Executive Retention and Severance Agreement
Exhibit 10.3
This Executive Retention and Severance Agreement (the “Agreement”) is made and entered into as of
May 6, 2008 (the “Effective Date"), by and between Move, Inc. and Xxxxx Xxxxxxxxx (the
"Executive”). Capitalized terms used in this Agreement shall have the meanings set forth in Section
4, below.
1. Purpose. The purpose of this Agreement is (i) to encourage Executive to remain in the
employ of the Company (as defined in Section 4.3) and to continue to devote Executive’s full
attention to the success of the Company and (ii) to provide specified benefits to Executive in the
event of a Termination Upon Change of Control or a Termination in Absence of Change of Control, as
such terms are defined in Section 4 of this Agreement.
2. Termination Upon Change of Control. In the event of Executive’s Termination Upon a
Change of Control, provided that Executive complies with Section 5.2 below and provides the
transition services that the Company may request as described in Section 5.3 below, Executive shall
receive the following payments and benefits:
2.1 Accrued Salary and Vacation, and Benefits. Executive shall receive all salary and
accrued vacation (less applicable withholding) earned through the conclusion of the transition
period (or termination date if there is no transition period requested by the Company), and the
benefits, if any, under Company benefit plans to which Executive may be entitled pursuant to the
terms of such plans. In addition, the Company shall pay 100% of the Executive’s COBRA premiums for
the same or reasonably equivalent medical coverage he had on the date of his termination for a
period not to exceed the earlier of one (1) year following termination or until Executive becomes
eligible for medical insurance coverage at a new employer.
2.2 Cash Severance Payment. Executive shall receive a lump sum payment in an amount
equal to twelve (12) months of Executive’s base salary (less applicable withholding), paid within
five (5) business days after the conclusion of the transition period (or after the termination date
if there is no transition period requested by the Company).
2.3 Stock Award Acceleration. Immediately prior to the effective date of the Change
of Control, 100% of all outstanding stock options granted and restricted stock issued by the
Company to Executive prior to the date of this Agreement, including the options described in the
letter from W. Xxxxxxx Xxxx dated August 1, 2007 (the “Letter”), (collectively the “Outstanding
Options”), shall vest. In addition, all Outstanding Options, including the accelerated options
described above, shall be exercisable by Executive for a period of one year following the end of
such transition period (if any) or one (1) year following termination if the Company requests no
transition period.
2.4 Cash Bonus Payment. Executive shall receive a payment in an amount (the “Minimum
Bonus Payment”) equal to fifty percent (50%) of Executive’s “Target Bonus” for the year in which
Executive’s termination date occurs. In addition, if Executive’s termination date occurs in the
second half of the year (i.e., after June 30th), and all financial performance criteria established
in Executive’s bonus plan are achieved by the Company for the full year in which Executive’s
termination date occurs, then the Company will pay Executive an additional amount
(the “Contingent Bonus Payment”) equal to (i) a pro rata portion of Executive’s Target Bonus
prorated based on the number of days Executive is employed by the Company during such year, less
(ii) the Minimum Bonus Payment. “Target Bonus” means the total bonus amount Executive would be
entitled to receive for the entire year assuming achievement of 100% of the financial and
non-financial objectives established in Executive’s bonus plan (but not including any additional
bonus amount payable for over achievement of objectives). The Minimum Bonus Payment shall be paid
in a lump sum within five (5) business days after the conclusion of the transition period (or after
the termination date if there is no transition period requested by the Company) without regard to
the actual satisfaction of any performance criteria. The Contingent Bonus Payment, if any, shall be
paid in a lump sum within ninety (90) days after the end of the year in which Executive’s
termination date occurs. Payments under this section shall be less applicable withholding.
3. Termination in Absence of Change of Control. In the event of Executive’s Termination in
Absence of a Change of Control, provided that Executive complies with Section 5.2 below and
performs the transition services that the Company may request as described in Section 5.3 below,
Executive shall receive the following payments and benefits:
3.1 Basic Severance Compensation. Executive shall receive all salary and accrued
vacation (less applicable withholding) earned through the conclusion of the transition period (or
termination date if there is no transition period requested by the Company), and the benefits, if
any, under Company benefit plans to which Executive may be entitled pursuant to the terms of such
plans. In addition, the Company shall pay 100% of the Executive’s COBRA premiums for the same or
reasonably equivalent medical coverage he had on the date of his termination for a period not to
exceed the earlier of one (1) year following termination or until Executive becomes eligible for
medical insurance coverage at a new employer.
3.2 Cash Severance Payment. Executive shall receive a lump sum payment in an amount
equal to twelve (12) months of Executive’s base salary (less applicable withholding), paid within
five (5) business days after the conclusion of the transition period (or termination date if there
is no transition period requested by the Company.)
3.3 Stock Award Acceleration. Upon Executive’s termination date, 100% of all
outstanding stock options granted and restricted stock issued by the Company to Executive prior to
the date of this Agreement, including the options described in the letter from W. Xxxxxxx Xxxx
dated August 1, 2007 (the “Letter”), (collectively the “Outstanding Options”), shall vest. In
addition, all Outstanding Options, including the accelerated options described above, shall be
exercisable by Executive for a period of one (1) year following the end of such transition period
(if any) or one year following termination if the Company requests no transition period.
3.4 Cash Bonus Payment. Executive shall receive a payment in an amount (the “Minimum
Bonus Payment”) equal to fifty percent (50%) of Executive’s “Target Bonus” for the year in which
Executive’s termination date occurs. In addition, if Executive’s termination date occurs in the
second half of the year (i.e., after June 30th), and all financial performance criteria established
in Executive’s bonus plan are achieved by the Company for the full year in which Executive’s
termination date occurs, then the Company will pay Executive an additional amount
(the “Contingent Bonus Payment”) equal to (i) a pro rata portion of Executive’s Target Bonus
prorated based on the number of days Executive is employed by the Company during such year, less
(ii) the Minimum Bonus Payment. “Target Bonus” means the total bonus amount Executive would be
entitled to receive for the entire year assuming achievement of 100% of the financial and
non-financial objectives established in Executive’s bonus plan (but not including any additional
bonus amount payable for over achievement of objectives). The Minimum Bonus Payment shall be paid
in a lump sum within five (5) business days after the conclusion of the transition period (or after
the termination date if there is no transition period requested by the Company) without regard to
the actual satisfaction of any performance criteria. The Contingent Bonus Payment, if any, shall be
paid in a lump sum within ninety (90) days after the end of the year in which Executive’s
termination date occurs. Payments under this section shall be less applicable withholding.
4. Definitions. Capitalized terms used, but not previously defined, in this Agreement shall
have the meanings set forth in this Section 4.
4.1 “Cause” means (a) your willful and continued failure to perform substantially your
duties with the Company (other than any such failure resulting from incapacity due to physical or
mental illness, and specifically excluding any failure by you, after reasonable efforts, to meet
performance expectations), for thirty (30) days after a written demand for substantial performance
is delivered to you by the President or Chief Executive Officer of Move which specifically
identifies the manner in which the President or Chief Executive Officer believes that you have not
substantially performed your duties, or (b) your willful engagement in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company. For purposes of this
provision, no act or failure to act, on the part of you, shall be considered “willful” unless it is
done, or omitted to be done, by you in bad faith without reasonable belief that your action or
omission was in the best interests of the Company.
4.2 “Change of Control” means (a) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a
trustee or other fiduciary holding securities of the Company under an employee benefit plan of the
Company, that becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A)
the outstanding shares of common stock of the Company or (B) the combined voting power of the
Company’s then-outstanding securities; (b) the Company is party to a merger or consolidation, or
series of related transactions, which results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or another entity) at least fifty (50%)
percent of the combined voting power of the voting securities of the Company or such surviving or
other entity outstanding immediately after such merger or consolidation; (c) the sale or
disposition of all or substantially all of the Company’s assets (or consummation of any
transaction, or series of related transactions, having similar effect), unless at least fifty (50%)
percent of the combined voting power of the voting securities of the entity acquiring those assets
is held by persons who held the voting securities of the Company immediately prior to such
transaction or series of transactions; (d) there occurs a change in the composition of the Board of
Directors of the Company within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors; (e) the dissolution or
liquidation of the Company, unless after such liquidation or dissolution all or substantially all
of the assets of the Company are held in an entity at least fifty (50%) percent of the combined
voting power of the voting securities of which is held by persons who held the voting securities of
the Company immediately prior to such liquidation or dissolution; or (f) any transaction or series
of related transactions that has the substantial effect of any one or more of the foregoing.
4.3 “Company” means Move, Inc., any successor thereto and, following a Change of
Control, any successor or owner of substantially all the business and/or assets of Move, Inc.
4.4 “Diminution of Responsibilities” means the occurrence of any of the following
conditions, without Executive’s consent and which condition is not cured by the Company within ten
(10) days after notice by Executive specifying the condition: (a) a reduction by the Company of
Executive’s duties, responsibilities, authority or reporting relationship such that Executive no
longer serves in a substantive, senior executive role for the Company comparable in stature to
Executive’s current role, or no longer reports to the President of the Company; (b) a reduction in
Executive’s base salary or the percentage of his base salary on which his target bonus is based,
provided that a reduction in base salary that is the result of a general reduction in salary in an
amount similar to reductions for other similarly situated Company executives shall not constitute a
“Diminution of Responsibilities”; (c) a material reduction in benefits (other than future option
grants), provided that a reduction in benefits that is the result of a general reduction in
benefits in an amount similar to reductions for other similarly situated Company employees shall
not constitute a “Diminution of Responsibilities”; (d) the Company’s requiring Executive to be
based at any office or location more than 50 miles from the Company’s offices in Richmond, British
Columbia or its headquarters in Westlake Village, California; or (e) a material breach by the
Company of the terms of this Agreement or the Letter to you.
4.5 “Disability” means the inability to engage in the performance of Executive’s
duties by reason of a physical or mental impairment which constitutes a permanent and total
disability in the opinion of a qualified physician.
4.6 “Incumbent Director” means a director who (1) is a director of the Company as of
the Effective Date, (2) is elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent Directors at the time of
such election or nomination, or (3) was not elected or nominated in connection with an actual or
threatened proxy contest relating to the election of directors to the Company.
4.7 “Termination in Absence of Change of Control” means:
a) any termination of employment of Executive by the Company without Cause (i) that
occurs prior to the date that the Company first publicly announces it has entered
into a definitive agreement or that the Company’s Board of Directors has endorsed a
tender offer for the Company’s stock that in either case if consummated would
result in a Change of Control (even though consummation is subject to approval or
requisite tender by the Company’s stockholders and other conditions and
contingencies), (ii) that occurs after the Company announces that
any definitive agreement or tender offer referred to in clause (i) has been
terminated and before it announces it has entered into another such definitive
agreement or the Board of Directors has endorsed another tender offer, or (iii)
that occurs more than twelve (12) months following the consummation of any
transaction or series of related transactions that result in a Change of Control;
or
(b) any resignation by Executive based on a Diminution of Responsibilities that
occurs within one-hundred and twenty (120) days following the occurrence of one of
the conditions that constitutes a Diminution of Responsibilities, but only where
such Diminution of Responsibilities occurs: (i) prior to the date that the Company
first publicly announces it has entered into a definitive agreement or that the
Company’s Board of Directors has endorsed a tender offer for the Company’s stock
that if consummated would result in a Change of Control (even though consummation
is subject to approval or requisite tender by the Company’s stockholders and other
conditions and contingencies), (ii) after the Company announces that any definitive
agreement or tender offer referred to in clause (i) has been terminated and before
it announces it has entered into another such definitive agreement or the Board of
Directors has endorsed another tender offer, or (iii) more than twelve (12) months
following the consummation of any transaction or series of related transactions
that result in a Change of Control.
Notwithstanding anything to the contrary herein, the term Termination in Absence of
Change of Control shall not include termination of the employment of Executive (1) by the Company
for Cause; (2) as a result of the voluntary termination of employment by Executive for reasons
other than a Diminution of Responsibilities; or (3) that is a Termination Upon a Change of Control.
4.8 “Termination Upon Change of Control” means:
(a) any termination of the employment of Executive by the Company without Cause
during the period commencing on or after the date that the Company first publicly
announces that it has signed a definitive agreement or that the Company’s Board of
Directors has endorsed a tender offer for the Company’s stock that in either case
when consummated would result in a Change of Control (even though consummation is
subject to approval or requisite tender by the Company’s stockholders and other
conditions and contingencies) and ending at the earlier of the date on which the
Company publicly announces that such definitive agreement or tender offer has been
terminated without a Change of Control or on the date which is twelve (12) months
following the consummation of any transaction or series of transactions that
results in a Change of Control; or
(b) any resignation by Executive based on a Diminution of Responsibilities where
(i) such Diminution of Responsibilities occurs during the period commencing on or
after the date that the Company first publicly announces that it has signed a
definitive agreement that when consummated would result in a Change of Control
(even though consummation is subject to approval or requisite
tender by the Company’s stockholders and other conditions and contingencies) and
ending on the date which is twelve (12) months following the consummation of the
transaction or series of transactions that results in the Change of Control, and
(ii) such resignation occurs within one-hundred and twenty (120) days following
such Diminution of Responsibilities.
Notwithstanding anything to the contrary herein, the term Termination Upon Change of Control
shall not include any termination of the employment of Executive (1) by the Company for Cause; (2)
as a result of the voluntary termination of employment by Executive for reasons other than a
Diminution of Responsibilities; or (3) that is a Termination in Absence of Change of Control.
5. No Other Benefits; Release; Transition Period; Termination Under Other Circumstances.
5.1 No Other Benefits Payable. Executive shall be entitled to no other compensation,
benefits, or other payments from the Company as a result of any termination of employment.
5.2 Release of Claims. The Company may condition payment of the cash severance and
accelerated vesting of stock awards in Sections 2 or 3 of this Agreement upon the delivery by
Executive of a signed mutual release of known and unknown claims related to Executive’s employment
in a form satisfactory to the Company.
5.3 Transition Period. In the event of Executive’s Termination Upon a Change of
Control or Termination in Absence of a Change of Control, the Company shall have the right
exercisable by notice to Executive given at any time prior to ten (10) days after the effective
date of such termination to request that Executive remain employed by the Company for such period
following such termination as the Company may elect, but in no event longer than one hundred eighty
(180) days following the effective date of such termination. If Executive agrees to such transition
period (by giving notice to the Company within five (5) days after the Company’s notice to
Executive), then during such period Executive shall remain a full time employee of the Company at
the rate of compensation and with the same benefits as in effect on the date of his termination,
shall perform such duties consistent with his prior responsibilities as the Company shall
reasonably request, including services designed to transition his duties and responsibilities to
one or more replacements, and at the conclusion of the transition period shall receive the benefits
provided in Section 2 or 3 above as the case may be. If the Company requests a transition period as
provided above and Executive does not agree to it, Executive shall receive the benefit of Section
2.1 or 3.1 (computed through the date of termination), as the case may be, but shall not receive
the benefit of the other provisions of this Agreement. The Company need not request a transition
period, in which case Executive shall receive the benefit of Section 2 or Section 3, as the case
may be, and the other provisions of this Agreement based on the date of actual termination. The
Company shall have the right at any time to terminate Executive during the transition period, in
which case Executive shall be entitled to the benefits of Section 2 or Section 3, as the case may
be. Executive shall have the right to terminate his employment at any time during the transition
period, but if Executive shall fail or refuse to complete the transition period, other than as a
result of death or Disability, then Executive shall not be entitled to the benefit of Section 2 or
Section 3 (except Section 2.1 or 3.1 through the date such services cease).
In the case of Executive’s death or Disability during the transition period, he shall be deemed to
have completed the transition period service for the full period requested.
5.4 Termination Under Other Circumstances. In the event of Executive’s termination for
Cause, or any resignation by Executive that does not constitute a Termination Upon a Change of
Control or a Termination in Absence of Change of Control, the Company’s sole financial obligations
to Executive shall be to pay to Executive all salary and accrued vacation (less applicable
withholding) earned through the effective date of Executive’s termination or resignation, to honor
Executive’s vested options and restricted stock (if any), and to provide the benefits, if any,
under the Company’s benefit plans to which Executive may be entitled pursuant to the terms of such
plans. In the event of a termination of Executive’s employment (1) by the Company as a result of
the Disability of Executive or (2) as a result of the death of Executive, Executive (or Executive’s
estate) shall be entitled to the benefits of Section 3.
6. Agreement Not to Solicit. If Company performs its obligations to deliver the severance
payments and benefits set forth in Sections 2 or 3 of this Agreement, then for a period of one (1)
year after Executive’s termination of employment, Executive will not solicit or seek to induce any
employee, distributor, vendor, representative or customer of the Company to discontinue that
person’s or entity’s relationship with or to the Company.
7. Arbitration. Any claim, dispute or controversy arising out of this Agreement, the
interpretation, validity or enforceability of this Agreement or the alleged breach thereof shall be
submitted by the parties to binding arbitration by the American Arbitration Association. The site
of the arbitration proceeding shall be in Los Angeles County, California, or another location
mutually agreed to by the parties.
8. Conflict in Benefits.
8.1 Effect of Agreement. This Agreement, together with the Letter, a copy of which is
attached hereto and incorporated herein by reference, the option agreements by which the option
grants referred to in the Letter are evidenced, option agreements relating to option grants issued
prior to the date of this Agreement, and the confidentiality and invention assignment agreement
executed by you, shall supersede all prior arrangements, whether written or oral, and
understandings regarding Executive’s employment with the Company and shall be the exclusive
agreement for the determination of any compensation due to Executive from Company as a result of
Executive’s employment with Company. In the event of any conflict in these various documents, the
provisions of this agreement shall control the others and the Letter shall control the option
agreements.
9. Miscellaneous.
9.1 Successors of the Company. The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession or
assignment had taken place. In the event of a Change in Control in which the options granted by the
Company to Executive cannot be assumed by the successor or assign, Company shall give Executive
reasonable advanced notice of such Change in Control, all options granted by the Company to
Executive shall vest and become exercisable prior to such Change in Control, and Company shall
allow Executive a reasonable opportunity to exercise such options prior to such Change in Control.
9.2 Modification of Agreement. This Agreement and the Letter referred to in Section
8.1 above may be modified, amended or superseded only by a written agreement signed by Executive
and the Company’s President, Chief Executive Officer, or an authorized member of the Board of
Directors of the Company.
9.3 Governing Law. This Agreement shall be interpreted in accordance with and governed
by the laws of the State of California.
9.4 No Employment Agreement. Executive acknowledges and understands that his
employment with the Company is at-will and can be terminated by either party for no reason or for
any reason not otherwise specifically prohibited by law. Nothing in this Agreement is intended to
alter Executive’s at-will employment status or obligate the Company to continue to employ Executive
for any specific period of time, or in any specific role or geographic location.
EXECUTIVE
|
MOVE, INC. | |||
/s/ Xxxxx Xxxxxxxxx
|
By: /s/ W. Xxxxxxx Xxxx | |||
Xxxxx Xxxxxxxxx
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Name: Xxxx Xxxx | |||
| Title: CEO |
