EXHIBIT 10.11

 

EXECUTION COPY

 

KEVIN J. SMITH

SEPARATION AND SETTLEMENT AGREEMENT

AND GENERAL RELEASE

 

This Separation and Settlement Agreement and General Release (this “Agreement”)
is made as of this 13th day of February 2004 (the “Effective Date”), by and
between Kevin J. Smith (the “Employee”) and Heidrick & Struggles International,
Inc., and Heidrick & Struggles, Inc., both Delaware corporations (collectively,
the “Company”) concerning the Employee’s termination of employment with the
Company.

 

WHEREAS, the Company and the Employee entered into that certain Employment
Agreement dated as of March 20, 2002, (the “Employment Agreement”);

 

WHEREAS, the Employee has tendered his resignation as Chief Financial Officer of
the Company, to be effective on March 31, 2004 (the “Termination Date”), which
the Company accepted on the terms set forth in this Agreement; and

 

WHEREAS, the Company and the Employee intend that this Agreement shall be in
complete settlement of all rights of the Employee under the Employment Agreement
or otherwise relating to his employment by the Company.

 

NOW THEREFORE, in consideration of the mutual promises and agreements set forth
below, the Company and the Employee agree as follows:

 

1. Termination. The Employee’s employment with the Company will terminate by
mutual consent effective as of the close of business on the Termination Date and
the Employee will continue to be paid his current monthly salary (at a rate of
$35,833.33 per month), expense reimbursements and employee benefits and will
continue to vest in all incentive and other benefits through the Termination
Date.

 

2. Resignation. The Employee hereby agrees to resign as the Chief Financial
Officer of the Company as of the Termination Date. The Employee hereby resigns
from all other officer, director and other positions with the Company and all of
its affiliates effective as of the close of business on the Effective Date.
Employee agrees to execute a letter of resignation, in the form attached hereto
as Exhibit A, and shall execute any additional resignation letters as may be
reasonably requested by the Company.

 

3. 2003 and 2004 Bonus Payments.

 

(a) The Employee shall receive a 2003 Bonus payment (“2003 Bonus”) from the
Company in the gross amount of TWO HUNDRED FIFTEEN THOUSAND DOLLARS
($215,000.00) to be paid on the first business day following the date on which
this Agreement becomes final and binding pursuant to paragraph 13 below (the
“Initial Payment Date”).

 

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(b) The Employee shall receive a 2004 Bonus payment (“2004 Bonus”) from the
Company in the gross amount of FIFTY THREE THOUSAND DOLLARS ($53,000.00) to be
paid on the Initial Payment Date.

 

4. Other Payments. Employee shall receive a series of severance payments from
the Company in the aggregate gross amount of EIGHT HUNDRED AND SIXTY THOUSAND
DOLLARS ($860,000.00), to be paid in twelve equal monthly installments in the
gross amount of SEVENTY-ONE THOUSAND SIX HUNDRED SIXTY-SIX DOLLARS AND SIXTY-SIX
CENTS ($71,666.66) (the “Severance Payments”) on the Initial Payment Date and
then as of each one-month anniversary of the Termination Date. The Company’s
obligation to pay the Severance Payments is conditioned upon the execution of
this Agreement, including the execution of the General Release and Waiver,
provided in Exhibit B to this Agreement (the “Release”) and the continued
compliance by the Employee of all of the terms and conditions of this Agreement.
The first Severance Payment shall be made on the Initial Payment Date; provided,
however, that in the event that the cash payments to be made to the Employee as
of the Initial Payment Date are not adequate to provide for the required tax
withholding on such cash payments together with the withholding requirements
associated with any non-cash benefits provided hereunder, the Company may
accelerate a portion of the Severance Payment installments (starting with the
earliest installments due) to the Initial Payment Date in order to satisfy such
withholding obligations.

 

5. Sign-On Loan. The Company shall forgive the outstanding aggregate principal
of the loan made to the Employee pursuant to the Employment Agreement,
determined as of the Termination Date (projected to be in the amount of
EIGHTY-THREE THOUSAND THREE HUNDRED AND THIRTY THREE DOLLARS and THIRTY-THREE
CENTS ($83,333.33), after giving effect to the forgiveness which occurred on
January 8, 2004), with such forgiveness to be effective as of the Initial
Payment Date. The Company shall continue to provide the Employee the gross-up
payment regarding any imputed interest through the Initial Payment Date, in
accordance with the terms of the Employment Agreement.

 

6. Restricted Stock Units. Effective as of the Termination Date, the Employee
shall forfeit and/or relinquish any and all interests and rights in any unvested
restricted stock units awarded under any plan or program maintained by the
Company or any of its affiliates. Other than the awards set forth on Exhibit C
hereto, the Employee acknowledges and agrees that he does not possess, nor is
entitled to, any other restricted stock unit awards under any plan or program of
the Company or any of its affiliates.

 

7. Stock Options. Effective as of the Termination Date, the Employee shall
forfeit and/or relinquish any and all interests and rights in and under all
unvested outstanding stock options awarded under any plan or program maintained
by the Company or any of its affiliates. All outstanding options which are
vested as of the Termination Date shall continue to be exercisable for a period
of sixty (60) days following the Termination Date. Other than the awards set
forth on Exhibit C hereto, the Employee acknowledges and agrees that he does not
possess, nor is entitled to, any other stock option awards under any plan or
program of the Company or any of its affiliates.

 

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8. Performance Share Program. Effective as of the Termination Date, the Employee
shall forfeit and/or relinquish any and all interests and rights under the
Company’s Performance Share Program, for any and all performance periods.
Employee acknowledges that he is not entitled to any future participation or
payouts with respect to the Performance Share Program.

 

9. Accrued Vacation. The Employee shall receive payment for all accrued and
unused vacation, if any, as of the Termination Date, to the extent provided in
accordance with the Company’s standard policies. Such payment shall be paid not
later than the Initial Payment Date.

 

10. Termination of Benefits. Except as specifically provided in this Agreement
with respect to plans or arrangements specifically identified in this Agreement,
the Employee’s continued participation in all employee benefit (pension and
welfare) and compensation plans will cease as of the Termination Date. Any
payments made to the Employee pursuant to this Agreement, other than with
respect to the continued payment of salary through the Termination Date, shall
be disregarded for purposes of determining the amount of benefits to be accrued
on behalf of the Employee under any pension or other benefit plan maintained by
the Company or its affiliates. Nothing contained herein shall limit or otherwise
impair Employee’s right to receive pension or similar benefit payments which are
vested as of the Termination Date under any applicable tax qualified pension or
other tax qualified benefit plan.

 

11. Medical Benefits. Employee’s entitlement to continue family medical coverage
under the benefit plans of the Company operated in the United States will be
determined in accordance with the provisions of section 4980B of the Internal
Revenue Code and section 601 of the Employee Retirement Income Security Act
(sometimes referred to as “COBRA coverage”).

 

12. Other Payments. The Employee agrees and acknowledges that, other than as
specifically provided for in this Agreement, no additional payments are due from
the Company or any affiliate on any basis whatsoever other than reimbursements
in accordance with the Company’s policies for ordinary and reasonable expenses
incurred on or before the Termination Date.

 

13. Releases. As part of this Agreement, and in consideration of the additional
payments provided to Employee in accordance with this Agreement, the Employee is
required to execute the Release and deliver the Release following the
Termination Date. This Agreement (including all Exhibits to this Agreement), and
the commitments and obligations of all parties hereunder:

 

(a) shall become final and binding on the Effective Date, subject only to
Employee’s execution and delivery of the Release to the Company on the
Termination Date and the expiration of the Employee’s right to revoke the
execution of the Release in accordance with paragraph 3(d) of the Release,
attached as Exhibit B; and

 

(b) shall not become final and binding if Employee revokes such execution.

 

The Employee is aware that he may hereafter discover claims or facts in addition
to or different from those he now knows or believes to be true with respect to
the matters related herein.

 

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Nevertheless, it is the intention of the Employee to fully, finally and forever
settle such matters, and all claims, demands, and causes of action relative
thereto, whether known or unknown, which may exist, or previously have existed,
between Employee and the Company in connection with such matters, including,
without limitation, the termination of Employee’s employment with the Company.
In furtherance of such intention, the Release given herein shall be and remain
in effect as a full and complete release of all such matters, notwithstanding
the discovery or existence of any additional or different claims or facts
relative thereto.

 

(c) Within three business days following such time as the Employee delivers the
above Release, the Company shall execute and deliver to Employee a Release in
the form set forth in Exhibit B-2.

 

14. Assistance with Claims. The Employee agrees to cooperate with the Company or
any affiliate in the defense, prosecution or evaluation of any pending or
potential claims or proceedings involving or effecting the Company or any
affiliate during the period of Employee’s employment with the Company (the
“Employment Period”) or relating to any decisions in which Employee participated
or any matter of which Employee had knowledge. Employee agrees, unless precluded
by law, to promptly inform the Company if he is asked to participate (or
otherwise become involved) in any claims that may be filed against the Company
or any affiliate relating to the Employment Period. Employee also agrees, unless
precluded by law, to promptly inform the Company if he is asked to assist in any
investigation (whether governmental or private) of the Company or any affiliate
(or their actions) relating to any matter occurring during the Employment
Period, regardless of whether a lawsuit has then been filed against the Company
or any affiliate with respect to such investigation. Specifically and without
limitation, Employee will attend and participate in meetings and interviews
conducted by Company personnel, and/or attorneys appointed by the Company and
may be represented by counsel who may attend such meetings and interviews, and
execute written affidavits confirming Employee’s statements in such meetings in
respect of any such matters; provided such meetings do not unreasonably
interfere with Employees full-time employment or self-employment entered into
after the Termination Date. Employee will make himself available for the
foregoing at mutually convenient times during business hours from time to time
as reasonably requested by the Company. Promptly upon the receipt of the
Employee’s written request, the Company agrees to reimburse the Employee for all
reasonable out-of-pocket expenses associated with such cooperation, including,
without limitation, meals, lodging, travel and ground transportation expenses;
provided, however, that such reimbursement shall specifically exclude any fees
for legal representation engaged by Employee, that is not otherwise reimbursable
pursuant to the Company’s policies in effect at such time or the Company’s
By-Laws. This paragraph 14 shall not preclude the Employee from responding to an
inquiry in an honest manner.

 

15. Non-Disparagement. The Employee agrees that on and after the date of this
Agreement, he will not make any disparaging, critical or derogatory statement
about the Company or any affiliate or their shareholders or any of their
officers, directors or employees or otherwise make disparaging comment on any
aspects of Employee’s employment with the Company, and the Company agrees not to
make any disparaging, critical or derogatory statement about the Employee or
Employee’s employment with the Company; provided that the provisions of this
paragraph 15 shall not apply to testimony as a witness, any disclosure required
by law to be made by the Company or the Employee, the assertion of or defense
against any claim of

 

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breach of this Agreement and shall not require either party to make false
statements or disclosures.

 

16. Restrictive Covenants. Except as may be modified by the following provisions
of this paragraph 16, Employee expressly acknowledges and agrees that the
Employee will continue to remain subject to the covenant provisions of the
Employment Agreement (the paragraphs titled: Confidentiality and
Non-Solicitation/Non-Competition) (the “Covenants”), and further agrees that
obligations under such provisions are not limited in any way by this Agreement
or termination from employment with the Company:

 

(a) Employee shall return all documents, records and property of the Company and
any affiliate of the Company as of the Termination Date. The Employee shall
return to the Company no later than the Termination Date any and all original
and duplicate copies of all the Employee’s work product and of files, calendars,
books, records, notes, notebooks, customer lists and proposals to customers,
manuals, computer equipment (including any desktop and/or laptop computers,
handheld computing devices, home systems, computer disks and diskettes), mobile
telephones (including SIM cards and the like), Blackberry devices, personal data
assistants (PDAs), fax machines, and any other magnetic and other media
materials the Employee has in his possession or under his control that belong to
the Company or any of its affiliates that contain confidential or proprietary
information concerning the Company or any of its affiliates or their clients or
operations. The Employee also must return and/or agree to immediately return to
the Company any keys, credit cards and I.D. cards that belong to the Company or
any of its affiliates but are in the Employee’s possession or within the
Employee’s control.

 

(b) Employee agrees not to instigate or participate in any administrative or
judicial proceeding against the Company or any affiliate (except for proceedings
to enforce this Agreement) unless requested by the Company or otherwise required
by law.

 

(c) Subject to the foregoing provisions of this paragraph 16, the Company will
continue to have the right to enforce such obligations of the Covenants as
provided in the Employment Agreement.

 

17. Non-Disclosure. Employee acknowledges that the benefits provided by the
Company under this Agreement are not generally available to other employees of
the Company, and agrees that, except as may be required by the lawful order of a
court or agency of competent jurisdiction, Employee will keep the terms of this
Agreement secret and confidential indefinitely. Notwithstanding the foregoing
provisions of this paragraph 17, Employee may disclose the contents of this
Agreement to his attorneys, accountants and financial advisors and his immediate
family, provided that Employee takes steps that are reasonably calculated to
assure that such persons do not further disclose the terms of this Agreement.
The Employee further agrees that, prior to the commencement of any new
employment, if prior to the end of the expiration of the restrictive provisions
of the Covenants, he will furnish the prospective new employer with a copy of
the provisions of this Agreement (and as needed, relevant provisions of the
Employment Agreement) relating to competition, confidentiality, and
solicitation. Employee also agrees that, during such period, the Company may
advise any new employer or prospective new employer of

 

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the provisions of this Agreement relating to competition, confidentiality, and
solicitation and furnish the new employer or prospective new employer with a
copy of such provisions.

 

18. Withholding for Taxes. All benefits and payments provided to the Employee
pursuant to this Agreement which are required to be treated as compensation
shall be subject to all applicable withholding and reporting requirements.

 

19. Settlement of Disputes. The Settlement of Disputes provisions set forth in
Section 8 of the Employment Agreement are hereby incorporated by reference and
are made part of this Agreement and shall be applicable for all disputes as may
arise hereunder, regardless of whether the Employment Agreement is, or may
deemed to be, in full force and effect.

 

20. Attorneys Fees. In the event of any dispute with respect to a breach or
asserted breach of this Agreement, the prevailing party as determined by the
presiding judge or arbitration panel in said proceeding shall be entitled to
recover such party’s reasonable attorneys fees and expenses from the other
party.

 

21. Miscellaneous.

 

(a) Binding Effect. This Agreement shall be binding upon each of the parties and
upon their respective heirs, administrators, representatives, executors,
successors and assigns, and shall inure to the benefit of each party and to
their heirs, administrators, representatives, executors, successors, and
assigns.

 

(b) Applicable Law. This Agreement shall be construed in accordance with the
laws of the State of Illinois, without regard to the conflict of law provisions
of any jurisdiction.

 

(c) Entire Agreement. This Agreement reflects the entire agreement between the
Employee and the Company and, except as specifically provided herein, supersedes
all prior agreements and understandings, written or oral relating to the subject
matter hereof, it being acknowledged, however, that the Employee shall continue
to be subject to the Covenants of the Employment Agreement. To the extent that
the terms of this Agreement (including Exhibits to this Agreement) are to be
determined under, or are to be subject to, the terms or provisions of any other
document, this Agreement (including Exhibits to this Agreement) shall be deemed
to incorporate by reference such terms or provisions of such other documents.

 

(d) Notices. Any notice pertaining to this Agreement shall be in writing and
shall be deemed to have been effectively given on the earliest of (a) when
received, (b) upon personal delivery to the party notified, (c) one business day
after delivery via facsimile with electronic confirmation of successful
transmission, (d) one business day after delivery via an overnight courier
service or (e) five days after deposit with the United Postal Service, and
addressed as follows:

 

to the Employee at:

  

Mr. Kevin J. Smith

6 Clubside Court

Burr Ridge, IL 60521

 

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Or such other address as Employee duly notifies the Company.

 

with a copy to:

  

William Bettman, Esq.

Vedder, Price, Kaufman & Kammholz, P.C.

222 North LaSalle Street

Chicago, IL 60601

to the Company at:

  

Heidrick & Struggles International, Inc.

233 South Wacker Drive

Suite 4200

Chicago, IL 60606-6303

Attn: Fritz E. Freidinger - General Counsel and

Corporate Secretary

Fax: (312) 496-1297

with a copy to:

  

Donald L. Norman, Jr., Esq.

Mayer, Brown, Rowe & Maw LLP

190 S. LaSalle Street

Chicago, IL 60603

Fax: (312)706-9179

 

(e) Waiver of Breach. The waiver by either party to this Agreement of a breach
of any provision of this Agreement shall not operate as or be deemed a waiver of
any subsequent breach by such party. Continuation of benefits hereunder by the
Company following a breach by the Employee of any provision of this Agreement
shall not preclude the Company from thereafter exercising any right that it may
otherwise independently have to terminate said benefits based upon the same
violation.

 

(f) Amendment. This Agreement may not be modified or amended except by a writing
signed by the parties to this Agreement.

 

(g) Counterparts. This Agreement may be signed in multiple counterparts, each of
which shall be deemed an original. Any executed counterpart returned by
facsimile shall be deemed an original executed counterpart.

 

(h) No Third Party Beneficiaries. Unless specifically provided herein, the
provisions of this Agreement are for the sole benefit of the parties to this
Agreement and are not intended to confer upon any person not a party to this
Agreement any rights hereunder.

 

(i) Terms and Construction. Each party has cooperated in the drafting and
preparation of this Agreement. The language in all parts of this Agreement shall
be in all cases construed according to its fair meaning and not strictly for or
against either party.

 

(j) Admissions. Nothing in this Agreement is intended to be, or will be deemed
to be, an admission of liability by Employee or the Company to each other, or an
admission that they or any of their agents, affiliates, or employees have
violated any

 

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state, federal or local statute, regulation or ordinance or any principle of
common law of any jurisdiction, or that they have engaged in any wrongdoing
towards each other.

 

(k) Indemnification. Employee shall continue to be eligible for indemnification
by the Company to the extent provided to other former Executives of the Company,
as provided in the Company by-laws as currently in effect or as may be required
by Delaware law.

 

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IN WITNESS WHEREOF, this Separation and Settlement Agreement and General Release
bas been duly executed as of the Effective Date.

 

/s/    KEVIN J. SMITH               Date: 2-23-04

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        Kevin J. Smith        

 

Heidrick & Struggles International, Inc.

             /s/    FRITZ E. FREIDINGER                Date: 2-13-04

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By:

  Fritz E. Freidinger        

Title:

  General Counsel and Corporate Secretary        

 

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Exhibit A

 

LETTER OF RESIGNATION

 

Board of Directors

Heidrick & Struggles International, Inc.

233 South Wacker Drive

Chicago, IL 60606-6303

 

Dear Sirs:

 

I hereby resign as Chief Financial Officer with Heidrick & Struggles
International, Inc. (the “Company”) to become effective as of March 31, 2004,
and acknowledge acceptance thereof by the Company. Effective immediately, I
hereby resign each other officer, director and other position with the Company
and any of its related entities. My resignation is in accordance with the terms
of the Separation and Severance Agreement, dated February 13, 2004, and I hereby
confirm that I have no claim for compensation for loss of office, save as set
out in that Agreement.

 

Very truly yours, /s/    KEVIN J. SMITH        

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Kevin J. smith

 

Resignation acknowledged and accepted:

Heidrick & Struggles International, Inc.

By:   /s/    Illegible            

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Its:

  Secretary

 

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Exhibit B

 

EMPLOYEE RELEASE AND WAIVER

 

1. This document is attached to, is incorporated into, and forms a part of, a
Separation and Settlement Agreement and General Release, dated February 13, 2004
(the “Agreement”) by and between Heidrick & Struggles International, Inc. (the
“Company”) and Kevin J. Smith (the “Employee”). Except for (i) a Claim based
upon a breach of the Agreement, (ii) a Claim which is expressly preserved by the
Agreement, or (iii) a Claim duly filed pursuant to the group welfare and
retirement plans of the Company, the Employee, on behalf of himself and the
other Employee Releasors, releases and forever discharges the Company and the
other Company Releasees from any and all Claims which the Employee now has or
claims, or might hereafter have or claim, whether known or unknown, suspected or
unsuspected (or the other Employee Releasors may have, to the extent that it is
derived from a Claim which the Employee may have), against the Company Releasees
based upon or arising out of any matter or thing whatsoever, from the beginning
of time to the date affixed beneath Employee’s signature on this General Release
and Waiver and shall include, without limitation, Claims (other than those
specifically excepted above) arising out of or related to the Employment
Agreement dated March 20, 2002 and Claims arising under (or alleged to have
arisen under) (a) the Age Discrimination in Employment Act of 1967, as amended;
(b) Title VII of the Civil Rights Act of 1964, as amended; (c) The Civil Rights
Act of 1991; (d) Section 1981 through 1988 of Title 42 of the United States
Code, as amended; (e) the Employee Retirement Income Security Act of 1974, as
amended; (f) The Immigration Reform Control Act, as amended; (g) The Americans
with Disabilities Act of 1990, as amended; (h) The National Labor Relations Act,
as amended; (i) The Fair Labor Standards Act, as amended; (j) The Occupational
Safety and Health Act, as amended; (k) The Family and Medical Leave Act of 1993;
(1) any state antidiscrimination law; (m) any state wage and hour law; (n) any
other local, state or federal law, regulation or ordinance; (o) any public
policy, contract, tort, or common law; or (p) any allegation for costs, fees, or
other expenses including attorneys’ fees incurred in these matters. Employee
further represents that he has not, and never will, institute against the
Company or any of the Company Releasees any action or other proceeding in any
court, administrative agency, or other tribunal of the United States, any State
thereof or any foreign jurisdiction, with respect to any Claim or cause of
action of any type, other than as provided under (i), (ii) or (iii) above,
arising or which may have existed at any time prior to the effective date of the
Agreement. If Employee does institute such a claim, he agrees to pay the
reasonable costs incurred by the Company or any of the Company Releasees in
defending such action, including reasonable attorneys’ fees, experts’ fees and
costs.

 

2. For purposes of this General Release and Waiver, the terms set forth below
shall have the following meanings:

 

(a) The term “Agreement” shall include the Agreement and the Exhibits thereto.

 

(b) The term “Claims” shall include any and all rights, claims, demands, debts,
dues, sums of money, accounts, attorneys’ fees, experts’ fees, complaints,

 

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judgments, executions, actions and causes of action of any nature whatsoever,
cognizable at law or equity.

 

(c) The term “Company Releasees” shall include the Company and its affiliates
and their respective officers, directors, trustees, members, employees,
shareholders, partners, assigns and administrators and fiduciaries under any
employee benefit plan of the Company and of any affiliate, and insurers, and
their predecessors and successors.

 

(d) The term “Employee Releasors” shall include the Employee, and his family,
heirs, executors, representatives, agents, insurers, administrators, successors,
assigns, and any other person claiming through the Employee.

 

3. The following provisions are applicable to and made a part of the Agreement
and this General Release and Waiver:

 

(a) By this General Release and Waiver, the Employee Releasors do not release or
waive any right or claim which they may have under the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit Protection Act, which
arises after the date of execution of this General Release and Waiver.

 

(b) In exchange for this General Release and Waiver, the Employee hereby
acknowledges that he has received separate consideration beyond that to which he
is otherwise entitled under the Company’s policies, under contract, or under
applicable law.

 

(c) The Employee has consulted with an attorney of his choosing prior to
executing the Agreement and this General Release and Waiver.

 

(d) The Employee has up to twenty-one (21) days from the date of presentment to
consider whether or not to execute the Agreement and this General Release and
Waiver which right the Employee has chosen to waive with the advice of counsel.
In the event of such execution, the Employee has a further period of seven (7)
days from the date of said execution in which to revoke said execution. The
Agreement and this General Release and Waiver will not become effective until
expiration of such revocation period.

 

4. The Agreement (including this General Release and Waiver and all other
Exhibits to the Agreement), and the commitments and obligations of all parties
thereunder:

 

(a) shall become final and binding immediately following the expiration of the
Employee’s right to revoke the execution of the Agreement in accordance with
paragraph 3(d) of this Exhibit B;

 

(b) shall not become final and binding until the expiration of such right to
revoke; provided, however, that nothing contained herein shall confer any right
upon the Company to revoke the Agreement; and

 

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(c) shall not become final and binding if the Employee revokes such execution.

 

* * * * * * *

 

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The Employee hereby acknowledges that he has carefully read and understands the
terms of the Agreement and this General Release and Waiver and each of his
rights as set forth therein.

 

 

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    Kevin J. Smith

Date:

       

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State of                             

 

County of                             

 

Subscribed Before Me This

         Day of                     , 2004

 

 

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Notary Public

 

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Exhibit B-2

 

COMPANY GENERAL RELEASE AND WAIVER

 

1. This document is attached to, is incorporated into, and forms a part of, a
Separation and Settlement Agreement and General Release, date February 13, 2004
(the “Agreement”) by and between Heidrick & Struggles International, Inc. (the
“Company”) and Kevin J. Smith (the “Employee”). Except for (i) a Claim based on
a breach of the Agreement, (ii) a Claim which is expressly preserved by the
Agreement, (iii) a Claim relating to or arising out of the Employee’s fraud or
criminal activity, or (iv) a Claim relating to or arising out of the Employee’s
willful or intentional misconduct in the performance of Employee’s obligations
under the Employment Agreement, the Company, on behalf of itself and the other
Company Releasors, releases and forever discharges the Employee and the other
Employee Releasees from any and all Claims which the Company now has or claims,
or might hereafter have or claim, whether known or unknown (or the other Company
Releasors may have, to the extent that it is derived from a Claim which the
Company may have), against the Employee Releasees based upon or arising out of
any matter or thing whatsoever, from the beginning of time to the date affixed
beneath the Company’s signature on this General Release and Waiver, and shall
include, without limitation, Claims (other than those specifically excepted
above) arising out of or related to the Employment Agreement dated March 20,
2002, and Claims arising under (or alleged to have arisen under) (a) any local,
state, federal, regulation or ordinance; (b) any public policy, contract, tort,
or common law; or (c) any allegation for costs, fees, or other expenses
including attorneys’ fees incurred in these matters. Company further represents
that it has not, and never will, institute against the Employee or any of the
Employee Releasees any action or other proceeding in any court, administrative
agency, or other tribunal of the United States, any State thereof or any foreign
jurisdiction, with respect to any Claim or cause of action of any type, other
than as provided under (i), (ii), (iii) or (iv) above, arising or which may have
existed at any time prior to the effective date of the Agreement. If Company
does institute such a claim, it agrees to pay the reasonable costs incurred by
the Employee or any of the Employee Releases in defending such action, including
reasonable attorneys’ fees, experts’ fees and costs.

 

2. For purposes of this General Release and Waiver, the terms set forth below
shall have the following meanings:

 

(a) The term “Agreement” shall include the Agreement and the Exhibits thereto.

 

(b) The term “Claims” shall include any and all rights, claims, demands, debts,
dues, sums of money, accounts, attorneys’ fees, complaints, judgments,
executions, actions and causes of action of any nature whatsoever, cognizable at
law or equity.

 

(c) The term “Company Releasors” shall include the Company and any of its
affiliates and, to the extent acting on behalf of the Company or any of its
affiliates and not acting in their individual capacities, their respective
officers, directors, trustees, members, employees, shareholders, partners,
assigns, administrators and fiduciaries

 

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under any employee benefit plan of the Company and of any affiliate, and
insurers, and their predecessors and successors.

 

(d) The term “Employee Releasees” shall include the Employee, and his family,
heirs, executors, representatives, agents, insurers, administrators, successors,
assigns, and any other person claiming through the Employee.

 

3. The Agreement (including this General Release and Waiver and all other
Exhibits to the Agreement), and the commitments and obligations of all parties
thereunder:

 

(a) shall become final and binding immediately following the expiration of the
Employee’s right to revoke the execution of the Agreement in accordance with
paragraph 3(d) of Exhibit B to the Agreement;

 

(b) shall not become final and binding until the expiration of such right to
revoke; provided, however, that nothing contained herein shall confer any right
upon the Company to revoke the Agreement; and

 

(c) shall not become final and binding if the Employee revokes such execution.

 

* * * * * * *

 

--------------------------------------------------------------------------------

The Company hereby acknowledges that it has carefully read and understands the
terms of the Agreement and this General Release and Waiver and each of its
rights as set forth therein.

 

Heidrick & Struggles International, Inc.  

--------------------------------------------------------------------------------

By:

  Fritz E. Freidinger

Title:

  General Counsel and Corporate Secretary

Date:

       

--------------------------------------------------------------------------------

 

State of                             

 

County of                         

 

Subscribed Before Me This

         Day of                     , 2004

 

 

--------------------------------------------------------------------------------

Notary Public]

 

--------------------------------------------------------------------------------

Exhibit C

 

Kevin J. Smith

 

NON QUALIFIED STOCK OPTIONS

 

Grant
Date

--------------------------------------------------------------------------------

 

Number
of Shares

--------------------------------------------------------------------------------

 

Option
Exercise
Price

--------------------------------------------------------------------------------

 

Vested as of
Termination
Date

--------------------------------------------------------------------------------

 

Forfeited as of
Termination
Date

--------------------------------------------------------------------------------

 

Expiration of
Vested Options

--------------------------------------------------------------------------------

01-08-02

  10,000   $17.73   10,000   0   60 days following Termination Date

03-06-02

  40,000   $18.40   26,666   13,334   60 days following Termination Date

03-06-03

  50,000   $11.90   16,666   33,334   60 days following Termination Date

 

RESTRICTED STOCK UNITS

 

Grant Date

--------------------------------------------------------------------------------

   Number of Shares

--------------------------------------------------------------------------------

   Vested as of Termination
Date

--------------------------------------------------------------------------------

   Forfeited as of Termination
Date

--------------------------------------------------------------------------------

03-06-03

   4,202.0    1,400    2,802