AMENDED AND RESTATED EMPLOYMENT AGREEMENT FOR RODERICK H. DILLON, JR.
Exhibit 10.8
AMENDED AND RESTATED
FOR
XXXXXXXX X. XXXXXX, XX.
This Amended and Restated Employment Agreement (“Agreement”) is entered into this 28th
day of February, 2008, by and between Diamond Hill Investment Group, Inc. (hereinafter referred to
as the “Employer”) and Xxxxxxxx X. Xxxxxx, Xx. (hereinafter referred to as the “Executive”).
WHEREAS, the Executive is currently employed as the President and Chief
Executive Officer (“CEO”) of the Employer pursuant to the terms of that certain Employment
Agreement, dated August 10, 2007 (“Prior Agreement”); and
WHEREAS, the Executive and the Employer previously agreed to amend the Prior
Agreement, and wish to amend and restate the Prior Agreement for purposes of Section 409A of the
Internal Revenue Code effective January 1, 2008; and
WHEREAS, the Executive desires to continue his employment with the Employer in
such capacity under the terms of this Agreement which shall supersede the terms of the Prior
Agreement; and
NOW, THEREFORE, and in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and adequacy of which is agreed to by the parties,
the Employer and the Executive hereby mutually agree as follows:
1. Employment and Duties. The Employer hereby employs the Executive, and the
Executive hereby accepts continued employment with the Employer upon the terms and conditions
hereinafter set forth. The Executive will continue to serve the Employer as its President and CEO.
In such capacity, the Executive will report directly to the Board of Directors of the Employer
(the “Board”) and have all powers, duties, and obligations as are normally associated with such
positions. Subject to the provisions of Paragraph 5 [“Termination of Employment”], the Executive
will further perform such other duties and hold such other positions related to the business of the
Employer and its Affiliates as may from time to time be reasonably requested of him by the Board;
provided that the Executive shall not be required to perform such services that involve a material
decrease in the level of responsibility currently maintained by the Executive. For purposes of
this Agreement, an “Affiliate” shall mean any corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture, trust, association or
organization which is, directly or indirectly, controlled by, or under common control with, the
Employer. Except as otherwise set forth in this Agreement, the Executive will devote all of his
skills and substantially all of his time and attention to said positions and in furtherance of the
business and interests of the Employer and its Affiliates and will not directly or indirectly
render any services of a business, commercial or professional nature to any person or organization
without the prior written consent of the Board (which consent will not be unreasonably withheld or
delayed); provided, however, that the
Executive will not be precluded from participation in
community, civic, charitable or similar activities which do not unreasonably interfere with his
responsibilities hereunder.
2. Term of Employment
a. Original Term. This Agreement will be effective upon execution by
both parties. The term of employment will begin, or be deemed to have begun, on January 1, 2006
(the “Effective Date”), and to the extent the Executive’s Compensation (as defined in Section 3,
below) is increased, retroactive payments will be made back to the Effective Date within 30 days of
the execution of this Agreement. The Agreement will continue through the five-year period ending
on the day before the fifth anniversary date of the Effective Date, subject, however, to prior
termination or to extension, as herein provided.
b. Extension of Term. The Employer and the Executive agree that the Board will
review the Executive’s performance with the intent that, if the Executive’s performance so
warrants, the Employer may extend the term of this Agreement for additional time periods to be
determined in the discretion of the Board and as agreed upon by the Executive. By October 1, 2010,
or, in the event that this Agreement is extended as provided for in this Paragraph 2(b), within
ninety (90) days preceding the end of any extension period, the Chairman of the Board (the
“Chairman”) will notify the Executive of the Employer’s decision whether or not to grant an
extension of this Agreement for an additional time period. In the event that the Chairman fails to
notify the Executive, on or before the date described in the preceding sentence, of the decision
regarding the extension of the term of this Agreement, the term of this Agreement will
automatically be extended for an additional one-year period.
3. Compensation.
a. Salary. The Executive will receive an initial annual base salary
of a minimum of $360,000, which may be increased on an annual basis, but not decreased without the
Executive’s written consent, by the Board during the term of this Agreement. In the event that the
Board increases the Executive’s initial base salary, the amount of the initial base salary,
together with any increase(s) will be his base salary (hereinafter referred to as the “Base
Salary”). Following the end of each calendar year, and no later than March 15 of each year, the
Board will review the Executive’s Base Salary, and in the event that the Company has met profit and
growth goals agreed upon between the Board and the Executive, the Base Salary will be increased by
a percentage determined by the Board, based upon its review of objective information reflecting the
base salaries of executive officers of similarly sized entities in the same business as the
Employer. The Base Salary will be payable in accordance with the Employer’s regular payroll
payment practices.
b. Bonus. Each calendar year during which the Employer has in effect a
performance-based compensation plan (the “Performance Plan”) in compliance with the provisions of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), the Executive will be
eligible for bonus compensation equal to a specified percentage of a bonus pool established for
employees of the Employer (the “Bonus”). Such bonus pool will be based upon the attainment of
goals and objectives which may include average assets under management, investment advisory revenue
and target operating profit margin for the relevant
calendar year. The Executive’s percentage of
the bonus pool will be determined by the Compensation Committee of the Board, based upon his
satisfaction of certain performance criteria, including, but not limited to, investment performance
of client portfolios and his overall contribution to the investment team and to the firm. All
bonus payments to be made pursuant to this Paragraph 3(b) will be made pursuant to the terms and
conditions of the Performance Plan and will be paid to the Executive in either cash or equity
awards under the Employer’s Equity Incentive Plan no later than March 15th of the calendar year
following the calendar year for which such bonus is payable.
4. Fringe Benefits and Expenses.
a Fringe Benefits. The Employer will provide the Executive with all
health and life insurance coverages, disability programs, tax-qualified retirement plans, equity
compensation programs, paid holidays, paid vacation, perquisites, and such other fringe benefits of
employment as the Employer may provide from time to time to actively employed senior executives of
the Employer; and consistent with the foregoing the Executive shall be entitled to a minimum of the
following benefits during the term of this Agreement:
| (i) | standard health insurance of such coverage and term as provided by the Employer to actively employed senior executives of the Employer; | ||
| (ii) | a minimum of six (6) weeks paid vacation each year, based on current year Base Salary; | ||
| (iii) | continued participation in the Employer’s 401(k) retirement savings plan; | ||
| (iv) | participation in such other health, disability, insurance, pension, profit sharing or other employee benefit plan that the Employer may establish from time to time in which the Executive is otherwise eligible to participate. |
Notwithstanding any provision contained in this Agreement, the Employer may discontinue or
terminate at any time any employee benefit plan, policy or program, now existing or hereafter
adopted, to the extent permitted by the terms of such plan, policy or program and will not be
required to compensate the Executive for such discontinuance or termination.
b. Expenses. The Employer shall reimburse the Executive for all reasonable
travel, industry, entertainment, and out-of-pocket and miscellaneous expenses incurred by the
Executive in connection with the performance of his business activities under this Agreement in
accordance with the existing policies and procedures of the Employer pertaining to reimbursement of
such expenses to senior executives. In addition, the Employer agrees to reimburse the Executive
for reasonable legal expenses in connection with the review and analysis of this Agreement by an
attorney selected by the Executive, in an amount not to exceed $10,000.
5. Termination of Employment.
Wherever used in this Paragraph 5, the word “terminate” or “termination” shall mean a
“separation from service” of the Executive from the Employer within the meaning of Section 409A of
the Code and Treasury Regulation § 1.409A-1(h), except in the event of the Executive’s death.
a. Death of Executive. The Executive’s employment hereunder will terminate upon
his death and the Executive’s beneficiary (as designated by the Executive in writing with the
Employer prior to his death) will be entitled to the following payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment; and
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs, including but
not limited to a pro rata portion of the Bonus payment specified in Paragraph 3(b), above, and such
payment shall be made no later than March 15th of the calendar year following the calendar year for
which such Bonus is payable.
In the absence of a beneficiary designation by the Executive, or, if the Executive’s designated
beneficiary does not survive him, payments and benefits described in this subparagraph will be paid
to the Executive’s estate.
b. Disability. The Executive’s employment hereunder may be terminated by the
Employer upon 45 days written notice from the Employer following the determination, as set forth
immediately below, that he suffers from a Permanent Disability. For purposes of this Agreement,
“Permanent Disability” means a disability that, in the opinion of the Employer, renders, or will
render, the Executive unable to perform his duties under this Agreement by reason of any medically
determinable impairment, which can be expected to result in death, or which has lasted or can be
expected to last, for a continuous period of at least twelve months. If the Executive disagrees
with the Employer’s decision that the Executive’s disability renders or will render him unable to
perform his duties under this Agreement, such dispute shall be resolved by a panel of three
physicians: one physician to be chosen by the Employer, one physician to be chosen by the
Executive, and a third physician to be chose by the first two physicians. Each physician shall
have the opportunity to examine the Executive and the decision of a majority of the physicians on
the panel shall be binding on the Employer and the Executive, and shall be rendered within 45 days
after the third physician is appointed to the panel. The cost of the physicians shall be paid by
the Employer. During any period that the Executive fails to perform his duties hereunder as a
result of a Permanent Disability (“Disability Period”), the Executive will continue to receive his
Base Salary at the rate then in effect for such period until his employment is terminated pursuant
to this subparagraph; provided, however, that payments of Base Salary so made to the Executive will
be reduced by the sum of the amounts, if any, that were payable to the Executive at or before the
time of any such salary payment under any
disability benefit plan or plans of the Employer and that
were not previously applied to reduce any payment of Base Salary. In the event that the Employer
elects to terminate the Executive’s employment pursuant to this subparagraph, the Executive will be
entitled to the following payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment; and
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs, including but
not limited to a pro rata portion of the Bonus payment specified in Paragraph 3(b), above, and such
payment shall be made no later than March 15th of the calendar year following the calendar year for
which such Bonus is payable.
c. Termination of Employment for Cause. The Employer may terminate the
Executive’s employment upon written notice at any time for “Cause” if such Cause is reasonably
determined by the Board (provided the Executive does not fully cure the effect of the event giving
rise to “Cause” to the Employer’s reasonable satisfaction within thirty (30) days following his
receipt of notice of termination from the Employer). For purposes of this Agreement, the term
“Cause” means that the Executive has:
i. caused the Employer or any of its Affiliates, other than pursuant to the advice of the
Employer’s legal counsel, to violate a law which, in the opinion of the Employer’s legal counsel,
is reasonable grounds for civil penalties in excess of $250,000 or criminal penalties against the
Employer, an Affiliate or the Board;
ii. engaged in conduct which constitutes a material violation of the established written policies
or procedures of the Employer regarding the conduct of its employees, including policies regarding
sexual harassment of employees and use of illegal drugs or substances in the course of his
employment with Employer;
iii. committed fraud, or acted with willful misconduct or gross negligence, in carrying out his
duties under this Agreement;
iv. been convicted of any crime involving moral turpitude or a violation of federal or state
securities or investment adviser laws; or
vi. committed a breach of any material covenant, provision, term, condition, understanding or
undertaking set forth in this Agreement.
In the event that the Employer terminates the Executive’s employment for Cause, the Executive will
be entitled to the following payments and benefits:
A. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying
such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment; and
B. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs.
d. Termination Without Cause. The Employer may terminate the Executive’s
employment for any reason upon ninety (90) days prior written notice to the Executive. If the
Executive’s employment is terminated by the Employer for any reason other than the reasons set
forth in subparagraphs b or c of this Paragraph 5, subject to the applicable provisions of Section
409A of the Code, the Executive will be entitled to the following payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment;
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs, including but
not limited to a pro rata portion of the Bonus payment specified in Paragraph 3(b), above, and such
payment shall be made no later than March 15th of the calendar year following the calendar year for
which such Bonus is payable.;
iii. a single lump sum payment, payable within 15 days following the date of termination of
employment, equal to six (6) months of the Base Salary applicable to the Executive on the date of
termination of employment;
iv. beginning on the first day of the seventh month following the date of termination of
employment, continuation of the Executive’s Base Salary in effect on the date of his termination of
employment for a period of six (6) months; provided, that these payments will be made in separate,
equal payments no less frequently than monthly over such six-month period; and
v. a single lump sum payment, payable within fifteen (15) days following the date of termination of
employment, equal to the Bonus paid or payable to the Executive with respect to the most recently
completed fiscal year of the Employer.
e. Voluntary Termination by Executive. The Executive may resign and terminate
his employment with the Employer for any reason whatsoever upon not less than ninety (90) days
prior written notice to the Employer. In the event that the Executive terminates his employment
voluntarily pursuant to this Paragraph 5(e), the Executive will be entitled to the following
payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying
such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment; and
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs.
f. Good Reason Termination. The Executive may resign and terminate his
employment with the Employer for “Good Reason” upon not less than thirty (30) days prior written
notice to the Employer. For purposes of this Agreement, the Executive will have “Good Reason” to
terminate his employment with the Employer if any of the following events occur (provided the
Employer does not fully cure the effect of such event to the Executive’s reasonable satisfaction
within ten (10) days following its receipt of notice of termination of employment from the
Executive):
i. the Executive’s Base Salary is reduced for any reason other than in connection with the
termination of his employment;
ii. without the Executive’s consent, the percentage assigned to the Executive of any bonus pool
created by the Employer for its employees is less than 20%;
iii. without his consent, the Employer permanently and/or consistently assigns the Executive to
duties that are materially inconsistent in any respect with his position (including, without
limitation, his status, office and title), authority, duties or responsibilities as set forth in
Paragraph 1 (but excluding any other duties related to the business of the Employer or its
Affiliates reasonably requested of him by the Board), or takes any other action that results in a
permanent and/or consistent material diminution in such position, authority, duties, or
responsibilities;
iv. without his consent, the Employer changes the Executive’s reporting structure within the
organization so that the Executive no longer reports directly to the Board; or
v. the Employer breaches any material covenant, provision, term, condition, understanding or
undertaking set forth in this Agreement.
In the event that the Executive terminates his employment for Good Reason pursuant to this
Paragraph 5(f), subject to the applicable provisions of Section 409A of the Code, the Executive
will be entitled to the following payments and benefits:
A. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying such amount by the number of unused
vacation days), and any business expenses that are unreimbursed—all, as of the date of termination
of employment;
B. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs, including but
not limited to a pro rata portion of the Bonus payment
specified in Paragraph 3(b), above, and such
payment shall be made no later than March 15th of the calendar year following the calendar year for
which such Bonus is payable;
C. a single lump sum payment, payable within 15 days following the date of termination of
employment, equal to six (6) months’ of the Base Salary applicable to the Executive on the date of
termination of employment;
D. beginning on the first day of the seventh month following the date of termination of employment,
continuation of the Executive’s Base Salary in effect on the date of his termination of employment
for a period of six (6) months; provided, that these payments will be made in separate, equal
payments no less frequently than monthly over such six-month period; and
E. a single lump sum payment, payable within fifteen (15) days following the date of termination of
employment, equal to the Bonus paid or payable to the Executive with respect to the most recently
completed fiscal year of the Employer.
g. Failure to Extend Term of Agreement. If the Employer notifies the Executive
that the Employer will not extend the term of this Agreement under the provisions of Paragraph 2(b)
hereof, the Executive’s employment under this Agreement will terminate at the end of such term and
the Executive will be entitled to the following payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but unused
(determined by dividing Base Salary by 365 and multiplying such amount by the number of unused
vacation days), and any business expenses that are unreimbursed – all as of the date of termination
of employment; and
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs, including but
not limited to the Bonus payment specified in Paragraph 3(b), above, and such payment shall be made
no later than March 15th of the calendar year following the calendar year for which such bonus is
payable.
6. Change In Control.
Wherever used in this Paragraph 6, the word “terminate” or “termination” shall mean a
“separation from service” of the Executive from the Employer within the meaning of Section 409A of
the Code and Treasury Regulation § 1.409A-1(h).
a Occurrence of Change in Control. In the event that during the term of this
Agreement, a Change in Control [as defined under Section 409A of the Code and the regulations
thereunder] occurs and, within twenty-four (24) months following such Change in Control, the
Executive’s employment is terminated by the Employer or its successor for any reason other than the
reasons set forth in subparagraphs b or c of Paragraph 5 or is terminated by the Executive under
subparagraph f of Paragraph 5, then in addition to any other provision of Paragraph 5 of this
Agreement and subject to the applicable provisions of Section 409A of the Code, the Employer or its
successor will pay to the Executive the following payments and benefits:
i. any Base Salary that is accrued but unpaid, the value of any vacation that is accrued but
unused, (determined by dividing Base Salary by 365 and multiplying such amount by the number of
unused vacation days), and any business expenses that are unreimbursed all, as of the date of
termination of employment;
ii. any rights and benefits (if any) provided under plans and programs of the Employer, determined
in accordance with the applicable terms and provisions of such plans and programs;
iii. a single lump sum payment, payable within 30 days following the date of termination of
employment, equal to the total annual Base Salary and Bonus paid or payable to the Executive with
respect to the most recently completed fiscal year of the Employer; and
iv. a single lump sum payment, payable within 60 days following the date of termination of
employment, equal to twelve (12) months of the premium applicable to the Executive on the date of
termination of employment for the Executive and his family (provided the Executive had family
coverage on such date) under the Employer’s group health plan.
b. Treatment of Taxes. If payments provided under this Agreement, when combined
with payments and benefits under all other plans and programs maintained by the Employer,
constitute “excess” parachute payments as defined in Section 280G(b) of the Code, the Employer or
its successor will reduce the Executive’s benefits under this Agreement and/or the other plans and
programs maintained by the Employer (in a manner to be mutually agreed upon between the Employer or
its successor and the Executive) so that the Executive’s total “parachute payment” as defined in
Code §280G(b)(2)(A) under this Agreement and all other plans and programs will be One Dollar ($1)
less than the amount that would be an “excess parachute payment.” Treatment of taxes under this
paragraph 6(b) will be made at the time and in the manner mutually agreed to by the parties to this
Agreement. In addition, in the event of any subsequent inquiries regarding the treatment of tax
payments under this Paragraph 6, the parties will agree to the procedures to be followed in order
to deal with such inquiries.
7. Special Timing Rules for Certain Payments. In the event that the
Executive is a “specified employee” within the meaning of Section 409A of the Code, determined
through the application of the Employer’s specified employee identification procedures, any
payments made pursuant to Paragraph 5 or Paragraph 6 of this Agreement, except any payment made in
the event of the Executive’s death, that constitute deferred compensation subject to Section 409A
of the Code shall be delayed for a period of not less than six months and shall be paid on the
first day of the seventh month following the date of the Executive’s separation from service.
8. Nonexclusivity of Rights. Nothing in this Agreement will prevent or limit
the Executive’s continuing or future participation in any incentive, fringe benefit, deferred
compensation, or other plan or program provided by the Employer and for which the Executive may
qualify, nor will anything herein limit or otherwise affect such rights as the Executive may have
under any other agreements with the Employer. Amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any plan or program of the Employer at or
after
the date of termination of employment, will be payable in accordance with such plan or program.
9. Noncompetition Covenant. The Executive agrees that, during the term of this
Agreement, including any extension thereof, and for a period of one (1) year thereafter following
his termination of employment, he shall not:
a. call upon or solicit, either for the Executive or for any other person or firm that engages in
competition with any business operation actively conducted by the Employer or any Affiliate during
the term of this Agreement, any customer with whom the Employer or any Affiliate directly conducts
business (including, solely by way of example, intermediaries and corporations that purchase
directly from the Employer or an Affiliate); or interfere with any relationship, contractual or
otherwise, between the Employer or any Affiliate and any customer with whom the Employer or any
Affiliate directly conducts business; or
b. induce any person who is an employee, officer or agent of the Employer or any Affiliate to
terminate said relationship.
Nothing in this Paragraph or this Agreement shall be interpreted to (i) limit or reduce the
Executive’s ownership rights in the Xxxxxx Value Model (the “DVM”); (ii) prevent the Executive from
devoting his time and attention to the revision of the DVM; or (iii) limit or preclude the
Executive from licensing the use of the DVM to any individual or entity following his termination
of employment with the Employer.
In the event of a breach by the Executive of any covenant set forth in this Paragraph 9, the term
of such covenant will be extended by the period of the duration of such breach and such covenant
will survive any termination of this Agreement but only for the limited period of such extension.
The restrictions on competition provided herein shall supersede any restrictions on competition
contained in any other agreement between the Employer and the Executive and may be enforced by the
Employer and/or any successor thereto, by an action to recover payments made under this Agreement,
an action for injunction, and/or an action for damages. The provisions of this Paragraph 9
constitute an essential element of this Agreement, without which the Employer would not have
entered into this Agreement. Notwithstanding any other remedy available to the Employer at law or
at equity, the parties hereto agree that the Employer or any successor thereto, will have the
right, at any and all times, to seek injunctive relief in order to enforce the terms and conditions
of this Paragraph 9.
If the scope of any restriction contained in this Paragraph 9 is too broad to permit enforcement of
such restriction to its fullest extent, then such restriction will be enforced to the maximum
extent permitted by law, and the Executive hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such restriction.
10. Confidential Information. The Executive will hold in a fiduciary capacity,
for the benefit of the Employer, all secret or confidential information, knowledge, and data
relating to the Employer and its Affiliates, that shall have been obtained by the Executive during
his employment with the Employer and that is not public knowledge (other than by acts by the
Executive or his representatives in violation of this Agreement). During and after termination of
the Executive’s employment with the Employer, the Executive will not, without the prior written
consent of the Board, communicate or divulge any such information, knowledge, or data to anyone
other than the Employer or those designated by it, unless the communication of such information,
knowledge or data is required pursuant to a compulsory proceeding in which the Executive’s failure
to provide such information, knowledge, or data would subject the Executive to criminal or civil
sanctions and then only with prior notice to the Employer.
The restrictions imposed on the release of information described in this Paragraph 10 may be
enforced by the Employer and/or any successor thereto, by an action to recover payments made under
this Agreement, an action for injunction, and/or an action for damages. The provisions of this
Paragraph 10 constitute an essential element of this Agreement, without which the Employer would
not have entered into this Agreement. Notwithstanding any other remedy available to the Employer
at law or at equity, the parties hereto agree that the Employer or any successor thereto, will have
the right, at any and all times, to seek injunctive relief in order to enforce the terms and
conditions of this Paragraph 10.
If the scope of any restriction contained in this Paragraph 10 is too broad to permit enforcement
of such restriction to its fullest extent, then such restriction will be enforced to the maximum
extent permitted by law, and the Executive hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such restriction.
11. Intellectual Property. The Executive agrees to communicate to the Employer,
promptly and fully, and to assign to the Employer all intellectual property developed or conceived
solely by the Executive, or jointly with others, during the term of his employment, which are
within the scope of either the Employer ’s business or an Affiliate’s business, or which utilized
Employer materials or information. For purposes of this Agreement, “intellectual property” means
inventions, discoveries, business or technical innovations, creative or professional work product,
or works of authorship. The Executive further agrees to execute all necessary papers and otherwise
to assist the Employer, at the Employer ’s sole expense, to obtain patents, copyrights or other
legal protection as the Employer deems fit. Any such intellectual property is to be the property
of the Employer whether or not patented, copyrighted or published. Notwithstanding any provision
contained herein or anywhere else in the Agreement, the provisions of this Paragraph 11 shall not
apply to the DVM.
12. Assignment and Survivorship of Benefits. The rights and obligations of the
Employer under this Agreement will inure to the benefit of, and will be binding upon, the
successors and assigns of the Employer, if the Employer shall at any time be merged or consolidated
into, or with, any other company, or if substantially all of the assets of the Employer are
transferred to another company, then the provisions of this Agreement will be binding upon and
inure to the benefit of the company resulting from such merger or consolidation or to which such
assets have been transferred, and this provision will apply in the event of any subsequent merger,
consolidation, or transfer.
13. Notices. Any notice given to either party to this Agreement will be in
writing, and will be deemed to have been given when delivered personally or sent by certified mail,
postage prepaid, return receipt requested, duly addressed to the party concerned, at the address
indicated below or to such changed address as such party may subsequently give notice of:
| If to Diamond Hill: | Diamond Hill Investment Group, Inc. | |||
| 000 Xxxx X. XxXxxxxxx Xxxx. | ||||
| Xxxxx 000 | ||||
| Xxxxxxxx, Xxxx 00000 | ||||
| If to the Executive: | Xxxxxxxx X. Xxxxxx, Xx. | |||
| At the last address on file | ||||
| with the Employer |
14. Indemnification. The Executive shall be indemnified by the Employer to the
extent provided in the case of officers under the Employer’s Articles of Incorporation or
Regulations, to the maximum extent permitted under applicable law. The Employer shall use
commercially reasonable efforts to continue its Director and Officer Liability Insurance
(“DOL Insurance”) under substantially similar terms and in substantially similar
amounts as in existence prior to the termination of employment. The DOL Insurance shall be
maintained for at least seven (7) years from termination of employment and without limiting the
foregoing, the Executive shall not be excluded from coverage under such DOL Insurance during such
period.
15. Taxes. Anything in this Agreement to the contrary notwithstanding, all
payments required to be made hereunder by the Employer to the Executive will be subject to
withholding of such amounts relating to taxes as the Employer may reasonably determine that it
should withhold pursuant to any applicable law or regulations. In lieu of withholding such
amounts, in whole or in part, however, the Employer may, in its sole discretion, accept other
provision for payment of taxes, provided that it is satisfied that all requirements of the law
affecting its responsibilities to withhold such taxes have been satisfied.
16. Arbitration; Enforcement of Rights. Any controversy or claim arising out
of, or relating to this Agreement, or the breach thereof, except with respect to Paragraphs 9, 10
and 11, will be settled by arbitration in the city of Columbus, Ohio, in accordance with the Rules
of the American Arbitration Association, and judgment upon the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof.
All legal and other fees and expenses, including, without limitation, any arbitration expenses,
incurred by the Executive in connection with seeking in good faith to obtain or enforce any right
or benefit provided for in this Agreement, or in otherwise pursuing any right or claim, will be
paid by the Employer, to the extent permitted by law, provided that the Executive is successful in
whole or in part as to such claims as the result of litigation, arbitration, or settlement.
In the event that the Employer refuses or otherwise fails to make a payment when due and is
ultimately decided that the Executive is entitled to such payment, such payment will be increased
to reflect an interest equivalent for the period of delay, compounded annually, equal to the prime
or base lending rate used by Bank of America, and in effect as of the date the payment was first
due.
17. Governing Law/Captions/Severance. This Agreement will be construed in
accordance with, and pursuant to, the laws of the State of Ohio. The captions of this Agreement
will not be part of the provisions hereof, and will have no force or effect. The invalidity or
unenforceability of any provision of this Agreement will not affect the validity or enforceability
of any other provision of this Agreement. Except as otherwise specifically provided in this
paragraph, the failure of either party to insist in any instance on the strict performance of any
provision of this Agreement or to exercise any right hereunder will not constitute a waiver of such
provision or right in any other instance.
18. Entire Agreement/Amendment. This instrument contains the entire agreement
of the parties relating to the subject matter hereof, and the parties have made no agreement,
representations, or warranties relating to the subject matter of this Agreement that are not set
forth herein. This Agreement may be amended only by mutual written agreement of the parties.
However, by signing this Agreement, the Executive agrees without any further consideration, to
consent to any amendment necessary to avoid penalties under Code §409A.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
| DIAMOND HILL INVESTMENT GROUP, INC. | ||||||
| By: | ||||||
| Its: | ||||||
| Xxxxxxxx | X. Xxxxxx, Xx. | |||||
