FIRST AMENDMENT
Exhibit
10.16
FIRST
AMENDMENT
TO
XXXXXX X. XXXXXXXX EMPLOYMENT AGREEMENT
THIS
FIRST AMENDMENT to the Employment Agreement is made and entered into December
__, 2008, effective as of January 1, 2009 by and between CoStar Realty
Information, Inc. (“Company”) and Xxxxxx
X. Xxxxxxxx (“Executive”).
W
I T N E S S E T H;
WHEREAS,
Company and Executive are parties to that certain Employment Agreement dated as
of April 24, 1998, effective as of January 1, 1998 (the “Employment
Agreement”) pursuant to which Executive is employed as Company’s
President and Chief Executive Officer; and
WHEREAS,
Company and Executive desire to amend the terms of the Employment Agreement as
set forth herein effective as of January 1, 2009 (the Employment Agreement, as
amended, is hereinafter referred to as the “Agreement”), in order
to comply with the provisions of Section 409A of the Internal Revenue Code and
the rules and regulations promulgated thereunder and to make certain other
clarifying revisions.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
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1.
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Section
4(a) is deleted and replaced in its entirety to read as
follows:
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“The
annual base salary (the “Base Salary”) of
Executive under this Agreement shall be at the rate set by the Compensation
Committee of the Board of Directors of the Company (the “Compensation
Committee”) or the Board of Directors of the Company (the “Board”)
annually. Base Salary shall be payable in biweekly or such other
installments as shall be consistent with the Company’s payroll procedures for
its senior executives.”
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2.
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Section
4(b) is deleted and replaced in its entirety to read as
follows:
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“The
Company shall maintain for the benefit of Executive during the term of
Executive’s employment under this Agreement (and, where applicable, for such
period thereafter as Executive is entitled to payments thereunder pursuant to
this Agreement) an executive cash bonus program (the “Bonus Program”) on
the terms set by the Compensation Committee or the Board, which will provide
Executive with an opportunity to receive an annual cash bonus based on
attainment of performance objectives set annually by the Compensation Committee
or the Board. The annual bonus shall be paid as soon as reasonably
practicable after the end of the calendar year for which it is earned and, in
any case, no later than March 15 of the following calendar year.”
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3.
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Section
7(a) is deleted and replaced in its entirety to read as
follows:
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“(a) By the Company Without
Cause. The Company may terminate Executive’s employment at any
time, without Cause (as defined herein), upon sixty (60) days written notice to
Executive. If the Company terminates Executive’s employment without
Cause, Executive: (x) shall receive through the later of (i) the expiration of
the Current Term or (ii) one year from the date of termination, the compensation
provided for under paragraph 4(a) of this Agreement, provided that any payments
that would otherwise be made under this subsection (x) after March 15 of the
year following the calendar year of termination shall be paid to Executive no
later than March 15 of the year following the calendar year of termination of
employment; (y) shall be entitled to receive the bonus he would have received
under the Bonus Program (as in effect on the date of termination) as if he
continued in the position he held immediately prior to termination for the
balance of the calendar year in which such termination occurs, provided that such bonus shall
be paid no later than March 15 of the year following the calendar year of
termination of employment; and (z) shall be, if not otherwise, fully vested in
all stock options granted to Executive under the Company’s stock incentive plans
(as in effect on the date of termination). Upon termination of
Executive’s employment without Cause, the exercise period for all vested options
shall be one-hundred eighty (180) days after cessation of
employment.
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4.
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The
last paragraph of Section 7(c) is deleted and replaced in its entirety to
read as follows:
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“If
Executive terminates his employment for Good Reason, Executive: (x) shall
receive through the later of (i) the expiration of the Current Term or (ii) one
year from the date of termination, the compensation provided for under paragraph
4(a) of this Agreement, provided that any payments
that would otherwise be made under this subsection (x) after March 15 of the
year following the calendar year of termination shall be paid to Executive no
later than March 15 of the year following the calendar year of termination of
employment; (y) shall be entitled to receive the bonus he would have received
under the Bonus Program (as in effect on the date of termination) as if he
continued in the position he held immediately prior to termination for the
balance of the calendar year in which such termination occurs, provided that such bonus shall
be paid no later than March 15 of the year following the calendar year of
termination of employment; and (z) shall be, if not otherwise, fully vested in
all stock options granted to Executive under the Company’s stock incentive plans
(as in effect on the date of termination). Upon termination of
Executive’s employment with Good Reason, the exercise period for all vested
options shall be one-hundred eighty (180) days after cessation of
employment.
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5.
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A
new Section 7(e) shall be added and read as
follows:
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“In the
event that under the terms of the applicable stock incentive plan(s), all or any
portion of Executive’s stock options that are not otherwise fully vested upon
termination of employment and are scheduled to vest pursuant to Section 7 in
connection with such termination cannot be accelerated in accordance with the
terms of this Agreement, then Executive shall be entitled to receive cash
consideration for each share underlying that portion of Executive’s stock
options that cannot be so accelerated equal to the excess (if any) of the
highest closing price of the Company’s common stock during the 180 days
following Executive's date of termination (or, if the Company is no longer
publicly traded as of the date of termination, the per-share price in connection
with the transaction(s) that resulted in the Company no longer being publicly
traded) over the exercise price of such option. Any such cash
consideration shall be paid within 10 days following the date the amount of the
payment pursuant to this Section 7(e) is determined.”
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6.
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Section
9 is amended to add the following to the end of subsection (ii) of the
first sentence of Section 9: “, payable no later than March 15
of the year following the calendar year of
termination.”
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7.
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Section
10 is amended to add the following to the end of subsection (ii) of the
first sentence of Section 10: “, payable no later than March 15
of the year following the calendar year of
termination.”
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8.
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Section
22 is amended by adding the following sentence to the end
thereof: “In all events, any amount payable under this Section
22 shall be paid no later than the end of the calendar year after the
applicable tax is remitted to the applicable taxing
authority.”
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9.
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A
new Section 23 is added as follows:
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Compliance with Section
409A. It is the intention of the parties hereto that this
Agreement comply with the provisions of Section 409A of the Internal Revenue
Code (the “Code”) and the rules and regulations promulgated thereunder
(collectively, “Section 409A”). Notwithstanding anything in this
Agreement to the contrary, to the extent that the Company determines, in its
sole discretion, that any payment or benefit to be provided under the Agreement
to or for the benefit of Executive would be subject to the additional tax
imposed under Section 409A(a)(1)(B) of the Code, the commencement of such
payments and/or benefits shall be delayed (but only to the extent necessary
under Section 409A) until the earlier of (i) the date that is six months
after Executive’s “separation from service” (as such term is defined under
Section 409A) or (ii) the date of Executive’s death. Any
payments delayed pursuant to section (i) of the preceding sentence shall be paid
on the first day of the seventh month after Executive’s separation from service,
or as soon as reasonably practicable thereafter and any remaining payments shall
be made as originally scheduled (e.g. if payments under Section 7(a)(x) of the
Agreement would be subject to the additional tax, Executive would not receive
payments for six months after termination, then would receive six months of base
salary on the first day of the seventh month after termination, and the
remaining installments of base salary provided by Section 7(a)(x) (approximately
six months’ base salary) would be paid to Executive as provided by Section
4(a)). In the event of Executive’s death, any payments shall be made
pursuant to section (ii) of the sentence above no later than the later of (a) 75
days following the Executive’s death, or (b) the last
day of Executive’s taxable year in which such death
occurs.
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10.
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Counterparts. This
First Amendment, for the convenience of the parties, may be executed in
any number of counterparts, all of which when taken together shall
constitute one and the same
agreement.
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11.
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Except
as modified hereby, the Employment Agreement continues in full force and
effect.
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IN
WITNESS WHEREOF, the parties have executed this First Amendment on the day and
year first above written.
COSTAR
REALTY INFORMATION, INC.
By:
/s/ Xxxxxxx
Xxxxx
Xxxxxxx Xxxxx
Chairman of the Board
/s/ Xxxxxx X.
Xxxxxxxx
Xxxxxx X. Xxxxxxxx
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