CHANGE IN CONTROL AGREEMENT
Exhibit 10.17
THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”), effective this 10th day of March, 2023 (the “Effective Date”), is by and among Gunston Consulting, LLC, a Virginia limited liability company (“Consultant”), Medalist Diversified REIT, Inc., a Maryland corporation (“REIT”), and Xxxxx Xxxxxxx (“Gunston-Employee”).
W I T N E S S E T H:
WHEREAS, pursuant to a Consulting Agreement dated as of March 1, 2020 (the “Consulting Agreement”), REIT engaged Consultant, as an independent contractor, to provide the services specified in the Consulting Agreement;
WHEREAS, XXXX has previously authorized Consultant to engage Gunston-Employee as an employee of Consultant, on the terms and conditions specified in the Letter Agreement, dated November 30, 2022, between Consultant and REIT (the “Letter Agreement”), to assist Consultant in providing services to REIT pursuant to the Consulting Agreement;
WHEREAS, on March 10, 2023, REIT announced the formation by the Board of Directors of REIT (the “Board”) of a special committee of independent directors (the “Special Committee”) to explore potential strategic alternatives;
WHEREAS, in order to incentivize Gunston-Employee to remain employed by Consultant and, in such capacity, to continue to assist Consultant in providing services to REIT pursuant to the Consulting Agreement and the Letter Agreement, REIT desires to authorize Consultant to pay Gunston-Employee, and to reimburse Consultant for, the compensation set forth below, subject to the terms and conditions set forth herein;
WHEREAS, the Board, upon recommendation of the Special Committee, has determined that the arrangements provided for in this Agreement are advisable and in the best interests of REIT.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows:
| 1. | Definitions. The following terms shall have the following meanings: |
“Cause Event” includes, but is not limited to, each of the following: (i) any act of fraud, dishonesty or neglect of services by Gunston Employee in connection with the services to be provided under this Agreement or against any Company customer, tenant, vendor, lender or affiliated company; or (ii) the breach or prospective breach of any provision of this Agreement by Gunston Employee.
“Change in Control” means any of the following events: (i) any person or entity, including a “group” as defined in Section 13(d)(3) of the Exchange Act, other than REIT or a wholly-owned subsidiary thereof, becomes the direct or indirect beneficial owner of REIT’s securities having 50% or more of the combined voting power of the then outstanding securities of REIT; (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of REIT after such transaction are held in the aggregate by the holders of REIT’s securities entitled to vote generally immediately prior to such transaction; (iii) a complete liquidation or dissolution of REIT; (iv) the sale or other disposition of all or substantially all of the assets of REIT (whether effectuated by REIT or by a subsidiary of REIT) to any person or entity (other than to a subsidiary of REIT); or (v) a majority of the members of the Board of Directors of REIT are replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by the directors comprising a majority of the Board of Directors of REIT immediately prior to the replacement of the first director by an unendorsed person in such twelve (12)-month period.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Successor” means the successor to XXXX or the purchaser from REIT, as the case may be, in a transaction that results in a Change in Control.
| 2. | Retention Benefits and Other Matters Related to Termination. |
| i. | a Change in Control occurs at a time when Gunston-Employee remains employed by Consultant and no Cause Event has then occurred and within twelve (12) months after the date of the Change in Control, Gunston-Employee elects to terminate his engagement with Consultant to provide services to REIT (or the Successor, if any) because: (i) REIT or any Successor requires Gunston-Employee to relocate his primary work location by more than fifty (50) miles from the location as of the Effective Date, (ii) REIT (or the Successor, if any) directs Consultant to reduce the annual compensation of Gunston-Employee, (iii) REIT (or the Successor, if any) directs Consultant to materially diminish Gunston-Employee’s position, authority, duties or responsibilities with respect to services to REIT (or the Successor, if any), or (iv) REIT (or the Successor, if any) commits a material breach of the Consulting Agreement and fails to cure such material breach within thirty (30) days after receiving written notice of such material breach. |
| ii. | Consultant terminates, at the request of XXXX, the employment of Gunston-Employee (other than on account of a Cause Event) ninety (90) or fewer days prior to the Change in Control (in which event, the date of the Triggering Event shall be the date of the Change in Control). |
For the avoidance of doubt, cessation or termination of the services of Gunston-Employee due to death or disability of Gunston-Employee shall not give rise to a Triggering Event.
| 3. | Deferred Compensation and Severance Omnibus Provisions. |
e.Notwithstanding any of the provisions of this Agreement, neither REIT nor Consultant shall be liable to Gunston-Employee if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A or is otherwise subject to an excise tax imposed on Gunston-Employee.
IN WITNESS WHEREOF, REIT, Consultant, and Gunston-Employee have caused this Agreement to be executed, all effective as of the Effective Date.
GUNSTON CONSULTING, LLC | | GUNSTON-EMPLOYEE | |
By: | /s/ X. Xxxxx Xxxx, Xx. | | /s/ Xxxxx Xxxxxxx |
Name: Title: | X. Xxxxx Xxxx, Xx. Managing Member | | Xxxxx Xxxxxxx |
| | ||
By: | /s/ Xxxxxxx X’Xxxxx | | |
Name: | Xxxxxxx X’Xxxxx | | |
Title: | Independent Director | | |
EXHIBIT A
RELEASE
| a. | For and in consideration of the Retention Amount payable by Gunston Consulting, LLC, a Virginia limited liability company (“Consultant”) to Xxxxx Xxxxxxx (“Xxxxxxx”), and reimbursable by Medalist Diversified REIT, Inc., a Maryland corporation (“REIT”), pursuant to that certain Change in Control Agreement (“Agreement”), effective March 10, 2023, by and among Consultant, REIT, and Xxxxxxx, and other good and valuable consideration, Xxxxxxx, for himself and his heirs, executors, administrators, successors and assigns, hereby releases and forever discharges Consultant, REIT, Medalist Diversified Holdings, L.P., MDR Franklin Square, LLC, MDR Hanover Square, LLC, MDR Ashley Plaza, LLC, MDR Brookfield, LLC, MDR Lancer, LLC, MDR Greenbrier, LLC, MDR Parkway, LLC, MDR Salisbury, LLC, and their past, present or future directors, officers, employees, agents, members, partners, shareholders, attorneys, insurers, consultants (whether any such person or entity was acting as an agent or in an individual capacity), and employee benefit plans (collectively, the “Releasees”), from all claims, demands, liabilities, or causes of action of any nature whatsoever, whether known or unknown, which Xxxxxxx had or has against any of the Releasees from the beginning of time until the termination of the Agreement (hereinafter, the “Claims”). |
| b. | Without limiting the generality of the foregoing, this Release includes, but is not limited to, any and all Claims, whether known or unknown, which Xxxxxxx had or has as a result of his employment with Consultant and Consultant’s consulting arrangement with REIT or any of the Releasees or the cessation thereof, including, without limitation, any and all Claims alleging wrongful termination, the failure to pay wages, the failure to pay overtime, retaliatory discharge, discrimination, harassment or retaliation in employment on the basis of race, color, sex, religion, national origin, age, disability, handicap, marital status, or any other category protected by applicable federal, state or local law, and/or the violation of any rights under: the Age Discrimination in Employment Act; the Xxxxx Xxxxxxxxx Fair Pay Act of 2009; Title VII of the Civil Rights Act of 1964; the Civil Rights Acts of 1866 and 1871; the Civil Rights Act of 1991; the Equal Pay Act; the Americans with Disabilities Act; the Family and Medical Leave Act; the Fair Labor Standards Act; the Employee Retirement Income Security Act of 1974; the National Labor Relations Act; the Immigration Reform and Control Act of 1986; the Occupational Safety and Health Act; the Fair Credit Reporting Act; the Xxxxxxxx-Xxxxx Act of 2002; and all other federal, state or local laws or regulations, including those prohibiting employment discrimination or regulating employment or the termination of employment in any way. |
| x. | Xxxxxxx represents that he has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any Claim, whether known or unknown, or any portion thereof or interest therein, which he had, has or may have against Releasees. |
| d. | Nothing herein precludes or impedes Xxxxxxx from filing or participating in a charge of discrimination filed with the Equal Employment Opportunity Commission, the National Labor Relations Board, or any other similar state or federal agency, but Xxxxxxx agrees and understands that he has no right to and may not have any right to any personal recovery or monetary relief as a result thereof or as a result of any other person or agency filing such a charge or administrative claim. |
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DateColin Xxxxxxx
