Exhibit 10.1
SEVERANCE AND NONSOLICITATION
AGREEMENT
THIS
AGREEMENT is made and entered into on this
26 th
day of
March, 2007, by and between WCI COMMUNITIES, INC.
(“WCI”), a Delaware corporation, and Albert F.
Moscato, Jr. (the “Employee”).
RECITALS:
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A.
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Employee is the
Sr. Vice President of Business Development of WCI, and is an
employee of WCI and/or one or more of it subsidiaries.
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B.
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Employee is not
now a party to any employment agreement with WCI or any of its
subsidiaries.
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C.
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WCI would like
to provide some assurance to Employee that if there is a change in
control of WCI and within twelve months after such change in
control, Employee’s employment is terminated, Employee will
receive certain severance payments, provided Employee does not
solicit any employees of WCI or its subsidiaries.
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NOW, THEREFORE, IN CONSIDERATION of
the recitals and the mutual agreements herein set forth, the
parties agree as follows:
1. Definitions . The
following terms, which are used in this Agreement, are defined as
follows:
a. “ Base Salary
” means the amount of Employee’s base salary (without
inclusion of any bonus) in effect immediately prior to a Change in
Control.
b. “ Cause ”
means: (i) any act of willful misconduct or dishonesty by
Employee in the performance of his duties; (ii) any willful
and persistent failure by Employee to attend to his/her duties; or
(iii) any action by Employee which would constitute a
violation of the provisions of this Agreement under the headings
“Nonsolicitation” and “Confidentiality and
Nondisclosure” if such actions occurred during the
Nonsolicitation Restricted Period; or (iv) Employee’s
conviction of (or pleading guilty or nolo contendere to) any
felony, or of a criminal offense resulting in imprisonment, or of
any misdemeanor involving theft, embezzlement, dishonesty or moral
turpitude.
c. “ Change in Control
” means the occurrence of any of the following
events:
(i) any “Person” within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended, or any successor thereto (the
“ Act ”) (other than WCI or any company owned,
directly or indirectly, by the shareholders of WCI in substantially
the same proportions as their ownership of stock of WCI) becomes
the “Beneficial Owner” within the meaning of
Rule 13d-3 promulgated under the Act of 35% or more of the
combined voting power of the then outstanding securities of WCI
entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities” );
excluding, however, any circumstance in which such beneficial
ownership resulted from any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by WCI or by any
corporation controlling, controlled by, or under common control
with, WCI; or
(ii) a change in the composition of
the Board since the effective date of this Agreement
(“Effective Date”), such that the individuals who, as
of such date, constituted the Board (the “Incumbent
Board ”) cease for any reason to constitute at least a
majority of such Board; provided that any individual who becomes a
director of WCI subsequent to the Effective Date whose election, or
nomination for election by WCI’s stockholders, was approved
by the vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be deemed a member of the Incumbent
Board; and provided further, that any individual who was initially
elected as a director of WCI as a result of an actual or threatened
election contest, as such terms are used in Rule 14a-12 of
Regulation 14A promulgated under the Act, or any other actual
or threatened solicitation of proxies or consents by or on behalf
of any person or entity other than the Board shall not be deemed a
member of the Incumbent Board; or
(iii) a reorganization,
recapitalization, merger or consolidation (a “Corporate
Transaction” ) involving WCI, unless securities
representing more than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors of WCI or the corporation resulting from such
Corporate Transaction (or the parent of such corporation) are held
subsequent to such transaction by the person or persons who were
the beneficial holders of the Outstanding Company Voting Securities
immediately prior to such Corporate Transaction, in substantially
the same proportions as their ownership immediately prior to such
Corporate Transaction; or
(iv) the sale, transfer or other
disposition of all or substantially all of the assets of
WCI.
d. “ Company ”
means WCI and each of its Subsidiaries.
e. “ Good Reason
” means, following a Change in Control: (i) any material
reduction in Employee’s salary below the level of Base Salary
or (ii) any material adverse change in Employee’s
duties, title or responsibilities; provided, however, that Good
Reason shall not be deemed to have occurred unless Employee gives
WCI thirty (30) days written notice, and within such thirty
(30) day period, the Company does not restore Employee’s
Base Salary or restore Employee to the prior position, in which
event Good Reason shall be deemed to have occurred at the time of
the giving of such written notice.
f. “ Nonsolicitation
Restricted Period ” means a period of twelve
(12) months which begins on the date of Termination and ends
twelve (12) months after the date of Termination.
g. “ Severance ”
means cash payments equal to nine (9) months of Base Salary,
payable monthly.
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h. “ Subsidiary ”
means each entity (including, without limitation, every
corporation, partnership, limited partnership, limited liability
company, trust and joint venture) in which WCI owns, or has the
right to acquire, directly or indirectly, a controlling
interest.
i. “ Termination
” means the termination of Employee’s employment with
the Company by the Company, other than for Cause, or the
termination of such employment by Employee for Good Reason, in
either case at any time within the twelve (12) months
following a Change of Control.
j. “ WCI ” means
WCI Communities, Inc., and any successor in connection with any
restructuring of WCI Communities, Inc. which does not result in a
Change in Control.
2. Severance
a. Basis for Payment . If,
within twelve (12) months following a Change in Control,
Employee’s employment is terminated by Company, other than
for Cause, or if within such twelve (12) month period,
Employee terminates his/her employment with the Company for Good
Reason, Employee will be entitled to receive Severance.
b. Payment of Severance .
Severance will be paid by WCI in nine (9) equal monthly
installments, beginning with the month after the month in which
Termination occurred. Severance shall terminate if, during the
Nonsolicitation Restricted Period, Employee violates any of the
provisions of this Agreement under the headings
“Nonsolicitation” and “Confidentiality and
Nondisclosure”. Termination of WCI’s obligations to pay
Severance under this Section 2.b shall not release Employee
from his/her obligations under this Agreement.
3. Effect of Death or
Disability .
a. During Employment . All of
the obligations of WCI hereunder, including the obligation of WCI
to pay Severance, will terminate upon a termination of employment
as a result of death or disability.
b. During Nonsolicitation
Restricted Period . In the event of the death or disability of
Employee during the Nonsolicitation Restricted Period, Severance
shall terminate as of the date of death, and Employee or his/her
personal representative shall be entitled to receive any payments
of Severance accrued (on a per diem basis) but unpaid as of the
date of death.
4. Nonsolicitation . During
the Nonsolicitation Restricted Period, Employee shall not solicit
any person who was an employee of or consultant to the Company at
any time within three (3) months prior to Termination to
accept employment with Employee, with Employee’s new
employer, or with any other person or entity, or encourage any
person to terminate his/her employment or consultant relationship
with the Company, or assist any person or entity, including
Employee’s new employer, in identifying employees of or
consultant
