Exhibit 10.1

 

 

CONFIDENTIAL SEVERANCE AGREEMENT

AND COMPREHENSIVE RELEASE AND WAIVER OF CLAIMS

 

This AGREEMENT, dated as of June 29, 2016, is between John B. Richards (the
“Employee”) and The Joint Corp., a corporation organized pursuant to the laws of
Delaware, (the Company).

 

WHEREAS, the Employee and the Company previously entered into or the Employee
became a party to the following agreements:

 

·An Employment Agreement entered into on or about October 23, 2015 (the
“Employment Agreement”),

 

·A Non-Competition and Non-Solicitation Agreement entered into in December 2013
(the “Non-Competition Agreement”),

 

·A Restricted Stock Award executed by the Employee in January 2014 (the
“Restricted Stock Award”), and

 

·A Stock Option Agreement executed by the Employee on or about March 14, 2016
(the “Stock Option Agreement”), and

 

·The Employment Agreement, the Non-Competition Agreement, the Restricted Stock
Award, and the Stock Option Agreement shall be known collectively as the “Prior
Agreements.”

 

WHEREAS, the Employee’s employment with the Company shall terminate at 12:01
a.m. on June 30, 2016 (the “Termination Date”) as a result of the Employee’s and
Company’s mutual agreement to end the employment relationship; and

 

WHEREAS, the Employee has also tendered and the Company has accepted the
Employee’s voluntary resignation as a member of the Company’s Board of
Directors; and

 

WHEREAS, the parties hereto desire to set forth their mutual agreement
concerning the terms and conditions of the termination of the employment of the
Employee, including any rights of the Company and the Employee following the
Employee’s termination of employment with the Company;

 

NOW, THEREFORE, in consideration of the respective agreements of the parties,
and subject to the conditions set forth herein, the parties acknowledge and
agree as follows:

 

1.Mutual Nondisparagement. The Employee shall not make public statements or
publish or make (under circumstances reasonably likely to result in such
statement being published) any statement that adversely affects or otherwise
maligns the business or reputation of the Company; any affiliate, subsidiary, or
parent of the Company; or any of their respective products, services, employees,
officers, or directors. The Company’s officers, directors, and senior managers
(COO, Vice President of Operations, Director of IT, and Director of Human
Resources) shall not make public statements or publish or make (under
circumstances reasonably likely to result in such statement being published) any
statement that adversely affects or otherwise maligns the business or reputation
of the Employee. In the event the Company’s Director of Human Resources receives
an inquiry regarding the Employee, the Company shall only provide the dates the
Employee’s employment with the Company began and ended, the job position the
Employee held during the Employee’s employment with the Company, and the fact
that the employment relationship ended by mutual agreement. Notwithstanding the
foregoing, nothing in this paragraph will limit any person from cooperating and
answering questions truthfully under oath in any civil, criminal, governmental,
or regulatory proceeding.

 

Confidential

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2.Return of Property & Confidentiality; Non-Competition. Within ten business
days of the Effective Date (as defined below), the Employee shall return to the
Company all of the Company’s property including that of its subsidiaries that is
in the Employee’s possession, including, but not limited to, all electronic
data, computer-related equipment, keys and other devices used to access the
Company’s property, manuals, handbooks, and documents. The Company shall
promptly return Employee’s personal property, personal effects and personal
documents located in the Company’s offices. The Employee understands and agrees
that the Confidentiality Agreement in Section 3 of the Non-Competition Agreement
shall remain in full force and effect. Confidential Information as defined in
Section 3 of that agreement includes information received in confidence by the
Company from its franchisees, customers or suppliers or other third parties.
Confidential Information includes such information in any form or format. The
Company and the Employee acknowledge and agree that the Confidential Information
constitutes valuable, special and unique property of the Company, and in some
cases of customers and to which the Employee has had access on a confidential
basis, and derives economic value because it is not generally known to the
public or others who could benefit from its disclosure or use, or is otherwise
required to be kept confidential. If disclosure of Confidential Information is
sought of the Employee by a subpoena or judicial or administrative order, the
Employee shall give the Company prompt notice thereof within five days of the
Employee’s receipt of such subpoena or order, and the Company may resist by all
legitimate means any attempt, of any kind whatever, to compel disclosure of
Confidential Information. To the extent the Employee has any doubt, either now
or in the future, as to whether information the Employee possesses is
Confidential Information, the Employee will contact the Company for
clarification before divulging or using such information. The Employee agrees
that a breach of this provision of the Agreement will result in immediate,
irreparable damage and harm to the Company and that the Company will be entitled
to obtain immediate, temporary, preliminary and permanent injunctive relief to
prevent the breach and also recover its reasonable attorneys’ fees and costs
incurred seeking to or obtaining any remedy for Employee’s breach.[1]

 

Employee understands and agrees that, in addition to Section 3 of the
Non-Competition Agreement, Sections 4, 5, 6, 7, 8, and 10 of the Non-Competition
Agreement shall survive and be binding on him, and consistent with that the
Employee and the Company hereby agree that as it relates to Section 4, the
restrictive periods shall be those identified in clause (B) of each of the
subsections of Section 4.

 

__________________

[1] The federal Defend Trade Secrets Act of 2016 immunizes employees against
criminal and civil liability under federal or state trade secret laws – under
certain circumstances – if the Employee discloses a trade secret for the purpose
of reporting a suspected violation of law. Immunity is available if the Employee
discloses a trade secret in either of these two circumstances: (1) the Employee
discloses the trade secret (a) in confidence, (b) directly or indirectly to a
government official (federal, state or local) or to a lawyer, (c) solely for the
purpose of reporting or investigating a suspected violation of law; or (2) in a
legal proceeding, the Employee discloses the trade secret in the complaint or
other documents filed in the case, so long as the document is filed “under seal”
(meaning that it is not accessible to the public).

Confidential

 -Page 2 of 6-

 

3.Release & Waiver of Claims. In consideration for the obligations set forth in
this Agreement and for other valuable consideration, the sufficiency of which is
hereby acknowledged, the Employee hereby promises to not sue and forever waives,
releases and discharges the Company, its parents, subsidiaries, predecessors,
successors, and assigns and the foregoing’s respective directors, officers,
employees, agents, insurers, and attorneys (“Company Releasees”) from any and
all charges, claims, demands, actions, causes of action, or suits at law or in
equity, of whatsoever kind or nature, whether presently known or unknown,
suspected or unsuspected, which the Employee may now have or may now or
hereafter assert including, but not limited to, any and all claims relating to
any omissions, acts, or events that have occurred until and including the date
on which this Agreement becomes effective, including but not limited to, any and
all claims relating to the Employee’s employment with the Company or the
cessation of the Employee’s employment with the Company, whether now known or
unknown, including but not limited to claims for discrimination or unequal pay
or retaliation under local, state or federal law, including without limitation
Title VII of the Civil Rights Act, the Equal Pay Act, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Family and Medical
Leave Act, the Fair Labor Standards Act, the Workers’ Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act and the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), claims under any
applicable state or local law relating to employment, claims for emotional
distress or other damages, claims in tort or contract, claims under any
applicable whistleblower law and any similar federal, state or local law, and
claims for libel, slander, defamation, invasion of privacy, promissory estoppel,
breach of any duty of good faith and fair dealing, and wrongful discharge in
violation of public policy. The Employee waives all rights to assert a claim for
relief available under any and all such laws, including but not limited to,
claims for attorneys’ fees, damages, reinstatement, back pay, or injunctive or
other equitable relief. The Employee and the Company acknowledge that the
Employee’s waiver and release with respect to administrative charges under the
above-referenced laws are effective only so as to waive and release the
Employee’s right to recover monetary, personal or other relief against the
Company and that this Agreement does not prevent or restrict the Employee’s
ability or right to file administrative charges with, cooperate in any
investigation by or provide information to the Equal Employment Opportunity
Commission, the National Labor Relations Board, the Securities and Exchange
Commission or any other federal, state or local administrative agency.
Notwithstanding the foregoing, this release and waiver does not extend, limit,
impair, affect, or discharge in any way any obligations incurred or specified
under this Agreement; any vested rights in any Company-sponsored deferred
savings plan, pension plan, or equity compensation plan (including but not
limited to the Restricted Stock Award and the Stock Option Agreement) as of the
time of the Separation Date; the Employee’s right to continue group health care
coverage under COBRA; the right to receive workers’ compensation benefits for
any work-related injuries (except the Employee represents that the Employee has
not suffered or sustained any work-related injuries during the Employee’s
employment with the Company, and that the Employee is currently able to work
without limitation, either physical or mental, and is not currently suffering
from any injury or disease caused by or in any way related to the Employee’s
employment with the Company); unemployment insurance benefits; any claim that
cannot be released or waived as a matter of law; any rights or claims that may
arise after the date this Agreement becomes effective; any rights or claims that
Employee may have in his capacity as a stockholder of the Company; or any right
to indemnification and defense under any insurance policy or that Employee may
have pursuant to the Company’s governing and organizational documents including,
without limitation, its certificate of incorporation, bylaws, and
indemnification agreements applicable to him as an officer or director.

 

Confidential

 -Page 3 of 6-

 

Employee acknowledges that the Company has paid the Employee all salary, wages,
commissions, bonuses, vacation, and other compensation due to the Employee, if
any, as of the date of the Employee’s execution of this Agreement, that the
Company is not obligated to pay the Employee any amount of additional
compensation pursuant to the Employment Agreement.

 

4.Stock Options & Restricted Stock. If Employee signs (and does not revoke) this
Agreement, he shall be entitled to receive the following benefits which, to the
extent inconsistent with the Prior Agreements, shall supersede and replace the
corresponding provisions of the Prior Agreements:

 

a.Notwithstanding the terms of the Stock Option Agreement and notwithstanding
the termination of Employee’s employment, one-quarter (25%) of the 80,000
“Option Shares” (as defined in the Stock Option Agreement) shall vest on each of
the first four anniversaries of the “Grant Date” (as defined in the Stock Option
Agreement), and the “Expiration Date” shall be May 13, 2020.

 

b.Notwithstanding the terms of the Restricted Stock Award and notwithstanding
the termination of Employee’s employment, the unvested 1,390 Grant “A” shares
and the unvested 8,343 Grant “B” shares scheduled to vest during the month of
July 2016 shall vest in July 2016 after which the total number of vested shares
under the Restricted Stock Award shall be 285,067.

 

5.Acknowledgments and Agreements. The Employee acknowledges and agrees that (a)
the Employee freely and voluntarily entered into this Agreement, (b) before
entering into this Agreement, the Employee was encouraged to consult an attorney
of the Employee’s choice and the Employee had an opportunity and sufficient time
to review this Agreement with the Employee’s attorney, (c) the Employee fully
understands the terms of this Agreement, and (d) the Employee is receiving
pursuant to this Agreement rights and consideration in addition to that to which
the Employee is not already entitled.

 

6.Review of Agreement. The Employee acknowledges further that, before entering
into this Agreement, the Employee had at least twenty-one (21) days to review
and consider this Agreement. The Employee further acknowledges that the Employee
used as much or as little of the twenty-one (21) day period as the Employee
desired before entering into this Agreement.

 

7.Revocation. The Employee may revoke this Agreement within seven (7) days of
the date of the Employee’s execution hereof, in which case this Agreement and
all of the Employee’s rights under the Agreement shall be null and void.
Revocation can be made by providing written notice (or electronic written) to
the Company no later than the close of business on the eighth (8th) day after
the date of the execution hereof. Employee acknowledges that this Agreement
shall not become effective and the Company shall have no obligation under this
Agreement unless and until the seven (7) day revocation period specified by this
section expires without Employee’s having effectively revoked this Agreement.
This Agreement shall become effective upon execution by both parties and the
expiration of the seven (7) day revocation period described in this Section 9
(the “Effective Date”).

 

Confidential

 -Page 4 of 6-

 

8.Warranties and Representations. The Employee warrants and represents that, to
the best of his knowledge as of June 28, 2016, the Employee is not aware of any
violations of any law by the Company or any of its affiliates, parents or
subsidiaries or of conduct by the Company or any of its affiliates, parents or
subsidiaries or any representative of the Company or any of its affiliates,
parents or subsidiaries that could lead to liability under any law on the part
of the Company or any other released party except those, if any, which the
Employee has previously disclosed to the Company. The Employee further warrants
and represents that the Employee has notified the Company of any matter which
Employee has any reason to suspect may lead to future violations of law by the
Company or any of its affiliates, parents or subsidiaries. The Employee further
warrants and represents that neither the Employee nor a person or entity acting
on the Employee’s behalf has initiated, reported, or filed any complaints or
charges against the Company or any of its affiliates, parents or subsidiaries
with any court, government agency or regulatory body and that the Employee has
not assigned to any third party any claim against or involving the Company or
any of its affiliates, parents or subsidiaries.

 

9.Cooperation. Following the Effective Date, Employee shall cooperate with and
assist the Company in any Proceeding in which the Company is involved and in
which Employee may have information about or was involved. Such cooperation and
assistance shall be provided at a time and manner mutually and reasonably
agreeable to Employee and the Company, and shall include, but not be limited to,
providing information, documents, and testimony, submitting to depositions, and
generally cooperating to assist the Company. The Company agrees to reimburse
Employee for the reasonable expenses associated with any travel and lodging
associated with his cooperation under this Section. For purposes of this
Agreement, “Proceeding” shall mean, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and appeal of, and
the giving of testimony in, any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative.

 

10.Invalidity of Provision. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction. If any provision of this Agreement is held unreasonable,
unlawful, or unenforceable in any respect, such provision shall be interpreted,
revised, or applied in a manner that renders it lawful and enforceable to the
fullest extent possible.

 

Confidential

 -Page 5 of 6-

 

11.Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Arizona without giving effect to the
conflicts of law principles thereof.

 

12.Miscellaneous. No provision of this Agreement may be modified or discharged
unless such modification or discharge is agreed to in writing and signed by the
Employee and the Company. No provision of this Agreement may be waived unless
such waiver is in writing and signed by the party to be charged therewith. No
waiver by either party hereto at any time of any breach by the other party
hereto of any provision of this Agreement to be performed by such other party
shall be deemed a waiver of any other provisions at the same or at any prior or
subsequent time. Except with respect to (i) the provisions of the Stock Option
Agreement, the Restricted Stock Award, and the Non-Competition Agreement that
pursuant to their terms survive the termination of the Employee’s employment
with the Company; (ii) the Company’s governing documents such as bylaws and
articles or certificates of incorporation; (iii) any indemnification and defense
agreements applicable to officers and directors of the Company; and (iv)
insurance policies of the Company Releasees, there are no agreements or
representations, oral or otherwise, express or implied, that have been made by
any party that are not expressly set forth in this Agreement, and except as
excluded here, this Agreement supersedes and replaces any prior agreements,
understandings, contracts, commitments between the Employee and the Company
Releasees.

 

IN WITNESS WHEREOF, this Agreement has been executed and entered into by the
parties hereto as of the date first written above.

 

 

      THE JOINT CORP.                 By: /s/ Richard A. Kerley /s/ John B.
Richards       John B. Richards   Its: Lead Director            

 

  Printed Name: Richard A. Kerley           Date: 6/29/16   Date: 6/29/16

 

 

 

Confidential

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