Exhibit 10.2

 

ZAIS GROUP, LLC
EMPLOYEE

RESTRICTIVE COVENANTS AGREEMENT

 

This Restrictive Covenants Agreement (“Agreement”) is entered into effective
this ______ day of December, 2016 (the “Effective Date”), by and between ZAIS
Group, LLC (“ZAIS”), on behalf of itself and its Affiliates and its and their
respective successors and assignees (collectively referred to herein as “ZAIS
Group”), and _______________(the “Employee”).  ZAIS and the Employee are
collectively referred to herein as the “Parties.” Terms not otherwise defined
herein are defined in Appendix A.

 

In consideration of receiving a grant of Restricted Stock Units under the ZAIS
Group Holdings, Inc. 2015 Stock Incentive Plan in December 2016 (the “Plan”),
which the Employee acknowledges to be good and valuable consideration for the
Employee's obligations hereunder, the Parties hereby agree as follows:

 

1.        Confidential Information of ZAIS Group. The Employee agrees, at all
times, including after employment termination, to: (i) hold in the strictest
confidence, and shall neither use in any manner detrimental to any member of
ZAIS Group nor disclose, publish, divulge or make accessible, directly or
indirectly, to any Person, any Confidential Information of ZAIS Group, without
the prior written consent of ZAIS Group Holdings, Inc. (“ZGH”); (ii) exercise
all reasonable efforts to prevent third parties from gaining access to such
Confidential Information of ZAIS Group; (iii) inform all other employees and
agents to whom the Employee discloses Confidential Information, of the
proprietary interest and nature of such Confidential Information and of the
recipient’s obligations under ZAIS Group's policies to keep such information
confidential; and (iv) take such other protective measures as may be or become
reasonably necessary to preserve the confidentiality of such Confidential
Information.

 

Notwithstanding the preceding paragraph, the Employee may divulge or communicate
Confidential Information: (i) to officers, directors, partners, members and
employees and members of ZAIS Group, and to auditors, counsel and other
professional advisors to such Persons and ZAIS Group; provided, however, that
such Persons have a need to know and have been informed of the confidential
nature of the information, and, in any event, the Person disclosing such
information shall be liable for any failure by such Persons to abide by the
provisions of this Section 1; (ii) to the extent the disclosure of Confidential
Information is required to be disclosed by order of a court of competent
jurisdiction, administrative agency or governmental body, or by any law, or by
subpoena, summons or any other administrative or legal process, or by applicable
regulatory standards, in which case the disclosing Party will (except as
prohibited by law) provide ZAIS Group or the Person whose Confidential
Information is required to be disclosed, as applicable, with prompt, prior
written notice of such compelled disclosure and the opportunity to prevent or
limit such disclosure; provided, however, that such Person either (x) agrees to
keep such Confidential Information confidential in accordance with this Section
1 and the Employee shall be liable for such Person’s compliance with the
provisions of this Section 1, or (y) signs a confidentiality agreement with ZGH
with respect to any such Confidential Information.

 

 

 

 

The Employee agrees that the performance records and financial results of ZAIS
Group are the exclusive property of ZAIS Group, and the Employee shall have no
ownership, attribution or other rights with respect thereto. The Employee hereby
assigns to ZAIS Group the performance and financial results generated in
connection with the Employee's employment by ZAIS Group.

 

The Employee understands that nothing contained in this Agreement limits the
Employee's ability to file a charge or complaint with the Equal Employment
Opportunity Commission, the National Labor Relations Board, the Occupational
Safety and Health Administration, the Securities and Exchange Commission or any
other federal, state or local governmental agency or commission (“Government
Agencies”). The Employee further understands that this Agreement does not limit
the Employee's ability to communicate with any Government Agencies or otherwise
participate in any investigation or proceeding that may be conducted by any
Government Agency, including providing documents or other information, without
notice to any member of ZAIS Group. This Agreement does not limit the Employee's
right to receive an award for information provided to any Government Agencies.

 

2.       Restrictive Covenants.

 

(a)       During the Non-Compete Restricted Period, the Employee shall not,
directly or indirectly, without in each instance the prior written consent of
ZGH, invest in, own, manage, operate, finance, control, be employed by, or
participate in the ownership, management, operations, financing or control of,
lend its name or a similar name to, lend its credit to, render services or
advice to, or otherwise assist, any Person (other than a member of ZAIS Group)
that engages in, owns, invests in, operates, manages or controls, any venture,
business, or enterprise engaged in providing Competitive Investment Services in
North America, Europe or Asia; provided, however, that the Employee may (i) own
no more than 3% of any class of securities of any Person traded on any national
securities exchange and no more than 5% of any class of securities of any Person
whose securities are not traded on any national securities exchange (so long as
such securities do not constitute more than 5% of the overall equity or voting
power of such Person) and (ii) provide investment advice for managing the assets
of himself or members of his Immediate Family; provided, further, that in the
event the Employee's employment is terminated by ZAIS Group other than because
of a termination For Cause (as such term is defined in the Amended and Restated
Operating Agreement of ZAIS, as such is in effect from time to time), the
provisions of this Section 2(a) shall automatically terminate with respect to,
and no longer be applicable to, the Employee.

 

(b) During the Restricted Period, the Employee shall not, directly or
indirectly, without in each instance the prior written consent of ZGH:

 

(i)       solicit, hire or employ, or otherwise engage (or assist any other
Person in soliciting, hiring, employing or otherwise engaging) as an employee,
independent contractor or otherwise, any employee of a member of ZAIS Group who
was employed or engaged by ZAIS Group, or in any way interferes with any such
person’s contractual arrangements or relationship with any members of ZAIS
Group;

 

(ii)       solicit (or assist any other Person in soliciting) the business of
any current, former or prospective Client of a member of ZAIS Group (excluding
any Person that has not been a Client or prospective Client of a member ZAIS
Group within one year prior to such solicitation); provided, however, that the
Employee shall not be deemed to be in violation of this Section 2(b)(ii) solely
by virtue of the Employee's employment by or association with a Person that the
Employee does not control (even if such Person solicits any such current former,
or prospective Client of ZAIS Group), so long as the Employee is not engaged in,
does not participate in or encourage and is not directly or indirectly in any
way responsible for such solicitation or persuasion efforts;

 

2 

 

 

(iii)       otherwise induce or attempt to induce (or assist any other Person in
inducing) any current, former or prospective Client to cease doing business with
any member of ZAIS Group, or in any way interfere with the relationship between
any current, former or prospective Client and ZAIS Group; or

 

(iv)       issue, disseminate or otherwise make public any written or oral
statements likely to disparage or harm the business or reputation of any member
of ZAIS Group or the reputation of any executive or employee of a member of ZAIS
Group.

 

3.       Severability of Covenants. If any of the covenants set forth in this
Agreement is held by a court of competent jurisdiction to be unreasonable,
unenforceable, arbitrary or against public policy, such covenants will be
interpreted or deemed to be reformed to provide for the maximum activity,
duration, geographical area or other limitations permitted by applicable law.
The covenants set forth in this Agreement and each provision hereof are
severable and distinct covenants and provisions. The invalidity or
unenforceability of any such covenant or provision as written shall not
invalidate or render unenforceable the remaining covenants or provisions hereof,
and any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such covenant or provision in any other.

 

4.       Remedies. The Employee acknowledges that in the event of a breach of
this Agreement by the Employee, money damages would be inadequate and ZAIS Group
would have no adequate remedy at law. Accordingly, the Employee agrees that each
member of ZAIS Group shall have the right, in addition to any other rights and
remedies existing in its favor with respect to any such breach, to enforce their
rights and such Employee's obligations under this Agreement not only by a claim
for damages but also by an action or actions for specific performance,
injunction or other equitable relief, without posting any bond or security.
Without limiting the foregoing, in the case of a breach or threatened breach of
this Agreement, in addition to a claim for damages, ZAIS Group shall have the
right to obtain injunctive or other equitable relief to restrain any breach or
threatened breach, or otherwise to enforce specifically the provisions, of this
Agreement. If the Employee breaches the provisions of this Agreement, in
addition to any rights ZAIS Group may have at law and in equity, ZAIS Group may
redeem all shares obtained upon settlement of the Restricted Stock Unit for $.01
per share.

 

5.       Survival. The covenants set forth in this Agreement shall survive the
termination of the Employee's employment. The provisions of this Agreement shall
be subject to, and not in any way affect the enforceability of, any separate
agreement entered into by any officer or employee of ZAIS Group restricting or
prohibiting certain business activities of such Person.

 

3 

 

  

6.       Applicable Law; Venue; Waiver of Jury Trial.

 

(a)       The Parties hereto hereby agree that all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement shall be governed by the internal
laws of the State of Delaware without giving effect to any choice of law or
conflict of law provision or rule, notwithstanding that public policy in
Delaware or any other forum jurisdiction might indicate that the laws of that or
any other jurisdiction should otherwise apply based on contacts with such state
or otherwise.

 

(b)       Each of the Parties hereto submits to the exclusive jurisdiction of
the Court of Chancery in the State of Delaware in any action or proceeding
arising out of or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and determined in any such
court. Each Party hereto also agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
Parties hereto waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party hereto with respect thereto.
The Parties hereto each agree that final judgment in any such suit, action or
proceeding brought in such a court shall be conclusive and binding on it and may
be enforced in any court to the jurisdiction of which it is subject by a suit
upon such judgment.

 

(c)        EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES
THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6(c).

 

7.       Acknowledgements. As consideration for the grant of Restricted Stock
Units under the Plan, the Employee acknowledges that: (1) he has knowledge of
confidential information, proprietary information and trade secrets relating to
members of ZAIS Group, the Business and the Clients; (2) the products and
services comprising the Business are, or may be, marketed throughout the United
States and internationally; (3) the Business competes with other businesses that
are or could be located in any part of the United States or internationally; (4)
ZAIS Group has required the covenants set forth in this Agreement as a condition
to the grant of Restricted Stock Units; (5) the covenants set forth in Section 2
are reasonable and necessary to protect and preserve the Business and to protect
the goodwill of ZAIS Group; and (6) ZAIS Group will be irreparably harmed and
damaged if the covenants in Section 1 and/or Section 2 are breached.

 

4 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

ZAIS Group, LLC

 

 

By: ________________________________

 

 

ACCEPTED AND AGREED TO:

 

 

 

______________________________________

Employee

5 

 

  

APPENDIX A

 

DEFINITIONS

 

“Affiliate” means with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or, with respect to any Person that is
an individual, such Person’s Family Member. For purposes of this definition,
“control,” when used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of equity interests,
by contract or otherwise; and the terms “controlling” and “controlled” have
correlative meanings to the foregoing. For purposes of the definition of
“control,” a general partner, managing member or trustee of a Person shall
always be considered to control such Person.

 

“Business” means the business of providing Investment Services.

 

“Clients” means Persons to whom ZAIS Group provides Investment Services,
including any institutional clients (including insurance companies, pension
funds and endowments, but expressly excluding any collateralized loan obligation
transaction purchasers), on a managed account basis or otherwise, hedge funds,
fund of funds, and other pooled investment vehicles, real estate investment
trusts or business development companies.

 

“Competitive Investment Services” means Investment Services with respect to
mortgage, government, corporate or other credit products, including residential
whole loans, residential mortgage-based securities, asset-based securities,
commercial real estate, commercial whole loans, commercial mortgage-based
securities, investment grade government or corporate credit, high yield
government or corporate credit or structured government or corporate credit
vehicles or with respect to other products that compete with the Business in the
United States, Asia or Europe.

 

“Confidential Information” means any confidential, non-public or proprietary
information (whether transmitted orally or in writing or stored electronically)
relating to the business or the affairs of any member of ZAIS Group or its or
their respective clients, officers, directors, members or Principals of members
and identified (orally or in writing), or otherwise known by (or should
reasonably be known by) the recipient, as being confidential. The following
information (which list is not intended to be exhaustive) shall be considered
“Confidential Information” without the need for identification as such: the
information provided to the Employee pursuant any review of the books and
records, budget, financial reports, tax records of any member of ZAIS Group or
any other information provided to the Employee pursuant to Article XI of the
Parent Operating Agreement, future transactions (regardless of whether such
transactions are consummated), customer lists, employee lists, salary and other
compensation or benefits of employees, financial data, financial or strategic
plans, forecasts, records and other business information, plans, reports or
data, client lists, information encompassed in drawings, designs, plans,
proposals, reports, research, marketing and sales plans, costs, quotations,
specification sheets, recording media, information which relates, directly or
indirectly, to the computer systems and computer technology, including source
codes, object codes, reports, flow charts, screens, algorithms, use manuals,
installation or operation manuals, computer software, spreadsheets, data
computations, formulas, techniques, databases, and any other form or compilation
of computer-related information and other confidential, non-public or
proprietary information relating to the business or the affairs of the Employee,
each member of ZAIS Group or its or their respective clients, directors,
officers, members or Principals of members. Confidential Information shall not,
however, include any information that: (i) is or becomes generally available to
the public other than as a result of a disclosure by any member or officer in
breach of this Agreement; (ii) was or becomes available on a non-confidential
basis from a source other than ZAIS Group, or any officer or director of a
member of ZAIS Group; provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to ZAIS Group or any other Person with respect to
such information; (iii) is or was developed by the receiving Person
independently of, or was known by the receiving Person prior to, any disclosure
of such information made by the disclosing Person, other than disclosures by any
member or any Affiliate of a member in connection with his employment by or
provision of services to ZAIS Group; (iv) to the extent it is required to be
disclosed by order of a court of competent jurisdiction, administrative agency
or governmental body, or by any law, or by subpoena, summons or any other
administrative or legal process, or by applicable regulatory standards, after
notice of such requirement has been given to ZAIS Group or the disclosing Person
(except as prohibited by law) and ZAIS Group or the disclosing Person has had a
reasonable opportunity to oppose such disclosure; or (v) is disclosed with the
written consent of the Person to which such Confidential Information relates or,
with respect to any Confidential Information concerning ZAIS Group, ZGH.

 

6 

 

 

“Fund” means any investment company, mutual fund, business development company,
partnership, fund, closed-end fund, unit investment trust, offshore fund, common
or collective fund or collective trust, special purpose vehicle, hedge fund or
other pooled investment vehicle, including any pooled investment vehicle that
invests in real estate or interests in real estate, whether or not registered,
or, as applicable, whether or not its shares are registered, under the
Investment Company Act of 1940, as amended, the Securities Exchange Act of 1934,
as amended or the Securities Act (or similar provisions of applicable Law of any
jurisdiction other than the United States).

 

“Immediate Family” means, with respect to any individual Person, (a) such
Person’s spouse, parent, grandparent, children, grandchildren and siblings (in
each case, whether by

marriage or adoption), (b) such Person’s former spouses and current spouses of
the individuals described in clause (a), and (c) estates, trusts, partnerships
and other entities of which a material portion of the interest are held directly
or indirectly by any of the foregoing individuals described in clause (a) or
(b).

 

“Investment Services” means any investment advisory or subadvisory services,
including (a) the management of an investment account or Fund (or portions
thereof or a group of investment accounts or Funds); (b) the giving of advice
with respect to the investment or reinvestment of assets or funds (or any group
of assets or funds); (c) otherwise acting as an “investment adviser” within the
meaning of the Investment Advisers Act of 1940, as amended; (d) rendering
investment advice for a fee or other compensation, directly or indirectly,
within the meaning of Section 3(21)(A)(ii) of the Employee Retirement Income
Security Act of 1974, as amended (or any successor law), or Section 4975 of the
United States Internal Revenue Code of 1986, as amended, or any corresponding
provision of any succeeding law; or (e) acting as a trustee, general partner,
manager, or managing member of any Person that is an Affiliate of the provider
of the services described in items (a) through (d), including any institutional
clients (including insurance companies, pension funds and endowments), on a
managed account basis or otherwise, hedge funds, fund of funds, and other pooled
investment vehicles, real estate investment trust or business development
company.

 

7 

 

 

“Non-Compete Restricted Period” means, with respect to the Employee, the period
starting from the Effective Date of this Agreement and ending on the following
date:

 

(i)if the Employee held 150,000 or fewer invested Class B-0 Units (as defined in
the Parent Operating Agreement) on December 1, 2016, the three-month anniversary
of the date his employment with ZAIS Group is terminated for any reason;

 

(ii)if the Employee held more than 150,000 and less than or equal to 300,000
invested Class B-0 Units on December 1, 2016, the six-month anniversary of the
date his employment with ZAIS Group is terminated for any reason; and

 

(iii)if the Employee held more than 300,000 invested Class B-0 Units on December
1, 2016, the one-year anniversary of the date his employment with ZAIS Group is
terminated for any reason.

 

"Parent Operating Agreement" means the Second Amended and Restated Limited
Liability Company Agreement of ZAIS Group Parent, LLC, dated as of March 17,
2015, as amended on March 20, 2015 and as further amended on July 21, 2015.

 

“Person” means and includes any individual, bank, savings association,
corporation, partnership (limited, general, exempted or otherwise), limited
liability company, limited company, company, exempted company, société anonyme,
unit trust, joint-stock company, trust or unincorporated organization.

 

“Principal” means, with respect to a specified Person that is not an entity
whose securities are publicly traded, any manager, officer, partner or trustee
of such Person or any other Person that owns directly more than twenty percent
(20%) of the equity of such specified Person. (including warrants and options
then-exercisable for equity).

 

“Restricted Period” means the period starting from Effective Date of this
Agreement and ending one year after such the Employee's employment with ZAIS
Group is terminated for any reason.

 

 

8