
Newton, MA 02467
Fax: 617-558-0397
The Company and Leibler shall be obligated to notify the other party of any
change in address, which shall be effective when made in accordance with this
Paragraph.
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22. This is the whole Agreement between Leibler and the Company. Other
than as stated herein, the parties acknowledge that no promise or inducement has
been offered for this Agreement and that this Agreement is executed without
reliance on any statement of the parties or their representatives. If any
portion of this Agreement is found to be unenforceable, then both Leibler and
the Company desire that all other portions that can be separated from it or
appropriately limited in scope shall remain fully valid and enforceable.
Executed this 7th day of February, 2000.
/s/Kenneth R. Leibler
------------------------------------
Kenneth R. Leibler
Subscribed and sworn to by the above-named individual before the undersigned
notary this 7th day of February, 2000.
SEAL: /s/Cindy M. Leal
------------------------------------
Notary Public
My Commission Expires: October 21, 2005
Executed this 7th day of February, 2000.
Liberty Financial Companies, Inc.
By /s/Gary L. Countryman
--------------------------------------
Gary L. Countryman, President and
Chief Executive Officer
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