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Liquidity Services, Inc. Executive Employment Agreement

Executive Employment Agreement

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 This Executive Employment Agreement involves

LIQUIDITY SERVICES INC | LIQUIDITY SERVICES, INC

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Title: LIQUIDITY SERVICES, INC. EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: District Of Columbia     Date: 7/13/2016
Industry: Retail (Catalog and Mail Order)     Sector: Services

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Exhibit 10.1

 

LIQUIDITY SERVICES, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT ( “Agreement” ) is entered into as of July 13, 2016 (the “Effective Date” ), by and between Liquidity Services, Inc., a Delaware corporation (“ LSI ” or the “Company” ), and Mark Shaffer (the “Executive” ).

 

1.              Employment Agreement .   On the terms and conditions set forth in this Agreement, the Company agrees to employ the Executive and the Executive agrees to be employed by the Company for the Employment Period set forth in Section 2 hereof and in the position and with the duties set forth in Section 3 hereof.  Terms used herein with initial capitalization are defined in Section 10.12 below.

 

2.              Term .   The term of employment under this Agreement shall be the period set forth in Schedule 1 attached hereto commencing on the Effective Date (the “Employment Period” ).

 

3.              Position and Duties .   The Executive shall serve in the position and with the duties and title set forth in Schedule 1 attached hereto during the Employment Period.  In such capacity, the Executive shall have the normal duties, responsibilities, and authority of such position, subject to the power of the Executive’s “Reporting Officer” as designated in Schedule 1 , the Company’s Chairman of the Board of Directors (the “Board” ) or the Board to reasonably expand or limit such duties, responsibilities and authority. The Executive shall report to the Reporting Officer designated in Schedule 1 .  The Executive shall devote the Executive’s best efforts and full business time and attention to the business and affairs of the Company; provided, however, that Executive may, to the extent such participation or service does not materially interfere with the performance of the obligations described in this Agreement, (i) participate in charitable, civic, political, social, trade, or other non-profit organizations and (ii) with the consent of the Board such consent not to be unreasonably withheld, serve as a non-management director of business corporations (or in a like capacity in other for-profit organizations).

 

4.              Place of Performance .   In connection with the Executive’s employment by the Company, the Executive shall be based at the principal executive offices of the Company, except as otherwise agreed by the Executive and the Company and except for reasonable travel on Company business.

 

5.              Compensation .

 

5.1.     Base Salary .   During the Employment Period, the Company shall pay to the Executive an annual base salary (the “Base Salary” ), which initially shall be at the rate per year as set forth in Schedule 1 .  The Base Salary shall be payable semi-monthly or in such other installments as shall be consistent with the Company’s payroll procedures. The Base Salary may be increased at any time or from time to time, but it may not be decreased without the consent of the Executive.

 

5.2           Bonus.   The Executive shall be eligible for a performance bonus as set forth in Schedule 1 .

 

5.3           Equity Awards .

 



 

5.3.1.       Annual Award .  Executive shall be eligible to receive an annual equity award, subject to the terms of the Liquidity Services, Inc. Amended and Restated 2006 Omnibus Long-Term Incentive Plan or successor plan, as determined by the Board or any committee thereof.

 

5.3.2        Special Award .  In consideration of Executive entering into this Agreement and subject to approval by the Board or any committee thereof, the Company shall grant Executive 15,000 shares of Restricted Stock pursuant to the Liquidity Services, Inc. Amended and Restated 2006 Omnibus Long-Term Incentive Plan, which grant date shall be the date the grant is approved by the Board or any committee thereof (the “Special Award”). The restrictions on the Special Award shall lapse equally over three years, with twenty five percent (25%) of the Restricted Stock vesting each year on the anniversary of the grant date.  All other terms and conditions of such award shall be governed by the Liquidity Services, Inc. Amended and Restated 2006 Omnibus Long-Term Incentive Plan and the applicable award agreements.

 

5.4           Benefits .  During the Employment Period, the Executive will be entitled to receive such other benefits approved by the Reporting Officer and made available to similarly situated senior executives of the Company, including health insurance, disability insurance, and 401(K) benefits.  At all times the Company agrees to maintain Director’s and Officer’s Liability coverage for the Executive. Nothing contained in this Agreement shall prevent the Company from changing insurance carriers or otherwise modifying the Company’s employee benefit programs.

 

5.5           Employee Leave .   The Executive shall be entitled to all public holidays observed by the Company in addition to a total of 26 days of paid time off in accordance with the applicable policies of the Company, which shall be taken at a reasonable time or times per year.

 

6.              Expenses .   The Executive is expected and is authorized to incur reasonable expenses in the performance of his duties hereunder, including the costs of entertainment, travel, and similar business expenses incurred in the performance of his duties.  The Company shall reimburse the Executive for all such expenses promptly upon periodic presentation by the Executive of an itemized account of such expenses and appropriate receipts.  Any reimbursements provided under this Agreement that constitute deferred compensation within the meaning of Code Section 409A shall be made or provided in accordance with the requirements of Code Section 409A, including that (i) in no event shall any fees, expenses or other amounts eligible to be reimbursed by the Company under this Agreement be paid later than the last day of the calendar year next following the calendar year in which the applicable fees, expenses or other amounts were incurred; and (ii) the amount of expenses eligible for reimbursement that the Company is obligated to pay or provide, in any given calendar year shall not affect the expenses that the Company is obligated to reimburse in any other calendar year.

 

7.              Termination of Employment .

 

7.1.          Termination .   The Executive’s employment by the Company during the Employment Period will continue until Executive’s death, Disability, resignation or until Executive’s termination by the Board at any time.

 

7.2.          Notice of Termination .   Any termination of the Executive’s employment by the Company or the Executive (other than because of the Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10.1 hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon, if any, and shall set 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.  Termination of the Executive’s employment shall take effect on the Date of Termination.

 

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8.              Compensation Upon Termination .

 

8.1.          Death .   If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death, the Company shall pay to the Executive’s estate, or as may be directed by the legal representatives of such estate, the Executive’s full Base Salary through the next full calendar month following the Date of Termination and all other unpaid amounts, if any, to which the Executive is entitled as of the Date of Termination in connection with any fringe benefits pursuant to Section 5.4 and expenses pursuant to Section 6 . Subject to Section 8.5 below, the payments contemplated by this Section 8.1 shall be paid at the time they are due, and the Company shall have no further obligations to the Executive or his or her estate under this Agreement.

 

8.2.          Disability .   If the Company terminates the Executive’s employment during the Employment Period because of the Executive’s Disability, the Company shall pay the Executive the Executive’s full Base Salary through the third full calendar month following the Date of Termination and all other unpaid amounts, if any, to which the Executive is entitled as of the Date of Termination in connection with any fringe benefits pursuant to Section 5.4 and expenses pursuant to Section 6 . Subject to Section 8.5 below, the payments contemplated by this Section 8.2 shall be paid at the time they are due, and the Company shall have no further obligations to the Executive under this Agreement; provided, however, that the Base Salary shall be reduced by the amount of any disability benefit payments made to the Executive during a period of Disability from any insurance or other policies provided by the Company.

 

8.3.          By the Company with Cause or by the Executive without Good Reason .  If the Company terminates the Executive’s employment during the Employment Period for Cause or if the Executive voluntarily terminates the Executive’s employment during the Employment Period other than for Good Reason, the Company shall pay the Executive the Executive’s full Base Salary through the Date of Termination and all other unpaid amounts, if any, to which Executive is entitled as of the Date of Termination in connection with any fringe benefits pursuant to Section 5.4 and expenses pursuant to Section 6 .  Subject to Section 8.5 below, the payments contemplated by this Section 8.3 shall be paid at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.

 

8.4.          By the Company without Cause or by the Executive for Good Reason If the Company terminates the Executive’s employment during the Employment Period other than for Cause, Death, or Disability or the Executive terminates his employment during the Employment Period for Good Reason, the Company shall pay the Executive: (A) the Executive’s full Base Salary through the Date of Termination and all other unpaid amounts, if any, to which the Executive is entitled as of the Date of Termination in connection with any fringe benefits pursuant to Section 5.4 and expenses pursuant to Section 6 ; and (B) a lump-sum severance package equal to (i) twelve months of the Executive’s Base Salary and (ii) an amount equal to the average annual target incentive bonus earned by the Executive during the previous two fiscal years (collectively the “Severance Payment” ). Subject to Section 8.5 below, the Severance Payment shall be payable to the Executive within 60 days of the Date of Termination, provided the Executive timely executes and returns a separation agreement and release of claims in a form acceptable to the Company, and such release has become irrevocable by such date.

 

8.5.          Code Section 409A Matters . Anything in this Agreement to the contrary notwithstanding, if (A) on the date of Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”)) with the Company, Executive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) and (B) as a result of such separation from service, Executive would receive any payment under this Agreement that, absent the application of this Section 8.5, would be subject to the

 

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additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earliest of (1) six months after the Executive’s separation from service, (2) the Execut


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