Source: https://investors.liquidityservices.com/node/12976/html
Timestamp: 2020-02-23 03:43:26
Document Index: 650437068

Matched Legal Cases: ['§ 2000', '§ 621', '§ 12101', '§ 1001', '§ 1981', '§ 2', '§ 32', '§ 32']

The number of shares outstanding of the issuer’s common stock, par value $.001 per share, as of May 5, 2016 was 30,726,554.
This document contains forward-looking statements. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include but are not limited to the factors set forth in our Annual Report on Form 10-K for the year ended September 30, 2015 and subsequent filings with the Securities and Exchange Commission. You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements.
· Consignment model — fee revenue. Under our consignment model, we recognize commission revenue from sales of merchandise in our marketplaces that is owned by others. These commissions, which we refer to as seller commissions, represent a percentage of the sale price the buyer pays upon completion of a transaction. We vary the percentage amount of the seller commission depending on the various value-added services we provide to the seller to facilitate the transaction. For example, we generally increase the percentage amount of the commission if we take possession, handle, ship, or provide enhanced product information for the merchandise. In most cases we collect the seller commission by deducting the appropriate amount from the sales proceeds prior to their distribution to the seller after completion of the transaction. Revenue from our consignment model accounted for approximately 17.5% and 20.2% of our total revenue for the three and six months ended March 31, 2016. The merchandise sold under our consignment model accounted for approximately 56.2% and 61.5% of our GMV for the three and six months ended March 31, 2016.
· Surplus Contract. The Surplus Contract is a competitive-bid contract under which we acquire, manage and sell all usable DoD surplus personal property turned into the DLA Disposition Services (“DLA”). Surplus property generally consists of items determined by the DoD to be no longer needed, and not claimed for reuse by, any federal agency, such as computers, electronics, office supplies, scientific and medical equipment, aircraft parts, clothing and textiles. The Surplus Contract requires us to purchase all usable surplus property offered by the DoD at 4.35% of the DoD’s original acquisition value (OAV). The current, or third, Surplus Contract became effective on November 4, 2015, covers only non-rolling stock and has a base term of two years with four one-year renewal options. The prior, or second, Surplus Contract requires us to purchase all rolling and non-rolling usable surplus property offered by the DoD at 1.8% of the DoD’s OAV; the wind-down period under the second Surplus Contract will remain in effect until September 2016 to allow for the continued processing of usable Recycling Control Point (RCP) non-rolling stock surplus property.
Under the Scrap Contract, we acquire scrap property at a per pound price and disburse to the DLA a percentage of the profits, currently 65%, realized from the sale of the inventory, after deduction for allowable expenses. We refer to these disbursement payments to the DoD as profit-sharing distributions. We recognize as revenue the gross proceeds from these sales. The DOD reimburses us for certain direct expenses deemed to be payable by the DOD rather than the contractor. During fiscal 2015, if the Company’s customer base met certain small business criteria as defined in the contract, the member may have received an additional incentive payment which was withheld from payments to the DLADS. The current Scrap Contract will expire on August 31, 2016. On April 8, 2016, the DLA awarded the next Scrap Contract to the Company. Under the new Scrap Contract, the Company will acquire scrap property from the DLA and pay the DLA a revenue-sharing payment equal to 64.5% of the gross resale proceeds. The Company will bear all of the costs for the sorting, merchandising and sale of the property. The new Scrap Contract has a 36-month base term, commencing in the fourth quarter of fiscal year 2016 or the first quarter of fiscal year 2017, with two 12-month extension options exercisable by the DLA. Revenue from the Scrap contract accounted for approximately 8.5% and 10.4% of our total revenue for the three and six months ended March 31, 2016. The Scrap contract accounted for approximately 4.8% and 5.2% of our total GMV for the three and six months ended March 31, 2016.
Our Wal-Mart Contracts. We have various contracts with Wal-Mart Stores, Inc., under which we purchase certain consumer products from Wal-Mart that have been removed from the sales stream of its retail operations. All of these agreements have customary commercial terms, which generally expire within a year and allow both parties to terminate for convenience with reasonable notice. We also had a long-term contract with Wal-Mart that did not provide for termination for convenience (the “Wal-Mart Agreement”). On December 1, 2014, Wal-Mart alleged that we failed to comply with certain provisions under the Wal-Mart Agreement and terminated the agreement effective December 8, 2014. We disputed these allegations and contested the termination of the Wal-Mart Agreement. On January 22, 2015, we finalized a settlement with Wal-Mart whereby, in exchange for both parties waiving all respective claims against the other, Wal-Mart agreed to pay $7.5 million in damages. The amount of the settlement was recorded within accounts receivable and a reduction of inventory on the consolidated balance sheet as of December 31, 2014, as the settlement compensated us for the overpayment of inventory from Wal-Mart. We received the payment in February 2015. On September 30, 2015, we sold certain assets related to the Jacobs Trading Company to a buyer, Tanager Acquisitions, LLC. In connection with the disposition, the buyer assumed certain liabilities related to the Jacobs Trading Company. The buyer issued to us a promissory note in the amount of $12.3 million. The divestiture of the Jacobs Trading Company resulted in an $8.0 million loss. The sale generated a tax loss that is expected to result in a $31.5 million cash benefit from prior year income taxes and $2.0 million of additional tax credits available to offset future taxes. In March, 2016, we received $30.1 million of the cash benefit and expect to receive the remaining $1.4 million in fiscal year 2017. We also received $5.0 million for an overpayment of taxes paid in fiscal year 2015 to bring our total tax refund to $35.1 million in March, 2016.
We test our goodwill and other intangible assets for impairment annually or more frequently if events or circumstances indicate impairment may exist. Examples of such events or circumstances could include a significant change in business climate, a loss of significant customers, or a significant decline in stock price. We make a qualitative evaluation about the likelihood of goodwill impairment to determine whether we should calculate the fair value of a reporting unit. If our evaluation indicates a likelihood of goodwill impairment, we apply a two-step fair value-based test to assess goodwill for impairment of our two reporting units. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step is then performed. The second step compares the carrying amount of the reporting unit’s goodwill to the implied fair value of the goodwill. If the fair value of the goodwill is less than the carrying amount, an impairment loss would be recorded in our statements of operations. Intangible assets with definite lives are amortized over their estimated useful lives and are also reviewed for impairment if events or changes in circumstances indicate that their carrying amount may not be realizable.
In accordance with FASB Accounting Standards Codification Topic 280 (“ASC 280”), which provides that the characteristics of a component require that it (a) constitutes a business, (b) has discrete financial information, and (c) its performance is reviewed by management, the Company has identified its reporting units as LSI-Retail Supply Chain Group (RSCG) and LSI-Capital Assets Group
Income taxes. For interim income tax reporting the Company estimates its annual effective tax rate and applies this effective tax rate to its year to date pre-tax (loss) income. The Company’s effective income tax rate before discrete items was 28.6% and 22.8% for the six months ended March 31, 2016 and March 31, 2015, respectively. The 2016 effective tax rate differed from the statutory federal rate of 35.0% primarily as a result of the impact of foreign, state, and local income taxes and permanent tax adjustments. We expect our future years’ tax rates to be between 30% and 40%.
The Company did not repurchase shares during the six months ended March 31, 2016 or 2015 with the approximately $5.1 million remaining under a shares repurchase program approved by our Board of Directors. Under the program, we are authorized to repurchase the issued and outstanding shares of common stock. Share repurchases may be made through open market purchases, privately negotiated transactions or otherwise, at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions. The repurchase program may be discontinued or suspended at any time, and will be funded using our available cash. In addition, the Company’s Board of Directors has approved the repurchase of an additional $5.0 million in shares raising the current amount approved for repurchase, that may yet be expended up to $10.1 million.
Effective March 25, 2016, the Company terminated its $75 million a senior credit facility. Borrowings under the Agreement bore interest at an annual rate equal to the 30 day LIBOR rate plus 1.25% (1.608% at December 31, 2015) due monthly. The Company’s borrowing availability under the Facility as of December 31, 2015 was $37.5 million. There were no outstanding borrowings under the Facility at the time of its termination.
As of March 31, 2016, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, our Chief Financial Officer, and our Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer concluded that our disclosure controls and procedures were effective and were operating to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer, principal financial officer, and principal accounting officer, as appropriate to allow timely decisions regarding required disclosure.
From time to time, we may become involved in litigation relating to claims arising in the ordinary course of our business. On July 14, 2014, Leonard Howard filed a putative class action complaint in the United States District Court for the District of Columbia against the Company and its chief executive officer, chief financial officer, and chief accounting officer, on behalf of stockholders who purchased the Company’s common stock between February 1, 2012, and May 7, 2014. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, misrepresenting the Company’s growth initiative, growth potential, and financial and operating conditions, thereby artificially inflating its share price, and seeks unspecified compensatory damages and costs and expenses, including attorneys’ and experts’ fees. On October 14, 2014, the Court appointed Caisse de Dépôt et Placement du Québec and the Newport News Employees’ Retirement Fund as co-lead plaintiffs. The Plaintiffs filed an amended complaint on December 15, 2014, which alleges substantially similar claims but which does not name the chief accounting officer as a defendant. On March 2, 2015, the Company moved to dismiss the amended complaint for failure to state a claim or plead fraud with the requisite particularity. On March 31, 2016, the Court granted that motion in part and denied it in part. The Company has until May 16, 2016, to answer the amended complaint. The Company believes the allegations in the amended complaint are without merit and cannot estimate a range of potential liability, if any, at this time.
In addition to the other information set forth in this report, you should carefully consider the factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2015, which could materially affect our business, financial condition or future results. The risks described in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
LIQUIDITY SERVICES, INC. AND
This Severance Agreement and General Release (the “Agreement”) dated as of March 1, 2016 (the “Effective Date”), is entered into by and between Liquidity Services, Inc., a Delaware corporation with offices at 1920 L Street, NW, 6th Floor, and its subsidiary companies (collectively, the “Company”), and James E. Williams (the “Executive”).
WHEREAS, the Executive served as the General Counsel and Corporate Secretary of Liquidity Services, Inc.; and,
WHEREAS, the Company and the Executive desire to set forth in writing the terms and conditions governing the Executive’s separation from employment, as set forth below:
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned parties agree as follows:
(a) The Executive’s employment with the Company shall cease effective April 2, 2016 (the “Termination Date”). Effective as of the Effective Date, (i) the Executive shall no longer serve as General Counsel and Corporate Secretary of Liquidity Services, Inc. or in any other position the Executive may hold with or on behalf of the Company or any of its Affiliates (as defined below), and (ii) Executive shall take no official action in the name or on behalf of the Company or any of its Affiliates nor have any authority to bind the Company or any of its Affiliates. The Executive further agrees to execute and deliver to the Company such documents concerning such separation from employment (and any related service) as may be reasonably requested by the Company or its Affiliates. For purposes of this Agreement, “Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with the Company, including its current and former parents, subsidiaries and affiliated entities, from time to time.
(b) Accrued Obligations. On the Termination Date, the Executive shall receive payment for unpaid base salary through the Effective Date. The Executive will receive no payment for unused paid time off (“PTO”) accrued through the Effective Date and will accrue no further PTO after the Effective Date.
(c) Other Benefits. The Executive’s benefits under any benefit plan, agreement or arrangement of the Company or its Affiliates shall be determined under the applicable terms of any such plan, agreement or arrangement, and shall be paid or provided at the time or times and in the manner provided therein (and consistent with the Executive’s employment being terminated by the Company other than for “cause”).
(d) Business Expenses. The Executive will be reimbursed for business expenses reasonably incurred prior to the Termination Date in accordance with the Company’s policies and procedures for reimbursement including with respect to reporting and documentation of such expenses. The Company will also reimburse the Executive for his professional advisory expenses incurred in connection with a pending IRS audit of his individual tax returns; provided that: (1) any such reimbursement is capped at $25,000 in the aggregate with respect to such IRS audit (unless the Board of Directors increases the cap on the aggregate amount authorized for the group of senior executives with similar pending IRS audits, in which case, Executive will be entitled to a proportional increase in his reimbursement cap); and (2) only professional advisory expenses arising out of or related to Employee’s employment with the Company will be reimbursable.
2. Consideration. In exchange for the Executive’s execution of this Agreement, which includes the waiver and release of claims set forth in Section 10 below, the parties agree to the following:
(a) Severance Payments. The Company will pay to the Executive a cash lump sum of $395,660, which represents his full Base Salary plus an amount equal to the average of the actual annual incentive bonuses paid during the previous two fiscal years, less applicable taxes and withholdings (the “Severance Payment”) following the Termination Date on the first regularly scheduled payroll date following the seventh (7th) calendar day after the Executive’s execution of this Agreement, unless the Executive revokes this Agreement as provided in Section 12 below.
(b) Benefits Continuation. For the 12-month period ending April 30, 2017, or until the Executive obtains coverage from a new employer offering coverage (if sooner), the Company will cover the Executive’s cost of coverage with respect to health care benefits as provided by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). The Company shall pay such costs directly after the Executive confirms he has elected COBRA coverage, provided Executive provides monthly, written affirmation that he has not obtained coverage from another employer.
(c) Outplacement. The Company will provide the Executive comprehensive executive outplacement assistance through the firm of Right Management.
(d) No Consideration Absent Execution of this Agreement. The Executive understands and agrees that his entitlement to the payment specified in Section 2(a) is contingent on the execution of this Agreement and his compliance with his obligations under this Agreement and the Confidentiality and Competitive Activities Agreement (as defined below). The Executive understands that if he does not sign the Agreement, the Company has no obligation to provide the Executive with any of the consideration provided in Section 2 of this Agreement, including but not limited the consideration provided for in Section 2(a) and Section 2(b) of this Agreement.
(e) Withholding. Any payments provided to the Executive pursuant to this Agreement shall be subject to withholding and reporting requirements under applicable law.
(f) Compliance with Section 409A. To the extent (i) any payments or benefits to which the Executive becomes entitled under this Agreement, or under any other agreement or Company plan, in connection with the Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Internal Revenue Code and the regulations promulgated thereunder (“Section 409A”) and (ii) the Executive is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payments shall not be made or commence until the earliest of (A) the expiration of the six (6) month period measured from the date of the Executive’s “separation from service” (as such term is defined in Section 409A) from the Company; or (B) the date of the Executive’s death following such separation from service. Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to the Executive or the Executive’s beneficiary in one lump sum (without interest). Any termination of the Executive’s employment is intended to constitute a “separation from service” and will be determined consistent with the rules relating to a “separation from service”. It is intended that payments hereunder satisfy, to the greatest extent possible, the exemptions from the application of Section 409A. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that payments hereunder are exempt from, or otherwise comply with, Section 409A. To the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which such expenses were incurred, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.
3. Outstanding Equity Awards. The Company agrees that under the terms of the Company’s 2006 Omnibus Long-Term Incentive Plan, as amended, the Executive has the right to exercise the remaining unexercised and vested options (the “Vested Options”) previously granted to him for twelve(12) months after the Termination Date, after which all such options shall be cancelled and all such options shall terminate and no longer be exercisable.
The vesting of any options or restricted stock, the vesting of which is wholly or partially tied to criteria other than the Executive’s continued employment with the Company, shall cease as of the Termination Date and all unvested equity grants shall terminate and no longer be exercisable as of the Termination Date. The vesting of the Executive’s options and restricted stock awards shall otherwise continue through the Termination Date.
4. No Amounts Owing. By signing below, Executive acknowledges and agrees that he has received all wages, bonuses and any other compensation already due to him from the Company, except any future payments as set forth in Section 2.
5. Non-Disclosure. Executive agrees that he has not disclosed and will keep the provisions of this Agreement confidential; provided, however, the Executive may disclose the contents of the Agreement to members of Executive’s immediate family (including a significant
other) and to Executive’s personal financial and legal advisers and to enforce Executive’s rights hereunder, and except as may be required by law and is necessary for legitimate enforcement or compliance purposes, on the condition that he instructed such persons that the terms and existence of this Agreement are confidential and must not be further disclosed.
6. Publicity; Non-disparagement.
(a) In the event that any person requests information regarding the Executive’s employment with the Company and its Affiliates, the Company shall respond simply by confirming Executive’s dates of employment, job titles and rates of pay, and the Company’s Chief Executive Officer and Vice President of Human Resources shall respond to all such requests by potential employers consistent with the information provided in a separately agreed reference summary.
(b) The Executive hereby agrees that he will not disparage or criticize the Company, its Affiliates, officers, directors or employees, or issue any communication, written or otherwise, that reflects adversely on or encourages any adverse action against the Company, its Affiliates, officers, directors or employees, except if testifying truthfully under oath pursuant to any lawful court order or subpoena or otherwise responding to or providing disclosures required by law. This includes any statement to or response to an inquiry by any member of the press or media, whether written, verbal, electronic or otherwise.
7. Continuing Obligations Regarding Non-Competition, Non-Solicitation and Confidential Information.
(a) Executive’s Employee Agreement Regarding Confidentiality and Competitive Activities, made by and between the Company and Executive, dated as of November 11, 2005 (the “Confidentiality and Competitive Activities Agreement”), is attached hereto as Exhibit A and the terms of such agreement are incorporated herein by reference, except as specifically modified by the provisions of Section 7(b) and 7(d) below. The Executive acknowledges that the Executive remains subject to the provisions of the Confidentiality and Competitive Activities Agreement following the Termination Date, as set forth therein. The Executive acknowledges that the provisions of the Confidentiality and Competitive Activities Agreement and this Agreement are reasonable and necessary for the furtherance of the Company’s business and for the protection of the business of the Company and its Affiliates, and that part of the compensation paid under this Agreement is in consideration for the Executive’s compliance and continued compliance with the provisions of the Confidentiality and Competitive Activities Agreement and this Agreement. For purposes of this Agreement, the decision of the Company as to what constitutes Confidential Information, as defined in the Confidentiality and Competitive Activities Agreement, shall be final and binding on the Executive.
(b) Section 2.1 of the Confidentiality and Competitive Activities Agreement is hereby deleted in its entirety as replaced by the following: Executive acknowledges that his services have been of special, unique and extraordinary value to the Company and that the Company’s ability to accomplish its purposes, pursue its business plans and compete in the marketplace depended substantially on the Executive’s skills and services. Therefore, Executive
hereby covenants and agrees that at no time for twenty-four (24) months (and if twenty-four (24) months is determined by a court to be overly broad, then eighteen (18) months; and if eighteen (18) months is determined by a court to be overly broad, then twelve (12) months) following the Termination Date (the “Non-Compete Period”), will he directly or indirectly, without the prior written consent of the Company, become interested or engaged, directly or indirectly, as a shareholder, bondholder, creditor, officer, director, partner, agent, contractor with, employer or representative of, or in any manner associated with, or give financial, technical or other assistance to, any person, firm, corporation or any other entity in competition with the Company within (i) the United States; (ii) the other geographic areas in which the Company conducted business during the Executive’s employment with the Company and/or (iii) in any market in which the Company conducts business, including without limitation, the Internet, or any other global information network. For the purposes of this provision, the Executive acknowledges and agrees that the Company regularly conducts business, solicits customers and otherwise competes in the foregoing electronic markets.
(c) Following the Termination Date, or at any time as the Company may request, the Executive will promptly deliver to the Company all documents (whether prepared by the Company, an Affiliate, the Executive or a third party) relating to the Company or any of its Affiliates or any of their businesses or property which the Executive may possess or which is or was under the Executive’s direction or control, except as described in Section 7(d) below.
(d) Nothing in this Agreement or elsewhere shall prohibit or restrict the Executive from (i) retaining and utilizing all documentation relating to his personal entitlements and obligations, and a copy of his rolodex and its electronic equivalents; (ii) making truthful statements, and disclosing documents and information, (A) when required by law, court order, subpoena or the like, (B) when requested by a governmental or self-governing organization or body, or (C) in any proceeding to enforce this Agreement; (iii) making disclosures to any prospective employer solely to the extent necessary to inform such employer concerning any restrictions on the Executive’s freedom to perform services for such employer; or (iv) making disclosures to his spouse, attorneys, tax advisors or accountants, provided such individuals agree to be bound by the provisions of this Agreement.
(e) In the event of a breach or threatened breach of this Section 7 or the Confidentiality and Competitive Activities Agreement, the Executive acknowledges that the Company and its Affiliates will be caused irreparable harm which is not capable of being calculated and which cannot be fully or adequately compensated by the recovery of damages alone. Accordingly, the Executive agrees that the Company and its Affiliates shall be entitled to interim and permanent injunctive relief, specific performance and other equitable remedies in addition to their other remedies at law to have the provisions of this Agreement or the Confidentiality and Competitive Activities Agreement enforced.
8. Return of Property. On or before the Termination Date, the Executive shall return to the Company any and all Company property in his possession or control, including but not limited to all keys, corporate credit cards and other equipment provided by the Company for use during employment, together with all materials, documents, files or papers, notes or records, and any copies thereof, relating to the Company or any of the Company’s customers.
9. Cooperation with Company. The Executive understands that the Company has agreed to the terms of this Agreement (including the Severance Payment) in exchange for, among other things, his agreement to cooperate with the Company on all matters for which the Company may reasonably request assistance following the Termination Date. In addition, the Executive agrees that he will, upon reasonable request, assist and cooperate with the Company and its Affiliates in connection with the defense or prosecution of any claim that may be made against or by the Company and its Affiliates or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company and its Affiliates including meeting with the Company and its Affiliates’ counsel, any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, including testifying in any proceeding to the extent such claims, investigations or proceedings relate to services performed or required to be performed by the Executive, pertinent knowledge possessed by the Executive, or any act or omission by the Executive. The Executive further agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this paragraph.
(a) The Executive expressly acknowledges that this Agreement is worded in an understandable way.
(b) By executing this Agreement and accepting the consideration specified in Section 2 hereof, the Executive agrees to release and forever discharge the Company, its past and present shareholders, its past and present subsidiaries, affiliates and related companies (including any predecessors), its successors and assigns and all past and present directors, officers, employees, attorneys and agents of these entities, personally, and as directors, officers, employees, attorneys and agents and any person or entity acting for or on behalf of the Company (hereinafter the “Company Releasees”) from liability for any and all claims, damages, causes of action, both in law and in equity, which Executive or his estate, agents, attorneys, heirs, executors, successors and assigns now has or may have, whether known or unknown, suspected or unsuspected, and whether asserted or not, against the Company Releasees, or any of them, arising out of or related to Executive’s employment by the Company and Executive’s separation from the Company (hereinafter “Claims”), including, but not limited to, (i) any Claims under Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000 et seq.) (“Title VII”), the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, as amended (29 U.S.C. § 621 et seq.) (the “ADEA”), the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) (the “ADA”), the Executive Retirement Income Security Act of 1974, as amended (29 U.S.C. § 1001 et seq.), the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Genetic Information Nondiscrimination Act of 2008, the Family and Medical Leave Act of 1993, the District of Columbia Human Rights Act (D.C. Code §§ 2-1401 to 2-1411 (2011)), the District of Columbia Family and Medical Leave Act (D.C. Code §§ 32-501 to 32-517 (2011)), the District of Columbia Accrued Sick and Safe Leave Act (D.C. Code §§ 32-131.01 to 32-131.16 (2011)), (ii) any Claims under any other Federal, state or local law (statutory, regulatory or otherwise) that may be legally waived and released; provided, however, that the Executive and his estate, agents, attorneys, heirs, executors, successors and assigns do not release any Claims arising from or relating to (A) the terms of this Agreement or any obligations preserved by this Agreement, (B) continued insurance, indemnification and
advances by the Company for actions taken while serving as an officer thereof (including coverage by any D&O or similar insurance policy generally applicable to current officers of the Company, and that certain Indemnification Agreement dated January 23, 2006) until the expiration of the applicable statute of limitations period; (C) the Executive’s rights to COBRA coverage, (D) the Executive’s accrued and unpaid wages as of the Termination Date or rights to vested benefits under Company benefit plans, or (E) any legal claims which the Executive may not waive or release by law.
(c) The Executive understands that the Company is agreeing to pay the consideration described in Section 2 of this Agreement in part because of, and in exchange for, this specific release of Claims (including Claims of discrimination under Title VII, the ADEA, the ADA and other applicable laws) and that a portion of these payments is in addition to any other payments or things of value to which the Executive may already be entitled, has received, or is receiving from the Company.
(d) The Executive understands that excluded from this Agreement and Release are any claims that cannot be waived by law, including but not limited to the right to file a charge with or participate in an investigation conducted by the EEOC or state agency, but that he is waiving his right to any monetary recovery should the EEOC or any other agency pursue any claims on his behalf.
11. Voluntary Signature and Advice of Counsel; Review Period. Without detracting in any respect from any other provision of this Agreement:
(a) The Executive, in consideration of the payment provided to him in Section 2(a), agrees and acknowledges that this Agreement constitutes a knowing and voluntary waiver of all rights or claims he has or may have against the Company Releasees as set forth herein, including, but not limited to, all rights or claims arising under ADEA, including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA; and he has no physical or mental impairment of any kind that has interfered with his ability to read and understand the meaning of this Agreement or its terms, and that he is not acting under the influence of any medication or mind-altering chemical of any type in entering into this Agreement.
(b) The Executive understands that, by entering into this Agreement, he does not waive rights or claims that may arise after the date of his execution of this Agreement, including without limitation any rights or claims that he may have to secure enforcement of the terms and conditions of this Agreement.
(c) The Executive agrees and acknowledges that the consideration provided to him under Section 2 of this Agreement is in addition to anything of value to which he is already entitled.
(d) The Company hereby advises the Executive to consult with an attorney prior to executing this Agreement.
(e) The Executive acknowledges that he was informed that he has at least twenty-one (21) days in which to review and consider this Agreement and to consult with an attorney regarding the terms and effect of this Agreement.
(f) Nothing in this Agreement shall prevent the Executive (or his attorneys) from (a) commencing an action or proceeding to enforce this Agreement or (b) exercising his right under the Older Workers Benefit Protection Act of 1990 to challenge the validity of his waiver of ADEA claims set forth in Section 10.
12. Revocation Period. The Executive is advised that he may revoke this Agreement within seven (7) calendar days after the date he signs this Agreement (the “Revocation Period”). The Executive agrees that if he wants to revoke this Agreement, he must notify the Company in writing as set forth in Section 13, and following revocation this Agreement shall be deemed void ab initio.
13. Notice. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, or sent by registered mail, postage prepaid or by overnight courier. Any such notice shall be deemed given when so delivered personally, or, if mailed, five (5) days after the date of deposit in the United States mail, or, if delivered by overnight courier, the day after such sending, as follows:
1920 L Street, NW 6th Floor
Attention: Mark Shaffer
909 3rd, 27th Floor
Attention: Robert M. Sedgwick
Any party may, by notice given in accordance with this Section 13 to the other party, designate another address or person for receipt of notices hereunder.
14. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, estate, trustees, administrators, successors, heirs, distributees, devisees and legatees. This Agreement is personal to the Executive and neither this Agreement nor any rights hereunder may be assigned by the Executive; provided, however, that the Executive shall be entitled, to the extent permitted
under applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit hereunder following the Executive’s death by giving written notice thereof. In the event of the Executive’s death or a judicial determination of his incompetence, references in this Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative.
15. No Mitigation. The Executive shall be under no obligation to mitigate damages by seeking other employment, and there shall be no offset against amounts or benefits due to the Executive under this Agreement or otherwise on account of any remuneration or benefits provided by any subsequent employer (except as provided in Section 2(b)).
16. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions of this Agreement at the same or any prior or subsequent time.
17. Counterparts. This Agreement may be executed in several counterparts (including via facsimile), each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Signature copies delivered by facsimilie or “PDF” shall also be sufficient.
18. Severability. The Company and the Executive agree that the agreements and provisions contained in this Agreement are severable and divisible, that each such agreement and provision does not depend upon any other provision or agreement for its enforceability, and that each such agreement and provision set forth herein constitutes an enforceable obligation between the parties hereto. Consequently, the parties hereto agree that neither the invalidity nor the unenforceability of any provision of this Agreement shall affect the other provisions, and this Agreement shall remain in full force and effect and be construed in all respects as if such invalid or unenforceable provision were omitted.
19. Headings. The inclusion of headings in this Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof.
20. Governing Law/Venue. This Agreement shall be construed as a document under seal, and shall be governed by the laws of the District of Columbia, without giving effect to any principles of conflict of law or choice of law rules (whether of the District of Columbia or any other jurisdiction) that would result in the application of the substantive or procedural laws or rules of any other jurisdiction. Venue for all disputes arising under or related to this Agreement of Executive’s employment with the Company will be the District of Columbia.
21. No Admission. The making of this Agreement is not intended, and shall not be construed or deemed to be, an admission that the Company violated any Federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract, or committed any wrong whatsoever against you or anyone else, and the Company expressly denies any such violation, breach or wrong.
22. Entire Agreement. Except as provided or preserved herein, this Agreement constitutes the entire agreement between Executive and the Company with respect to the subject matter hereof and supersedes all prior agreements with respect to the subject matter hereof. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. No reliance is placed on any representation, opinion, advice or assertion of fact made by the Company or its directors, officers and agents to the Executive, except to the extent that the same has been reduced to writing and included as a term of this Agreement. Accordingly, there shall be no liability, either in tort or contract, assessed in relation to any such representation, opinion, advice or assertion of fact. All references to any law shall be deemed also to refer to any successor provisions to such law. The Company acknowledges there are no contractual restrictions on the Executive’s post-employment activities, other than as expressly set forth or preserved in this Agreement. In the event of any inconsistency between any provision of this Agreement and any provision of any other plan, program, policy, agreement or arrangement of the Company or its Affiliates, the provisions of this Agreement shall control to the extent more favorable to the Executive.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the Effective Date.
/s/ Michael Lutz
In connection with the quarterly report of Liquidity Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, William P. Angrick, III, Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
In connection with the quarterly report of Liquidity Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Jorge A. Celaya, Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
In connection with the quarterly report of Liquidity Services, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), I, Michael Sweeney, Chief Accounting Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: