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Executive Retirement Agreement

This Executive Severance Agreement is made on [AGREEMENT DATE] (the “Effective Date”) between [COMPANY NAME], a [CORPORATE JURISDICTION] corporation with its principal place of business at [COMPANY ADDRESS] (the "Company") and [EXECUTIVE NAME], whose principal place of residence is at [EXECUTIVE ADDRESS] (the "Executive").

The parties agree as follows (the capitalized terms used in this agreement, in addition to those above, being defined in section 15 (Definitions):

1.  Executive's Retirement. The Executive hereby resigns from, and will cease to be an officer or employee of, the Company or any Related Company in any capacity, effective as of [RETIREMENT DATE] (the "Retirement Date").

2. Retirement Benefits. Upon the Executive's signature of this agreement, the Company shall provide him or her with the benefits described in, but subject to terms of, this agreement, including the following.

2.1. Severance Payment. The Company shall, on the date that is six months and one day after the Retirement Date, pay the Executive a single lump sum amount equal to [NUMBER OF MONTHS] of his or her [RETIREMENT YEAR] base pay.

2.2. COBRA Benefits. The Company shall, for a period of [HEALTH BENEFITS TIME PERIOD] from the Retirement Date, assume the payment of the COBRA medical coverage only for the Executive and his or her spouse, if any. The Company is not required to assume the Executive's payments for any other type of insurance coverage or COBRA benefits.

2.3. Accrued Vacation. The Company shall, within [30] days following the Retirement Date, pay the Executive a lump sum cash payment equal to $[VACATION ACCRUAL DOLLAR AMOUNT], which represents [ACCRUED VACATION DAYS] days of accrued but unused vacation.

2.4. Equity Awards. Schedule A, Equity Plans, details all outstanding stock options and all outstanding shares of restricted stock granted to the Executive under the Equity Plans as of the Retirement Date.

2.5. Disability Severance Payment

(a) Termination Due to Disability. The Company shall make a Disability Severance Payment to the Executive, but only if

(i) the Executive's employment with the Company and any Related Company terminates before the Executive attains the age of 62 due to Disability, and

(ii) the Executive has completed at least one year but not more than [15] years of service.

(b) Payment in Installments. The Company shall make the Disability Severance Payment in installments, beginning on the first day of the [7]th full month following the Termination Date and thereafter in five substantially equal annual installments, the last four to be made on the anniversary dates of the first installment payment.

2.6. Section 409A of the Code

(a) Interpretation to Ensure Compliance. This agreement will be interpreted in accordance with the applicable requirements of, and exemptions from, Section 409A of the Code. If any payments and benefits under this agreement are subject to Section 409A of the Code, this agreement will be interpreted and administered in a manner that satisfies the requirements of Sections 409A (a)(2), (3), and (4) of the Code.

(b) Amendment to Ensure Compliance. If the Company and the Executive determine that any benefits or other payments that are payable under this agreement and intended to comply with Sections 409A(a)(2), (3), and (4) of the Code do not in fact comply with Section 409A of the Code, they shall either amend this agreement or take such other actions as they deem reasonably necessary or appropriate, to comply with the applicable requirements and to maintain as nearly as possible the economic terms of this agreement.

2.7. Definition of “COBRA.” In this agreement, “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.

2.8. Definition of “Code.” In this agreement, “Code” means the Internal Revenue Code of 1986, including the Treasury Regulations made under the Code.

2.9. Definition of "Disability." In this agreement, "Disability" means any mental or physical condition that renders the Executive unable to perform the essential functions of his or her position, with or without reasonable accommodation, for a period in excess of [DISABILITY ABSENCE DAYS] days in the aggregate in any [DISABILITY PERIOD] period, and "disabled" has a comparable meaning. The Executive will be deemed to be disabled

(a) if he or she has been determined by the Social Security Administration to be totally disabled, or

(b) if he or she has been determined to be disabled in accordance with a disability insurance program, but only if the definition of disability applied under any such disability insurance program complies with the requirements of the first sentence of this definition.

2.10. Definition of "Disability Severance Payment." In this agreement, "Disability Severance Payment" means the payment calculated in accordance with Schedule A, Calculation of Disability Severance Payment.

3. Consulting Services. Following the Retirement Date, the Company may engage the Executive, on one or more occasions, to perform consulting services on mutually agreed-upon terms. The Company shall, in that case, pay the Executive $[CONSULTING FEE] per day plus expenses for his or her consulting services.]

4. Release

4.1. General Release. To the maximum extent permitted by Law, the Executive knowingly and voluntarily agrees to release the Company, its Representatives, and all Related Companies from all claims, known or unknown, that he or she may have against it or any of them as of the Effective Date. For that purpose, the Executive shall, at the same time as he or she signs this agreement, sign a general release of claims and promise not to sue substantially in the form attached as Exhibit 1 (Form of General Release of Claims) (the “Release”).

4.2. Company’s Obligations Conditional. The Company's obligations under this agreement are conditional on the Executive's release of all Released Persons from all Released Claims (as those terms are defined in the Release) existing on or before the effective date of the Release, other than claims

(a) for pension, retirement, or savings benefits that are or are required to be inalienable under the terms of any Company executive benefit plan, and

(b) relating to enforcing any of the Executive's rights under this agreement.

4.3. Effective Date of Release. For the Release to be effective,

(a) the Executive must have provided a signed version to the Company, and

(b) the Release will have become effective and irrevocable by its terms within [EXECUTION PERIOD FOR RELEASE] after the Executive's termination of employment with the Company.

5.  Executive's Acknowledgements

5.1. Agreement Final and Binding. This agreement is, subject to the Executive's rights under section 5.7 (Revocation Period), final and binding.

5.2. Full Compensation. Throughout the term of the Executive’s employment, he or she was fully and appropriately compensated for all hours worked in accordance with applicable Law.

5.3. Entitlement to Leave. The Executive has been provided with all leave to which he or she is entitled under Company policy and applicable Law.

5.4. Different Benefits. Certain of benefits provided under this agreement differ from or are greater than benefits that the Executive would otherwise be eligible to receive upon resignation, absent this agreement.

5.5. COBRA Benefits. The Company has no obligation to pay any portion of his or her COBRA benefits. 

5.6. No Admission of Liability. Nothing in this agreement, and no action that the Company takes, will be interpreted as its admission of any liability, wrongdoing, or violation of law.

5.7. Revocation Period. The Executive understands that he or she may revoke this agreement at any time within [seven] days after he or she signs it and that it does not become effective until this revocation period has expired without revocation.

5.8. Unsecured Obligation. The Executive’s rights under this agreement are unfunded obligations of the Company. The Company will not make any provision to segregate any assets of the Company for payment of any amounts due to the Executive under this agreement. The Executive will only have the rights of a general unsecured creditor of the Company.

5.9. Acknowledgement of Contract Terms. The Executive

(a) has read this agreement,

(b) understands its terms,

(c) has had the opportunity to consult[ and has consulted] with independent legal counsel, and

(d) has signed this agreement voluntarily.

6.  Payments

6.1. Withholdings by Company. The Company may withhold from any payment made any taxes or other amount the Company is authorized or required to withhold.

6.2. Payments by Executive. Except for employment taxes that are the obligation of the Company, the Executive shall pay all taxes (including interest, fines, and penalties) imposed on him or her under applicable Law relating to the payments or benefits contemplated by this agreement, subject to any right to reimbursement under this agreement.

7.  Covenants

7.1. Cooperation. The Executive shall cooperate with the Company as needed by the Company after the Retirement Date by providing Executive's consultation, testimony, and other information or time in matters that may arise, such as claims against the Company or any of the Released Parties. The Company shall reimburse the Executive for travel and other reasonable and pre-approved expenses in connection any Company request for cooperation.

7.2. Return of Property. Promptly after the Retirement Date, the Executive shall return to the Company all the Company property, both originals and copies, under his or her direct or indirect control.7.3. 

8.  Confidentiality 

8.1. Confidentiality Obligations. During the Restricted Period, the Executive shall hold in confidence all material, non-public, business-related information, written or oral, whether or not it is marked by the parties as confidential, relating to the Company and its business disclosed or made available to the Executive during the course of his or her employment. The Executive shall also keep confidential, indefinitely, the terms of this agreement, except

(a) for disclosure to the Executive's spouse, if any, to his or her attorneys, and to his or her accountants and tax preparers for the purpose of preparing income tax returns, but only if the Executive first informs them of, and directs them to maintain, the confidential nature of this information in accordance with the terms of this agreement, or

(b) except to the extent that such disclosure is compelled by Law.

8.2. Response to Dispute Inquiries. In response to any inquiry on the matter, the Executive may otherwise state only that any dispute that the Executive may have had with the Company or any other party covered by the Release has been "resolved."

8.3. Definition of “Restricted Period.” In this agreement, “Restricted Period” means the period from the Effective Date to the date that is [LENGTH OF RESTRICTED PERIOD] years after the Retirement Date.

9.  Non-Competition

9.1. Restrictions. During the Restricted Period[ and within the [DELINEATION OF RESTRICTED TERRITORY]], the Executive shall not, directly or indirectly, engage in any Restricted Activity.

9.2. [Permitted Investments. The Executive may, however, participate as a passive investor holding up to [PASSIVE INVESTMENT PERCENT]% of the equity securities of a publicly-traded entity that is engaged in any Restricted Business.]

9.3. Definition of “Restricted Activity.” In this agreement, “Restricted Activity” means

(a) owning, managing, operating, controlling, or financing,

(b) participating in the ownership, management, operation, control, or financing of, or

(c) being connected as an officer, director, executive, partner, principal, agent, or consultant of any entity engaged in

a Restricted Business.

9.4. Definition of “Restricted Business.” In this agreement, “Restricted Business” means any [DEFINITION OF RESTRICTED BUSINESS].

10.  Non-Solicitation. During the Restricted Period, the Executive[, on his or her own behalf or in the service or on behalf of others] shall not

(a) induce or attempt to induce any officer, director, or employee to leave the Company, or

(b) solicit the business of any customer[ or consultant] of the Company.

11.  Non-Disparagement

11.1. No Negative Statements. During the Restricted Period, the Executive shall not disparage or make any derogatory or negative statements about the Company or its Representatives in any manner likely to be harmful to any of them or any of their business, business reputations, or personal reputations.

11.2. Responses During Investigations. The Executive may, however, respond accurately and fully to any question, inquiry, or request for information as part of an investigation by any Governmental Authority or when required by Law.

12.  Indemnification. The Company shall indemnify the Executive against all claims, liability, and expenses (including legal fees) arising from any third party claim or proceeding brought against the Executive in connection with any of his or her actions that were properly within the scope of his or her employment with the Company or any Related Companies. 

13.  Termination

13.1. Termination for Breach. This agreement will terminate immediately if the Executive intentionally and materially breaches any of sections 8 (Confidentiality), 9 (Non-Competition), 10 (Non-Solicitation), or 11 (Non-Disparagement) and fails to cure his or her breach, if curable, within [30] days.

13.2. Effect of Termination. In the event of termination of this agreement in accordance with section 13.1 (Termination for Breach), the Executive[ shall promptly repay to the Company all severance amounts he or she had received up to that date and] will have no further rights under this agreement.

14. D&O Insurance Coverage

14.1. Continuing Coverage. The Executive will continue to be entitled to any rights to indemnification under the Company's directors' and officers' insurance, certificate of incorporation, or by-laws as in effect on the Effective Date in connection with any claims made relating to the period before his or her Retirement Date.

14.2. Subsequent Policies. The Company shall ensure that any such policies that it obtains after the Termination Date are "claims made" policies that cover the Executive to the same extent as other former officers or directors of the Company.

15.  Definitions. For purposes of this agreement, the following terms shall have the meanings specified below:

15.1. "Affiliate" of any Person means, at the time the determination is made, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with that Person.

15.2. “COBRAis defined in section 2.7 (Definition of “COBRA”).

15.3. “Codeis defined in section 2.8 (Definition of “Code”).

15.4. "Control" means, for a Person, the ownership interest in an entity that has the practical effect of giving that Person, either alone or with others, the majority voting interest in that entity, and the terms “Controlled” and “Controlling” have comparable meanings.

15.5. “Disabilityis defined in section 2.9 (Definition of “Disability”).

15.6. "Disability Severance Payment" in section 2.10 (Definition of "Disability Severance Payment").  

15.7. “Governmental Authority” means

(a) the government of the United States or any other nation, or any of its or their geographical or political units or subdivisions, and

(b) any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or relating to, government.

15.8. “Law” means

(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and

(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.

15.9. “Notice” means any notice, request, direction, or other document that a party can or must make or give under this agreement.

15.10. “Person” includes

(a) any corporation, company, limited liability company, partnership, Governmental Authority, joint venture, fund, trust, association, syndicate, organization, or other entity or group of persons, whether incorporated or not, and

(b) any individual.

15.11. "Related Company" means any Affiliate of the Company of which the Executive, at the Company’s request, is or was serving as a director, trustee, general partner, officer, employee, agent, or fiduciary.

15.12. "Release" is defined in section 4.1 (Release).

15.13. Representative” means, for any Person,

(a) each director, officer, shareholder, partner, employee, agent, or professional advisor[ in connection with the transactions contemplated in this agreement], and any other authorized representative, and

(b) that Person’s Affiliates and the directors, officers, shareholders, partners, employees, agents, or professional advisors of those Affiliates.

15.14. "Restricted Activity" is defined in section 9.3 (Definition of "Restricted Activity").

15.15. "Restricted Business" is defined in section 9.4 (Definition of "Restricted Business").

15.16. "Restricted Period" is defined in section 8.3 (Definition of "Restricted Period").

15.17. “Retirement Date” is defined in section 1.1 (Retirement on Retirement Date).

16. General Provisions

16.1. Further Assurances. Each party, upon receipt of Notice from the other party, shall sign (or cause to be signed) all further documents, do (or cause to be done) all further acts, and provide all assurances as may reasonably be necessary or desirable to give effect to the terms of this agreement.

16.2. Amendment. This agreement may only be amended by a written document signed by both parties.

16.3. Binding Effect. This agreement benefits and binds the parties and their respective heirs, successors, and permitted assigns.

16.4. Assignment. The Executive may not assign this agreement or any of its rights or obligations under this agreement without the Company’s prior written consent. The Company may assign this agreement or any of its rights and obligations under this agreement, effective upon Notice to the Executive,

(a) to any Affiliate, or

(b) in connection with any sale, transfer, or other disposition of all or substantially all of its business or assets but only if the assignee assumes all of the Company’s obligations.

16.5. Third Party Beneficiaries. This agreement grants or may grant rights to estate representatives or beneficiaries who succeed to the Executive's rights to payments or benefits under this agreement. No Person other than the parties themselves and those representatives or beneficiaries has any rights or remedies under this agreement.

16.6. Payment of Expenses. Each party is responsible for all costs (including legal fees) and other expenses that it incurs in connection with the negotiation and preparation of this agreement.

16.7. Notices

(a) Form of Notice. All notices and other communications between the parties must be in writing.

(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, (iii) first-class registered or certified mail, postage prepaid[, (iv) fax][ or (v) electronic mail] to the party’s address specified in this agreement, or to the address that a party has notified to be that party’s address for the purposes of this section.

(c) Receipt of Notice. A Notice given in accordance with this agreement will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth Business Day following mailing.

16.8. Remedies Cumulative. The rights and remedies available to a party under this agreement are cumulative and in addition to, not exclusive of or in substitution for, any rights or remedies otherwise available to that party.

16.9. Survival. Section 13.2 (Effect of Termination) survives the termination of this agreement.

16.10. Severability. If any part of this agreement is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.

16.11. Waiver.  A party’s failure or neglect to enforce any of rights under this agreement will not be deemed to be a waiver of that party's rights.

16.12. Equitable Relief. The Executive acknowledges that its breach or threatened breach of any its obligations under sections 8 (Confidentiality), 9 (Non-Competition), 10 (Non-Solicitation), or 11 (Non-Disparagement) would not be susceptible to adequate relief by way of monetary damages only. Accordingly, the Company may, in that case, apply to court for any applicable equitable remedies (including injunctive relief), without the need to post any security.

16.13. Governing Law. This agreement will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.

16.14. Dispute Resolution

(a) Arbitration. Any dispute or controversy arising under or in connection with this agreement will be settled exclusively by arbitration in [STATE], in accordance with the rules of the American Arbitration Association then in effect by [NUMBER OF ARBITRATORS] arbitrator(s).

(b) No Punitive Damages. The arbitrator(s) will not have the power to award punitive damages.

(c) Judgment. The successful party may enter the arbitral judgment in any court having jurisdiction.

16.15. Waiver of Jury Trial. Each party irrevocably waives its rights to trial by jury in any action or proceeding arising out of or relating to this agreement or the transactions relating to its subject matter.

16.16. Attorney Fees. If either party brings legal action to enforce its rights under this agreement, the prevailing party will be entitled to recover its expenses (including reasonable attorneys' fees) incurred in connection with the action and any appeal.

16.17. Interpretation

(a) References to “Executive.” Any references in this agreement to “the Executive” includes reference to any estate representative or beneficiary who succeeds to the Executive's rights to payments or benefits under this agreement.

(b) Statutes, etc. Unless specified otherwise, any reference in this agreement to a statute includes the rules and policies made under that statute and any provision that amends, supplements, supersedes, or replaces that statute or those rules or policies.

(c) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa, words importing gender include all genders.

(d) Headings. The headings used in this agreement and its division into sections, schedules, exhibits, and other subdivisions do not affect its interpretation.

(e) Internal References. References in this agreement to sections, schedules, exhibits, and other subdivisions are to those parts of this agreement.

(f) Conflict of Terms. If there is any inconsistency between the terms of this agreement and those in the Executive's employment agreement, the terms of this agreement will prevail.

16.18. Schedules and Exhibits. The following are attached to and forms part of this agreement:

(a) Schedule A: Equity Plans

(b) Schedule BCalculation of Disability Severance Payment

(c) Exhibit 1: Form of General Release of Claims

16.19. Counterparts. This agreement may be signed in any number of counterparts, each of which is an original and all of which taken together form one single document.

16.20. Effectiveness of this Agreement. This agreement will not become effective until the [eighth] day following the date on which the Executive signs it. If the Executive revokes this agreement within that period, both it and the Release will be void.

This agreement has been signed by the parties.

[COMPANY NAME]

By:   ___________________________________

Name:

Title:

Date:

[EXECUTIVE NAME]

By:   ___________________________________

Name:

Date:

Schedule A - Equity Plans

Schedule B - Calculation of Disability Severance Payment

Exhibit 1 - Form of General Release of Claims 

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