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Exhibit
10.1
CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN CONTROL
AGREEMENT (this “ Agreement ”), effective as of
February 15, 2007 (the “Effective Date”) is
entered into by and among Sunstone Hotel Investors, Inc., a
Maryland corporation (the “ Company ”) and Ken
Cruse (the “ Executive ”).
WHEREAS, the Executive is
employed by the Company as its Chief Financial Officer;
and
WHEREAS, the Board of
Directors of the Company (the “ Board ”)
believes that it is in the best interest of the Company that the
Executive be reasonably secure in his employment and position with
the Company, so that the Executive can exercise independent
judgment as to the best interest of the Company and its
shareholders, without distraction by any personal uncertainties or
risks regarding the Executive’s employment with the Company
created by the possibility of a change in control of the
Company.
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
1. Term of this
Agreement
This Agreement will continue
in effect until the earlier of: (a) the termination or
cessation of the Executive’s employment with the Company
before a Change in Control (as defined below), or (b) the
Company’s performance of all of its obligations, and the
Executive’s receipt of all of the payments and benefits to
which he is entitled, under this Agreement (the
“Term”).
2. Termination of
Employment Upon a Change in Control .
(a) If a Change in Control
(as defined below) occurs during the Term, and the
Executive’s employment is terminated by the Company (or its
successor, as the case may be) without Cause or by the Executive
for Good Reason (both such capitalized terms as defined below), in
each case within twelve (12) months after the effective date
of the Change in Control, then the Executive shall be entitled to
the following payments and benefits, subject to the terms and
conditions set forth in this Agreement:
(i) The Executive shall be
paid, in two lump sum payments: (A) the Executive’s
earned but unpaid base salary and accrued but unpaid vacation pay
through the Date of Termination (as defined below) and any annual
bonus for any fiscal year of the Company that ends on or before the
Date of Termination to the extent not previously paid (the “
Accrued Obligations ”), and (B) an amount (the
“ Severance Amount ”) equal to two
(2) times the sum of (x) the base salary in effect on the
Date of Termination (without giving effect to any reduction that
would constitute Good Reason) plus (y) the Bonus Severance
Amount (as defined below) in
effect on the Date of
Termination. For purposes hereof, the “Bonus Severance
Amount” shall equal the lesser of the Executive’s
target annual bonus for the year in which the Date of Termination
takes place or the actual annual bonus that the Executive earned in
the calendar year prior to the year in which the Date of
Termination occurs. The Accrued Obligations shall be paid when due
under California law and the Severance Amount shall be paid no
later than 60 days after the Date of Termination;
(ii) For a period of eighteen
(18) months following the Termination Date, the Company shall,
at the Company’s sole expense, continue to provide the
Executive and the Executive’s eligible family members with
group health insurance coverage at least equal to that which would
have been provided to them if the Executive’s employment had
not been terminated (or at the Company’s election, pay the
applicable COBRA premium for such coverage); provided ,
however , that if the Executive becomes re-employed with
another employer and is eligible to receive group health insurance
coverage under another employer’s plans, the Company’s
obligations under this Section 2(a)(ii) shall be
reduced to the extent comparable coverage is actually available to
the Executive and the Executive’s eligible family members,
and any such coverage shall be reported by the Executive to the
Company;
(iii) To the extent not
theretofore paid or provided, the Company shall timely pay or
provide to the Executive any vested benefits and other amounts or
benefits required to be paid or provided or which the Executive is
eligible to receive as of the Termination Date under any plan,
program, policy or practice or contract or agreement of the Company
and its affiliates; and
(iv) All outstanding stock
options, restricted stock units and other equity awards granted to
the Executive under any of the Company’s equity incentive
plans (or awards substituted therefore covering the securities of a
successor company) shall become immediately vested and exercisable
in full.
Notwithstanding the
foregoing, it shall be a condition to the Executive’s right
to receive the amounts and benefits provided for in Sections
2(a)(i)(B) , 2(a)(ii) , 2(a)(iii) and
2(a)(iv) above that the Executive execute, deliver to the
Company and not revoke a release of claims in substantially the
form attached hereto as Exhibit A .
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(b) For purposes of this
Agreement, “ Change in Control ” shall mean the
occurrence of any of the following events:
(i) Any transaction or event
resulting in the beneficial ownership of voting securities,
directly or indirectly, by any “person” or
“group” (as those terms are defined in Sections
3(a)(9), 13(d), and 14(d) of the Exchange Act and the rules
thereunder) having “beneficial ownership” (as
determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors
(“voting securities”) of the Company that represent
greater than 50% of the combined voting power of the
Company’s then outstanding voting securities (unless
Executive has beneficial ownership of at least 50% of such voting
securities), other than any transaction or event resulting in the
beneficial ownership of securities:
(A) By a trustee or other
fiduciary holding securities under any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person
controlled by the Company or by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person
controlled by the Company, or
(B) By the Company or a
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of the stock of the Company, or
(C) Pursuant to a transaction
described in clause (iii) below that would not be a Change in
Control under clause (iii);
(ii) Individuals who, as of
the Effective Date, constitute the Board (the “ Incumbent
Board ”) cease for any reason to constitute at least a
majority of the Board; provided , however , that any
individual becoming a director subsequent to the date hereof whose
election by the Company’s stockholders, or nomination for
election by the Board, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
an election contest with respect to the election or removal of
directors or other solicitation of proxies or consents by or on
behalf of a person other than the Board;
(iii) The consummation by the
Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of
(x) a merger, consolidation, reorganization, or business
combination or (y) a sale or other disposition of all or
substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case,
other than a transaction
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(A) which results in the
Company’s voting securities outstanding immediately before
the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company
or such person, the “ Successor Entity ”))
directly or indirectly, greater than 50% of the combined voting
power of the Successor Entity’s outstanding voting securities
immediately after the transaction, and
(B) after which no person or
group beneficially owns voting securities representing greater than
50% of the combined voting power of the Successor Entity;
provided , however , that no person or group shall be
treated for purposes of this clause (B) as beneficially owning
greater than 50% of the combined voting power of the Successor
Entity solely as a result of the voting power held in the Company
prior to the consummation of the transaction; or
(iv) The approval by the
Company’s stockholders of a liquidation or dissolution of the
Company.
For purposes of clause
(i) above, the calculation of voting power shall be made as if
the date of the acquisition were a record date for a vote of the
Company’s stockholders, and for purposes of clause
(iii) above, the calculation of voting power shall be made as
if the date of the consummation of the transaction were a record
date for a vote of the Company’s stockholders.
(c) For purposes of this
Agreement, “ Cause ” shall mean the occurrence
of any one or more of the following events:
(i) The Executive’s
willful failure to perform or gross negligence in performing his
duties owed to the Company, after ten (10) days following a
written notice being delivered to the Executive by the Board, which
notice specifies such failure or negligence;
(ii) The Executive’s
commission of an act of fraud or dishonesty in the performance of
his duties;
(iii) The Executive’s
conviction of, or entry by the Executive of a guilty or no contest
plea to, any felony or any felony or misdemeanor involving moral
turpitude;
(iv) Any breach by the
Executive of his fiduciary duty or duty of loyalty to the Company;
or
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(v) The Executive’s
material breach of the Non-Competition Agreement or the
Non-Disclosure Agreement between the Executive and the Company, if
any.
The termination of employment
of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of a majority the
Board at a meeting of the Board called and held for such purpose
(after reasonable notice is provided to the Executive and the
Executive is given an opportunity to be heard before the Board),
finding that, in the good faith opinion of the Board, sufficient
Cause exists to terminate the Executive pursuant to this
Section 2(c) ; provided , that if the Executive
is a member of the Board, the Executive shall not participate in
the deliberations regarding such resolution, vote on such
resolution, nor shall the Executive be counted in determining a
majority of the Board.
(d) For purposes of this
Agreement, “Date of Termination ” means
(i) if the Executive’s employment is terminated by the
Company for Cause, the date of receipt of the Notice of Termination
or any later date specified therein (which date shall not be more
than thirty (30) days after the giving of such notice), as the
case may be, or (ii) if the Executive’s employment is
terminated by the Executive with or without Good Reason, the Date
of Termination shall be the thirtieth day after the date on which
the Executive notifies the Company of such termination, unless
otherwise agreed by the Company and the Executive.
(e) For purposes of this
Agreement, “ Good Reason ” shall mean the
occurrence of any one or more of the following events without the
Executive’s prior written consent, unless the Company cures
the circumstances constituting Good Reason (provided such
circumstances are capable of cure) prior to the Date of
Termination:
(i) A material reduction in
the Executive’s titles, duties, authority and
responsibilities, or the assignment to the Executive of any duties
materially inconsistent with the Executive’s position,
authority, duties or responsibilities as in effect immediately
prior to a Change in Control without the written consent of the
Executive;
(ii) The Company’s
reduction of the Executive’s annual base salary or bonus
opportunity as in effect immediately prior to a Change in
Control;
(iii) The relocation of the
Company’s headquarters to a location more than thirty five
(35) miles from the Company’s headquarters as of the
date immediately prior to a Change in Control; or
(iv) The Company’s
failure to cure a material breach of its obligations under this
Agreement within fifteen (15) days after written notice is
delivered to the Board by the Executive which specifically
identifies the manner in which the Executive believes that the
Company has breached its obligations under this
Agreement.
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(f) Notice of
Termination . Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of
Termination to the other parties hereto given in accordance with
Section 8(c) of this Agreement. For purposes of this
Agreement, a “ Notice of Termination ” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination is other than the date of
receipt of such notice, specifies the termination date (which date
shall be not more than thirty (30) days after the giving of
such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
3. Full Settlement .
The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement and except as expressly provided,
such amounts shall not be reduced whether or not the Executive
obtains other employment. If any party to this Agreement institutes
any action, suit, counterclaim, appeal, arbitration or mediation
for any relief against another party, declaratory or otherwise
(collectively, an “ Action ”), to enforce the
terms hereof or to declare rights hereunder, then the Prevailing
Party in such Action shall be entitled to recover from the other
party all costs and expenses of the Action, including reasonable
attorneys’ fees and costs (at the Prevailing Party’s
attorneys’ then-prevailing rates) incurred in bringing and
prosecuting or defending such Action and/or enforcing any judgment,
order, ruling or award (collectively, a “ Decision
”) granted therein, all of which shall be deemed to have
accrued on the commencement of such Action and shall be paid
whether or not such Action is prosecuted to a Decision. Any
Decision entered in such Action shall contain a specific provision
providing for the recovery of attorneys’ fees and costs
incurred in enforcing such Decision. A court or arbitrator shall
fix the amount of reasonable attorneys’ fees and costs upon
the request of either party. Any judgment or order entered in any
final judgment shall contain a specific provision providing for the
recovery of all costs and expenses of suit, including reasonable
attorneys’ fees and expert fees and costs incurred in
enforcing, perfecting and executing such judgment. For the purposes
of this paragraph, costs shall include, without limitation, in
addition to costs incurred in prosecution or defense of the
underlying action, reasonable attorneys’ fees, costs,
expenses and expert fees and costs incurred in the
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following: (a) postjudgement
motions and collection actions; (b) contempt proceedings;
(c) garnishment, levy, debtor and third party examinations;
(d) discovery; (e) bankruptcy litigation; and
(f) appeals of any order or judgment. “ Prevailing
Party ” within the meaning of this Section includes,
without limitation, a party who agrees to dismiss an Action
(excluding an Action instituted in contravention of the
requirements of Paragraph 7(b) below) in consideration for the
other party’s payment of the amounts allegedly due or
performance of the covenants allegedly breached, or obtains
substantially the relief sought by such party.
4. Certain Additional
Payments by the Company .
(a) All capitalized terms
used in this Section 4 not otherwise defined in this
Agreement are defined in Section 4(g). Anything in this
Agreement to the contrary notwithstanding and except as set forth
below, in the event it shall be determined that any Payment would
be subject to the Excise Tax, then the Executive shall be entitled
to receive an additional payment (the “ Excise Tax
Gross-Up Payment ”) in an amount such that, after payment
by the Executive of all taxes (and any interest or penalties
imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Excise Tax
Gross-Up Payment, the Executive retains an amount of the Excise Tax
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this
Section 4(a) , if it shall be determined that the
Executive is entitled to the Excise Tax Gross-Up Payment, but that
the Parachute Value of all Payments does not exceed 110% of the
Safe Harbor Amount, then no Excise Tax Gross-Up Payment shall be
made to the Executive and the amounts payable under this Agreement
shall be reduced so that the Parachute Value of all Payments, in
the aggregate, equals the Safe Harbor Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first
reducing the payments under Section 2(a)(i) , unless an
alternative method of reduction is elected by the Executive, and in
any event shall be made in such a manner as to maximize the Value
of all Payments actually made to the Executive. For purposes of
reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amount payable under this
Agreement would not result in a reduction of the Parachute Value of
all Payments to the Safe Harbor Amount, no amounts payable under
the Agreement shall be reduced pursuant to this
Section 4(a) . The Company’s obligation to make
Excise Tax Gross-Up Payments under this Section 4 shall
not be conditioned upon the Executive’s termination of
employment.
(b) Subject to the provisions
of Section 4(c) , all determinations required to be
made under this Section 4 , including whether and when
an Excise Tax Gross-Up Payment is required, the amount of such
Excise Tax Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by such nationally
recognized accounting firm as may be selected
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by the Company and reasonably
acceptable to the Executive (the “ Accounting Firm
”); provided , that the Accounting Firm’s
determination shall be made based upon “substantial
authority” within the meaning of Section 6662 of the
Code. The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that
there has been a Payment or such earlier time as is requested by
the Company. All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any Excise Tax Gross-Up Payment, as
determined pursuant to this Section 4 , shall be paid
by the Company to the Executive within five days of the receipt of
the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the
Executive, unless the Company obtains an opinion of outside legal
counsel, based upon at least “substantial authority”
within the meaning of Section 6662 of the Code, reaching a
different determination, in which event such legal opinion shall be
binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm
hereunder, it is possible that Excise Tax Gross-Up Payments that
will not have been made by the Company should have been made (the
“ Underpayment ”), consistent with the
calculations required to be made hereunder. In the event the
Company exhausts its remedies pursuant to Section 4(c)
and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall
notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the
Company of the Excise Tax Gross-Up Payment. Such notification shall
be given as soon as practicable, but no later than 10 business days
after the Executive is informed in writing of such claim. The
Executive shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day
period following the date on which the Executive gives such notice
to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the
Executive shall:
(i) give the Company any
information reasonably requested by the Company relating to such
claim,
(ii) take such action in
connection with contesting such claim as the Company shall
reasonably request in writing from time to-time, including, without
limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
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(iii) cooperate with the
Company in good faith in order effectively to contest such claim,
and
(iv) permit the Company to
participate in any proceedings relating to such claim;
provided , however , that
the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in
connection with such-contest, and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties) imposed as a result
of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this
Section 4(c) , the Company shall control all
proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion,
either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company
shall determine; provided , however , that, if the
Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis, and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax
or income tax (including interest or penalties) imposed with
respect to such advance or with respect to any imputed income in
connection with such advance; and provided , further
, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with respect to
which the Excise Tax Gross-Up Payment would be payable hereunder,
and the Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.
(d) If, after the receipt by
the Executive of an Excise Tax Gross-Up Payment or an amount
advanced by the Company pursuant to Section 4(c) , the
Executive becomes entitled to receive any refund with respect to
the Excise Tax to which such Excise Tax Gross-Up Payment relates or
with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of
Section 4(c) , if applicable) promptly pay to the
Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company
pursuant to Section 4(c) , a determination is made that
the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing
of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the
amount of Excise Tax Gross-Up Payment required to be
paid.
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(e) Notwithstanding any other
provision of this Section 4 , the Company may, in its
sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit
of the Executive, all or any portion of any Excise Tax Gross-Up
Payment, and the Executive hereby consents to such
withholding.
(f) Any other liability for
unpaid or unwithheld Excise Taxes shall be borne exclusively by the
Company, in accordance with Section 3403 of the Code. The
foregoing sentence shall not in any manner relieve the Company of
any of its obligations under this Employment Agreement.
(g) Definitions . The
following terms shall have the following meanings for purposes of
this Section 4 :
(i) “ Excise Tax
” shall mean the excise tax imposed by Section 4999 of
the Code, together with any interest or penalties imposed with
respect to such excise tax.
(ii) “ Parachute
Value ” of a Payment shall mean the present value as of
the date of the change of control for purposes of Section 280G
of the Code of the portion of such Payment that constitutes a
“parachute payment” under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such
Payment.
(iii) A “
Payment ” shall mean any payment or distribution in
the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of the
Executive, which is paid or payable pursuant to this Agreement or
any other plan or agreement of the Company.
(iv) The “ Safe
Harbor Amount ” shall mean 2.99 times the
Executive’s “base amount,” within the meaning of
Section 280G(b)(3) of the Code.
(v) “ Value
” of a Payment shall mean the economic present value of a
Payment as of the date of the change of control for purposes of
Section 280G of the Code, as determined by the Accounting Firm
using the discount rate required by Section 280G(d)(4) of the
Code.
5. Effect of
Section 409A of the Code . Notwithstanding anything to the
contrary in this Agreement, if the Company determines (i) that
on the date the Executive’s employment with the Company
terminates or at such other time that the Company determines to be
relevant, Executive is a “specified-employee” (as such
term is
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defined under Section 409A) of the
Company and (ii) that any payments to be provided to Executive
pursuant to this Agreement are or may become subject to the
additional tax under Section 409A(a)(1)(B) of the Code or any
other taxes or penalties imposed under Section 409A of the
Code (“Section 409A Taxes”) if provided at the time
otherwise required under this Agreement then (A) such payments
shall be delayed until the date that is six months after date of
the Executive’s “separation from service” (as
such term is defined under Section 409A of the Code) with the
Company, or such shorter period that, as determined by the Company,
is sufficient to avoid the imposition of Section 409A Taxes
(the “Payment Delay Period”) and (B) such payments
shall be increased by an amount equal to interest on such payments
for the Payment Delay Period at a rate equal to the prime rate in
effect as of the date the payment was first due plus one point (for
this purpose, the prime rate will be based on the rate published
from time to time in The Wall Street Journal).
6. Indemnification
Agreement . On the Effective Date, the Company and the
Executive shall enter into an indemnification agreement in
substantially the form attached hereto as Exhibit B (the
“Indemnification Agreement”).
7. Successors
.
(a) This Agreement is
personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.
(b) This Agreement shall
inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) 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 the Company to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
8. Miscellaneous
.
(a) Governing Law .
This Agreement shall be governed by and construed in accordance
with the laws of the State of California, without reference to
principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
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(b) Arbitration . To
the fullest extent allowed by law, any controversy, claim or
dispute between Executive and the Company (and/or any of its
owners, directors, officers, employees, affiliates, or agents)
relating to or arising out of Executive’s employment or the
cessation of that employment will be submitted to final and binding
arbitration in the county in which Executive work(ed) for
determination by one arbitrator in accordance with the American
Arbitration Association’s (“AAA”) National Rules
for the Resolution of Employment Disputes, as the exclusive remedy
for such controversy, claim or dispute. In any such arbitration,
the parties may conduct discovery in accordance with the applicable
rules of the arbitration forum, except that the arbitrator shall
have the authority to order and permit discovery as the arbitrator
may deem necessary and appropriate in accordance with applicable
state or federal discovery statutes. The arbitrator shall issue a
reasoned, written decision, and shall have full authority to award
all remedies which would be available in court. The parties shall
share the filing fees required for the arbitration, provided that
Executive shall not be required to pay an amount in excess of the
filing fees required by a federal or state court with jurisdiction.
The Company shall pay the arbitrator’s fees and any AAA
administrative expenses. Any judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction
thereof. Possible disputes covered by the above include (but are
not limited to) unpaid wages, breach of contract, torts, violation
of public policy, discrimination, harassm
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