**Exhibit 10.16**

 

**SEPARATION AGREEMENT**

**AND GENERAL RELEASE**

 

     THIS SEPARATION AGREEMENTAND GENERAL RELEASE (“Agreement”) is entered into on December 14, 2004 by andbetween BILL L. FAIRFIELD (“Fairfield”) and SITEL CORPORATION (“SITEL”).

 

     SITEL and Fairfield havemutually agreed to end their employer-employee relationship.  This Agreement is intended to provide theterms of the mutual separation.

 

     1.  **Resignation**.  Fairfield hereby resigns effective December31, 2004 (the “Effective Date”) from all positions he holds as a directorand/or officer of SITEL Corporation and any of its subsidiaries or jointventures or investments (collectively the “related entities”).  Fairfield shall promptly deliver any separatedocuments further evidencing such resignations as SITEL may request.  SITEL will provide Fairfield with an advancecopy of the press release and internal communication which SITEL intends toissue promptly following execution of this Agreement.

 

     2.  **Compensation**.  As a material inducement to Fairfield toenter into this Agreement, SITEL agrees to:

 

          (a)    pay Fairfield the equivalent of twelve (12)months of Fairfield’s current annual base salary ($400,000) in equalinstallments and on the dates which correspond to SITEL’s regular paydays fromand after the Effective Date through December 31, 2005.  If Fairfield accepts other full-timeemployment with another company in which he serves as a senior executive or afull-time consulting arrangement with another company in which he consults withsenior executives at any time prior to December 31, 2005 (“replacementarrangement”), Fairfield shall immediately advise SITEL of the name of suchcompany and the compensation payable to Fairfield under such replacementarrangement.  The compensation payable toFairfield under this Paragraph 2(a) after the date that Fairfield beginsproviding services to such other company under such replacement arrangementshall be reduced on each payment date by the amount of any cash compensationpaid or payable to Fairfield under such replacement arrangement during suchtime period.  For avoidance of doubt,this provision concerning replacement arrangement is not intended to and doesnot include teaching positions or short-term consulting engagements (thee monthsor less with any particular company); and

 

         (b)    pay the same portion of the premium costsassociated with continued medical and dental insurance coverage of Fairfieldand his family under COBRA, on the dates such payments come due for the twelve(12) period through December 31, 2005, as SITEL paid when Fairfield was a SITELemployee (with Fairfield paying the same contribution he had been paying as aSITEL employee), provided that Fairfield timely elects continued medical anddental insurance coverage under COBRA and subject to the customary termsapplicable to such continued insurance coverage under COBRA.

 

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    Any vacation time accrued forthe year 2004 in accordance with SITEL policy and not taken by Fairfield shallbe included in Fairfield’s last regular payroll check for the period endedDecember 31, 2004.  Fairfieldacknowledges that he is not entitled to any bonus in respect of 2004 or anyprior year.

 

     With respect to any otherSITEL benefit plans in which Fairfield participated prior to the EffectiveDate, Fairfield’s participation in such plans shall end as of the EffectiveDate and Fairfield shall be entitled to such benefits as may be payable to himin accordance with and subject to the terms and conditions of such plans as ineffect from time to time.  SITELacknowledges that Fairfield is vested in his contributions to SITEL’snon-qualified Executive Wealth Accumulation Plan and earnings thereon, and thatthe balance of Fairfield’s account under such plan shall be paid out toFairfield promptly and in any event within the 60 days provided by such plan inaccordance with Fairfield’s lump-sum election on file with SITEL.

 

     3.     **Consulting.**     During the twelve (12) month period endingDecember 31, 2005, Fairfield shall provide consulting services to SITEL asreasonably requested from time to time by SITEL’s Chief Executive Officer inthe latter’s discretion.  SITEL shall payFairfield a total of $1.00 for such consulting services, payable at the time ofthe first post-Effective Date payment specified in Paragraph 2(a).  The parties anticipate that Fairfield’s timecommitment hereunder will not exceed 10 hours per month.  SITEL acknowledges that Fairfield has otherbusiness, community and personal commitments and responsibilities and confirmsthat reasonable efforts will be made so that Fairfield can provide theseconsulting services to SITEL at times which are not in conflict with Fairfield’sother time commitments and responsibilities. Fairfield shall be reimbursed for all reasonable out-of-pocket expensesin connection with his consulting services pursuant to this Paragraph 3 whichare approved in advance by SITEL’s Chief Executive Officer and incurred andreported in accordance with SITEL’s policies and procedures.

 

     4.     **Effect on Options.**     As of the date of this Agreement,Fairfield has options to purchase a total of 315,000 shares of common stock ofSITEL.  Of these options, 115,000 wereissued to Fairfield when he was a non-employee director, all of which are vestedand will continue in accordance with their terms after the Effective Date (the “non-employeedirector options”) and the remaining 200,000 were issued to Fairfield after hebecame an executive of SITEL and by their terms would expire either concurrentlywith or within 90 days after the Effective Date (the “employee options”).  Pursuant to an Amendment to Option Agreementto be executed as of December 31, 2004, SITEL intends to permit the acceleratedvesting and continuance of the employee options for the period specified insuch amendment.

 

     Fairfield acknowledges thatfollowing the Effective Date he will accrue no further interest in any optionsto purchase stock of SITEL and that his only rights to exercise SITEL stockoptions shall be those specified in the original option agreements, as amendedin the case of the employee options by the Amendment to Option Agreement.  For purposes of clarity, Fairfield’s optionsare as follows:

 

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| **Number of** | ** ** | **Option** | ** ** | ** **     | ** ** | **Expiration** | ** ** | ** **                     | ** ** |
|---------------|------------|------------|------------|----------------|------------|----------------|------------|--------------------------------|------------|
| **Options**   | ** ** | **Price**  | ** ** | **Grant Date** | ** ** | **Date**       | ** ** | **Type**                       | ** ** |
|          |       |       |       |           |       |           |       |                           |       |
| 4,000         |       | $4.390625  |       | 7/3/1995       |       | 7/3/2005       |       | Non-employee director  options |       |
| 4,000         |       | $19.50     |       | 7/3/1996       |       | 7/3/2006       |       | Non-employee director  options |       |
| 12,000        |       | $16.8125   |       | 6/6/1997       |       | 6/6/2007       |       | Non-employee director  options |       |
| 67,000        |       | $4.78125   |       | 1/18/1999      |       | 1/18/2009      |       | Non-employee director  options |       |
| 18,000        |       | $2.71875   |       | 5/6/1999       |       | 5/6/2009       |       | Non-employee director  options |       |
| 10,000        |       | $2.51      |       | 5/4/2001       |       | 5/4/2011       |       | Non-employee director options  |       |
| 200,000       |       | $2.765     |       | 3/14/2002      |       | 3/14/2012      |       | Employee options               |       |

 

     5.     **SITEL’s ConfidentialInformation**.    Fairfieldacknowledges that all Confidential Information (defined below) acquired byFairfield during his director and employment relationships with SITEL shallremain exclusively the proprietary property of SITEL.  Through the Effective Date, Fairfield shallmaintain such Confidential Information as strictly confidential and use itsolely for the benefit of SITEL.  Fromand after the Effective Date, Fairfield shall continue to maintain the strictconfidentiality of, and shall not disclose or use, such ConfidentialInformation.

 

     “Confidential Information”as used in this Agreement means (a) information from of concerning SITEL’s (aswall as that of its related entities) products, services, current or futureactivities and plans relating to development, production or sales including thetiming of such matters, production, or design secrets, technical design orspecifications of products, intellectual property, research and development,processes, systems, marketing and other business strategies and tactics,procurement practices, pricing techniques and models, contract forms, contractpricing and other terms, requirements, costs, profit margins, discounts,rebates, finances, financial statements, and other financial information,credit history, policies, contracts, books, records and documents; (b) names ofSITEL’s (as well as that of its related entities) clients, vendors andstrategic partners and other information concerning such clients, vendors andstrategic partners and their respective and businesses, products, services,current or future activities and plans relating to development, production orsales including the timing of such matters, productions or design secrets,technical design or specifications of products, intellectual property, researchand development, processes, systems, marketing and other business strategiesand tactics, procurement practices, pricing techniques and models, contractforms, contract pricing and other terms, requirements, costs, profit margins,discounts, rebates, finances, financial statements, and other financialinformation, credit history, policies, contacts, books, records and documents,and for avoidance of doubt includes all information which is covered byconfidentiality agreements executed by SITEL with or for the benefit of suchclients, vendors and/or strategic partners; (c) all information of or aboutSITEL (or of or about any of its related entities) which is marked confidentialor proprietary; and (d) all other information which a reasonable person wouldunderstand is confidential and/or proprietary to SITEL or a related entity andwhich if disclosed would likely cause significant harm to SITEL.  All information referenced above shall beprotected as Confidential Information regardless whether it is written or oraland regardless of the media in which it is contained or by which it wascommunicated.  The term “ConfidentialInformation” shall not include information which Fairfield can demonstrate isgenerally known to the public (other than as a result of disclosures byFairfield in breach of his confidentiality obligations to SITEL).

 

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     6.     **Full Consideration**.     Fairfield expressly acknowledges that thecompensation provided in Paragraph 2 includes consideration for the settlement,waiver, release, and discharge or any and all claims Fairfield may have againstSITEL as well as its related entities and include all claims arising under thecommon law or under federal, state or local statute, law or regulation, orcause of action, regarding discrimination based on race, color, religion, sex,disability, national origin, political affiliation, veteran status, maritalstatus, or sexual orientation, retaliation, claims arising under the AgeDiscrimination and Employment Act, Older Workers Benefit Protection Act, Familyand Medical Leave Act, Title VII, the Americans With Disabilities Act, the FairLabor Standards Act, the Employee Retirement Income Security Act and any andall claims for compensation, bonuses, severance pay, vacation pay, expensereimbursement, attorneys fees and costs, breach of contract, wrongfuldischarge, interference with contract, intentional or negligent infliction ofemotional distress, defamation, promissory estoppel, detrimental reliance, orany other reason established by the common law or by federal, state, or locallaws.

 

     7.     **Cooperation**.  If any matters for which Fairfield wasresponsible during his employment remain pending as of the date of thisAgreement, Fairfield agrees to provide any cooperation or assistance reasonablyneeded by SITEL to complete such matters. If any claims, actions or proceedings involving or affecting SITEL orits related entities, or its or their respective officers, agents andemployees, arise which pertain to any period, transaction or occurrence priorto and including the Effective Date and in respect of which SITEL reasonably believesFairfield’s assistance or cooperation will be advisable, Fairfield agrees tocooperate fully with SITEL in investigating, preparing and testifying inrespect of such claims, actions or proceedings. Fairfield’s assistance and cooperation shall be provided without furtherconsideration beyond that provided in Paragraph 2 of this Agreement butFairfield shall be reimbursed for all reasonable out-of-pocket expenses inconnection with such assistance and cooperation which are approved in advanceby SITEL’s Chief Executive Officer and incurred and reported in accordance withSITEL’s policies and procedures.

 

     8.     **Return of Property**.  Fairfield shall promptly return to SITEL allproperty of SITEL which remains within Fairfield’s possession or control,including without limitation, as applicable, keys, access cards, passwords,corporate credit cards, corporate phone cards, computers, cellular phones, andautomobiles.

 

     9.     **Non-Competition**.  Fairfield acknowledges that SITEL would notbe willing to pay the compensation provided in Paragraph 2 or to engageFairfield’s consulting services pursuant to Paragraph 3 or to permit thecontinued holding of certain options pursuant to Paragraph 4 if Fairfield,prior to December 31, 2005, directly or indirectly, whether for his own accountof for or with (whether as agent, consultant, independent contractor, owner,partner or otherwise) any other person or any entity whatsoever which is orintends to be engaged in providing outsourced contact center services engagesin any of the activities described below in this Paragraph 9:

 

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          (a)     **Solicitation of Clients.**  Solicit, interfere in a harmful way withSITEL’s business relationship with, or endeavor to entice away from SITEL, anyperson or any entity of any kind whatsoever, in any geographic area of theworld where SITEL has done business, which was or is a client of SITEL, forwhich SITEL performed services, with respect to any business, product or servicethat is competitive to the products or services offered by SITEL, or underdevelopment by SITEL, as of December 31, 2004 (the date of separation ofFairfield’s employment relationship with SITEL).  This restriction shall apply only to suchclients of SITEL as were served by SITEL at any time during the one (1) yearperiod prior to December 31, 2004;

 

          (b)     **Solicitation ofProspective Clients**.  Solicit,interfere in a harmful way with SITEL’s attempted business relationship with,or endeavor to entice away from SITEL, any person or any entity of any kindwhatsoever, in any geographic area of the world where SITEL has done business,which was a prospective client of SITEL, with respect to any product or servicethat is competitive to the products or services offered by SITEL, or underdevelopment by SITEL, as of December 31, 2004. This restriction shall apply only to such prospective clients of SITELas were listed as a prospect of SITEL as of December 31, 2004 on any internalpipeline of SITEL to which Fairfield had access;

 

          (c)     **Solicitation of Employees**.  Solicit or endeavor to induce any of SITEL’semployees or consultants, who were in the employ or retainer of SITEL as ofDecember 31, 2004, to terminate their relationship with SITEL, or take awaysuch employees or consultants, or attempt to solicit, induce, recruit,encourage, or take away employees or consultants of SITEL, either for Fairfieldor for any other person or entity;

 

          (d)     **Solicitation ofProspective Employees**. Solicit, interfere in a harmful way with SITEL’s attempted employment orretention of, or endeavor to entice away from employment with SITEL any personwith whom SITEL had engaged in discussions concerning employment or consultingarrangements during the six (6) months period prior to December 31, 2004, andwith whom Fairfield had personal contact or knowledge as to SITEL’s discussionswith such person.

 

          (e)     **Solicitation of OtherBusiness Relations**.  Induce orattempt to induce any supplier, business partner, licensor, licensee, or otherbusiness relation of SITEL to cease doing business with SITEL, or interfere ina harmful way with the relationship between any such supplier, businesspartner, licensor, licensee, or other business relation and SITEL;

 

          (f)     **Disclosure or Use ofConfidential Information**. Communicate, divulge, use or disclose for use by any person or any otherentity whatsoever, any Confidential Information (as defined in Paragraph 5); or

 

          (g)     **Advise or Recommend Activities**.  Advise or recommend to any other person orany other entity whatsoever that they engage in any activity which Fairfield isrestricted from engaging in under subsections (a) through (f) above.

 

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     If Fairfield breached thisParagraph 9 in any respect, Fairfield shall not be entitled to any paymentscoming due under Paragraph 2 on any regular payday date after such breach (andshall immediately return to SITEL on demand any payments already received byFairfield pursuant to Paragraph 2 on or after such breach) and SITEL shall havethe right to terminate the employee options in accordance with the Amendment toOption Agreements.

 

     For avoidance of doubt, theforegoing provisions are not intended to, and do not, include indirectinvolvement consisting solely of Fairfield’ beneficial ownership, within themeaning of Rule 13d-3 promulgated under the Securities and Exchange Act of1934, of 2% or less of the outstanding securities of any class of securitiesissued by a publicly-traded entity.

 

     If Fairfield has any doubtsabout whether an activity he wishes to engage in may breach this paragraph 9 hemay provide at least 10 working days advance written notice of the proposedactivity to SITEL (to the separate attention of the CEO and the General Counselat 7277 World Communications Drive, Omaha, Nebraska 68122) including fulldetails.  If Fairfield has provided suchnotice (with the required full details) and SITEL has not delivered itsresponse (which may be positive, negative, or indicate that additional detailsare needed) within 10 working days after SITEL received the notice inaccordance with such provisions, then if Fairfield proceeds with such activityin strict accordance with such notice such activity will not be considered asbreaching this Paragraph 9.

 

     10.     **Non-Admission**.  This agreement shall not in any way beconstrued as an admission by SITEL, it officers, agents, or employees, of anywrongful or unlawful act or omission whatsoever against Fairfield or any otherperson, or by Fairfield of any wrongful or unlawful act or omission whatsoeveragainst SITEL or any other person.  SITELspecifically disclaims any liability to, or wrongful or unlawful act or omissionagainst, Fairfield or any other person on the part of itself, its officers,agents or employees.

 

     11.     **Waiver**.  As a material inducement to SITEL to enter intothis Agreement, Fairfield represents to SITEL that he has not filed anylawsuits, charges, or complaints with any local, state or federal agency orcourt of law arising from his relationship with SITEL, including the mutualtermination of such relationship. Fairfield further represents to SITEL that, subject to SITEL’scompliance with the terms of this Agreement, he will not seek to recover anymonetary damages against SITEL.

 

     12.     **Intent**.  The parties understand and agree that theoverriding and controlling intent of this Agreement is to accomplish a fullrelease of all claims or actions Fairfield has or might have against SITEL orany related entity, or which SITEL or any related entity has or might haveagainst Fairfield, for any wrongful, unlawful or unfair act or omission up toand including the date of the execution of this Agreement.  Fairfield, for himself and his successors andassigns, does hereby release, settle, acquit and forever discharge SITEL, andany related entity, its and their officers, agents and employees, and SITEL, foritself and its successors and assigns, does hereby release, settle, acquit andforever discharge Fairfield, of and from any and all claims, actions, causes ofaction, rights, demands, debts, damages, grievances, or any action of whatevernature, known or unknown, arising from or 

 

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in any way connected with the employment relationship between theparties, any actions taken by SITEL or any related entity or Fairfield duringthe employment relationship, the termination of that relationship and any otherdealings of any kind between Fairfield and SITEL or any related entity up tothe Effective Date.

 

     13.     **Knowing and Voluntary**.  Fairfield expressly acknowledges that heunderstands all the provisions of this Agreement and that he is knowingly andvoluntarily entering into this Agreement. Fairfield further acknowledges that SITEL has encouraged and given himthe opportunity to thoroughly discuss all aspects of this Agreement with hisattorney and other advisors before signing this Agreement.

 

     14.     **Governing Law**.  This Agreement is made and entered into inthe State of Nebraska and shall in all respects be interpreted, enforced, andgoverned under the laws of said State. The language of all parts of this Agreement shall in all cases be construedas a whole, according to its fair meaning, and not strictly for or against anyof the parties hereto.

 

     15.     **Effect of Invalidity**.  If any provision of the Agreement is declaredor determined by any court of competent jurisdiction to be illegal, invalid,void, or unenforceable, the legality, validity, and enforceability of theremaining provisions shall not be affected thereby, and such illegal, invalid,void or unenforceable or invalid provision shall be deemed not a part of thisAgreement.

 

     16.     **Entire Agreement**.  This Agreement sets forth the entireagreement between the parties and, unless otherwise specified herein, fullysupersedes any and all prior agreements or understandings between the partiesas to Fairfield’s employment.  SITELacknowledges that the Indemnification Agreement dated on or about July 3, 1995relating to Fairfield’s service as a director and later an officer of SITELremains in effect according to its existing terms and conditions.

 

     17.     **Opportunity to Review**.  Fairfield expressly acknowledges that SITELhas advised him that he may take up to twenty-one (21) days in which to reviewthe terms of this Agreement, and that following his execution of thisAgreement, he has an additional seven (7) days in which to revoke hisagreement.  Any such revocation shall notaffect the resignations tendered by Fairfield pursuant to Paragraph 1, which anyshall remain in full force and effect from the date thereof.

 

| /s/ Bill L. Fairfield |
|-----------------------|
| BILL L. FAIRFIELD     |
|                  |
| SITEL CORPORATION     |
| By:                   | /s/ James F. Lynch |
|                  | James F. Lynch, CEO |

 

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