EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between AirSculpt Technologies, Inc., a Delaware corporation (the “Company”), and Xxxx Magazine (“Executive”) this December 29 2022, with employment to commence on or before January 30, 2023 (the “Effective Date”).
WHEREAS, the Company desires to employ Executive and as Chief Executive Officer of the Company in accordance with the terms and conditions of this Agreement; and
WHEREAS, Executive desires to serve as Chief Executive Officer of the Company in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:
2. | Title; Duties and Obligations; Location. |
2.6 Location. Executive’s services shall be performed principally at the Company’s principal office located in Miami, Florida. However, from time to time, Executive may be required by his job responsibilities to travel on Company business, and Executive agrees to do so. Executive’s work schedule shall be determined and managed by Executive in his sole discretion, provided, however, Executive performs all duties necessary in his capacity as the Company’s Chief Executive Officer. In order to facilitate the transition from the Company’s prior chief executive officer to Executive, during the period following the Effective Date through the earlier of (i) the six (6) month anniversary thereof, or (ii) the date that Executive completes his relocation to the Miami, Florida metropolitan area, Executive shall use all reasonable good faith efforts, excepting when it is impractical to do so, to provide services from any of (a) the Company headquarters in Miami, Florida, (b) any of the Company’s centers, or (c) Nashville, Tennessee, at least 3 business days per week, unless Executive receives prior written approval from the Executive Chairman of the Board.
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4.3 Relocation. Executive must relocate to the Miami, Florida metropolitan area within six (6) months after the Effective Date. In order to subsidize Executive’s cost of this relocation, the Company will pay a lump sum amount of $175,000 on the next regular pay date of the Company following the Effective Date. The payment provided in this Section 4.3 is intended to help Executive defray the costs and expenses related to his relocation, including but not limited to house hunting trips, temporary housing area, packing and shipping of household items, vehicles, and any other personal items, and any other similar expenses. For avoidance of doubt, the Company shall not have any obligation to provide, and the payment described above shall be in lieu of, reimbursement for any relocation and moving expenses under this Agreement or otherwise. Executive acknowledges that this lump sum subsidy is taxable income for federal income purposes. If Executive does not relocate to the Miami, Florida metropolitan area within six (6) months of the Effective Date, Executive shall repay to the Company the full amount of the lump sum payment under this Section 4.3.
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Performance Level | Below Threshold |
Threshold | Target | Overachieve | Exceptional |
PSU TSR Percentile Rank vs. Index | Less than 30th%-ile | At least 30th%-ile | 50th%-ile | 75%-ile | 100%-ile |
Number of PSUs Earned as a % of Target | 0% | 50% | 100% | 150% | 200% |
For performance in excess of 30th percentile, the number of PSUs to be earned between each benchmark TSR percentile shall be determined based on linear interpolation. E.g., 125% of the target PSUs will vest at the 62.5th percentile |
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4.7 | Clawbacks: Recovery of Relocation Reimbursement and Signing Bonus. |
(a) Any incentive-based or other compensation paid to Executive under this Agreement, including but not limited to Bonuses and equity awards, or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation, stock exchange listing requirement or any clawback policy adopted by the Company from time to time will be subject to the deductions and clawback as may be required by such law, including but not limited to the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act, government regulation, stock exchange listing requirement or clawback policy.
(b) Executive acknowledges and agrees that if, for any reason within twelve (12) months after the Effective Date, either Executive voluntarily terminates his employment other than for Good Reason (and other than due to Disability), or if the Company terminates Executive’s employment for Cause, Executive shall reimburse the Company for the full amount of the relocation reimbursements made under Section 4.3 and the sign-on bonus paid under Section 4.4 not later than twenty (20) business days after any such termination of employment and the Company shall be authorized to withhold from any then current payment due to Executive, including but not limited to severance benefits, accrued but unpaid salary and vacation benefits, and vested equity awards, in order to recover such amounts.
5. | Benefits. |
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7. | Termination of Executive’s Employment. |
In the event Executive’s employment is terminated in accordance with this Section 7.1, the Company shall pay the following amounts to Executive within the time period required by applicable law:
(i) any accrued but unpaid Salary (as determined pursuant to Section 4.1 hereof) for services rendered prior to the date of Executive’s termination of employment (the “Termination Date”), which accrued but unpaid Salary shall be paid on or before the time required by law;
(ii) payment for any accrued but unused paid time off;
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(iii) expenses reimbursable under Section 6 hereof incurred prior to the Termination Date but not yet reimbursed, which reimbursable (but not yet reimbursed) expenses, if any, shall (subject to Executive’s timely submission of invoices) be paid on or before the time required by law; and
(iv) vested entitlements under any other Company benefit plan or program (with the exception of those, if any, relating to severance) that Executive is otherwise entitled to receive under such plan, program, policy or practice on the Termination Date, in each case, in accordance with (and subject to the terms, conditions and limitations set forth in) such plan, program, policy, or practice.
The amounts described in clauses (i) through (iv) above shall be referred to herein as the “Accrued Obligations.” All other Company obligations to Executive pursuant to this Agreement will become automatically terminated and completely extinguished.
7.2 Termination Without Cause by the Company or Termination by Executive For Good Reason Prior to or Following the Change in Control Period. The Company may terminate Executive’s employment under this Agreement without Cause, prior to or following any Change in Control Period, at any time upon written notice to Executive or Executive may resign with Good Reason subject to the notification requirements and the Cure Period (as defined below), in each case as set forth below. In the event of such termination, Executive will receive:
(i) The Accrued Obligations and any Bonus earned in respect of a prior completed year that has not yet been paid; and
(ii) Subject to Section 7.7, payments in an aggregate amount equal to two (2) times the sum of (x) Executive’s annual Salary (at the rate as of the Termination Date) plus (y) Executive’s target Bonus, payable (less applicable withholdings and deductions) in equal installments over the twenty-four (24) months following the Termination Date in accordance with the Company’s then-current payroll practices, with payments commencing on the next regular pay date of the Company following the date that the Release becomes effective and is no longer subject to revocation, with payment of a lump sum payable on the first such payroll payment date for all installments otherwise due for the period following the Termination Date. In addition, if Executive was participating in the Company’s group health, dental and/or vision plans immediately prior to the date of termination and properly elects to continue health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then, subject to Executive’s copayment of the premium amounts at the applicable Company active employees’ rate, the Company shall pay to the group health plan provider, the COBRA provider or Executive a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to Executive if Executive had remained employed by the Company until the earliest of the following: (i) the eighteen (18) month anniversary of the date of termination; (ii) Executive’s eligibility for group medical plan benefits under any other employer’s group medical plan or otherwise through other employment; or (iii) the cessation of Executive’s continuation coverage rights under COBRA. Notwithstanding the foregoing, if the Company determines at any time that its payments pursuant to this paragraph may be taxable income to Executive or that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company may convert such payments to payroll payments directly to Executive for the time period specified above; and such payments shall be subject to tax-related deductions and withholdings and shall be paid on the Company’s regular payroll dates, in such case, the Company will reimburse Executive for taxes payable on any portion of such payments or reimbursement that are treated as nondeductible taxable income to Executive so that the economic benefit is the same to Executive as if such payment or benefits were provided on a nontaxable basis. Any other premiums or costs of COBRA continuation coverage not provided above (including, without limitation, for any COBRA coverage after the time period set forth above) shall be at the sole expense of Executive. The payments referred to in this clause (ii) are referred to as the “Severance Payments.”
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(iii) In addition, subject to Section 7.7, any RSUs granted to Executive (including the Sign-On Equity Award) which would have vested within twelve (12) months following Executive’s termination pursuant to its vesting schedule shall immediately become vested upon Executive’s termination, and any PSUs granted to Executive (including the Sign-On Equity Award) shall remain outstanding and eligible to vest on a pro-rated basis (based on a fraction the numerator of which is the number of days during which Executive was employed by the Company during the performance period and the denominator of which is the total number of days in the performance period). Any such pro-rated PSUs shall vest solely to the extent of achievement of the applicable performance criteria by the Company, as determined by the Board. For the avoidance of doubt, the PSUs that do not remain outstanding and eligible to vest in accordance with the foregoing (whether on a pro-rated basis or otherwise), shall terminate immediately, automatically and without consideration on the Termination Date. For the avoidance of doubt, any unpaid installment of the cash sign-on bonus shall be paid in accordance with Section 4.4.
For purposes of this Agreement, “Good Reason” is defined as any one or more of the following without Executive’s prior written consent:
(a) a material reduction of Executive’s title, authority, duties or responsibilities (including reporting responsibilities) with the Company;
(b) a material reduction in Executive’s Salary;
(c) relocation of Executive’s principal place of work to a place more than twenty-five (25) miles from the Company’s headquarters in Miami, Florida as of the date hereof, unless such relocation is otherwise agreed to in writing by Executive; or
(d) any other material breach by the Company of this Agreement or any other material agreement or contract between Executive and any Company Group Member.
Notwithstanding the foregoing, Good Reason shall not exist unless Executive notifies the Company in writing of the existence of the applicable condition specified above not later than thirty (30) days after the initial existence of the condition, and the Company fails to remedy such condition within fifteen (15) days after receipt of such notice (the “Cure Period”); provided, however, that if the Company cannot remedy such condition within such fifteen (15) day period for reasons outside of the Company’s reasonable control, as determined by the Board in its sole and absolute discretion, the Cure Period shall be extended to provide an additional period to remedy such condition, which extension shall not in any case exceed fifteen (15) calendar days. In the event the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period (after giving effect to any extension of the Cure Period), Executive’s resignation for Good Reason must occur, if at all, within thirty (30) calendar days following the expiration of the Cure Period.
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7.3 | Termination of Employment due to Executive’s death or Disability. |
Executive’s employment under this Agreement shall terminate automatically upon Executive’s death. The Company may terminate Executive’s employment under this Agreement due to Executive’s Disability (as defined below). In the event of such termination, Executive (or Executive’s estate, as the case may be) will be entitled to receive, the Accrued Obligations, and any Bonus earned in respect of a prior completed year that has not yet been paid, and no other amount, except as required by applicable law.
All other Company obligations to Executive pursuant to this Agreement will be automatically terminated and completely extinguished. For purposes of this Agreement “Disability” means Executive’s physical or mental illness, injury or infirmity which prevents Executive from performing Executive’s material duties for a period of (A) one-hundred and eighty (180) consecutive calendar days or (B) an aggregate of ninety (90) calendar days out of any consecutive six (6) month period.
(i) The Accrued Obligations and any Bonus earned in respect of a prior completed year that has not yet been paid; and
(ii) Subject to Section 7.7, a lump sum payment in the aggregate amount equal to two (2) times the sum of (x) Executive’s annual Salary (at the rate as of the Termination Date) plus (y) Executive’s target Bonus, payable (less applicable withholdings and deductions), on the next regular pay date of the Company following the date that the Release becomes effective and is no longer subject to revocation, in accordance with the Company’s then-current payroll practices. Provided, in the event of such termination occurring prior to the occurrence of a Change in Control, all payments shall be made in installments in the same manner as provided at Section 7.2 with the unpaid balance paid in a lump sum on the date of consummation of such Change in Control (or if impracticable, then on the first payroll payment date following such Change in Control). In addition, if Executive was participating in the Company’s group health, dental and/or vision plans immediately prior to the date of termination and properly elects to continue health coverage under the COBRA, then, subject to Executive’s copayment of the premium amounts at the applicable Company active employees’ rate, the Company shall pay to the group health plan provider, the COBRA provider or Executive a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to Executive if Executive had remained employed by the Company until the earliest of the following: (i) the eighteen (18) month anniversary of the date of termination; (ii) Executive’s eligibility for group medical plan benefits under any other employer’s group medical plan or otherwise through other employment; or (iii) the cessation of Executive’s continuation coverage rights under COBRA. Notwithstanding the foregoing, if the Company determines at any time that its payments pursuant to this paragraph may be taxable income to Executive or that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company may convert such payments to payroll payments directly to Executive for the time period specified above; and such payments shall be subject to tax-related deductions and withholdings and shall be paid on the Company’s regular payroll dates, in such case, the Company will reimburse Executive for taxes payable on any portion of such payments or reimbursement that are treated as nondeductible taxable income to Executive so that the economic benefit is the same to Executive as if such payment or benefits were provided on a nontaxable basis. Any other premiums or costs of COBRA continuation coverage not provided above (including, without limitation, for any COBRA coverage after the time period set forth above) shall be at the sole expense of Executive.
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(iii) In addition, subject to Section 7.7, any unvested RSUs granted to Executive (including RSUs under the Sign-On Equity Award) shall immediately become 100% vested and paid upon Executive’s termination. Upon a Change in Control, all unvested PSUs granted to Executive, including PSUs under the Sign-On Equity Award, shall convert to time-vesting restricted stock units at the greater of (A) the target number of PSUs, and (B) the number of PSUs that would have vested based on actual performance during the applicable performance period through the date of the Change in Control. If Executive is terminated without Xxxxx or Executive resigns with Good Reason, subject to the notification requirements and the Cure Period (as defined below), during the Change in Control Period, all such converted time-vesting restricted stock units shall immediately become vested. Provided, in the event of such termination occurring prior to the occurrence of a Change in Control, on the Termination Date Executive shall become vested in any unvested RSUs and PSUs as provided at Section 7.2(iii) and, to the extent not 100% vested, shall immediately become 100% vested on the date of the Change in Control in accordance with the immediately preceding provisions of this Section 7.5. For the avoidance of doubt, any unpaid installment of the cash sign-on bonus shall be paid in accordance with Section 4.4.
(iv) “Change in Control” for purposes of this Agreement means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(A) any person becomes the owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (x) on account of the acquisition of securities of the Company directly from the Company, (y) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (z) solely because the level of ownership held by any person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(B) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (x) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the acquiring entity in such merger, consolidation or similar transaction or (By more than fifty percent (50%) of the combined outstanding voting power of the parent of the acquiring entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(C) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
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(D) individuals who, as of the date of this Agreement, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Agreement, the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (ii), the transaction or event described in clause (A), (B), (C), or (D) also constitutes a “change in control event” under Section 409A of the Code (defined below) if required in order for the payment not to violate Section 409A of the Code.
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9. | General Provisions. |
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9.7 Governing Law; Jurisdiction. Any and all actions or controversies arising out of this Agreement, Executive’s employment by the Company or the termination thereof, including, without limitation, breach of contract and tort claims, shall be construed and enforced in accordance with the internal laws of the State of Florida, without regard to any choice of law or conflicting provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Florida to be applied. Any and all actions arising out of this Agreement or Executive’s employment by the Company or the termination thereof shall be brought and heard in the state and federal courts located in the Florida, and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of any such courts. THE COMPANY AND EXECUTIVE HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS AGREEMENT OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY HEREFROM AND REPRESENT THAT THEY HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE SPECIFICALLY WITH RESPECT TO THIS WAIVER.
If to the Company, to:
000 Xxxxx Xxxx, Xxxx XX-000X
Xxxxx Xxxxx, XX 00000
Attn: Board of Directors
with a copy to:
XxXxxxxxx Will & Xxxxx LLP
000 Xxxxx Xxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Email: xxxxxxxxx@xxx.xxx
Attn: Xxxxxx Xxxxxxxx
If to Executive, to him at the offices of the Company with a copy to him at his home address as set forth in the records of the Company.
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11. | Code Section 409A Compliance. |
11.1 This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986 as amended, and any regulations and Treasury guidance promulgated thereunder (collectively, “Section 409A of the Code”).
11.2 The Company and Executive agree that they will execute any and all amendments to this Agreement as they mutually agree in good faith may be necessary to ensure compliance with the provisions of Section 409A of the Code.
11.3 The preceding provisions, however, shall not be construed as a guarantee by the Company of any particular tax effect to Executive under this Agreement. No Company Group Member shall be liable to Executive for any payment made under this Agreement which is determined to result in an additional tax, penalty or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A of the Code.
11.4 For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.
11.5 With respect to any reimbursement of expenses or any provision of in-kind benefits to Executive specified under this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (ii) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangements providing for the reimbursement of expenses referred to in Section 105(b) of the Code; (ii) the reimbursement of an eligible expense shall be made no later than the end of the year following the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
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11.6 Notwithstanding anything in this Agreement to the contrary, if a payment obligation arises on account of Executive’s separation from service while Executive is a “specified employee” as described in Section 409A of the Code and the Treasury Regulations thereunder and as determined by the Company in accordance with its procedures, by which determination Executive is bound, any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) shall be made on the first (1st) business day of the seventh (7th) month following the date of Executive’s separation from service, or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of Executive’s estate following Executive’s death.
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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES FIRST ABOVE WRITTEN.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first written above.
COMPANY | ||
AIRSCULPT TECHNOLOGIES, INC. | ||
By: | /s/ Xxxx Xxxxxxxxx | |
Name: Xxxx Xxxxxxxxx | ||
Title: Authorized Signatory | ||
EXECUTIVE | ||
By: | /s/ Xxxx Magazine | |
Xxxx Magazine |
[Signature Page to Xxxx Magazine Employment Agreement]
Exhibit A
[General Release of All Claims]
Exhibit A
[The language in this Release may change based on legal developments, no substantive changes may be made without Executive’s consent.]
GENERAL RELEASE OF ALL CLAIMS
1. For valuable consideration, the adequacy of which is hereby acknowledged, the undersigned (“Executive”), for himself, his spouse, heirs, administrators, children, representatives, executors, successors, assigns, and all other persons claiming through Executive, if any (collectively, “Releasers”), does hereby release, waive, and forever discharge AirSculpt Technologies, Inc. (the “Company”), and the Company’s subsidiaries, parents, affiliates, related organizations, and equity holders, and their respective affiliates, employees, officers, directors, attorneys, successors, and assigns or each of the foregoing (collectively, the “Releasees”) from, and does fully waive any obligations or liabilities of Releasees to Releasers of any kind and nature that Releasers had, have, or might claim to have against Releasees at the time Executive executes this General Release for or in respect of any and all liability, actions, charges, causes of action, demands, damages, or claims for relief, remuneration, sums of money, accounts or expenses, of any kind, with respect to Executive’s employment (or the termination thereof), under the Amended and Restated Employment Agreement between the Company and the Executive dated December 29, 2022 (the “Employment Agreement”) (or any successor agreement) and any action arising in tort including libel, slander, defamation or intentional infliction of emotional distress, and claims under any federal, state or local statute including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 and 1871 (42 U.S.C. § 1981), the Equal Pay Act, Employee Retirement Income Security Act, Family and Medical Leave Act, the National Labor Relations Act, the Fair Labor Standards Act, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, or the discrimination or employment laws of any state or municipality, and/or any claims under any express or implied contract which Releasers may claim existed with Releasees. This also includes, without limitation, a release by Executive of any claims for breach of contract, wrongful discharge and all claims for alleged physical or personal injury, emotional distress relating to or arising out of Executive’s employment with Company or the termination of that employment; and any claims under the WARN Act or any similar law, which requires, among other things, that advance notice be given of certain work force reductions. This release and waiver does not apply to any claims or rights that may arise after the date Executive signs this General Release. The foregoing release does not apply to (a) any claims or rights for vested compensation or benefits, (b) any claims or rights as an insured under the Company’s directors and officers liability insurance, and claims or rights for indemnification under the Indemnification Agreement between Executive and the Company dated January__, 2023 or the Company’s charter and by-laws and under applicable law, (c) any claims to enforce payments following termination of employment under the Employment Agreement, or (d) any claims or rights accruing to any Releaser as a shareholder of the Company.
2. Excluded from this release and waiver are any claims which cannot be waived by law, including but not limited to the right to participate in an investigation conducted by certain government agencies. Executive does, however, waive Executive’s right to any monetary recovery should any agency (such as the Equal Employment Opportunity Commission) pursue any claims on Executive’s behalf. Executive represents and warrants that Executive has not filed any complaint, charge, or lawsuit against the Releasees with any government agency or any court.
3. Executive acknowledges and agrees that the Employee Covenants Agreement between Executive and the Company, dated December 29, 2022 (the “Covenant Agreement”) and Executive’s obligations thereunder remain valid and binding on Executive following his termination of employment, and that Executive is required to comply with the terms and conditions of such Covenant Agreement. Executive further acknowledges and agrees that Section 7.7 of the Employment Agreement survives Executive’s termination of employment, and in the event of a breach of the Covenant Agreement and Executive’s failure to cure such breach within fifteen (15) days after receipt of notice from the Company of such breach, that the Company has the right to recover any severance payments paid to Executive and Executive is obligated to repay such payments in accordance with Section 7.7 of the Employment Agreement.
4. Executive acknowledges and recites that:
(a) Executive has executed this General Release knowingly and voluntarily and that he has read and understands this General Release in its entirety;
(b) Executive has been advised and directed orally and in writing (and this subsection (b) constitutes such written direction) to seek legal counsel and any other advice he wishes with respect to this General Release before executing it; and
(c) Executive is specifically waiving any claims regarding age discrimination, including, without limitation, pursuant to the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act.
(d) Executive’s execution of this General Release has not been forced by any employee or agent of the Company, and Executive has had an opportunity to negotiate about the terms of this General Release.
(e) Executive has been given at least twenty-one (21) days to consider this General Release, and if executed prior to the expiration of the twenty-one (21) day period, such execution is knowing and voluntary.1
(f) The additional benefits and other promises that Executive is to receive under the Employment Agreement are sufficient consideration for this General Release.
4. This General Release shall be governed by the internal laws (and not the choice of laws) of the State of Florida, except for the application of pre-emptive Federal law.
5. Executive may revoke this General Release within seven (7) calendar days after signing it. To be effective, such revocation must be made in writing to [NAME], with a copy received at [ADDRESS]. Revocation can be made by hand delivery, electronic mail, facsimile, or postmarking before the expiration of this seven (7) day period.
Date: | Executive: |
1 21 day period shall be extended to 45 days (or such longer period required by law) if in connection with termination of two or more individuals.
2
Exhibit B
[Employee Covenants Agreement]
EMPLOYEE COVENANTS AGREEMENT
EMPLOYEE COVENANTS AGREEMENT (the “Agreement”), dated as of December 29, 2022, by and between EBS Enterprises, LLC. (the “Company”) and the person identified as “Employee” on the signature page hereof (“Employee”).
WHEREAS, Employee has been offered employment with the Company pursuant to an employment agreement, of even date herewith, by and between Employee and the Company (the “Employment Agreement”); and
IN CONSIDERATION of the foregoing and the premises and the mutual covenants set forth below, the parties hereby agree as follows:
Employee agrees that:
(a) While working for the Company, Employee may develop, acquire, have access to and/or otherwise have knowledge of Confidential Company Information.
(b) Confidential Company Information is and will continue to be the sole and exclusive property of the Company (or the applicable member of the Company Group).
(c) Employee will use Confidential Company Information only in the performance of Employee’s duties for the Company Group. Employee will not use Confidential Company Information at any time (during or after Employee’s employment with the Company) for Employee’s personal benefit, for the benefit of any other person, or in any manner adverse to the interests of the Company Group or its customers, vendors or other business partners, in each case unless approved in advance in writing by the Company, which approval can be withheld in the Company’s sole and absolute discretion.
(d) Employee will not disclose Confidential Company Information at any time (during or after Employee’s employment with the Company) except (x) as such disclosure may be required in connection with Employee’s service to the Company, (y) when required to do so by a court of law, by any governmental agency or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction to order Employee to divulge, disclose or make accessible such information or (z) as approved in advance in writing by the Company, which approval can be withheld in the Company’s sole and absolute discretion. Employee agrees to provide the Company advance written notice of any disclosure pursuant to clause (y) of the preceding sentence and to cooperate with any efforts by the Company to limit the extent of such disclosure. Notwithstanding the foregoing or anything else contained herein to the contrary, this Agreement shall not preclude Employee from disclosing Confidential Company Information to a governmental body or agency or to a court if and to the extent that a restriction on such disclosure would limit Employee from exercising any protected right afforded Employee under applicable law. Employee furthermore acknowledges that Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if (i) Employee makes such disclosure in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney or accountant and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) Employee makes such disclosure in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal, to the extent permitted by applicable law.
(e) Employee will safeguard Confidential Company Information by taking all commercially reasonable steps and shall abide by all policies and procedures of the Company Group and its customers, vendors and other business partners in effect from time to time (with respect to such customers, vendors and other business partners, to the extent provided to the Company), regarding storage, copying, destroying, publication or posting, or handling of such Confidential Company Information, in whatever medium or format that Confidential Company Information takes.
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(f) When Employee’s employment relationship with the Company ends for any reason, or earlier if requested by the Company, Employee will immediately return to the Company all materials containing or relating to Confidential Company Information and, except as the Company may, in its sole discretion, expressly permit in writing, all equipment provided to Employee by the Company during Employee’s employment, including without limitation all computers, laptops, cellular telephones, printers, facsimile machines and scanners. Employee shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, photographs, databases, diskettes, or other documents or electronically stored information of any kind relating in any way to the business, potential business or affairs of the Company Group, its customers, vendors or other business partners or their respective affiliates.
(g) Unless this Agreement is otherwise required to be disclosed under applicable law, rule or regulation, Employee agrees to keep the terms and conditions of this Agreement strictly confidential, provided Employee may disclose this Agreement to his or her immediate family members, legal advisors or personal tax or financial advisors, or prospective future employers solely for the purpose of disclosing the limitations on Employee’s conduct imposed by the provisions of this Agreement, who, in each case, agree to keep such information confidential.
3. | Contributions and Inventions. |
(a) | The term “Covered Contributions and Inventions” means: |
(i) inventions, ideas, formulae, works, modifications, processes, discoveries, techniques, designs, methods, trade secrets, technical specifications and data, know- how, show-how, concepts, expressions, creations, improvements, works of authorship, ideas and other developments, whether or not they are patentable or copyrightable or subject to analogous protection and regardless of their form or state of development, of any kind that are or were, since the date of commencement of Employee’s employment with the Company, conceived, created, developed or reduced to practice by Employee, alone or with others, that (i) are conceived during regular working hours or at Employee’s place of work, whether located at Company, affiliate, or customer facilities, or (ii) relate to or as used in or reasonably likely to be used in the Business (as defined below) at the time of such conception, creation, development or reduction to practice (and such conception, creation, development or reduction to practice occurs while Employee remains an employee of the Company) or result from tasks assigned to Employee by the Company, or are conceived or made with the use of the Company’s resources, facilities or materials; and any and all patents, patent applications, copyrights, trademarks, domain names and other intellectual property rights, worldwide, with respect to any of the foregoing.
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(ii) The term “Covered Contributions and Inventions” specifically excludes any inventions Employee developed entirely on Employee’s own time without using Company equipment, supplies, facilities, or trade secret information unless the invention relates to the Business.
(iii) The term “Business” means (A) offering or providing minimally invasive physical fat removal and/or transfer procedures, including but not limited to such services as conducted or offered by any member of the Company Group as of the date hereof, and any other fat removal and/or transfer services or procedures contemplated to be conducted or offered by any Company Group member as of the date hereof, or the provision of any administrative, management, business, consulting, marketing or other support services with respect to the foregoing and (B) any other business of any member of the Company Group as conducted on or prior to the date of Employee’s termination of employment with the Company.
(b) | With respect to Covered Contributions and Inventions, Xxxxxxxx agrees: |
(i) Employee will disclose all Covered Contributions and Inventions promptly to the Company. Employee will not disclose any Covered Contributions and Inventions to anyone other than authorized personnel of the Company.
(ii) Employee will keep full and complete written records (the “Records”) in the manner prescribed by the Company of all Covered Contributions and Inventions. The Records shall be the sole and exclusive property of the Company, and Employee will surrender them upon the termination of employment, or upon the Company’s request.
(iii) All Covered Contributions and Inventions will belong solely to the Company from conception as “works made for hire” (as that term is used under U.S. copyright law) or otherwise. To the extent that title to any Covered Contributions and Inventions does not, by operation of law, vest in the Company, Employee hereby irrevocably assigns to the Company all right, title and interest, including, without limitation, tangible and intangible rights such as patent rights, industrial design rights, trademarks and copyrights, that Employee may have or may acquire in and to such Covered Contributions and Inventions, benefits and/or rights resulting therefrom, and agrees to promptly execute any further specific assignments related to such Covered Contributions and Inventions, benefits and/or rights at the request of the Company. Employee hereby irrevocably waives all unassignable rights in the Covered Contributions and Inventions including, without limitation, all moral rights, for the entire term of such rights, in favor of the Company and its licensees, successors and assigns. If Employee has any rights in the Covered Contributions and Inventions that cannot be assigned in the manner described herein, Employee agrees to unconditionally waive the enforcement of such rights. To the extent permitted by law, Employee hereby waives any and all currently existing and future monetary rights in and to the Covered Contributions and Inventions, including, without limitation, any rights that would otherwise accrue to Employee’s benefit by virtue of Employee being an employee of or other service provider to the Company.
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(vi) Employee will assist the Company in obtaining, maintaining and enforcing patent, industrial design, copyright, trademark, mask works and other appropriate protection for all Covered Contributions and Inventions in all countries, at the Company’s expense. If Employee is requested by the Company to render such assistance after the termination of employment, Employee will be entitled to a fair and reasonable rate of compensation for Employee’s assistance, and to reimbursement of reasonable expenses incurred at the Company’s request relating to such assistance. In the event that the Company is unable to secure Employee’s signature after reasonable effort in connection with any patent, industrial design, trademark, copyright, mask work or other similar protection relating to any Covered Contribution and Invention, Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his or her agent and attorney-in fact, to act for and on Employee’s behalf and stead to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, industrial designs, trademarks, copyrights, mask works or other similar protection thereon with the same legal force and effect as if executed by Employee.
(a) become employed by, engage, participate or invest in any Competing Business (as defined herein). For purposes of this Agreement, a “Competing Business” means any person or entity, other than the Company, that engages in any aspect of the Business. Notwithstanding the foregoing, the foregoing shall not prohibit any investment by Employee in publicly traded stock of a company representing less than two percent of the stock of such company;
(b) solicit, induce, or knowingly assist any third person in soliciting or inducing any person that is (or was at any time within the six (6) months immediately preceding the termination of Employee’s employment) an employee, consultant, independent contractor or agent of the Company Group, to leave the employment of the Company Group or cease performing services as an independent contractor, consultant or agent of the Company Group;
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(c) hire, engage, or knowingly assist any third party in hiring or engaging, any individual that is (or was at any time within six (6) months immediately preceding the termination of Employee’s employment) an employee, consultant, independent contractor or agent of the Company Group;
(d) endeavor to cause any person who at the date of termination of Employee’s employment or at any time during the six (6) months immediately prior to such termination was (or would reasonably have been expected to have been) known by Employee to be a supplier to the Company Group to either cease to supply the Company or materially alter the terms of such supply in a manner detrimental to the Company Group; or
(e) other than for the benefit of the Company Group, solicit for the purpose of providing products or services to a Competing Business, interfere with the Company Group’s relationships with, or endeavor to entice away from the Company Group for a Competing Business, any person or entity that is or was (at any time during the twelve (12) months immediately preceding Employee’s termination of employment with the Company), a Customer or Prospective Customer, where: (i) a “Customer” is any party who was party to an agreement with the Company Group or to whom any member of the Company Group provided goods or services and (ii) a “Prospective Customer” is any individual or entity with respect to whom or which the Company Group was engaged in solicitation or negotiations and in which solicitation Employee was in any way involved or of which Employee otherwise had any knowledge or should have had any knowledge.
(f) Notwithstanding any of the foregoing and for the avoidance of doubt, (i) general solicitations (e.g., internet, television, newspaper advertisement, email blast or posting) not targeted at employees or former employees of the Company shall not be in violation of this Section 5, (ii) Employee’s ownership of or performing services to a Managed Practice will not be a violation of this Section 5, and (ii) Section 5(a) shall not apply to services rendered by Employee in California after the date of Employee’s termination of employment with the Company.
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8. | Remedies Upon Breach. |
(a) Employee agrees that the restrictions contained in Sections 2, 3, 4, 5 and 6 of this Agreement and the location and period of time for which such restrictions apply are reasonable and necessary to protect the Company’s legitimate business interests and will survive the termination of Employee’s employment. Employee agrees that the restrictions contained in this Agreement will not prevent Employee from earning a livelihood during the applicable period of restriction. Employee agrees that in any action seeking specific performance or other equitable relief, Employee will not assert or contend that any of the provisions of this Agreement are unreasonable or otherwise unenforceable.
(b) Employee further agrees that in the event of Employee’s breach or threatened breach of any of the provisions of Sections 2, 3, 4, 5 and 6 of this Agreement, the Company would suffer substantial irreparable harm and would not have an adequate remedy at law for such breach. In recognition of the foregoing, Employee agrees that in the event of a breach or threatened breach of any of those provisions, in addition to such other remedies that the Company may have at law, without posting any bond or security, the Company shall be entitled to seek and obtain equitable relief, in the form of specific performance, or temporary, preliminary or permanent injunctive relief, or any other equitable remedy which then may be available, as well as an equitable accounting of all earnings, profits and other benefits arising, directly or indirectly, from such violation. The seeking of such injunction or order shall not affect the Company’s right to seek and obtain damages or other equitable relief on account of any such actual or threatened breach. Employee further covenants that Employee shall be responsible for payment of documented reasonable out-of- pocket fees and expenses of any member of the Company Group’s attorneys and experts, as well as any member of the Company Group’s documented reasonable out-of-pocket court costs, pertaining to any suit, arbitration, mediation, action or other proceeding (any of which, a “Proceeding”) (including the costs of any investigation related thereto) arising directly or indirectly out of Employee’s actual breach of the material provisions of this Agreement. In the event of any such Proceeding initiated by the Company in which the Company is not the prevailing party, the Company shall pay Employee’s documented reasonable out-of-pocket court costs, pertaining to such Proceeding.
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If to Employee at the name and address set forth on the signature page hereof. If to the Company, to:
000 Xxxxx Xxxx, Xxxx XX-000X
Xxxxx Xxxxx, XX 00000
Attn: Board of Directors
with a copy to:
XxXxxxxxx Will & Xxxxx LLP
000 Xxxxx Xxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Email: xxxxxxxxx@xxx.xxx
Attn: Xxxxxx Xxxxxxxx
or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
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COMPANY: | ||
By: | /s/ Xxxx Xxxxxxxxx | |
Name: Xxxx Xxxxxxxxx | ||
EMPLOYEE: | ||
Xxxx Magazine: | ||
Signature: | /s/ Xxxx Magazine | |
Name: | Xxxx Magazine | |
Address for notices: | ||
00 Xxxxx Xx. | ||
Xxxxxxx, XX 00000 |
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