EMPLOYMENT AGREEMENT
Exhibit 10.1
EMPLOYMENT AGREEMENT (this “Agreement”), effective as of July 1, 2010 (the “Effective Date”),
among Xxxx, Inc., a Maryland corporation (“Xxxx”), Xxxx Services, LLC, a Maryland limited liability
company and a wholly-owned subsidiary of Xxxx (“LLC”, and together with Xxxx, the “Employers”), and
Xxxxx Xxxxxxx (“Employee”).
Recitals
WHEREAS, Employee is currently employed by the Employers under an Employment Agreement dated
as of October 11, 2006, as amended on May 17, 2007, as extended effective May 30, 2010 and June 30,
2010 (the “Prior Agreement”); and
WHEREAS, the Employers desire to employ Employee as the President and Chief Executive Officer
of Xxxx and as the President and Chief Executive Officer of LLC, and Employee desires to be
employed by the Employers in such capacities effective as of the Effective Date pursuant to the
terms and conditions set forth below.
NOW, THEREFORE, Employee and Employers, in consideration of the mutual agreements, covenants
and conditions contained herein, and for other good and valuable consideration, hereby agree as
follows:
1. Basic Employment Provisions.
(a) Employment Period. Subject to the terms and conditions of this Agreement, (i) the
Employers hereby employ Employee, and (ii) Employee agrees to be employed by the Employers, in each
case for a period of three years from the Effective Date; provided, however, that
if this Agreement would otherwise expire during a period when (A) either of the Employers is party
to an agreement, the consummation of which would result in the occurrence of a Change of Control or
(B) the Board of Directors of Xxxx (the “Board”) or a committee thereof is engaged in active
negotiations or has commenced a process regarding a transaction, the consummation of which would
result in the occurrence of a Change of Control (such period of time described by clause (A) and/or
(B) of this Section 1(a), a “Change of Control Protection Period”), then this Agreement
shall continue in effect until the seven-month anniversary of the earlier of (x) the date of the
consummation of such Change of Control or (y) the date of the final and complete rescission or
abandonment of the agreement or transaction, the consummation of which would have resulted in such
Change of Control (the initial three-year period plus any such extension period(s), together, the
“Employment Period”).
(b) Duties. During the Employment Period, Employee shall serve as the President and
Chief Executive Officer of Xxxx and as the President and Chief Executive Officer of LLC. Employee
shall (x) have general responsibility for implementation of the policies of the Employers, as
determined by the Board, and for the management of the business and affairs of the Employers; (y)
in general, supervise and control all of the business and affairs of the Employers; and (z) perform
those services as set from time to time by the Board or other governing body of the Employers or a
committee thereof, commensurate with Employee’s positions, it being understood that Employee shall
not be required to perform any services, acts
or things not in accordance with applicable law or ethical standards or in the best interests
of the shareholders of either Employer. Employee shall report directly to the Board and Employee’s
principal place of employment shall be 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the “Principal
Location”). In furtherance of the foregoing, Employee shall have the primary right and
responsibility for providing the Board or other governing body of the Employers with
recommendations as to the Employers’ policies and business strategies and their implementation,
including, without limitation, those relating to Xxxx’ real estate assets. During the Employment
Period, Employee agrees to perform his duties hereunder faithfully and to the best of his ability
and to devote his full professional working time, attention and energies to the transaction of the
Employers’ business, in each case subject to the terms hereof. During the Employment Period,
Employee shall not be employed or otherwise engaged in any other business or enterprise without the
written consent of the Employers. Notwithstanding any other term hereof, but subject to the terms
and provisions of Sections 8 and 9, nothing contained herein shall preclude Employee from
(i) serving on the boards of a reasonable number of other trade associations and/or civic or
charitable organizations and businesses which do not compete with the business of the Employers,
(ii) engaging in charitable activities and community affairs, (iii) managing his personal and
family investments and affairs, or (iv) writing and selling works of fiction and non-fiction (to
the extent that such works do not disclose Confidential Information (as defined below)), in each
case as long as such activities do not materially interfere with the discharge of his duties and
responsibilities under this Section 1(b). Employee shall continue to serve as a member of
the Board.
(c) Compliance with the Employers’ Policies. During the Employment Period, Employee
shall be governed by and be subject to, and Employee hereby agrees to comply with, all of the
Employers’ policies applicable to the Employers’ employees generally or to the Employers’ employees
at Employee’s grade level, including, without limitation, the Employers’ Codes of Business Ethics
and Conduct, in each case, as any such policies are in effect from time to time (collectively, the
“Policies”).
2. Compensation.
(a) Salary. As compensation for the services to be rendered by Employee hereunder,
the Employers are jointly and severally obligated to pay to Employee for each year of the
Employment Period, commencing on the Effective Date, a gross annual base salary of not less than
$400,000 per year (as in effect from time to time after any increase (but not decrease), the “Gross
Annual Base Salary”), payable in accordance with the payroll practices of the Employers in effect
from time to time (but in all events no less frequently than semi-monthly). Employee shall be
entitled to such increases (but not decreases) in Gross Annual Base Salary, if any, as may be
determined from time to time by the Compensation Committee of the Board (the “Compensation
Committee”). The Compensation Committee shall consider such increases in Gross Annual Base Salary
at least annually, and shall take into account market data, the consumer price index, and any other
factors it deems relevant.
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(b) Bonus.
(i) With respect to the fiscal year that includes the Effective Date and each other fiscal
year that begins during the Employment Period, Employee shall be entitled to
receive, in addition to Employee’s Gross Annual Base Salary, an annual cash bonus award (or a
pro-rated portion thereof in the event that the applicable fiscal year began prior to or ended
following the Employment Period) (the “Annual Bonus”), with a target bonus opportunity of not less
than 70% of the Gross Annual Base Salary, based upon the achievement of target performance goals
established by the Compensation Committee (as in effect from time to time after any increase (but
not decrease), the “Target Bonus”); provided that in no event shall such targets or the
method for determining payouts based on the degree to which such targets are attained be less
favorable to Employee than those applying to other senior executives of the Employers generally for
the applicable fiscal year. Upon achievement of the targeted performance goals for the applicable
fiscal year, Employee shall be paid the Target Bonus. The applicable bonus plan shall specify the
Annual Bonus payable upon achievement of threshold, target, and maximum performance goals. To the
extent the performance goals are sufficiently quantifiable and Employee’s achievement level falls
between performance goal benchmarks, the Annual Bonus shall be determined using a straight line
interpolation between the two appropriate performance goals. Employee shall be entitled to such
increases (but not decreases) in Target Bonus, if any, as may be determined from time to time by
the Compensation Committee. The Compensation Committee shall consider such increases in Target
Bonus at least annually, and shall take into account market data, the consumer price index, and any
other factors it deems relevant.
(ii) The Annual Bonus will be paid in cash to Employee not later than the date annual bonuses
are generally paid to senior executives of the Employers, but in all events not later than the
later of the 15th day of the third month following the end of Employee’s first taxable
year in which the right to payment is no longer subject to a “substantial risk of forfeiture”
(within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986 (the “Code”) and any
proposed, temporary or final regulation, or any other guidance, promulgated with respect to Section
409A of the Code by the U.S. Department of Treasury or the Internal Revenue Service (“Section
409A”)).
(c) Benefits. During the Employment Period, the Employers shall provide Employee (and
Employee’s spouse and eligible dependents) with the benefits to which senior executives of the
Employers are or become entitled under the terms of any benefit plans or programs instituted by the
Employers, as in effect from time to time (it being understood that Xxxx or LLC may amend or
terminate such benefit plans or programs in accordance with the terms of such plans or programs at
any time during the Employment Period). For purposes of determining Employee’s eligibility for
participation in employee benefit plans and for other fringe benefits, Employee shall be deemed to
be a full time employee of whichever of the Employers provides more favorable benefits, in the
aggregate, to its senior executives. Employee shall be entitled to six weeks paid vacation per
year, which shall be taken in accordance with the policies of Xxxx governing vacation of senior
executives. In addition, notwithstanding anything contained in this Agreement to the contrary, as
soon as reasonably practicable following the Effective Date, the Employers shall secure and
maintain a five-year term life insurance policy covering Employee with (i) a top-rated insurer,
(ii) a death benefit equal to $680,000, and (iii) beneficiary(ies) selected by Employee, and which
contains such terms and conditions as are reasonably acceptable to Employee.
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(d) Equity Awards.
(i) Annual Long-Term Incentive Awards. During the Employment Period, Employee shall
be entitled to receive annual equity and/or long-term incentive awards at the time such awards are
generally made by the Employers to senior executives of the Employers, on a basis no less favorable
than such awards are made to other senior executives of the Employers (including with respect to
the form of award, the vesting and forfeiture conditions and the value of the award as a percentage
of total annual compensation) and consistent with past practices for awarding equity to Employee.
All equity and/or long-term incentive awards granted in connection with this Agreement or during
the Employment Period (including, without limitation, the Initial Options (as defined below)) will
provide that Employee may, at his option, satisfy the minimum required tax withholdings and, in the
case of stock options, pay the applicable exercise price, by either (A) the actual or constructive
transfer to Xxxx of nonforfeitable unrestricted shares of Xxxx common stock that have been owned by
Employee for more than six months prior to the date of exercise or the date on which such taxes are
required to be withheld (the “Previously Acquired Shares”), or (B) in the event that Employee does
not then own a sufficient number of Previously Acquired Shares, an automatic reduction in the
number of shares otherwise required to be delivered to Employee, as applicable, in all cases unless
and to the extent that any such transfer or reduction (1) is prohibited by a material financing or
other agreement that restricts the ability of the Employers to permit such reduction, or (2) would
reasonably be expected to jeopardize the cash flow of either of the Employers.
(ii) Initial Option Grant. In addition to any equity awards described in Section
2(d)(i), as of July 29, 2010 (the “Grant Date”), Xxxx shall xxxxx Employee 125,000
premium-based stock options to acquire Xxxx common stock (the “Initial Options”) pursuant to the
applicable stock incentive compensation plan, which shall provide for customary adjustment
provisions in the event of a stock split, reverse stock split, merger or other change in the
capitalization of Xxxx. The Initial Options shall (A) have a strike price equal to 125% of the
closing price of Xxxx’ common stock on the Grant Date, (B) have a 10-year term, and (C) vest 100%
on June 30, 2013 (subject to earlier acceleration as otherwise provided in this Agreement).
(iii) Acceleration. Upon a Change of Control (as defined herein or in the applicable
stock incentive compensation plan), all Employee’s outstanding equity awards (including, without
limitation, the Initial Options) shall vest and become non-forfeitable, with any outstanding stock
options immediately vesting and becoming exercisable (and, subject to Section 10.5 (Adjustments) of
the Xxxx, Inc. 2008 Omnibus Incentive Plan (or any similar provision of an applicable successor
plan), with all stock options remaining exercisable for the duration of their original term), the
restriction period (including, without limitation, any vesting requirements) on any restricted
stock and restricted stock units held by Employee shall lapse, and any other vesting requirements
or conditions with respect to the foregoing or other equity-based awards held by Employee shall
lapse and be disregarded.
(iv) Other Incentive Compensation. Employee shall be eligible to participate in any
other incentive compensation methods or programs established by either of the Employers and offered
to senior executives of Xxxx or LLC.
3. Termination. Employee’s employment may be terminated prior to the expiration of the
Employment Period under the following conditions, in each case subject to the terms of Section
4. In the event any party or parties (in the case of the Employers) hereto elect to terminate
the
Employment Period, such party or parties shall deliver written notice thereof (other than a
termination pursuant to Section 3(a)) in accordance with the terms of this Section
3, which written notice shall set forth the provision of this Section 3 under which
such termination is effective. A notice of termination hereunder may not be retracted or withdrawn
by the party or parties delivering the same, without the consent of the other party or parties
hereto.
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(a) Death. The Employment Period shall terminate automatically, without notice,
effective upon the death of Employee.
(b) Disability. The Employers may terminate the Employment Period at any time,
effective upon not less than 10 days prior written notice to Employee after Employee has been
unable to perform the essential duties of his positions because of “Disability” (as determined on
the basis of medical evidence satisfactory to the Board, in the Board’s reasonable discretion) for
a period of (i) 180 consecutive days in any 12-month period or (ii) 270 days in any 12-month
period, subject to reasonable accommodation provisions of applicable law.
(c) Cause. The Employers may terminate the Employment Period at any time for Cause,
effective upon delivery of prior written notice to Employee. For the purposes of this Agreement,
“Cause” shall mean Employee’s (i) breach of Section 9, (ii) material breach of any other
term or provision of this Agreement which is not cured by Employee within 20 days of written notice
thereof from either of the Employers (which notice shall specify that such notice is being
delivered for purposes of this Section 3(c)(ii)), (iii) fraud or dishonesty in the course
of Employee’s employment, (iv) for reasons other than Disability, continued gross neglect of the
duties to be performed by Employee hereunder which results in material harm to the Employers and
which is not cured by Employee within 20 days of written notice thereof from the Employers (which
notice shall specify that such notice is being delivered for purposes of this Section
3(c)(iv)), (v) material violation of any of the Policies that results in material injury to one
or both of the Employers or (vi) conviction or pleading guilty or nolo contendere to any felony
charge. Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for
Cause pursuant to clauses (i) through (v) of this Section 3(c) unless and until there shall
have been delivered to Employee a copy of a resolution duly adopted by the affirmative vote of not
less than either (A) a majority of the members of the Board or (B) two-thirds of the independent
members of the Board, at a meeting of the Board called and held for such purpose (after reasonable
notice to Employee and an opportunity for Employee, together with counsel of Employee’s choosing,
to be heard before the Board not less than 10 days after the giving of such notice), finding that
in the good faith opinion of the Board, Employee conducted himself as set forth above in clauses
(i) through (v) of this Section 3(c) and specifying the particulars of such conduct in
detail. Notwithstanding anything contained in this Agreement to the contrary, Employee’s failure
to perform his duties or fulfill his obligations under this Agreement after receiving a notice of
termination shall not constitute proper Cause for purposes of this Agreement.
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(d) Change of Control.
(i) In the event there is a termination by the Employers without Cause or a termination by
Employee for Good Reason, in either case (A) during a Change of Control Protection Period (whether
or not a Change of Control actually occurs) or (B) upon or within the
two-year period following a Change of Control (the periods described in clauses (A) and (B) of
this Section 3(d)(i), together, the “Change of Control Period”), Employee shall be entitled
to payment under Section 4(d).
(ii) For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of
the following after the Effective Date, whether directly or indirectly, voluntarily or
involuntarily, whether as part of a single transaction or a series of transactions: (A) individuals
who as of the Effective Date constitute the Board cease, for any reason, to constitute at least a
majority of the Board, unless the election or nomination for election of each new director was
approved by at least two-thirds of the directors then still in office who were directors as of the
Effective Date (either by a specific vote of such directors or by the approval of the Employers’
proxy statement in which each such individual is named as a nominee for a director without written
objection to such nomination by such directors); provided, however, that no
individual initially elected or nominated as a director as a result of an actual or threatened
election contest with respect to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than the Board shall be
deemed to be approved (solely for purposes of this Section 3(d)(ii)); (B) the sale,
transfer or other disposition of all or substantially all of the assets of either of the Employers
(other than to a wholly-owned direct or indirect subsidiary of either of the Employers or a benefit
plan of either of the Employers); (C) any person or entity or group of affiliated persons or
entities (other than Employee, Xxxxxxxx Xxxxxxxx or a group including either of them) acquiring
beneficial ownership (as that term is used in Rules 13d-3, 13d-5 or 16a-1 under the Securities
Exchange Act of 1934, as amended, whether or not applicable) of 30% or more of the shares of
capital stock or other equity of either of the Employers, having by the terms thereof voting power
to elect the members of the Board (in the case of Xxxx only), or, convertible into shares of such
capital stock or other equity of either of the Employers (collectively, “Voting Shares”), as the
case may be; (D) the stockholders or members of either of the Employers adopting a plan of
liquidation providing for the distribution of all or substantially all of either of the Employers’
assets or approving the dissolution of either of the Employers; or (E) the merger, consolidation,
or reorganization of either of the Employers or any similar transaction which results in (1) the
beneficial owners of the Voting Shares of either of the Employers immediately prior to such merger,
consolidation, reorganization or transaction beneficially owning, after giving effect to such
merger, consolidation, reorganization or transaction, interests or securities of the surviving or
resulting entity representing 50% or less of the shares of capital stock or other equity of the
surviving or resulting entity having by the terms thereof voting power to elect the members of the
board or directors (or equivalent thereof) or convertible into shares of such capital stock or
other equity of such entity or (2) any person or entity or group of affiliated persons or entities
(other than Employee, Xxxxxxxx Xxxxxxxx or a group including either of them) owning, after giving
effect to such merger, consolidation, reorganization or transaction, interests or securities of the
surviving or resulting entity, representing 30% or more of the shares of capital stock or other
equity of the surviving or resulting entity having by the terms thereof voting power to elect the
members of the board of directors (or equivalent thereof) or convertible into shares of such
capital stock or other equity of such entity.
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(e) Good Reason. Employee may terminate the Employment Period at any time for Good
Reason, effective upon not less than 10 days prior written notice to the Employers. For purposes
of this Agreement, “Good Reason” means (i) a material diminution in Employee’s
duties or responsibilities for either of the Employers, demotion of Employee or a change for
any reason in Employee’s direct reporting relationship to other than the Board or a committee
thereof (or, following a Change of Control, reorganization of either of the Employers, or the
shares of Xxxx ceasing to be publicly traded, a change for any reason in Employee’s direct
reporting relationship to other than the board of directors of any successor or acquiring entity
(including the ultimate parent of any such successor or acquiring entity), whether such successor
or acquiring entity (or its ultimate parent) is a public, private or other form of corporation,
limited liability company, partnership, holding company, hedge fund, private equity firm,
investment firm or other form of entity); (ii) Employee’s being removed from, not nominated for
re-election to, or not re-elected to the Board, other than for Cause or at his request; (iii)
either of the Employers’ (or any of their successors’ or acquiring entities’) material breach of
this Agreement which is not cured within 20 days of written notice thereof to the Employers (which
notice shall specify that such notice is being delivered for purposes of this Section
3(e)(iii)); (iv) Employee’s being required to report to an office to work on a regular basis at
a location outside of a 30-mile radius from the Principal Location; (v) a reduction of Employee’s
Gross Annual Base Salary or Target Bonus; (vi) any failure by the Employers to obtain the
assumption in writing of any obligation of the Employers to perform any agreement between Employee
and either of the Employers (A) by any successor to all or substantially all of the assets of
either of the Employers or (B) by any successor or acquiring entity upon a Change of Control of
either of the Employers, in either case whether by operation of law or contractually, as of the
date of such transaction; or (vii) Employee is not for any reason the most senior executive officer
responsible for all business units, functions and departments of either of the Employers
(including, without limitation, sales, marketing, accounting/finance, legal, information
technology, human resources, research & development, operations, and all divisions and product
lines) (any such business unit, function or department, a “Department”) (or, following a Change of
Control, reorganization of either of the Employers, or the shares of Xxxx ceasing to be publicly
traded, Employee is not for any reason the most senior executive officer of any successor or
acquiring entity (including the ultimate parent of any such successor or acquiring entity)
responsible for all Departments of such successor or acquiring entity (or its ultimate parent),
whether such successor or acquiring entity (or its ultimate parent) is a public, private or other
form of corporation, limited liability company, partnership, holding company, hedge fund, private
equity firm, investment firm or other form of entity). For purposes of any determination regarding
the existence of Good Reason, any claim by Employee that Good Reason exists shall be presumed to be
correct unless a court of competent jurisdiction issues a final judgment, order or decree
determining that the Employers have established by clear and convincing evidence that Good Reason
does not exist.
(f) Termination of the Employment Period Other Than for Death, Disability, Cause, Change
of Control or Good Reason. The Employers may terminate Employee’s employment (and thereby
terminate the Employment Period) at any time, for any or no reason, effective upon not less than 30
days prior written notice. Employee may terminate his employment, or resign, from the Employers
(and thereby terminate the Employment Period) at any time, for any or no reason, effective upon not
less than 30 days prior written notice.
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4. Obligations of the Employers Upon Termination of the Employment Period.
(a) Termination Pursuant to Section 3(a) (Death). In the event that the Employment
Period terminates pursuant to Section 3(a), no further compensation shall be paid to
Employee following the effective date of termination, provided that:
(i) on the 35th day following the effective date of termination, the Employers
shall pay to Employee’s estate or other beneficiary(ies), as applicable, a lump sum cash payment
equal to the sum of (A) Employee’s Gross Annual Base Salary through the effective date of
termination to the extent not theretofore paid, (B) any accrued vacation pay to the extent not
theretofore paid, (C) subject to Section 6, all business expenses which were incurred by
Employee prior to or as of the effective date of termination but not yet reimbursed by the
Employers and (D) the Annual Bonus payable for each year preceding the year during which
termination occurs, to the extent not theretofore paid (the aggregate amounts set forth in clauses
(A), (B), (C) and (D) above, collectively the “Accrued Obligations”);
(ii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee’s estate or other beneficiary(ies), as applicable, a lump sum cash payment of
a pro rata portion of the Target Bonus (as in effect on the effective date of termination) that
Employee would have been eligible to receive pursuant to Section 2(b) for the fiscal year
in which the effective date of termination occurs, based upon the percentage of the fiscal year
that shall have elapsed through the effective date of termination (the “Pro Rata Bonus”);
(iii) for 18 months following the effective date of termination, the Employers will reimburse
Employee’s spouse and eligible dependents on a monthly basis (on the 35th day following
the date the cost is incurred) for the cost (on a grossed-up basis) of maintaining health benefits
for Employee’s spouse and eligible dependents under a group health plan of the Employers,
provided that (A) Employee’s spouse and/or legal guardian for Employee’s eligible
dependents timely elects the continuation of group health plan benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and (B) Employee’s spouse and/or legal guardian
for Employee’s eligible dependents makes a monthly payment to the Employers in an amount equal to
the monthly premium payments (both the employee and employer portion) required to maintain such
coverage. Employee and the Employers acknowledge that this coverage will count towards the
Employers’ and such group health plan’s obligation to provide Employee’s spouse and eligible
dependents with the right to continuation coverage pursuant to COBRA and that Employee’s spouse
and/or eligible dependents will be able to continue such coverage at their own expense for the
balance of the period provided under COBRA (for the avoidance of doubt, the foregoing will not
cover any short-term or long-term disability insurance benefits); and
(iv) as of the effective date of termination, all of Employee’s outstanding equity awards
(including, without limitation, the Initial Options) shall vest and become non-forfeitable, with
any outstanding stock options immediately vesting and becoming exercisable (and with all stock
options remaining exercisable for three years following Employee’s termination date (but no later
than the original term)), the restriction period (including, without limitation, any vesting
requirements) on any restricted stock and restricted stock units held by Employee shall lapse, and
any other vesting requirements or conditions with respect to the foregoing or other equity-based
awards held by Employee shall lapse and be disregarded, and
such awards shall be settled in accordance with the terms of the plan and/or the applicable
award agreement (all acceleration pursuant to this paragraph, together, the “Equity Acceleration”).
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(b) Termination Pursuant to Section 3(b) (Disability). In the event that the
Employment Period is terminated pursuant to Section 3(b), no further compensation shall be
paid to Employee following the effective date of termination, provided that:
(i) on the 35th day following the effective date of termination, the Employers
shall pay to Employee or his legal representative, as applicable, a lump sum cash payment equal to
the Accrued Obligations;
(ii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee or his legal representative, as applicable, a lump sum cash payment equal to
the Pro Rata Bonus;
(iii) for 18 months following the effective date of termination, the Employers will reimburse
Employee on a monthly basis (on the 35th day following the day the cost is incurred) for
the cost (on a grossed-up basis) of maintaining health benefits for Employee (and Employee’s spouse
and eligible dependents) under a group health plan of the Employers, provided that (A)
Employee timely elects the continuation of group health plan benefits under COBRA and (B) Employee
makes a monthly payment to the Employers in an amount equal to the monthly premium payments (both
the employee and employer portion) required to maintain such coverage. Employee and the Employers
acknowledge that this coverage will count towards the Employers’ and such group health plan’s
obligation to provide Employee with the right to continuation coverage pursuant to COBRA and that
Employee will be able to continue such coverage at Employee’s own expense for the balance of the
period provided under COBRA (for the avoidance of doubt, the foregoing will not cover any
short-term or long-term disability insurance benefits) (with the exception of the duration, all
such reimbursement payments, gross-ups and related conditions described in this paragraph, the
“COBRA Reimbursement”); and
(iv) as of the effective date of termination, Employee shall be entitled to the Equity
Acceleration.
(c) Termination Pursuant to Section 3(c) (Cause). In the event that the Employment
Period is terminated pursuant to Section 3(c), no further compensation shall be paid to
Employee following the effective date of termination, provided that, on the 35th
day following the effective date of termination, the Employers shall pay to Employee a lump sum
cash payment equal to the Accrued Obligations.
(d) Termination Pursuant to Section 3(d) (Change of Control). In the event that the
Employment Period is terminated during the Change of Control Period (A) by the Employers for any
reason (other than Employee’s death or Disability, or with Cause) or (B) by Employee for Good
Reason, no further compensation shall be paid to Employee following the effective date of
termination, provided that:
(i) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to the Accrued Obligations;
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(ii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to the Pro Rata Bonus;
(iii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to 2.5 multiplied by the sum of (A) the Gross
Annual Base Salary (as in effect on the effective date of termination or, if higher, as in effect
immediately prior to any such Change of Control) plus (B) the Target Bonus (as in effect on the
effective date of termination or, if higher, as in effect immediately prior to any such Change of
Control) that Employee would have been eligible to receive pursuant to Section 2(b) for the
fiscal year in which the effective date of termination occurs;
(iv) for 18 months following the effective date of termination, the Employers will provide
Employee with the COBRA Reimbursement on a monthly basis (on the 35th day following the
day the cost is incurred) (and, in addition, to the extent Employee remains eligible
(provided that Employee may at any time supplement any cost necessary to allow for
continued eligibility as provided under the terms of the applicable policy), Employee may continue
participation in the Employers’ long-term disability plan on the same basis as provided prior to
the termination of Employee’s employment, at his own cost and expense, through the end of the
Employment Period, without regard to any earlier termination of employment); and
(v) as of the effective date of termination, Employee shall be entitled to the Equity
Acceleration.
(e) Termination by Employee Without Good Reason. In the event that the Employment
Period is terminated by Employee without Good Reason, no further compensation shall be paid to
Employee following the effective date of termination, provided that, on the 35th
day following the effective date of termination, the Employers shall pay to Employee a lump sum
cash payment equal to the Accrued Obligations.
(f) Termination by the Employers Without Cause or by Employee for Good Reason. In the
event that the Employment Period is terminated (other than during the Change of Control Period)
either (A) by the Employers for any reason (other than Employee’s death or Disability, or with
Cause) or (B) by Employee for Good Reason, no further compensation shall be paid to Employee
following the effective date of termination, provided that:
(i) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to the Accrued Obligations;
(ii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to the Pro Rata Bonus;
(iii) on the 35th day following the effective date of termination, the Employers
shall pay to Employee a lump sum cash payment equal to 1.5 multiplied by the sum of (A) the Gross
Annual Base Salary (as in effect on the effective date of termination) plus (B) the Target Bonus
(as in effect on the effective date of termination) that Employee would have been eligible to
receive pursuant to Section 2(b) for the fiscal year in which the effective date of
termination occurs;
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(iv) for 18 months following the effective date of termination, the Employers will provide
Employee with the COBRA Reimbursement on a monthly basis (on the 35th day following the
day the cost is incurred) (and, in addition, to the extent Employee remains eligible
(provided that Employee may at any time supplement any cost necessary to allow for
continued eligibility as provided under the terms of the applicable policy), Employee may continue
participation in the Employers’ long-term disability plan on the same basis as provided prior to
the termination of Employee’s employment, at his own cost and expense, through the end of the
Employment Period, without regard to any earlier termination of employment); and
(v) as of the effective date of termination, Employee shall be entitled to the Equity
Acceleration.
(g) Mutual Release of Claims. Payments under Section 4(f) (except the Accrued
Obligations and any equity or long-term incentive awards (including, without limitation, the
Initial Options) which were previously accelerated pursuant to Section 2(d)(iii) or
otherwise) shall be owed and made to Employee as described in Section 4(f);
provided that (i) the Employers have delivered to Employee a fully-executed copy of the
Mutual Release of Claims in the form attached hereto as Exhibit A (subject to adjustment as
necessary to comply with changes in applicable law) (the “Mutual Release”) within three days
following the effective date of termination of Employee’s employment, and (ii) Employee has
executed and not revoked the Mutual Release within 35 days following the effective date of
termination of Employee’s employment (and the Rescission Period set forth therein shall have
expired prior to such 35th day). Failure by the Employers to provide Employee with a
Mutual Release (executed by both of the Employers) within three days following the effective date
of termination of Employee’s employment shall release Employee from his obligation to execute the
Mutual Release, and Employee shall be entitled to the payments under Section 4(f) as
described therein. Employee’s (or his estate’s or representative’s) failure or refusal to sign, or
revocation of, the Mutual Release, following the delivery by the Employers of the Mutual Release
contemplated by this Section 4(g), shall relieve the Employers of liability to provide
Employee any and all payments under Section 4(f) (except the Accrued Obligations and any
equity or long-term incentive awards (including, without limitation, the Initial Options) which
were previously accelerated pursuant to Section 2(d)(iii) or otherwise).
5. Potential Reductions.
(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or
benefit received or to be received by Employee (including, without limitation, any payment or
benefit received in connection with a Change of Control or the termination of Employee’s
employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement
or agreement) (all such payments and benefits, together the “Total Payments”) would be subject (in
whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor
provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or
agreement, the Employers will reduce Employee’s payments and/or benefits under this Agreement, to
the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in
no event to less than zero), in the following order: (i) any cash severance amounts derived based
upon the sum of Gross Annual Base Salary
11
plus Target Bonus; (ii) any cash severance amounts derived based upon the Pro Rata Bonus;
(iii) any COBRA Reimbursement or other reimbursement of health benefits; and (iv) any Equity
Acceleration or other acceleration of outstanding equity awards (the payments and benefits set
forth in clauses (i) through (iv) of this Section 5(a), together, the “Potential
Payments”); provided, however, that the Potential Payments shall only be reduced if
(y) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of
federal, state and local income taxes on such reduced Total Payments and after taking into account
the phase out of itemized deductions and personal exemptions attributable to such reduced Total
Payments) is greater than or equal to (z) the net amount of such Total Payments without such
reduction (but after subtracting the net amount of federal, state and local income taxes on such
Total Payments and the amount of Excise Tax to which Employee would be subject in respect of such
unreduced Total Payments and after taking into account the phase out of itemized deductions and
personal exemptions attributable to such unreduced Total Payments.
(b) For purposes of determining whether and the extent to which the Total Payments will be
subject to the Excise Tax: (i) no portion of the Total Payments the receipt or enjoyment of which
Employee shall have waived at such time and in such manner as not to constitute a “payment” within
the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no portion of the
Total Payments shall be taken into account which, in the opinion of tax counsel (“Tax Counsel”)
reasonably acceptable to Employee and selected by the accounting firm which was, immediately prior
to the Change of Control, the Employers’ independent auditor (the “Auditor”), does not constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, without
limitation, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no
portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel,
constitutes reasonable compensation for services actually rendered, within the meaning of Section
280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of
the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall be determined by
the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(c) At the time that payments are made under this Agreement, the Employers shall provide
Employee with a written statement setting forth the manner in which such payments were calculated
and the basis for such calculations, including, without limitation, any opinions or other advice
the Employers received from Tax Counsel, the Auditor, or other advisors or consultants (and any
such opinions or advice which are in writing shall be attached to the statement). If Employee
objects to the Employers’ calculations, the Employers shall pay to Employee such portion of the
Potential Payments (up to 100% thereof) as Employee determines is necessary to result in the proper
application of this Section 5. All determinations required by this Section 5 (or
requested by either Employee or the Employers in connection with this Section 5) shall be
at the expense of the Employers. The fact that Employee’s right to payments or benefits may be
reduced by reason of the limitations contained in this Section 5 shall not of itself
limit or otherwise affect any other rights of Employee under this Agreement.
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6. Reimbursement of Expenses. The applicable Employer shall reimburse Employee for any and
all reasonable expenses incurred by him in the performance of his duties hereunder,
subject to the presentment of appropriate vouchers in accordance with the applicable Employer’s
normal policies for expense verification and subject to Section 22.
7. No Mitigation; No Offset. All amounts paid or due to Employee under Section 4
shall be paid without regard to whether Employee has taken or takes actions to mitigate damages.
Employee shall be under no obligation to seek other employment. Accordingly, there shall be no
offset against amounts due to Employee under this Agreement, or otherwise, on account of any
remuneration attributable to any subsequent employment that he may obtain or on account of any
claim that either of the Employers may have against him. The Employers’ obligation to make the
payments provided for in this Agreement and otherwise to perform their obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action
which the Employers may have against Employee or others.
8. Ownership of Materials. All records, materials, lists, files, manuals, tapes and all
other written or recorded data and information in whatever form that may be used by, or made
available to Employee in connection with his employment hereunder (“Materials”) are and shall
remain the sole property of the Employers. As soon as practicable following the voluntary or
involuntary termination of Employee’s employment hereunder, Employee shall return or cause to be
returned to the Employers Materials in Employee’s possession and/or under his control.
9. Covenant Not to Compete; Covenant Not to Solicit; Confidentiality. Employee expressly
recognizes and acknowledges that:
(a) The Employers have developed and established a valuable and extensive clientele for their
real estate information reporting services.
(b) The Employers’ business connections and clients have been established and maintained at
great expense and are of great value to the Employers.
(c) Employee has and will become familiar with and possessed of the manner, method, secrets,
and confidential and proprietary information pertaining to the Employers’ business methods and the
business requirements and needs of their clients (collectively, “Confidential Information”).
(d) By virtue of this Agreement and predecessor agreements, Employee has and will become
personally acquainted with the clients, business methods, and trade secrets of the Employers.
(e) In recognition and in consideration of the foregoing, Employee expressly covenants and
agrees as follows:
(i) During the Employment Period and continuing until the Non-Competition Termination Date (as
defined below), Employee shall not in any way, directly or indirectly, for himself or on behalf of
or in conjunction with any other person or entity, solicit for the benefit of a Competitive
Business (as defined below), divert, take away, or attempt to take away, any of the Employers’
clients or the business or patronage of any such clients. For purposes of applying this provision
after the termination or expiration of the Employment Period, “clients” shall mean
any person or entity to whom the Employers provided their services within six months prior to
such effective date of termination or expiration.
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(ii) During the Employment Period and continuing until the Non-Competition Termination Date,
Employee shall not in any way, directly or indirectly, for himself or on behalf of or in connection
with any other person or entity, solicit, entice, hire, employ, or endeavor to employ, any of the
Employers’ employees. For purposes of applying this provision after the termination or expiration
of the Employment Period, “employees” shall mean any person employed by the Employers within six
months prior to such effective date of termination or expiration.
(iii) During the Employment Period and continuing until the Non-Competition Termination Date,
Employee shall not, directly or indirectly, for himself or on behalf of or in connection with any
other person or entity: (A) enter into the employ of or render any services to any person, firm,
corporation or other entity engaged in any Competitive Business; (B) engage in any Competitive
Business for his own account; or (C) become associated with or own an interest in any Competitive
Business as an individual, partner, shareholder, member, creditor, director, officer, principal,
agent, employee, trustee, consultant, advisor or in any other relationship or capacity;
provided that so long as Employee is not otherwise in breach hereof, following his
termination of employment, Employee’s entering into the employ of or rendering any services to an
entity that engages in a Competitive Business that generates less than 20% of such entity’s
aggregate annual gross revenues from such Competitive Business (calculated as an average of the
three most recently completed fiscal years of such entity immediately prior to Employee’s
commencement of employment by or rendering services to such entity) shall not, in and of itself, be
deemed a breach hereof so long as Employee is not rendering any services with respect to and has no
direct or indirect involvement with such Competitive Business. For purposes of this Agreement,
“Competitive Business” means (1) the business of developing data, analysis or forecasts pertaining
to the construction, absorption, occupancy, rents, sales prices, automated valuation, or automated
credit risk analysis for United States commercial office, industrial, retail, multi-family, hotel
or other properties or real estate markets and (2) each other business in which the Employers are
engaged during the Employment Period. For informational purposes only and not for the purpose of
construing or restricting the scope of the term “Competitive Business,” the parties hereto hereby
agree that the following companies and/or their respective affiliates are currently engaged in a
Competitive Business: CoStar Group Inc. (including Property & Portfolio Research, Inc.), LoopNet,
Inc., Xxxxx’x KMV, Real Capital Analytics Inc. and CBRE Econometric Advisors. Mere passive
ownership of stock representing 2% or less of the capital stock of a publicly traded entity shall
not be deemed to constitute participation in a Competitive Business. Nothing in this Section
9(e)(iii) shall be deemed to prohibit Employee from engaging in research related to any of the
foregoing subjects for persons or entities developing data related to such subjects in a manner
incidental to their businesses (by way of example, nothing herein would prevent Employee from
engaging in any research for an investment banking firm that develops real estate data as a portion
of its overall business).
(iv) During the Employment Period and thereafter, Employee shall not divulge to others or use
for his own benefit, or assist others in using such information for their benefit, any Confidential
Information obtained prior to or after the date hereof from the Employers by virtue of the
relationship created hereunder or otherwise, unless such Confidential Information is
or becomes generally available to the public (other than by reason of Employee’s breach of
this Section 9(e)(iv)) and except in connection with (A) the performance of Employee’s
duties hereunder, (B) enforcement of Employee’s rights under this Agreement and (C) as required by
law. Notwithstanding anything in the foregoing, the parties hereto hereby acknowledge and agree
that, subject to the terms and conditions of this Section 9(e), Employee’s employment or
retention as a consultant in the real estate information industry does not, in and of itself,
constitute a breach of this Section 9(e)(iv).
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(f) For purposes of this Agreement, “Non-Competition Termination Date” shall mean (i) the date
that is two years following the effective date of termination of Employee’s employment for any
reason during the Change of Control Period and (ii) the date that is one year following the
effective date of termination of Employee’s employment other than during the Change of Control
Period.
10. Proprietary Rights.
(a) For purposes of this Agreement, “Works” shall mean intellectual property and proprietary
rights, including, without limitation, ideas, designs, concepts, techniques, inventions,
discoveries and works of authorship, whether or not patentable or protectable by copyright or as a
mask work, and whether or not reduced to practice, including, without limitation, devices,
processes, trade secrets, formulas, techniques, compositions of matter, computer software programs,
mask works and methods, together with any improvements thereon or thereto, derivative works made
therefrom and know how related thereto, in each case as it relates to the business of the
Employers.
(b) Employee hereby agrees that all Works made, conceived, developed or reduced to practice,
in whole or in part, solely by Employee or jointly with others, either during or after the
Employment Period, if such Works are (i) made through the use of any of the Confidential
Information, (ii) result from any work performed by Employee for either of the Employers, (iii)
relate to either of the Employers’ present or prospective business and/or activities, or (iv)
relate to either of the Employers’ actual or demonstrably anticipated research and development
during such term of engagement, shall belong exclusively to the Employers and shall be deemed part
of the Confidential Information for purposes of this Agreement whether or not fixed in a tangible
medium of expression. Without limiting the forgoing, Employee agrees that all such Works shall be
deemed to be “works made for hire” under the U.S. Copyright Act of 1976, as amended, and that the
Employers shall be deemed the author and owner thereof; provided that in the event and to
the extent that such Works are determined not to constitute “works made for hire” as a matter of
law, Employee hereby irrevocably assigns and transfers to the Employers the entire right, title and
interest, domestic and foreign, of Employee in and to such Works. The Employers shall have the
right to obtain and to hold in their own names, copyrights, registrations or such other protection
as may be appropriate to the subject matter, and any extensions and renewals thereof. Subject to
Section 26, Employee agrees to give the Employers, and any person designated by the
Employers, any assistance the Employers deem necessary or appropriate to perfect the rights defined
in this Section 10.
(c) Employee will promptly disclose in writing (which may be by e-mail) to the Board or its
designee, every Work made, conceived, developed or reduced to practice solely by
Employee, in connection with the business of either of the Employers either (i) during the
Employment Period, or (ii) following the Employment Period, if such Work is made through the use of
Confidential Information.
15
(d) Subject to Section 26, Employee agrees to assist each of the Employers, both
during and following the Employment Period, in obtaining and enforcing for each of the Employers’
own benefit patents, copyrights, mask work rights, trade secret rights and other legal protections
in any and all countries for any and all Works made by Employee (in whole or in part), the rights
to which belong to or have been assigned to the Employers pursuant to this Agreement. Upon
request, but subject to Section 26, Employee will execute all applications, assignments,
instruments and papers and perform all acts that either of the Employers or their counsel may deem
necessary or desirable to obtain or enforce any and all such patents, copyrights, mask work rights,
trade secret rights and other legal protections in such Works and otherwise to protect the
interests of each of the Employers therein. The Employers jointly and severally agree to bear all
expenses which they cause to be incurred by Employee in assigning, obtaining, maintaining and
enforcing said patents, copyrights, trade secret rights, mask work rights and other legal
protections in accordance with this Agreement.
(e) Employee understands that utilization of the Works is in the sole discretion of the
Employers, and that neither of the Employers is obligated to develop, market or otherwise use any
device or product.
11. Breach of Certain Provisions. Employee acknowledges that damages resulting from the
breach of the provisions of Section 9 or 10 may be difficult to calculate. In the event of
a breach or threatened breach by Employee of the provisions of Section 9 or 10, the
Employers shall be entitled to apply to any court of competent jurisdiction for an injunction
against such breach, actual or threatened. Notwithstanding the foregoing, the Employers shall at
all times retain their right to recover from Employee or any other person or entity that may be
held liable, their damages resulting from such breach.
12. Assignment. This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of all other parties hereto
(except that Employee’s rights to payments hereunder may be transferred by will or the laws of
descent or distribution without any such prior written consent). In the event of Employee’s death
while any payment, benefit or entitlement is due to Employee hereunder, such payment, benefit or
entitlement shall be paid or provided to Employee’s designated beneficiaries, or if there are no
such beneficiaries, to Employee’s estate.
16
13. Representations. Employee represents and warrants to both of the Employers that (a)
the execution, delivery, and performance of this Agreement by Employee does not, with or without
the giving of notice or the passage of time, or both, conflict with, result in a default, right to
accelerate, or loss of rights under any provision of any agreement or understanding to which
Employee is a party or by which Employee may be bound or affected and (b) this Agreement is the
legal, valid and binding obligation of Employee, enforceable against him in accordance with its
terms (except to the extent enforcement may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability affecting
the rights of creditors). Each of the Employers represents and warrants to Employee that the
execution, delivery, and performance of this Agreement by the Employers does not, with or without
the giving of notice or the passage of time, or both, conflict with, result in a default, right to
accelerate, or loss of rights under any provision of any agreement or understanding to which either
of the Employers, or, to the best knowledge of each of the Employers, any of the Employers’
affiliates is a party or by which either of the Employers, or, to the best knowledge of each of the
Employers, any of the Employers’ affiliates may be bound or affected. Each of the Employers
further represents and warrants to Employee that (i) it has full power and authority to enter into
and perform its obligations under this Agreement, (ii) the execution and delivery of this Agreement
by such Employer has been duly authorized by all necessary corporate or limited liability company
actions, as applicable, and (iii) this Agreement is the legal, valid and binding obligation of each
of the Employers, enforceable jointly and severally against each of the Employers in accordance
with its terms (except to the extent enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability affecting the rights of creditors).
14. Survival. The obligations of Employee and the Employers under this Agreement which by
their nature may require either partial or total performance after the expiration of the Employment
Period (including, without limitation, those under Sections 2(c), 4, 5, 9, 10, 11, 15, 24 and
26) will survive any termination or expiration of this Agreement.
15. Indemnification; Legal Fees; Insurance.
(a) To the fullest extent authorized by applicable law, the Employers shall indemnify and hold
harmless Employee from and against any and all claims, liabilities, judgments, fines, penalties,
costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses)
reasonably incurred by Employee in connection with any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that
Employee was or is a director, manager, officer or employee of the Employers, whether the basis of
such proceeding is alleged action or inaction in an official capacity as a director, officer or
employee while serving as a director, manager, officer or employee. The right to indemnification
hereunder shall include the right to be paid by the Employers the expenses (including, without
limitation, reasonable attorneys’ fees and expenses) incurred in defending any such proceeding in
advance of its final disposition; provided, however, that such advance shall be
made to Employee only upon delivery to the Employers of an undertaking by Employee to repay all
amounts so advanced if it shall ultimately be determined by final judicial decision from which
there is no further right to appeal that Employee is not entitled to indemnification and to such
advancement under this Section 15 or otherwise. For avoidance of doubt, the rights of
Employee under this Section 15(a) shall survive the termination or expiration of this
Agreement.
17
(b) If any contest or dispute shall arise under this Agreement involving termination of
Employee’s employment with either of the Employers or involving the failure or refusal of either of
the Employers to perform fully in accordance with the terms hereof, the Employers shall reimburse
Employee on a current basis for all reasonable legal fees and related expenses, if any, incurred by
Employee in connection with such contest or dispute (regardless of the result
thereof), together with interest in an amount equal to the prime rate as reported in The Wall
Street Journal, such interest to accrue 30 days from the date the Employers receive Employee’s
statement for such fees and expenses through the date of payment thereof, regardless of whether
Employee’s claim is upheld by a court of competent jurisdiction; provided, however,
that Employee shall be required to repay immediately any such amounts to the Employers to the
extent that a court of competent jurisdiction issues a final and non-appealable order setting forth
the determination that the position taken by Employee was in bad faith.
(c) Without limiting the generality and applicability of Section 15(a) or 15(b), the
Employers agree to continue and maintain both during the Employment Period and for a period of six
years following the termination of the Employment Period, a directors’ and officers’ liability
insurance policy covering Employee at a level, and on terms and conditions, no less favorable to
him than the coverage the Employers provide to other similarly-situated officers and directors. In
all events, Employee shall be covered, in respect of Employee’s activities as an officer, director,
manager and employee of the Employers or any of their subsidiaries or affiliates, by the Employers’
(or any of their subsidiaries or affiliates’) directors and officers liability insurance policy
with a top-rated insurer with the usual coverage (with respect to scope and period) and deductibles
in a total policy amount not to be less than $10,000,000 or other comparable policies, if any,
obtained by the Employers’ (or any of their subsidiaries’ or affiliates’) successors or acquiring
entities, to the fullest extent permitted by such policies.
16. Captions. The captions, headings and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit, or amplify the provisions hereof.
17. Notices. All notices required or permitted to be given hereunder shall be in writing
and shall be deemed delivered when actually received or, if mailed, whether or not actually
received, five days after deposited in the United States mail, postage prepaid, registered or
certified mail, return receipt requested, addressed to the party to whom notice is being given at
the following address or at such other address as such party may designate by notice (except that
notice of a change of address shall be effective only upon receipt):
| To the Employers: | Xxxx, Inc. | |||
| 000 Xxxxx Xxxxxx, 0xx Xxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Chairman of the Compensation Committee | ||||
| Employee: | The most recent address of Employee set forth in the personnel records of the Employers. | |||
| with a copy to: | Xxxxx Day | |||
| 000 Xxxx 00xx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxx X. Xxxx |
18
18. Severability. In the event that any one or more of the provisions of this Agreement
shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be affected thereby. Any
such invalid, illegal or unenforceable provision shall be replaced by other provisions which are as
similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are
valid and enforceable (but without expanding the time period or the scope of any restriction in
Section 9).
19. Entire Agreement; Amendments. This Agreement (together with the Mutual Release)
contains the entire agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject matter hereof
(including, without limitation, the Prior Agreement). This Agreement may be amended only by an
instrument in writing duly executed by an officer of the Employers and by Employee. In the event
of a conflict between any provision of this Agreement and any other provision of any plan, program,
policy, arrangement or other agreement of the Employers, the provisions of this Agreement, to the
extent more favorable to Employee, shall apply.
20. Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall constitute an original, and all of which together shall constitute one and the same
agreement, with the same effect as if the signatures upon such counterparts were upon the same
instrument.
21. Governing Law. This Agreement shall be governed by and construed and enforced
according to the laws of the State of New York, without regard to conflicts of laws principles
thereof (except that indemnification obligations owed to Employee in his capacity as an officer,
director or manager of either of the Employers shall be governed by Maryland law). The parties
hereto agree that the state and federal courts located in the County and State of New York shall
have exclusive jurisdiction in any action, suit or proceeding based on or arising out of this
Agreement and the parties hereto hereby: (a) submit to the personal jurisdiction of such courts;
(b) consent to service of process in connection with any action, suit or proceeding; (c) agree that
venue is proper and convenient in such forum; and (d) waive any other requirement (whether imposed
by statute, rule of court or otherwise) with respect to personal jurisdiction, subject matter
jurisdiction, venue, or service of process.
22. Compliance With Section 409A.
(a) The parties hereto intend that any amounts payable under this Agreement, and the
Employers’ and Employee’s exercise of authority or discretion hereunder comply with the provisions
of Section 409A so as not to subject Employee to the payment of the additional tax, interest and
any tax penalty which may be imposed under Section 409A. The Employers shall administer this
Agreement in compliance with Section 409A. In furtherance thereof, to the extent that any
provision hereof would result in Employee being subject to payment of the additional tax, interest
and tax penalty under Section 409A, the parties hereto agree to amend this Agreement if permitted
under Section 409A in a manner which does not impose any additional taxes, interests or penalties
on Employee in order to bring this Agreement into compliance with Section 409A, without materially
changing the economic value of the arrangements under this Agreement to any party hereto, and
thereafter the parties hereto will interpret its provisions in a manner that complies with Section
409A.
19
(b) Notwithstanding any provisions of this Agreement to the contrary, if Employee is a
“specified employee” (within the meaning of Section 409A and determined pursuant to policies
adopted by the Employers consistent with Section 409A) at the time of Employee’s separation from
service and if any portion of the payments or benefits to be received by Employee upon separation
from service would be considered deferred compensation under Section 409A and cannot be paid or
provided to Employee without his incurring taxes, interest or penalties under Section 409A, amounts
that would otherwise be payable pursuant to this Agreement (the “Delayed Payments”) and benefits
that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”), in each case,
during the six-month period immediately following Employee’s separation from service (such period,
the “Delay Period”) will instead be paid or made available on the earlier of (i) the first day of
the seventh month following the date of Employee’s separation from service and (ii) Employee’s
death (the applicable date, the “Permissible Payment Date”). The Employers will also reimburse
Employee for the after-tax cost incurred by Employee in independently obtaining any Delayed
Benefits (the “Additional Delayed Payments”), with any gross-up payment being paid to Employee
promptly but in no event later than the end of Employee’s taxable year immediately following the
year in which this gross-up payment is due.
(c) With respect to any amount of expenses eligible for reimbursement or the provision of any
in-kind benefits under this Agreement, to the extent such payment or benefit constitutes “deferred
compensation” under Section 409A or is required to be included in Employee’s gross income for
federal income tax purposes, such expenses (including expenses associated with in-kind benefits)
shall be reimbursed by the Employers no later than December 31st of the year following
the year in which Employee incurs the related expenses. In no event shall the reimbursements or
in-kind benefits to be provided by the Employers in one taxable year affect the amount of
reimbursements or in-kind benefits to be provided in any other taxable year, nor shall Employee’s
right to reimbursement or in-kind benefits be subject to liquidation or exchange for another
benefit.
(d) Each payment under this Agreement is intended to be a “separate payment” and not of a
series of payments for purposes of Section 409A.
(e) A termination of employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any amounts or benefits subject to Section
409A upon or following a termination of employment unless such termination is also a “separation
from service” (within the meaning of Section 409A), and notwithstanding anything contained herein
the contrary, the date on which such separation from service takes place shall be the termination
date.
23. No Waiver. The failure of any party hereto to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver of such party’s rights or
deprive such party of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver of this Agreement to be effective must be in writing
specifically referencing the provision being waived and signed by the party against whom the waiver
is being enforced.
20
24. Grantor Trust. If (a) any dispute arises under or in connection with this Agreement or
(b) Employee becomes eligible under Section 4(d) or 4(f), then the Employers shall deposit
any and all cash amounts payable or shares (or cash proceeds thereof) deliverable to Employee under
(i) the provision(s) of this Agreement which are the subject of the dispute and/or (ii) Section
4(d) or 4(f) (including, in any case, any amount due if a Delayed Payment would result in the
payment being made after any such termination of employment, as well as any estimated Delayed
Payments and estimated Additional Delayed Payments), as applicable, into an irrevocable grantor
trust established pursuant to a trust agreement approved by the Board in good faith (the “Grantor
Trust”) not later than the date that any amount in dispute was due pursuant to the terms of this
Agreement (or, in the event that Employee becomes eligible under Section 4(d) or 4(f), not
later than the 10th day following Employee’s termination date). From and after such
time(s) until the payment of all amounts from the Grantor Trust, the Employers shall deposit
additional amounts into the Grantor Trust on a monthly basis equal to the interest accrued on the
cash amounts contained therein (including the interest paid previously) at the United States
five-year treasury rate. The amounts and property held in the Grantor Trust shall be
paid/delivered to Employee in accordance with the terms of the Grantor Trust upon the (A)
resolution of the applicable dispute and/or (B) payment/delivery date(s) specified in Section
4(d) or 4(f), as applicable (or, in any case, if required by Section 22, on the
applicable Permissible Payment Date).
25. Withholding Taxes. The Employers may withhold from any amounts payable under this
Agreement such federal, state and local income and employment taxes as may be required to be
withheld pursuant to any applicable law or regulation.
26. Cooperation. During the Employment Period and continuing until the Non-Competition
Termination Date, subject to his other business and personal commitments, Employee will, upon
reasonable request and at the Employers’ sole expense, cooperate with the Employers, and furnish
any and all complete and truthful information, testimony or affidavits in any action or proceeding
in connection with any matter that arose during the Employment Period and that Employee has
knowledge of or involvement with, to the extent that such matter directly relates to (a) Employee’s
performance of his duties solely as an employee of the Employers and (b) the business or operations
of the Employers or any of their parents or subsidiary corporations or affiliates; provided
that such cooperation is not adverse to Employee’s legal or personal interests (but, subject to all
other provisions of this Section 26, mere inconvenience alone shall not constitute
adversity to Employee’s interests) (the “Cooperation”). Following the Employment Period, the
parties hereto will make their best efforts to have the Cooperation performed at reasonable times
and places and in a manner as not to unreasonably interfere with any other employment or services
in which Employee may then be engaged. Nothing in this Agreement shall be construed or interpreted
as requiring Employee to provide any testimony, sworn statement, declaration or affidavit that is
not complete and truthful. If the Employers require Employee to travel outside the metropolitan
area in the United States where Employee then resides to provide any testimony or otherwise provide
any Cooperation, then the Employers will reimburse Employee for all travel and lodging expenses
incurred by Employee to do so. To the extent that Employee undertakes to provide any Cooperation,
Employee shall be entitled to legal representation of Employee’s choosing and the Employers shall
reimburse Employee on a current basis for all reasonable legal fees and related expenses, if any,
incurred by Employee in connection with the Cooperation. In addition, to the extent that Employee
undertakes to provide
any Cooperation following the Employment Period, the Employers shall compensate Employee on a
current basis for all of Employee’s time (in excess of ten hours in any calendar year) spent
providing Cooperation, at a rate of not less than Employee’s Hourly Rate. For purposes of this
Agreement, Employee’s “Hourly Rate” is equal to (i) the sum of Employee’s highest Gross Annual Base
Salary during the Employment Period plus Employee’s highest Target Bonus during the Employment
Period, (ii) divided by 2,000. Following the Employment Period, in no event shall Employee be
required to provide Cooperation on more than 30 days in any one calendar year.
[signature page to follow]
21
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date(s)
written below, but effective as of the Effective Date.
| XXXX, INC. | ||||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | |||||
| Title: Executive Vice President | ||||||
| Date: July 29, 2010 | ||||||
| XXXX SERVICES, LLC | ||||||
| By: | /s/ Xxxxxxxx Xxxxxxxx | |||||
| Title: Executive Vice President | ||||||
| Date: July 29, 2010 | ||||||
| /s/ Xxxxx Xxxxxxx | ||||||
| Xxxxx Xxxxxxx | ||||||
| Date: July 29, 2010 | ||||||
22
EXHIBIT A
MUTUAL RELEASE OF CLAIMS
This Mutual Release of Claims (this “Agreement”) is made and entered into among Xxxxx Xxxxxxx
(the “Employee”), Xxxx, Inc., a Maryland corporation (“Xxxx”) and Xxxx Services, LLC, a Maryland
limited liability company and wholly-owned subsidiary of Xxxx (“Xxxx Services”, and collectively
with Xxxx, the “Company”). Xxxx and Xxxx Services are executing this Agreement on behalf of their
respective divisions, subsidiaries and affiliates and each of their predecessors, successors and
assigns.
WHEREAS, the Employee’s employment pursuant to the Employment Agreement between the Employee
and the Company, effective as of July 1, 2010 (the “Employment Agreement”), terminated effective
_____, 201_____
(the “Termination Date”); and
WHEREAS, in connection with such termination of employment and pursuant to the Employment
Agreement, the Employee and the Company have agreed to execute this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
Employee and the Company (collectively, the “Parties” and each, a “Party”) agree as follows:
1. Termination of Employment: The Employee’s employment with the Company, and any
subsidiaries of the Company, terminated on the Termination Date. Notwithstanding anything herein
to the contrary, the Company warrants that the Employee’s (a) prior service as an employee and/or
officer of the Company and any subsidiaries or affiliates of the Company and (b) prior and future
service as a manager and/or director of the Company and any subsidiaries or affiliates of the
Company, will be covered by the Company’s indemnities and insurance, as set forth in the Employment
Agreement.
2. Releases:
(a) Employee Claims:
(i) In consideration for the Company’s commitment to provide the severance benefits
contemplated by Section 4(f) of the Employment Agreement, the Employee releases and discharges the
Company, any parent, divisions, subsidiaries and affiliates and their current and former owners,
managers, officers, directors, shareholders, agents and employees (whether acting as
representatives of the Company or in their individual capacities), and each of their predecessors,
successors, and assigns (the “Company Released Parties”), from any and all claims and causes of
action (except for the commitments set forth in this Agreement and the obligations under the
Employment Agreement which by their nature may require either partial or total performance after
the expiration of the Employment Agreement (including, without limitation, those under Sections
2(c), 4, 5, 15 and 24 of the Employment Agreement)) arising out of or related to the Employee’s
employment or separation from employment, including, but not limited to, the General Claims (as
defined below), that the Employee, his heirs, executors, administrators, successors, and assigns
now have, ever had or may hereafter have, whether known or unknown, suspected or unsuspected, up to
and including the date of this Agreement;
provided that such claims or causes of action shall be released and discharged by the
Employee only to the extent that they arose solely in the Employee’s capacity as an employee of the
Company or any subsidiaries or affiliates of the Company (and, for the avoidance of doubt, in no
event shall any claim or cause of action be released or discharged by the Employee that arose in
connection with the Employee’s role as a director, manager and/or shareholder of the Company or any
subsidiaries or affiliates of the Company) (collectively, “Employee Claims”).
Exhibit
A
1
(ii) For purposes of this Agreement, “General Claims” means any claims for back wages,
bonuses, severance pay, vacation pay, holiday pay, or any other pay or benefits including, but not
limited to, benefits under the Employee Retirement Income Security Act of 1974 (except for vested
benefits, which are not affected by this Agreement), sexual or other harassment, or discrimination
or retaliation based on race, color, national origin, ancestry, religion, marital status, sex,
sexual orientation, citizenship status, pregnancy, medical condition or disability (as defined by
the Americans with Disabilities Act, or any other state or local law), age, or any other unlawful
discrimination or retaliation (under the Americans with Disabilities Act, Age Discrimination in
Employment Act, 29 USC § 621 et. seq., as amended by the Older Workers Benefit
Protection Act of 1990 (the “ADEA”), Title VII of the Civil Rights Act of 1964, as amended, the New
York State Human Rights Law, the New York Labor Law, § 1 et. seq., Article 1,
Section 11 of the New York State Constitution, the New York City Human Rights Law, N.Y.C. Admin.
Code § 8-101 et seq., and the New York Civil Rights Law, Civ. X. X. § 40-c, subd. 2
or any other federal, state or local laws), tort, breach of implied or express contract, breach of
promises, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional
distress, violation of public policy or wrongful or constructive discharge, and for attorneys’
fees, costs, disbursements or the like.
(iii) The release of Employee Claims made by the Employee in this Agreement does not apply to
Employee Claims that arise after the date this Agreement is executed, nor is it intended to waive
or release an Employee Claim under the Older Workers Benefit Protection Act that challenges the
validity of the release of any ADEA Employee Claim. To the extent they are actually known to him
as of the date of this Agreement, the Employee certifies that, as of the date of this Agreement, he
has reported all accidents, injuries or illnesses relating to or arising from his employment with
the Company.
(b) Company Claims: In consideration for the Employee’s commitment to the various
arrangements described herein, the Company, for itself and on behalf of each Company Released
Party, releases and discharges the Employee and his heirs, executors, administrators, successors
and assigns from any and all claims and causes of action (except for the commitments set forth in
this Agreement and the obligations under the Employment Agreement which by their nature may require
either partial or total performance after the expiration of the Employment Agreement (including,
without limitation, those under Sections 9, 10, 11 and 26 of the Employment Agreement)) arising out
of or related to the Employee’s service or separation from service (including, but not limited to,
the Employee’s service as an employee, officer, director and/or manager of the Company or any
subsidiaries or affiliates of the Company) or the Employee’s role as a shareholder of the Company
or any subsidiaries or affiliates of the Company, including, but not limited to, any claims
relating to the General Claims, that any Company Released Party now has, ever had or may hereafter
have, whether known or unknown, suspected or unsuspected, up to and including the date of this
Agreement (collectively, “Company Claims”). The release of Company Claims made by Company Released Parties does not
apply to Company Claims that arise after the date this Agreement is executed.
Exhibit
A
2
3. No Filings:
(a) The Employee further agrees, represents, warrants, promises and covenants that neither he,
nor any person, organization, or other entity acting on his behalf, has filed or will file, charge,
claim, xxx, or cause or permit to be filed, charged or claimed, any action for damages or other
relief (including injunctive, declaratory, monetary or other) against any Company Released Party
with any federal, state or local court or any administrative, regulatory or arbitration agency or
body, involving or based upon any claims, demands, causes of action, obligations, damages or
liabilities which are subject of this Agreement (other than an action (i) to enforce the terms
hereof or the applicable terms of the Employment Agreement or (ii) the subject matter of which does
not constitute an Employee Claim). The Employee further agrees that he will not personally recover
monies for filing any charge or complaint against any of the Company Released Parties with any
federal, state or local agency regarding his employment with or separation from the Company in the
future (other than an action (A) to enforce the terms hereof or the applicable terms of the
Employment Agreement or (B) the subject matter of which does not constitute an Employee Claim).
(b) The Company, on its behalf and on behalf of all Company Released Parties, further agrees,
represents, warrants, promises and covenants that no Company Released Party, nor any person,
organization, or other entity acting on his, her or its behalf, has filed or will file, charge,
claim, xxx, or cause or permit to be filed, charged or claimed, any action for damages or other
relief (including injunctive, declaratory, monetary or other) against the Employee with any
federal, state or local court or any administrative, regulatory or arbitration agency or body,
involving any matter occurring in the past up to the date of this Agreement, or involving or based
upon any claims, demands, causes of action, obligations, damages or liabilities which are subject
of this Agreement (other than an action (i) to enforce the terms hereof or the applicable terms of
the Employment Agreement or (ii) the subject matter of which does not constitute a Company Claim).
4. No Admission of Liability: Neither this Agreement, nor anything contained herein, shall
be construed as an admission or concession by the Company or the Employee that it or he has in any
respect violated or abridged any federal, state or local law or any right or obligation that it or
he may owe or may have owed to the other Party or engaged in any wrongdoing or illegal or
actionable acts or omissions. No final findings or final judgments have been made and neither
Party purports, or will claim, to be a prevailing party, to any degree or extent, nor will this
Agreement or its terms be admissible in any proceeding other than a proceeding for enforcement or
breach of the terms contained herein.
Exhibit A
3
5. Statements:
(a) The Company and the Employee agree that in consideration of the other commitments in this
Agreement, and except as shall be required by law, (i) except to the extent necessary to enforce
this Agreement or the applicable portions of the Employment Agreement, each Party shall keep
confidential and not disclose orally or in writing directly or indirectly to
any person (except such Party’s family members, attorneys, accountants and other agents or
advisors), any and all information concerning any facts, claims or assertions relating or referring
to any experiences of the Employee or treatment the Employee received by or on behalf of the
Company through the date of this Agreement (in each case, solely in respect of the Employee’s
capacity as an employee of the Company or any subsidiaries or affiliates of the Company), which
experiences or treatment could have provided a factual or legal basis for (A) a Company Claim or
(B) an Employee Claim, as respectively applicable, in any action or proceeding before any court or
administrative or arbitral body, and (ii) the Company and the Employee shall not make, either
directly or by or through another person, any oral or written negative, disparaging or adverse
statements or representations of or concerning the other Party, or make or solicit any comments,
statements, or the like to the media or to others that are derogatory or detrimental to the good
name or business reputation of the other Party; provided that this Section 5(a)
shall not restrict in any manner or to any degree, the Employee in his capacity or in connection in
any respect with his role as a director, manager and/or shareholder of the Company or any
subsidiary or affiliate of the Company.
(b) Consistent with applicable law, the Company shall afford the Employee the right and a
reasonable amount of time to review and comment on any public filings and statements that will
include a reference to the Employee, and the Company shall, consistent with applicable legal
requirements, make any revisions to such references reasonably requested by the Employee.
6. Property and Computer Access: The Employee represents and warrants that, except as
specified below, he has returned, or will return on or prior to the Termination Date, to the
Company all property in his possession, including, but not limited to, keys, building and Company
identification and access cards and credit cards, files, records, publications, address lists,
computers, files, software and other business equipment or information belonging to or relating to
the Company or the Company’s business. All fixtures, property and equipment located in the
Employee’s current office are and shall remain the sole property of the Employee.
7. Entire Agreement and Severability: The parties hereto agree that this Agreement may not
be modified, altered or changed except by a written agreement signed by the Parties and evidencing
an intent to modify this Agreement. Except for the Parties’ continuing obligations under the
applicable portions of the Employment Agreement, the Parties acknowledge that this Agreement
constitutes the entire agreement between them regarding the subjects addressed herein, superseding
all prior written and oral agreements. If any provision of this Agreement is held to be invalid,
the remaining provisions shall remain in full force and effect.
Exhibit A
4
8. Voluntary Execution: The Employee acknowledges that he has carefully read this
Agreement and understands all of its terms including the full and final release of Employee Claims
set forth herein (subject to Section 15 hereof). The Employee further acknowledges that he
has voluntarily entered into this Agreement; that he has not relied upon any representation or
statement, written or oral, not set forth in this Agreement; that the only consideration for
signing this Agreement is as set forth herein and in the Employment Agreement; that adequate
consideration has been received for executing this Agreement and that this document gives him the
opportunity and encourages him to have this Agreement reviewed by his attorney and/or tax advisor
prior to execution. The Employee also acknowledges that he has been
afforded up to 21 days to consider the release provision contained herein (the “Consideration Period”) and that he
has seven days after signing this Agreement to revoke it in writing (the “Rescission Period”). If
the Employee signs this Agreement prior to the conclusion of the Consideration Period, the balance
of the Consideration Period will be considered waived. Such revocation must be actually received
by the Company within the time period specified in order to be effective. Accordingly, this
Agreement will not be effective or enforceable and no payments required under this Agreement shall
be made until the expiration of the Rescission Period, unless otherwise previously scheduled in the
normal course of business. This Agreement becomes effective on the 8th day after it is
signed by the Employee and is not rescinded (the “Effective Date”), unless the last day of the
Rescission Period falls on a Saturday, Sunday or federal holiday. If the last day of the
Consideration Period and/or Rescission Period falls on a Saturday, Sunday or federal holiday, the
last day of the applicable period shall be the next business day following the weekend or holiday,
and the Effective Date shall be the day following the last day of the Rescission Period.
9. Survival: The covenants, representations and acknowledgments made by both Parties in
this Agreement shall survive the execution of the Agreement, and this Agreement shall inure to the
benefit of each Party, and the successors and assigns of each Party.
10. Successors; Binding Agreement:
(a) This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
(b) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of either
Xxxx or Xxxx Services to expressly assume and agree in writing to perform this Agreement and the
applicable portions of the Employment Agreement in the same manner and to the same extent that Xxxx
or Xxxx Services, as applicable, would be required to perform them if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to (but effective only
upon) such succession shall be a breach of this Agreement. As used in this Agreement, references
to “Xxxx,” “Xxxx Services” or the “Company” shall extend to any successor to its or their business
and/or assets as aforesaid which assumes and agrees to perform this Agreement, expressly, by
operation of law, or otherwise. Furthermore, each of Xxxx, Xxxx Services, and any successor(s) to
its or their business and/or assets are jointly and severally liable for all obligations under this
Agreement and the applicable portions of the Employment Agreement.
(c) The Employee may assign his right to receive any payments due to him under this Agreement
or the applicable portions of the Employment Agreement to an entity owned or controlled by the
Employee and/or any member(s) of his family.
11. Notices: All notices provided for in this Agreement shall be in writing, and shall be
deemed to have been duly given when delivered to the Party as specified in the Employment
Agreement.
Exhibit A
5
12. Governing Law: This Agreement shall be governed by and construed and enforced
according to the laws of the State of New York, without regard to conflicts of laws principles
thereof (except that indemnification obligations owed to the Employee in his capacity as an
employee, officer, director and/or manager of the Company shall be governed by Maryland law). The
Parties agree that the state and federal courts located in the County and State of New York shall
have exclusive jurisdiction in any action, suit or proceeding based on or arising out of this
Agreement and the Parties hereby: (a) submit to the personal jurisdiction of such courts; (b)
consent to service of process in connection with any action, suit or proceeding; (c) agree that
venue is proper and convenient in such forum; and (d) waive any other requirement (whether imposed
by statute, rule of court or otherwise) with respect to personal jurisdiction, subject matter
jurisdiction, venue, or service of process.
13. The Employee’s Representations: The Employee represents and acknowledges that: (a) he
has carefully read this Agreement and understands its terms; (b) he has had at least 21 days to
consider this Agreement prior to signing it; (c) the Company has advised the Employee to consult
with an attorney of his choosing, and the Employee has done so to the extent he desired; and (d)
the consideration provided in this Agreement is sufficient to support the releases in this
Agreement and includes sufficient additional consideration for the Employee’s release under the
ADEA.
14. Expenses: This Agreement and all contests and disputes arising under or in connection
with this Agreement shall be conclusively deemed to be in connection with, arising under, and
otherwise sufficiently related to the Employment Agreement, such that the Employee shall be
entitled to reimbursement from the Company in the manner described in Section 15(b) of the
Employment Agreement for any contest or dispute arising under or in connection with this Agreement.
15. Claims Not Released; No Restriction: Notwithstanding anything herein to the contrary,
nothing in this Agreement purports to or shall (a) release or discharge any Company Claim or
Employee Claim that may not be released or discharged by law, (b) release or discharge any of the
Employee’s claims or causes of action that arose in connection with the Employee’s role as a
director, manager and/or shareholder of the Company or any subsidiaries or affiliates of the
Company, (c) restrict the Employee in any manner or to any degree in his capacity or in connection
in any respect with his role as a director, manager and/or shareholder of the Company or any
subsidiary or affiliate of the Company or (d) release or discharge any Company Claim that arose in
connection with the Employee’s role as a director, manager and/or shareholder of the Company or any
subsidiaries or affiliates of the Company, to the extent that (i) the Employee brings a claim
against the Company in respect of the Employee’s role as a director, manager and/or shareholder of
the Company or any subsidiaries or affiliates of the Company (a “Non-Employee Claim”), and (ii)
such Company Claim is raised as a direct counterclaim, defense or offset to such Non-Employee
Claim.
[signature page to follow]
Exhibit A
6
IN WITNESS WHEREOF, the Parties hereto evidence their agreement by their signatures.
| XXXX, INC. | ||||||
| By: | ||||||
| Title: | ||||||
| Date: , 201_ | ||||||
| XXXX SERVICES, LLC | ||||||
| By: | ||||||
| Title: | ||||||
| Date: , 201_ | ||||||
| Xxxxx Xxxxxxx | ||||||
| Date: , 201_ | ||||||
Exhibit A
7
