Document:

Exhibit

Exhibit 10.1

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”) is entered into as of October 25, 2019, by and between CarMax, Inc., a Virginia corporation, for itself and on behalf of its subsidiaries and affiliates (hereafter referred to collectively as “CarMax”), and Enrique N. Mayor-Mora (hereafter referred to as the “Associate”).  

WHEREAS, CarMax and the Associate desire to agree upon the terms, conditions, compensation and benefits of the Associate’s employment;

WHEREAS, CarMax recognizes that the Associate has developed or will continue to develop an intimate knowledge of and experience with respect to the business of CarMax;

WHEREAS, the Associate has developed or will develop and/or has or will come in contact with CarMax’s proprietary and confidential information that is not readily available to the public, and which is of great importance to CarMax and is treated by CarMax as secret and confidential information; and

WHEREAS, upon execution of this Agreement, any prior severance or employment agreement, if any, between the Associate and CarMax, whether oral or written, will have no force and effect with respect to the terms and conditions of the Associate’s employment with CarMax and will be replaced and superseded by the terms of this Agreement.

NOW, THEREFORE, in consideration of the Associate’s employment and continued employment by CarMax and the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CarMax and the Associate, intending to be legally bound, agree as follows:

Article 1.  Term. 

The Associate’s employment with CarMax shall continue until such time as the Associate’s employment is terminated by either party in accordance with Article 7 of this Agreement or the Associate’s term of employment is extended or shortened by a subsequent written agreement duly executed by the Associate and CarMax.

Article 2.  Duties and Responsibilities.   

CarMax shall employ the Associate in the position of Senior Vice President, Chief Financial Officer.  The specific duties of such position are set forth in the then-current written job description for such position and are incorporated herein by reference.  The Associate acknowledges and agrees to perform those job duties and/or such other job duties that may be assigned to the Associate or required of the Associate by CarMax.  In the event that the Associate accepts a new or different position with CarMax or receives a new position title, (i) the Associate acknowledges and agrees to perform such new job duties, if any, as may be assigned to the 

Associate or required of the Associate by CarMax and (ii) this Agreement shall remain in full force and effect.

Article 3.  Standard of Care.

		
	3.1
	General.  During the term of this Agreement, the Associate shall devote his full business time, attention, knowledge and skills to CarMax’s business and interests.  The Associate covenants, warrants, and represents that he shall:

		
	(a)
	devote his best efforts and talents to the performance of his employment obligations and duties for CarMax;

		
	(b)
	exercise the highest degree of loyalty and the highest standards of conduct in the performance of his duties;

		
	(c)
	observe and conform to the rules, regulations, and policies established or issued by CarMax; and

		
	(d)
	observe and conform to the law in the performance of his employment obligations and duties for CarMax.

		
	3.2
	Forfeiture and Return of Incentive Compensation.  It is CarMax’s expectation that the Associate will discharge his duties hereunder with utmost attention to the standards set forth in Section 3.1.  In the event the CarMax, Inc. Board of Directors (“Board”) determines that the Associate has engaged in conduct constituting Cause (as defined in Section 7.4), which conduct directly results in the filing of a restatement of any financial statement previously filed with the Securities and Exchange Commission (or other governmental agency) under the Federal securities laws, the Associate shall immediately (i) forfeit all unpaid Affected Compensation (as defined below) and (ii) upon demand by CarMax repay to CarMax all Affected Compensation received or realized by the Associate together with interest at the prime rate in effect from time to time as reported in The Wall Street Journal; provided, however, that the forfeiture and repayment provisions of this Section 3.2 shall only apply where the Board makes a good faith determination that the Associate’s conduct constituting Cause also constitutes one or more of the following acts or omissions:

		
	(a)
	The Associate has committed a material breach of this Agreement, which breach was not cured or waived by CarMax, within ten (10) days of receipt by the Associate of notice from CarMax specifying the breach;

		
	(b)
	The Associate intentionally fails to perform his duties, engages in intentional misconduct or intentionally refuses to abide by or comply with the directives of the Board, CarMax’s Chief Executive Officer, or CarMax’s policies and procedures, as applicable, which actions continued for a period of ten (10) days after receipt by the Associate of notice of the need to cure or cease;

		
	(c)
	The Associate has willfully violated a material requirement of CarMax’s code of conduct or breached his fiduciary duty to CarMax; 

		
	(d)
	The Associate’s conviction of (or a plea of guilty or nolo contendere to) a felony or any crime involving moral turpitude, dishonesty, fraud, theft or financial impropriety; or

		
	(e)
	The Associate has engaged in illegal conduct, embezzlement or fraud with respect to the business or affairs of CarMax.

For purposes of this Section 3.2, “Affected Compensation” means any payment to the Associate, any award or vesting of any equity or other short-term or long-term incentive compensation to the Associate, or any before-tax proceeds of a sale of previously awarded equity compensation realized by the Associate, in any instance in which (i) the payment, award or vesting of the foregoing was expressly conditioned upon the achievement of certain financial results that were subsequently the subject of such restatement, and (ii) a lesser amount of payment, award or vesting or before-tax proceeds of a sale of any of the foregoing would have been made to, vested in or otherwise earned or realized by, the Associate based upon such restated financial results.

Article 4.  Other Employment.

The Associate shall not, during the term of this Agreement, be interested directly or indirectly, in any manner, as partner, officer, director, advisor, employee, or in any other capacity, in any other business similar to CarMax’s business for the Associate’s personal advantage or benefit or that of others; provided, further, the Associate agrees to obtain CarMax’s prior written consent before engaging in any other occupation for compensation (actual or expected) while employed by CarMax.  Such consent may be granted or withheld, in CarMax’s absolute discretion; provided, however, such consent will not be required where such other occupation for compensation does not (i) in any manner infringe upon the Associate’s job duties or the time or attention required to perform such duties, (ii) relate to any other business similar to CarMax’s business or (iii) have a detrimental effect on CarMax’s business, as determined in CarMax’s absolute discretion.   

Article 5.  Compensation and Benefits.

As remuneration for all services to be rendered by the Associate during the term of this Agreement, and as consideration for complying with the covenants herein, CarMax shall pay and provide to the Associate the following:

		
	5.1.
	Base Salary.   The Associate shall be paid an annual salary of $500,000.00 (the “Base Salary”), payable biweekly in the amount of $19,230.77 (the “Biweekly Amount”), subject to applicable federal, state, and local withholding and any performance-based adjustments made by CarMax.  In the event that the Associate accepts a new or different 

position with CarMax or accepts a new position title, CarMax, in its sole discretion, may adjust the Base Salary and Biweekly Amount.

		
	5.2
	Bonus.

		
	(a)
	The Associate is eligible to participate in CarMax’s performance-based bonus plan, as such plan may exist from time to time during the term of this Agreement and as defined and applied to the Associate’s position. 

		
	(b)
	The award and amount of any bonus shall be determined (i) under CarMax’s then-current performance-based bonus plan and (ii) at the absolute discretion of CarMax.

 
		
	5.3
	Long Term Incentives.  During the term, the Associate shall be eligible to participate in CarMax’s 2002 Stock Incentive Plan (or any successor incentive plan thereto) to the extent that the CarMax Compensation Committee, in its sole discretion, determines is appropriate.

		
	5.4
	401(k) Plan.  During the term of this Agreement, the Associate shall be entitled to participate in CarMax’s 401(k) plan, subject to the eligibility and participation requirements of such plan.

		
	5.5
	Welfare Benefit Plans.  During the term of this Agreement, the Associate and/or the Associate’s family will be eligible to participate in and will receive benefits under CarMax’s then-current welfare benefit plans, policies and programs (the “Welfare Plans”) to the extent such Welfare Plans are made available to other CarMax associates who are professionally similarly situated to the Associate (the “Peer Associates”), subject to the eligibility requirements and other provisions of such Welfare Plans.  The benefits available pursuant to such Welfare Plans may include group term life insurance, comprehensive health and major medical insurance, dental insurance, and short-term and long-term disability benefits.

		
	5.6
	Vacation.  During the term of this Agreement, the Associate will be entitled to paid vacation each fiscal year in accordance with then-current CarMax Time Away Guidelines.

		
	5.7
	Right to Change Plans.  Nothing herein shall obligate CarMax to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, policy program, or guideline so long as such changes are similarly applicable to the Peer Associates.

Article 6.  Expenses.

During the term of this Agreement, CarMax shall pay or reimburse the Associate for reasonable travel and business expenses incurred by the Associate in furtherance of CarMax business and in accordance with the then-current CarMax travel and expense policy and any 

other applicable policies, upon submission to CarMax of vouchers or receipts reflecting such expenses.

Article 7.  Employment Termination.

The Associate’s employment with CarMax may be terminated in accordance with any of the following provisions:

		
	7.1
	Termination by Death.

		
	(a)
	In the event the Associate’s employment ends by reason of the Associate’s death during the term of this Agreement, the Associate’s benefits shall be determined in accordance with the then-current CarMax survivor’s benefits, insurance, and/or other applicable programs.  Further, stock options and grants, including performance-based grants, will become vested and exercisable by the Associate, the Associate’s personal representatives, distributees, legatees, or estate in accordance with the terms and conditions of the applicable stock grant or option award agreement.

		
	(b)
	The date of termination due to death shall be the Associate’s date of death.  Upon the date of termination, CarMax shall be obligated to pay the Associate’s beneficiary or estate any Base Salary that was accrued but not yet paid as of the date of termination plus all other vested rights and benefits that the Associate is entitled to pursuant to this Agreement and other CarMax plans and programs.

		
	7.2
	Voluntary Termination by the Associate.  The Associate may terminate employment at any time by giving at least thirty (30) days prior written notice to his immediate supervisor.  During the notice period, the Associate shall fulfill all required job duties and responsibilities and cooperate and assist in the training of a replacement, if any.  CarMax reserves the right to require the Associate to discontinue working for CarMax at any time during the thirty (30) day notice period, but shall pay the Associate the amount the Associate would have earned during any non-working portion of the remaining thirty (30) day notice period in accordance with Article 5.1, in addition to any other benefits to which the Associate has a vested right on the last day of employment; provided, however, that the Associate shall forfeit any bonus with respect to the fiscal year in which his voluntary termination under this Article 7.2 occurs.  Subject to Section 7.5, CarMax thereafter shall have no further obligations under this Agreement.

		
	7.3
	Voluntary Termination by CarMax.  CarMax may terminate the Associate’s employment at any time and for any reason other than death or Cause (as defined below), by providing the Associate with at least thirty (30) days prior written notice.  CarMax reserves the right to require the Associate to discontinue working for CarMax during the thirty (30) day notice period, but shall pay the Associate the amount the Associate would have earned during any non-working portion of the remaining thirty (30) day notice period in accordance with Article 5.1, in addition to any other benefits to which the 

Associate has a vested right on the last day of employment.  After the thirty (30) day notice period, the Associate shall receive thirty-nine (39) biweekly payments equal to the Biweekly Amount less applicable federal, state, and local withholdings; provided however that CarMax’s obligation to provide such thirty-nine (39) biweekly payments is subject to the Associate’s compliance with (a) Articles 8, 9, 10 and 11 of this Agreement and (b) delivery to CarMax of an executed Agreement and General Release, which shall be substantially in the form attached hereto as Exhibit A (with such changes or additions as needed under then applicable law to give effect to its intent and purpose) (the “Agreement and General Release”) within twenty-one (21) days of presentation thereof by CarMax to the Associate.  Any amounts due following a termination of employment under this Agreement shall not be due until after the expiration of any revocation period applicable to the Agreement and General Release without the Associate having revoked such Agreement and General Release.  CarMax thereafter shall have no further obligations under this Agreement.

		
	7.4
	Voluntary Termination by CarMax For Cause.  Nothing in this Agreement shall be construed to prevent CarMax from terminating the Associate’s employment under this Agreement, without notice or liability, for Cause.  For purposes of this Agreement, “Cause” means that CarMax has any reason to believe any of the following:  

		
	(a)
	the Associate has committed fraud, misappropriation of funds or property, embezzlement or other similar acts of dishonesty;

		
	(b)
	the Associate has been convicted of a felony or other crime involving moral turpitude (or pled nolo contendere thereto); 

		
	(c)
	the Associate has used, possessed or distributed any illegal drug; 

		
	(d)
	the Associate has committed any misconduct that may subject CarMax to criminal or civil liability; 

		
	(e)
	the Associate has breached the Associate’s duty of loyalty to CarMax, including, without limitation, the misappropriation of any of CarMax’s corporate opportunities; 

		
	(f)
	the Associate has committed a serious violation or violations of any CarMax policy or procedure; 

		
	(g)
	the Associate has committed a violation of any term of this Agreement; 

		
	(h)
	the Associate refuses to follow the lawful instructions of CarMax management; 

		
	(i)
	the Associate has committed any material misrepresentation in the employment application process; 

		
	(j)
	the Associate has committed deliberate actions, including neglect or failure to perform the job, which are contrary to the best interest of CarMax; or

		
	(k)
	the Associate has continually failed to perform substantially his duties with CarMax.

If the Associate’s employment is terminated for Cause during the term of this Agreement, this Agreement will terminate without further obligation of CarMax to the Associate other than the payment to the Associate of his Base Salary through the date of termination for Cause.  The Associate shall immediately thereafter forfeit all rights and benefits he would otherwise have been entitled to receive under this Agreement.  

7.5      Good Reason Termination during Change in Control Employment Period.
(a)  For purposes of this Section 7.5, the defined terms set forth below shall have the following meanings: 
(i)    “Change in Control” means, as related to CarMax, Inc. (the “CarMax Parent”), the occurrence of either of the following events: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes, or obtains the right to become, the beneficial owner of CarMax Parent securities having twenty percent (20%) or more of the combined voting power of the then outstanding securities of the CarMax Parent that may be cast for the election of directors to the Board of the CarMax Parent (other than as a result of an issuance of securities initiated by the CarMax Parent in the ordinary course of business); or (ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the CarMax Parent before such transactions shall cease to constitute a majority of the board or of the board of directors of any successor to the CarMax Parent.
(i)    “Asset Sale” shall mean a sale of all or substantially all of the assets of the CarMax Parent in a single transaction or a series of related transactions.
(ii)    “Change in Control Date” shall mean the date on which a Change in Control or Asset Sale occurs.
(iii)    “Change in Control Employment Period” shall mean the period beginning on the Change in Control Date and ending on the second (2nd) anniversary of such date provided an Associate is employed by CarMax on such Change in Control Date.  
(iv)    “Good Reason” shall mean, without the Associate’s express written consent, the occurrence of any one (1) or more of the following:
(1)    A material reduction in the Associate’s Base Salary or target annual bonus;

(2)    A material reduction in the Associate’s duties or authority, (except in connection with the termination of the Associate’s employment (x) for Cause or disability, (y) as a result of the Associate’s death or retirement or (z) by the Associate other than for Good Reason); 
(3)    The Associate being required to relocate to a principal place of employment more than thirty-five (35) miles from the CarMax Parent’s headquarters;
(4)    The failure of the CarMax Parent to obtain an agreement from any successor to all or substantially all of the assets or business of the CarMax Parent to assume and agree to perform this Agreement within fifteen (15) days after a merger, consolidation, sale or similar transaction.
Notwithstanding anything herein to the contrary, for purposes of this Agreement, any determination of Good Reason must satisfy the materiality requirement under Treasury Regulation § 1.409A-1(n)(2)(i), any successor thereto and other applicable guidance.
(b)  At any time during the Change in Control Employment Period, the Associate may terminate his employment for Good Reason upon notice to CarMax.  Such notice shall state the intended date of termination and shall be given to CarMax at least forty-five (45) days prior to such date and shall set forth in detail the facts and circumstances claimed to provide grounds for such termination.  CarMax shall have the right to cure the facts and circumstances giving rise to such grounds for termination for Good Reason.  If CarMax does not so cure within the forty-five (45) day notice period, then the Associate’s employment shall terminate on the date of termination stated in the notice.  
(c)  Notwithstanding Article 7.2, in the event of the Associate’s voluntary termination of employment for Good Reason during the Change in Control Employment Period, the Associate shall receive thirty-nine (39) biweekly payments equal to the Biweekly Amount less applicable federal, state, and local withholdings; provided however that CarMax’s obligation to provide such thirty-nine (39) biweekly payments is subject to the Associate’s compliance with (i) Articles 8, 9, 10 and 11 of this Agreement and (ii) delivery to CarMax of an executed Agreement and General Release within twenty-one (21) days of presentation thereof by CarMax to the Associate.  Any amounts due following a termination of employment under this Agreement shall not be due until after the expiration of any revocation period applicable to the Agreement and General Release without the Associate having revoked such Agreement and General Release.  CarMax thereafter shall have no further obligations under this Agreement.
Article 8.  Covenant Not to Compete.   

The terms and provisions contained in this Article 8 comprise a covenant not to compete (the “Covenant Not to Compete”).  The Associate acknowledges and agrees as follows:

		
	8.1
	    CarMax operates a unique business concept regarding the sale and servicing of new and used vehicles in a highly competitive industry. 

		
	8.2
	CarMax’s competitors have attempted to duplicate CarMax’s business concept in various markets throughout the United States, including markets where CarMax does not currently have a business location, and may continue to do so.

		
	8.3
	In connection with the Associate’s employment with CarMax, he will receive access to, and training regarding, CarMax’s business concept and will, accordingly, acquire commercially valuable knowledge of and insight into CarMax’s operations and CarMax’s proprietary and confidential information, any of which if made available to any Competitor (as defined below) could place CarMax at a competitive disadvantage.  

		
	8.4
	In order to protect CarMax’s legitimate business interests from Competitors (as defined below) and to protect CarMax’s critical interest in its proprietary and confidential information, the Associate covenants and agrees as follows:

During the Associate’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Associate’s employment (the “Restricted Period”), the Associate will not, directly or indirectly, compete with CarMax by acting “in a competitive capacity” (as defined below), for, or on behalf of, any person or entity operating or developing, during the Restricted Period, a business that provides or intends to provide activities, products or services that are the same or substantially similar to, and competitive with, the business of CarMax as of Associate’s last day of employment with CarMax (each, a “Competitor”) within any Metropolitan Statistical Area (as defined by the United States Office of Management and Budget) in which CarMax has a retail store site as of Associate’s last day of employment.  Such Competitors include, but are not limited to: Sonic Automotive, Inc.; Lithia Motors, Inc.; Group 1 Automotive, Inc.; AutoNation, Inc.; Penske Automotive Group, Inc.; Asbury Automotive Group, Inc.; Hendrick Automotive Group;  Auction Direct USA, L.P.; Car Sense Inc.; AutoAmerica, Inc.; Left Gate Property Holding, Inc. d/b/a Texas Direct Auto; Off Lease Only, Inc.; Carvana, LLC; Carvana Group, LLC; AutoMatch USA, LLC; DriveTime Car Sales Company, LLC; DriveTime Automotive Group, Inc.; CarLotz, Inc.; Hertz Global Holdings, Inc.; Enterprise Holdings, Inc.; Avis Budget Group, Inc.; Cox Automotive, Inc.; Classified Ventures, LLC; TrueCar, Inc.; Edmunds.com, Inc.; Dealertrack Technologies, Inc.; Dealer Dot Com, Inc.; CarGurus, LLC; Blinker, Inc.; and Beepi, Inc., and any automotive retail operation affiliated with, owned, operated, or controlled by Berkshire Hathaway Inc.; Home Depot, Inc.; Lowe’s Companies, Inc.; Target Corporation; Wal-Mart Stores, Inc.; Sears Holdings Corporation; Carrefour S.A.; Costco Wholesale Corporation; Royal Dutch Shell plc; Exxon Mobil Corporation; Chevron Corporation; and/or Gulliver International Co., Ltd.

		
	8.5
	A business, including any Competitor, or any of its respective subsidiaries or affiliates, will not be considered to be in competition with CarMax for purposes of Article 8 if the business, or operating unit of the business, or its respective subsidiaries or affiliates, by 

which the Associate will be or is employed (i) does not have within the twenty-four (24) months preceding the Associate’s termination of employment with CarMax, annual gross revenues (calculated on a rolling 12-month basis) of at least $5,000,000 derived from the sale and servicing of new or used vehicles; or (ii) is not projected (by the business or operating unit of the business) to have within the twenty-four (24) months following the Associate’s termination of employment with CarMax, annual gross revenues (regardless of how calculated) of at least $5,000,000 derived from the sale and servicing of new or used vehicles.  
		
	8.6
	Acting “in a competitive capacity” shall mean providing to a Competitor, directly or indirectly, the same or substantially similar services that the Associate provided to CarMax at any time during Associate’s last twenty-four (24) months of employment.  

		
	8.7
	Nothing herein shall prevent or restrict the Associate from working for any person in any role or in any capacity that is not in competition with CarMax.  

    
		
	8.8
	Notwithstanding the foregoing, nothing herein shall be deemed to prevent or limit the right of the Associate to invest in the capital stock or other securities of any corporation whose stock or securities are regularly traded on any public exchange.

		
	8.9
	The Associate and CarMax have examined in detail the Covenant Not to Compete contained in this Article 8 and each agrees that the restraint imposed upon the Associate is reasonable in light of the legitimate business interests of CarMax and is not unduly harsh or burdensome with respect to the Associate’s ability to earn a livelihood.  If any provision of the Covenant Not to Compete relating to the time period, geographic area or scope of restricted activities shall be declared by a court of competent jurisdiction to exceed the maximum time period, geographic area or scope of activities, as applicable, that such court deems reasonable and enforceable, then such time period, geographic area or scope of activities shall be deemed to be, and thereafter shall become, the maximum time period, scope of activities or largest geographic area that such court deems reasonable and enforceable and this Agreement shall automatically be considered to have been amended and revised to reflect such determination.

		
	8.10
	The Associate and CarMax acknowledge that the Associate’s services are of a special, extraordinary, and intellectual character that gives the Associate unique value, and that CarMax’s business is highly competitive, and that violation of the Covenant Not to Compete provided herein would cause immediate, immeasurable, and irreparable harm, loss, and damage to CarMax not adequately compensable by a monetary award.  In the event of any breach or threatened breach by the Associate of the Covenant Not to Compete, CarMax shall be entitled to such equitable and injunctive relief as may be available to restrain the Associate from violating the provisions hereof.  Nothing herein shall be construed as prohibiting CarMax from pursuing any other remedies available at law or in equity for such breach or threatened breach, including the recovery of damages and the immediate termination of the employment of the Associate hereunder for Cause.

Article 9.  Non-Solicitation of Employees.

The Associate agrees that during the Associate’s employment with CarMax and for a period of twenty-four (24) months following the last day of the Associate’s employment, the Associate shall not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of CarMax with whom the Associate had material business-related contact on behalf of CarMax, to leave employment with CarMax for any reason whatsoever (the “Covenant Not to Solicit”).  For purposes of this Article 9, employee shall mean any individual employed by CarMax.
 
Article 10.  Confidentiality.

The terms and provisions contained in this Article 10 comprise a covenant of confidentiality (the “Covenant of Confidentiality”).

The Associate understands and agrees that any and all Protected Information is the property of CarMax and is essential to the protection of CarMax’s goodwill and to the maintenance of CarMax’s competitive position and accordingly should be kept secret.  For purposes of this Agreement, “Protected Information” means trade secrets, confidential and proprietary business information of or about CarMax, and any other information of CarMax, including technical data, processes, know‐how, financial data, analyses, forecasts, plans, operations information and data, customer lists (including potential customers) and information, marketing plans, materials and information, product and service information, accounts and billings information, sales transaction data, sales documents and information, discoveries, ideas, concepts, designs, drawings, specifications, techniques, models, information systems data and materials, computer software or hardware, data analyses and compilations, source code, object code, documentation, diagrams, flow charts, research, procedures, methods, systems, programs, price lists, pricing policies, supplier and distributor information, sources of supply, internal memoranda, promotional plans, internal policies, purchasing information, operating methods and procedures, training materials, and any products and services which may be developed from time to time by CarMax and its agents or employees, including the Associate; provided, however, that information that is in the public domain (other than as a result of a breach of this Agreement), approved for release by CarMax or lawfully obtained from third parties who are not bound by a confidentiality agreement with CarMax, is not Protected Information.
CarMax has advised the Associate and the Associate acknowledges that it is the policy of CarMax to maintain as secret and confidential all Protected Information, and that Protected Information has been and will be developed at substantial cost to and effort by CarMax.  The Associate agrees to hold in strict confidence and safeguard any and all Protected Information accessed or accessible by the Associate during the Associate’s employment.  The Associate shall not, without the prior written consent of CarMax, at any time, directly or indirectly, divulge, furnish, use, disclose or make accessible to any person, firm, corporation, association, or other entity (otherwise than as may be required in the regular course of the Associate’s employment with CarMax), any Protected Information, or cause any such Protected Information to enter the public domain.

Nothing contained in this Article 10 is intended to reduce in any way the protection available to CarMax pursuant to the Uniform Trade Secrets Act as adopted in Virginia or any other state or other applicable laws that prohibit the misuse or disclosure of confidential or proprietary information.  Unless lengthened by the application of the Virginia Uniform Trade Secrets Act or other applicable law, the restrictions in Article 10 shall remain in effect during Associate’s employment and for five (5) years thereafter.  

Article 11.  Return of CarMax Property. 

Upon the termination (for any reason) of the Associate’s employment with CarMax, the Associate shall deliver promptly to CarMax all CarMax property including, without limitation, any automobiles, equipment, credit cards, keys, building access cards, identification, cellular phones, computers, software, CD ROMs, customer lists, and all Protected Information as defined in Article 10 of this Agreement.  The Associate further agrees not to take or extract any portion of any such information and/or materials in written, computer, electronic or any other reproducible form.

Article 12.  Monies Owed.  

To the extent that the Associate owes CarMax any monies at the time of termination of employment, the Associate authorizes and agrees to have CarMax withhold such amounts owed from the Associate’s final paycheck, to the maximum extent permitted by applicable law.

Article 13.  Work Product.  

		
	(a)
	All work product prepared by the Associate in connection with performing job duties for CarMax shall be the sole property of CarMax.  CarMax shall have full and exclusive rights to use, reproduce, publish, or otherwise profit from such work product, as CarMax deems appropriate. The Associate agrees to assist CarMax, or any agent designated by CarMax, at any time and at no cost to the Associate, in obtaining any patents, copyrights, trademarks or other forms of legal protection for any such work product.

		
	(b)
	To the extent that any work product is deemed in any way to fall within the definition of “work made for hire,” as such term is defined in 17 U.S.C. § 101, such work product shall be considered “work made for hire,” the copyright of which shall be owned solely, completely and exclusively by CarMax.

		
	(c)
	For the purpose of this Agreement, the term “work product” includes, but is not limited to, reports, manuals, inventions, improvements, designs, formulae, processes, techniques, methods, computer software, proposals, technical solutions, patents, training materials, other works of authorship, innovations, and enhancements created by the Associate or the Associate’s staff.

Article 14.  Dispute Resolution.  

Except for actions initiated by CarMax to enjoin a breach by the Associate, and/or recover damages from the Associate, related to the Covenant Not to Compete (Article 8), the Covenant Not to Solicit (Article 9) or the Covenant of Confidentiality (Article 10) (collectively, the “Restrictive Covenants”), which action(s) CarMax may bring in an appropriate court of law or equity, any disagreement between the Associate and CarMax concerning anything covered by this Agreement or concerning other terms or conditions of the Associate’s employment or the termination of the Associate’s employment will be settled by final and binding arbitration pursuant to CarMax’s Dispute Resolution Rules and Procedures in effect at the time the disagreement or dispute arises or at the time of termination in the event the Associate’s employment terminated.  The decision of the arbitrator will be final and binding on both the Associate and CarMax and may be enforced in a court of appropriate jurisdiction.  

Article 15.  General Provisions.

		
	15.1
	Notices.  If CarMax needs to send any notices to the Associate in connection with this Agreement, it will send such notice to the Associate’s address of record, as shown in CarMax’s most recent payroll records.  The Associate shall send any similar notices to CarMax at:

        
CarMax, Inc.
Attention: Corporate Secretary 
12800 Tuckahoe Creek Parkway
Richmond, VA 23238

		
	15.2
	Amendments and Entire Agreement.  This Agreement may not be amended except by a writing executed by CarMax and the Associate.  This Agreement constitutes the entire agreement of CarMax and the Associate relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.  The terms and conditions of the Associate’s employment shall, to the extent not addressed or described in this Agreement, be governed by CarMax’s then-current policies and procedures and existing practices.

		
	15.3
	Successors and Assigns.  The Associate hereby consents to CarMax’s assignment of this Agreement to any affiliate, subsidiary or parent of CarMax at any time.  Any other assignment by either party of the rights and obligations of such party hereunder shall not be made without the prior written consent of such other party.

		
	15.4
	Severability.  All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law.  If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.  The Restrictive Covenants shall be 

severable, and if any of them is held invalid because of its duration, scope of area or activity, or any other reason, the parties agree that such covenant shall be adjusted or modified by the court to the extent necessary to cure that invalidity, and the modified covenant shall thereafter be enforceable as if originally made in this Agreement.

		
	15.5
	Attorney’s Fees.  In any action arising under this Agreement, CarMax, so long as it prevails, shall be entitled to recover its reasonable attorney’s fees and costs.  

		
	15.6
	Waiver of Rights.  No waiver by CarMax or the Associate of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.

		
	15.7
	Restrictive Covenants of the Essence.  The Restrictive Covenants in Articles 8, 9 and 10 of the Agreement are of the essence of this Agreement.  In the event that the Associate has a claim or cause of action against CarMax (whether related to this Agreement or not), such claim or cause of action, including but not limited to a breach of this Agreement by CarMax, shall not prevent or otherwise constitute a defense to CarMax’s enforcement of the Restrictive Covenants and shall not excuse the Associate’s performance of the Restrictive Covenants.  CarMax shall at all times maintain the right to seek enforcement of the Restrictive Covenants whether or not CarMax has previously refrained from seeking enforcement of any such Restrictive Covenant as to the Associate or any other peer Associate who has signed an agreement with similar covenants.

		
	15.8
	Definitions:  Headings and Numbers; Construction.  A term defined in any part of this Agreement shall have the defined meaning wherever such term is used herein.  The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Agreement.  Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.  This Agreement shall be construed and enforced without any presumption or construction against the party drafting the Agreement.

		
	15.9
	Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.

		
	15.10
	Governing Laws and Forum.  This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to conflicts of laws principles thereof.  In the event of any litigation between CarMax and Associate related to the enforcement or enforceability of the Restrictive Covenants, the parties agree that the Circuit Court for the County of Henrico, Virginia, shall have mandatory and exclusive jurisdiction and venue of any such action.

		
	15.11
	Grants or Options.  This Agreement does not affect the terms and conditions controlling, or status of, any stock options or grants of restricted stock which previously have been or later may be awarded to the Associate.  Any vested stock options or grants 

of restricted stock are governed by the terms of the letters by which they were made, which are incorporated herein by reference as if set forth in full in this Agreement.

		
	15.12
	No Encumbrances.  In entering into this Agreement, the Associate certifies that he possesses the legal capacity to do so, and that his employment with CarMax is not in violation of any other valid agreement.  The Associate agrees to hold CarMax harmless from any debts, judgments, or liens that the Associate acquired prior to entering into this Agreement.  If the Associate is currently involved in, or becomes involved in, a lawsuit or any other legal proceeding unrelated to CarMax or any of its affiliates, subsidiaries, or related entities (collectively, the “CarMax Entities”), the Associate warrants that such CarMax Entities shall have no liability with respect to such lawsuit or legal proceeding and agrees to fully indemnify the CarMax Entities for any and all fees, costs and other expenses with respect to any such action.

		
	15.13
	Opportunity to Review.  The Associate acknowledges that he has read this Agreement and has had an adequate opportunity to review it and to obtain any legal or financial advice that the Associate deems appropriate.  The Associate acknowledges that he has signed this Agreement freely and voluntarily.

Article 16.  Protected Rights.
Notwithstanding any other terms and conditions of this Agreement: 

The Associate understands that nothing contained in this Agreement limits the Associate’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 Associate further understands that this Agreement does not limit the Associate’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 CarMax. This Agreement does not limit the Associate’s right to receive an award for information provided to any Government Agencies.

[Signature Page Follows]

IN WITNESS WHEREOF, CarMax and the Associate have executed this Agreement as of October 25, 2019.

By:  /s/ Enrique N. Mayor-Mora            

Printed Name:        Enrique N. Mayor-Mora    

CarMax, Inc.

By:    /s/ Eric M. Margolin                
Name:    Eric M. Margolin
Title:    Executive Vice President, General Counsel and 
Corporate Secretary

EXHIBIT A

AGREEMENT AND GENERAL RELEASE

This Agreement and General Release (the “Agreement and General Release”), dated as of _______ __, 20__, is made by and between CarMax, Inc., for itself and its affiliates, subsidiaries, divisions, successors and assigns in such capacity, and the current, future and former employees, officers, directors, trustees and agents thereof (collectively referred to throughout this Agreement as the “Company”) and _______________________ (“Associate”), for him/herself and his/her heirs, executors, administrators, successors and assigns (together with Associate, collectively referred to throughout this Agreement and General Release as “Employee”) agree:

1.Last Day of Employment.  The Associate’s last day of employment with the Company is ____________, 20__.  In addition, effective as of ____________, 20__, the Associate resigns from the Associate’s position as                  of the Company, and will not be eligible for any benefits or compensation after ____________, 20__, other than as specifically provided in Article 7, as applicable, of the Severance Agreement between the Company and the Associate dated as of __________ __, 20__ (“Severance Agreement”) and the Associate’s continued right, if any, to indemnification and directors and officers liability insurance.  In addition, effective as of ____________, 20__, the Associate resigns from all offices, directorships, trusteeships, committee memberships and fiduciary capacities held with, or on behalf of, the Company or any benefit plans of the Company.  These resignations will become irrevocable as set forth in Section 3 below.
2.Consideration.  The parties acknowledge that this Agreement and General Release is being executed in accordance with Article 7.3 or 7.5 of the Severance Agreement, between the Company and the Associate dated as of __________ __, 20__ (“Severance Agreement”) and that this Agreement and General Release is a condition to the receipt by Employee of all payments and benefits thereunder.
3.Revocation.  The Associate may revoke this Agreement and General Release for a period of seven (7) calendar days following the day the Associate executes this Agreement and General Release.  Any revocation within this period must be submitted, in writing, to the Company and state, “I hereby revoke my acceptance of our Agreement and General Release.”  The revocation must be personally delivered or mailed to the Company’s ___________________________ at the Company’s corporate office, or his/her designee, and, if mailed, postmarked within seven (7) calendar days of execution of this Agreement and General Release.  This Agreement and General Release shall not become effective or enforceable until the revocation period has expired.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Virginia, then the revocation period shall not expire until the next following day that is not a Saturday, Sunday, or legal holiday.
4.General Release of Claims.  Employee knowingly and voluntarily releases and forever discharges the Company from any and all claims, rights, causes of action, demands, damages, fees, costs, expenses, including attorneys’ fees, and liabilities of any kind whatsoever, whether known or unknown, against the Company, that Employee has, has ever had or may have as of the date of 

execution of this Agreement and General Release, including, but not limited to, any alleged violation of:
●    The Age Discrimination in Employment Act of 1967, as amended;
●    The Older Workers Benefit Protection Act of 1990;
●    Title VII of the Civil Rights Act of 1964, as amended;
●    The Civil Rights Act of 1991;
●    Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
●    The Employee Retirement Income Security Act of 1974, as amended;
●    The Immigration Reform and Control Act, as amended;
●    The Americans with Disabilities Act of 1990, as amended;
●    The Worker Adjustment and Retraining Notification Act, as amended;
●    The Occupational Safety and Health Act, as amended;
●    The Family and Medical Leave Act of 1993;
		
	●
	All other federal, state or local civil or human rights laws, whistleblower laws, or any other local, state or federal law, regulations and ordinances; 

●    All public policy, contract, tort, or common laws; and
		
	●
	All allegations for costs, fees, and other expenses including attorneys’ fees incurred in these matters.

Notwithstanding anything herein to the contrary, the sole matters to which the Agreement and General Release do not apply are: (i) Employee’s rights, if any, of indemnification and directors and officers liability insurance coverage to which the Associate was entitled immediately prior to __________ __, 20__ with regard to the Associate’s service as an officer and director of the Company; (ii) Employee’s rights under any tax-qualified pension plan or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement maintained by the Company or under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (iii) Employee’s rights under Article 7.3 or 7.5 of the Severance Agreement, as the case may be; (iv) Employee’s rights as a stockholder of the Company; (v) Employee’s right to file charges or complaints 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”), although Employee waives the Associate’s right to recover any damages or other relief in any claim or suit brought by or through the Government Agencies on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law, provided, however, this Agreement and General Release does not limit Employee’s right to receive an award for information provided to any Government Agencies; (vi) Employee’s rights to file  charges with the Equal Employment Opportunity Commission, or any government agency concerning claims of discrimination, although Employee 

waives the Associate’s right to recover any damages or other relief in any claim or suit brought by or through the Equal Employment Opportunity Commission or any other federal, state or local agency on behalf of Employee under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or any other federal or state discrimination law, except where such waivers are prohibited by law; and (vii) Employee’s rights that cannot be released by private agreement under applicable law.

5.    Affirmations.  Employee affirms that the Associate has been paid or has received all compensation, wages, bonuses, commissions, and/or benefits to which the Associate may be entitled and no other compensation, wages, bonuses, commissions and benefits are due to the Associate, except as provided in Article 7.3 or 7.5 of the Severance Agreement, as applicable.  The Employee also affirms the Associate has no known workplace injuries.
6.Return of Property.  Employee represents that the Associate has returned to the Company all property belonging to the Company, including but not limited to any vehicle, laptop, cell phone, keys, access cards, phone cards and credit cards, and all Protected Information as defined in Article 10 of the Severance Agreement.
7.Cooperation.  Employee agrees to reasonably cooperate with the Company to provide truthful and accurate information in connection with any administrative proceeding, arbitration, or litigation relating to any matter that occurred during the Associate’s employment with the Company in which the Associate was involved or of which the Associate has knowledge.  Employee further understands that this Agreement and General Release does not limit 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 the Company.  
8.Governing Law and Interpretation.  This Agreement and General Release shall be governed and construed in accordance with the laws of the Commonwealth of Virginia, without reference to Virginia’s choice of law statutes or decisions.  In the event Employee or the Company breaches any provision of this Agreement and General Release, Employee and the Company acknowledge that either may institute an action to specifically enforce any term or terms of this Agreement and General Release pursuant to the dispute resolution provisions of Article 14 of the Severance Agreement.  Should any provision of this Agreement and General Release be declared illegal or unenforceable by any court of competent jurisdiction and should the provision be incapable of being modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement and General Release in full force and effect.  Nothing herein, however, shall operate to void or nullify any enforceable general release language contained in this Agreement and General Release.
9.No Admission of Wrongdoing.  Employee agrees neither this Agreement and General Release nor the furnishing of the consideration for this Agreement and General Release shall be deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind.

10.Amendment.  This Agreement and General Release may not be modified, altered or changed except upon express written consent of both parties wherein specific reference is made to this Agreement and General Release.

11.Entire Agreement.  This Agreement and General Release sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties; provided, however, that notwithstanding anything in this Agreement and General Release, the provisions in the Severance Agreement that are intended to survive termination of the Severance Agreement, including but not limited to those contained in Articles 8, 9, 10, 11 and 14 shall survive and continue in full force and effect.  Employee acknowledges the Associate has not relied on any representations, promises, or agreements of any kind made to the Associate in connection with the Associate’s decision to accept this Agreement and General Release.

EMPLOYEE HAS BEEN ADVISED THAT ASSOCIATE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND CONSIDER THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE. 
EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY CONSIDERATION PERIOD.  

HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE SEVERANCE AGREEMENT, TO WHICH EMPLOYEE WOULD NOT OTHERWISE BE ENTITLED, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS OR MIGHT HAVE AGAINST THE COMPANY AS SET FORTH HEREIN.

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement and General Release as of the date first above written:

	
		
	 
	CarMax, Inc.:   
 
 
By: ___________________________
Name:_________________________
Title:__________________________
Date:__________________________

	 
	Associate/Employee: 
 

Name: ________________________
Date: _________________________Exhibit

Exhibit 10.1

CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE OF CLAIMS

This Confidential Separation Agreement and Release of Claims (“Agreement”) is entered into by and between, on the one hand, Stephen A. Rosetta (“Mr. Rosetta”) and, on the other hand, Kilroy Realty Corporation, a Maryland corporation, and Kilroy Realty, L.P., a Delaware limited partnership (collectively, “KRC”).  KRC and Mr. Rosetta may be referred to herein jointly as “the parties” or individually as “the party.” 

RECITALS

WHEREAS, KRC has employed Mr. Rosetta as Executive Vice President, Chief Investment Officer; 

WHEREAS, the parties have agreed that Mr. Rosetta will separate from his employment with KRC on August 28, 2019 (the “Separation Date”); 

WHEREAS, KRC and Mr. Rosetta desire to resolve any and all matters and disputes between them as of the Effective Date of the Agreement, as defined below in Section 17, in an amicable manner, and to set out the terms for payment of additional consideration to Mr. Rosetta to secure the full and final release of all claims set forth herein; and 

WHEREAS, KRC and Mr. Rosetta understand and acknowledge that each of them is waiving legal rights or claims by signing the Agreement, and that each of them voluntarily enters into the Agreement with a complete understanding of its terms and with the intent to be bound thereby.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, KRC and Mr. Rosetta agree as follows:

		
	1
	SEPARATION FROM EMPLOYMENT

1.1    Through the Separation Date, Mr. Rosetta acknowledges and agrees that he has continuing obligations as Executive Vice President, Chief Investment Officer, to fulfill his duties and responsibilities, including but not limited to cooperating with KRC management and supporting an orderly transition of all projects under his management or direction and any other matters concerning existing or potential projects (acquisitions or dispositions), as well as tenants, vendors, suppliers, partners, joint ventures, brokers, agents, buyers, or anyone else with whom KRC does business.  KRC shall have the right to accelerate Mr. Rosetta’s separation from employment for any reason prior to the Separation Date provided that KRC shall pay Mr. Rosetta the balance of any salary, vacation, holiday, and floating holiday pay as if earned.  

1.2    On the Separation Date Mr. Rosetta shall cease to be an employee of KRC.  For the avoidance of doubt, the parties intend that the Separation Date shall constitute the date on which Mr. Rosetta shall cease to provide any and all services to KRC and its affiliates as an employee or otherwise (including without limitation services on any committee, boards or as an officer).  Mr. 

Rosetta agrees that the Separation Date shall constitute the date of Mr. Rosetta’s “separation from service” from KRC (within the meaning of Internal Revenue Code Section 409A (“Section 409A”) and the guidance promulgated thereunder).  

1.3    Mr. Rosetta acknowledges, agrees and represents that for a period of one year after the Separation Date he will use commercially reasonable efforts to assist KRC with respect to specific projects he worked on during his employment at KRC which KRC currently owns or is actively pursuing.  Nothing stated herein shall in any way amend or diminish Mr. Rosetta’s obligations under the Confidentiality Agreement, as defined below, or pursuant to the confidentiality provisions of the Agreement, particularly but without limitation Section 10.  

1.4    The parties acknowledge and agree that Mr. Rosetta executed a “Non-Competition, Non-Solicitation and Non-Disclosure Agreement” dated June 19, 2017 (the “Confidentiality Agreement”), which is enforceable to the fullest extent provided by law.  Mr. Rosetta further acknowledges and agrees that he has a continuing obligation after the Separation Date not to disclose, transmit, use or otherwise appropriate KRC’s Confidential Information, as defined below in Section 10; and further acknowledges and agrees that his post-employment obligations include in particular but without limitation (i) his obligations not to solicit or raid any current employees, customers, vendors, suppliers or joint venturers to terminate their employment or to cease doing business with KRC using Confidential Information protected by Section 10 of the Agreement; (ii) his obligations not to disclose or to interfere with a market expansion, acquisition or development (including joint venture) opportunity for KRC using Confidential Information protected by Section 10 of the Agreement; (iii) without limitation, but particularly, his obligations under the non-disparagement and confidentiality obligations set forth, respectively, in Sections 9 and 10 of the Agreement; and (iv) his obligations and undertakings set forth in Section 2.

1.5    Except as otherwise expressly authorized by KRC in writing, on and after the Separation Date, Mr. Rosetta shall not represent or act, directly or indirectly, for or on behalf of, or otherwise as an agent of, KRC or any one of the KRC Released Parties, as defined below in Section 4.1.

1.6    On the Separation Date KRC shall pay to Mr. Rosetta all unpaid salary and accrued but unused vacation and any floating holiday pay which would have been earned through the Separation Date, at Mr. Rosetta’s then current regular base salary rate, less applicable state and federal tax withholdings.  KRC shall also reimburse Mr. Rosetta for all approved reasonable and necessarily incurred business expenses and disbursements that have not otherwise been reimbursed, upon receipt of the required documentation.  No expenses shall be incurred by Mr. Rosetta on or after the Separation Date, for or on behalf of KRC without express written advance authorization.  

1.7    KRC will not dispute a claim for unemployment benefits should one be filed by Mr. Rosetta, though Mr. Rosetta acknowledges that it is the California Employment Development Department and not KRC which determines eligibility for such benefits.

1.8    KRC will maintain Mr. Rosetta’s personnel file and any financial information that Mr. Rosetta provided to KRC in a confidential manner.  Mr. Rosetta's personnel and payroll 

2

records shall reflect that he separated from employment due to mutual agreement.  Mr. Rosetta shall direct prospective employers to KRC’s Human Resources Department which will respond to any request for a reference by providing dates of employment and last held position, unless written authorization is provided at the time by Mr. Rosetta to disclose his most recent regular base salary.  

1.9    Mr. Rosetta understands that KRC-provided group health benefits will cease as of September 1, 2019, at which time he and any other participants previously enrolled through him will become eligible for continued medical insurance benefits through COBRA.  Should Mr. Rosetta elect in a timely manner to continue COBRA coverage on and after September 1, 2019 for himself or any other previously enrolled participants, COBRA premium payments shall be made directly by Mr. Rosetta to the attention of “Benefits Administrator”, Kilroy Realty Corporation, 12200 W. Olympic Blvd., Suite 200, Los Angeles, CA 90064.  Accordingly, commencing on and after September 1, 2019, KRC shall have no obligation to pay for or to reimburse the cost of medical insurance benefits for Mr. Rosetta or any other previously enrolled participants.

1.10    The parties acknowledge and agree that pursuant to the July 19, 2017 Cash Award Terms Agreement (the “July 19 Agreement”), an account was established in Mr. Rosetta’s name under KRC’s 2007 Deferred Compensation Plan (the “Plan”), and Mr. Rosetta was credited with Two Million Dollars ($2,000,000.00) (the “Cash Award”), which was subject to a risk of forfeiture under the vesting provisions provided in the July 19 Agreement.  

1.10.1    Pursuant to the July 19 Agreement, the sum of One Million Dollars ($1,000,000.00) of the Cash Award has vested (the “Vested Cash Award”).  On November 12, 2017 and May 26, 2018, Mr. Rosetta elected to defer payment of the portions of the Cash Award that vested on July 19, 2018 and July 19, 2019, respectively.  In accordance with Section 6.1(a)(iii) of the Plan, the deferred Vested Cash Award shall be distributed in a lump sum payment as soon as practicable after Mr. Rosetta’s Specified Employee Payment Date (as such term is defined in the Plan) and net of applicable tax withholding obligations.

1.10.2    Mr. Rosetta further acknowledges and agrees that the remainder of the Cash Award in the sum of One Million Dollars ($1,000,000.00) has not vested in accordance with the terms of the July 19 Agreement (the “Unvested Cash Award”).  In accordance with the terms of the July 19 Agreement, the entire Unvested Cash Award shall be forfeited as of the Separation Date and Mr. Rosetta shall have no remaining rights to any portion of the Unvested Cash Award as of the Separation Date.  

1.11    Mr. Rosetta was previously awarded restricted stock units (“RSUs”) by KRC pursuant to certain Restricted Stock Unit Agreements (each, an “RSU Agreement”).  As of the Separation Date, Mr. Rosetta will have a total of approximately 1,874.348727 RSUs that are vested, time-based and deferred (the “Vested RSUs”) that are held in an account KRC established at Solium, Inc. in Mr. Rosetta’s name (the “Solium Account”).  The Vested RSUs consist of the following: 1,874.348727 shares (2018 LTI Award (Time) – EVP).  Subject to the terms in the applicable RSU Agreement, the Vested RSUs shall be distributed to Mr. Rosetta in a single distribution of KRC common stock as soon as practicable after the date that is six (6) months and one (1) day following the Separation Date (the “Delayed Payment Date”), after taking into account the notional earnings or losses occurring prior to the Delayed Payment Date and net of applicable 

3

tax withholding obligations, subject to delay for administrative convenience set forth in the applicable RSU Agreement.  To the extent that any additional RSUs are credited as dividend equivalents with respect to the RSUs prior to the date of payment, such additional RSUs shall be paid in shares of KRC common stock, or the cash equivalent, on or within fifteen (15) days after the Delayed Payment Date, subject to delay for administrative convenience set forth in the applicable RSU Agreement.  In the event of any inconsistency or ambiguity between this Agreement and the applicable RSU Agreement as to the payment of any RSU, the applicable RSU Agreement controls.  There can be no guarantee or promise as to the value of a share of KRC common stock or RSUs on any future date.  The unvested, time-based and deferred RSUs (the “Unvested RSUs”) totaling approximately 64,787.92466 unvested RSUs, that are held in an account KRC established at Solium, Inc. in Mr. Rosetta’s name (the “Solium Account) shall be forfeited as of the Separation Date and Mr. Rosetta shall have no remaining rights to any portion of the Unvested RSUs as of the Separation Date.  

1.12    Mr. Rosetta acknowledges and agrees that (a) KRC has established the Solium Account, (b) Mr. Rosetta will transfer all shares of his KRC common stock and cash amounts in the Solium Account to his personal brokerage and/or bank account as soon as possible, but by no later than March 1, 2020 and (c) KRC will remove Mr. Rosetta’s access to the Solium Account immediately following such date.  Furthermore, in accordance with KRC’s Insider Trading Policy, Mr. Rosetta hereby acknowledges and agrees not to buy, sell or otherwise trade in any KRC securities while in possession of any material non-public information about KRC.

1.13    Except as expressly provided for in this Section 1 (or in Section 2 provided conditions set forth therein are satisfied), Mr. Rosetta acknowledges and agrees that all obligations of KRC to pay base salary, benefits, discretionary cash bonus for 2019 (which may be awarded in 2020), vacation and floating holiday pay, deferred cash or equity or other awards, RSUs, deferred compensation, Cash Award, auto allowance, separation pay, incentive pay, 401(k) contributions including the KRC matching contribution, or any other employee benefits, or any other compensation or remuneration of any kind in connection with Mr. Rosetta’s employment with KRC, or in connection with his separation from employment, shall cease as of the Separation Date, and that no compensation or other remuneration, or other payments of any kind, shall be due and owing to him from KRC, or from any of the KRC Released Parties, as defined in Section 4.1, for the period of time that Mr. Rosetta as an employee of KRC, or in connection with his separation from employment and the termination thereof.  Nothing stated herein shall amend any ERISA benefit plans in which Mr. Rosetta is a participant.  Any other or additional forms of payment by KRC to Mr. Rosetta, including the amounts set forth in Section 2, below (“Additional Consideration”) shall be made only as consideration for the releases, covenants, promises and obligations given and made by Mr. Rosetta in this Agreement, provided that Mr. Rosetta shall not have revoked this Agreement in accordance with Section 6, below.  Mr. Rosetta agrees that he has no rights in or with respect to any equity or equity-based awards granted by KRC or any of its affiliates except as specifically referenced in Sections 1.11, 1.12 and 1.13, above.

1.14    On the Separation Date Mr. Rosetta shall coordinate with Human Resources for the return of the following: (i) except as provided below in Section 1.14.1, all KRC property including all tangible or intangible property, such as equipment (including the company satellite phone), software, information, office, parking and/or elevator access keys, books and data, that he was 

4

provided during his employment; (ii) Confidential Information, as that term is defined in the Confidentiality Agreement and below in Section 10; and (iii) a complete list of all computer and website log-in passwords that he used for KRC work purposes (each and collectively, “KRC Property”).  Except as provided below in Sections 1.14.1 and 1.14.2, Mr. Rosetta represents and warrants that he has not, nor has anyone on his behalf, and will not, retain any KRC Property or Confidential Information of any type or in any form, whether created, generated, stored or transmitted in any electronic or other format, or in any other media, on any electronic device, such as but not limited to his personal laptop, thumb drives or other computer or electronic device to which he has access.  Additionally, as a limited and narrow exception hereto, Mr. Rosetta may retain any personnel or payroll records for himself to which he is legally entitled.  

1.14.1    As a limited and narrow exception to Section 1.14, Mr. Rosetta may retain the iPhone (with contact information, e.g., name, telephone number and email address) and iPad provided to him by KRC on condition that prior to the Separation Date, KRC Information Technology (IT) shall be provided access to each of these devices to remove any KRC-related information or material, and further provided that Mr. Rosetta shall have signed and not revoked this Agreement as provided for in Section 6, and shall otherwise comply with all confidentiality obligations.  Mr. Rosetta shall also coordinate with Human Resources and the IT Department in identifying any personal data or contact information for his retention.

1.14.2    KRC will also release Mr. Rosetta’s cell phone number so he will be allowed to retain it and his contacts from his Microsoft Outlook file, provided that any KRC Confidential Information contained in his contacts shall first be wiped clean from the cell phone by KRC IT and/or transferred to KRC.

1.15    Mr. Rosetta represents and warrants that he is not entitled to payment of any consideration, including by way of commissions, bonus or other form of remuneration, pursuant to that “Consulting Agreement” by and between KRC and Cushman & Wakefield of San Diego, Inc. (“C&W”) effective as of November 1, 2016 (the “Consulting Agreement”).  Further, for the avoidance of doubt, (1) Mr. Rosetta disclaims and waives any consideration, including commission or bonus, from KRC from any transaction relating to 9455 Towne Center Drive in San Diego or the prospective lease with Illumina the negotiations for which have terminated; and (2) Mr. Rosetta expressly disclaims and waives any right to receive from KRC (i) any “Earned Fees” as that term is used or referenced in the “Termination Notice” dated July 28, 2017 by and between KRC and C&W (the “Termination Notice”), or (ii) remuneration based on any other agreement between Mr. Rosetta and C&W. 

1.16    Mr. Rosetta acknowledges, agrees and represents that on the Separation Date he shall relinquish the brokers’ license that was provided to him by KRC and under which he conducted business on behalf of KRC, and further that he shall indemnify and hold harmless KRC and the KRC Released Parties, as defined herein in Section 4.1, from any claims, demands, liability or causes of action arising from his failure to do so. 

5

		
	2
	CONSIDERATION FOR MR. ROSETTA’S RELEASES AND COVENANTS 

2.1    In consideration for the releases, covenants, promises and obligations set forth in Sections 2 through 11, below, and the other covenants and promises of Mr. Rosetta set forth in this Agreement, and for past services rendered, KRC shall make the following payments as Additional Consideration to Mr. Rosetta under the terms and conditions set forth below, which payments KRC would not otherwise be obligated to make to Mr. Rosetta, provided that Mr. Rosetta shall not have revoked the Agreement as provided for in Section 6, and, in addition, shall otherwise comply with, or shall have complied with, each and every one of the releases, covenants, promises and obligations set forth in this Agreement: 

2.1.1    In further consideration of the Agreement and the benefits provided hereunder, and the release of Claims by Mr. Rosetta, KRC shall pay to Mr. Rosetta the sum of One Million Six Hundred Thousand Dollars ($1,600,000.00), less applicable tax withholding obligations, to be payable as follows:

		
	2.1.1.1
	KRC shall pay to Mr. Rosetta the sum of Eight Hundred Thousand Dollars ($800,000.00), less applicable state and federal tax withholdings, to be paid within fifteen (15) business days after the execution of this Agreement by Mr. Rosetta, provided that Mr. Rosetta has not revoked the Agreement within the Revocation Period pursuant to Section 6, below.

		
	2.1.1.2
	KRC shall pay to Mr. Rosetta the sum of Eight Hundred Thousand Dollars ($800,000.00) in twelve (12) equal monthly installments of Sixty-Six Thousand Six Hundred Sixty Six Dollars and Sixty Seven Cents ($66,666.67), less applicable state and federal tax withholdings, with the first payment to be delivered to Mr. Rosetta’s home address on file on October 1, 2019, with monthly payments to be made thereafter on the first of each month until the last payment is delivered on September 1, 2020. 

		
	2.1.1.3
	Mr. Rosetta represents and warrants that as of the date of signing the Agreement, he has not violated the terms of the Confidentiality Agreement, nor will he violate the post-employment restrictions regarding non-solicitation and confidential information in the Confidentiality Agreement or in the Agreement.  For the avoidance of doubt, Mr. Rosetta represents and warrants that he has not had, and will not have through the Effective Date of the Agreement, for himself or for the benefit of any third party, discussions with any current employees, customers, vendors, suppliers, joint venturers or public REITs with product in Class A office, mixed-use or Life Science or private equity firms who are also operators with product in Class A office, mixed-use or Life Science.  Mr. Rosetta acknowledges and agrees that he is bound by the Confidentiality Agreement and the Agreement with regard to the protections of Confidential Information set forth respectively in such agreements, and nothing stated herein shall in any way amend or diminish the protections of Confidential Information set forth in the Confidentiality Agreement and in Section 10, below.

2.1.2    Should Mr. Rosetta duly elect continued coverage under COBRA, KRC shall pay the premium for COBRA coverage for Mr. Rosetta or any other previously enrolled participants for twelve (12) months, covering the period of time September 1, 2019 through August 

6

31, 2020.  Commencing on September 1, 2020, should Mr. Rosetta wish to continue such COBRA coverage, he shall be solely responsible for making COBRA premium payments when due in a timely manner and for complying with any other obligations under COBRA.  Accordingly, on and after September 1, 2020, KRC shall have no further obligations whatsoever to pay for COBRA premiums pursuant to Mr. Rosetta’s election or to provide Mr. Rosetta notice regarding COBRA benefits.  Should Mr. Rosetta obtain other medical insurance through new employment prior to September 1, 2020, he shall promptly notify KRC to make arrangements to terminate his COBRA coverage so that KRC’s obligation herein to pay COBRA premiums shall be excused.  

2.1.3    After the Separation Date, should Mr. Rosetta breach any or all of his releases, covenants, promises or obligations under this Agreement, KRC shall be entitled to any and all remedies in accordance with Section 11.  The parties acknowledge and agree that any arbitrator shall have no power or authority to alter this provision should Mr. Rosetta breach the Agreement, and that this remedy shall be in addition to any remedy to which KRC is entitled as a prevailing party.

2.2    Other than the payments set forth expressly herein in Sections 1 and 2, Mr. Rosetta acknowledges and agrees that no other payments of any kind or in any amount shall be due and owing, or are due and owing, to him from KRC, or from any of the KRC Released Parties, as Additional Consideration for the releases set forth herein.

		
	3
	NO REPRESENTATIONS AS TO TAXABILITY OF ANY PAYMENTS 

3.1    KRC has not made, and does not make, any representations as to the taxability of any of the payments for the Additional Consideration, or any other payments or benefits contemplated by this Agreement, or any portion thereof, under state, local or federal law.  KRC may reflect any payments to Mr. Rosetta on a Form 1099 or W-2 as required by law.  Mr. Rosetta expressly acknowledges that in entering into this Agreement, no representations regarding taxability of the Additional Consideration or any such other payments and benefits have been made to him.  Mr. Rosetta shall be solely responsible for any and all tax liability with respect to the Additional Consideration and such other payments and benefits (except as to any amounts of tax withholding that KRC may actually withhold therefrom pursuant to applicable laws, rules and regulations).  

3.2    Mr. Rosetta shall indemnify and hold harmless KRC and the KRC Released Parties, as defined herein in Section 4.1, from any penalties, assessments, interest, or additional taxes imposed by, or as a result of, any final decision of a federal or state taxing authority with respect to the taxability of the Additional Consideration and such other payments and benefits.  Mr. Rosetta acknowledges and agrees that he has been advised to consult his own tax advisors with respect to the taxability of the payments provided for in Sections 1 and 2 herein.  

		
	4
	GENERAL RELEASE OF CLAIMS 

4.1    The term “KRC Released Parties” means and shall include Kilroy Realty Corporation and Kilroy Realty, L.P.; and/or any other entity, association, company, partnership, affiliate, business unit or division operated by, affiliated with, controlled by, or under common 

7

control with either one of the foregoing; and each of its or their current or former officers, directors, shareholders, investors, partners, representatives, members, employees (in their respective capacities as such, in their individual and personal capacities, and in any and all other capacities), servants, agents, managing agents, owners, partnerships, trustees, predecessors, successors, assigns, affiliates, parents, subsidiaries (whether or not wholly owned), and each of their predecessors, successors, assigns, affiliates, partnerships, parent corporations, subsidiaries (whether or not wholly owned); attorneys, administrators, insurers and reinsurers, accountants, and lenders; and all other related entities of any type, scope or existence, of each of the foregoing. 

4.2    The term “Rosetta Released Parties” means and shall include Mr. Rosetta, his heirs, executors, and representatives. 

4.3    The term “Released Claims” means and shall include any and all claims, actions, and causes of action, liens, debts, liabilities, demands, obligations, contracts or commitments, suits, debts, accounts, covenants, disputes, controversies, agreements, stock options agreements, promises, acts, costs and expenses (including without limitation attorneys’ fees and expert witness fees), damages and executions, of whatever kind or nature.  Without limitation, the term “Released Claims” includes any federal, state or local statutory, civil, common law or administrative claim, such as but not limited to claims under the California Fair Employment and Housing Act (FEHA) (Cal. Gov't Code section 12940 et seq.), Title VII of the 1964 Civil Rights Act, as amended (Title VII) (42 U.S.C. section 2000e et seq.), the Consolidated Omnibus Benefits Reconciliation Act of 1985 (COBRA) and any notices provided to Mr. Rosetta under COBRA, the Americans with Disabilities Act (ADA) (42 U.S.C. section 12101 et seq.), the Vocational Rehabilitation Act of 1973 (29 U.S.C. section 701, et seq.), the Employee Income Retirement Act (ERISA), 29 U.S.C. section 1001 et. seq., Section 132a of the California Workers' Compensation Act (Labor Code section 132a); claims under the California Labor Code (except with respect to workers’ compensation and unemployment compensation claims); claims for compensation including salary, discretionary cash bonus, Deferred Cash Payment, Unvested RSUs, Vested RSUs, each and any RSU Agreement, other equity or other awards, the Vested Cash Award, the Unvested Cash Award, fringe benefits, vacation, auto allowance, incentive pay or other employee benefits (except claims for California statutory unemployment insurance benefits); claims related to Mr. Rosetta’s separation from employment with KRC, and the termination of his employment and the timing thereof; any compensation from KRC, including commission or bonus, from any transaction relating to Kilroy Oyster Point in San Francisco, 9455 Towne Center Drive in San Diego or the prospective lease with Illumina the negotiations for which have terminated; “Earned Fees” as that term is referenced in the Termination Notice (provided that nothing stated herein is intended to release C&W from its obligations, if any, to Mr. Rosetta); attorneys' fees, costs, expenses and expert witness expenses, tort damages, personal injury damages, breach of implied or express contract, harassment, discrimination or retaliation on the basis of any statutorily protected class or at common law, failure to accommodate, failure to engage in an interactive process, wrongful termination in violation of public policy, breach of fiduciary duty, declaratory relief, injunctive relief, public policy breach, intentional or negligent infliction of emotional distress, breach of implied covenant of good faith and fair dealing, interference with contract, interference with prospective economic advantage, intentional or negligent misrepresentation, promissory fraud, fraud, conversion, defamation, libel, slander, invasion of privacy, disparagement of any kind or nature, malicious prosecution, or abuse of process, (whether express, implied in law or fact, oral 

8

or written), whether known or unknown, suspected or unsuspected, fixed or contingent, at law or in equity, which Mr. Rosetta ever had or held, now has or holds, or hereafter can, shall, or may have or hold at any time in the future, in any capacity, individually, or as a member of a class, collective or representative action, with respect to his employment with KRC or the termination thereof, the subject matter of this Agreement, or any other matters with, by or between KRC or any one of the KRC Released Parties and Mr. Rosetta at any time from the beginning of the World through the Effective Date of this Agreement. 

4.4    In consideration of the terms and provisions of the Agreement, Mr. Rosetta shall and does hereby and forever fully, finally and forever generally remise, release, waive and discharge KRC, the KRC Released Parties, and each of them, from any and all known or unknown, suspected or unsuspected, fixed or contingent, whether or not concealed or hidden, claims, rights, actions and causes of action, at law or in equity, including but not limited to the Released Claims, which Mr. Rosetta ever had or held, now has or holds, or hereafter can, shall, or may have or hold against KRC, the KRC Released Parties, or any one of them, based on any occurrences, transactions, events, acts, or omissions of any kind whatsoever from the beginning of the World through the Effective Date of the Agreement. 

4.5    In consideration of the terms and provisions of the Agreement, KRC and the KRC Released Parties shall and do hereby and forever fully, finally and forever generally remise, release, waive and discharge Mr. Rosetta, the Rosetta Released Parties, and each of them, from any and all known or unknown, suspected or unsuspected, fixed or contingent, whether or not concealed or hidden, claims, rights, actions and causes of action, at law or in equity, including but not limited to the Released Claims, which KRC or the KRC Released Parties ever had or held, now have or hold, or hereafter can, shall, or may have or hold against Mr. Rosetta, the Rosetta Released Parties, or any one of them, based on any occurrences, transactions, events, acts, or omissions of any kind whatsoever from the beginning of the World through the Effective Date of the Agreement. 

		
	5
	WAIVER OF SECTION 1542 RIGHTS

5.1    The parties hereby acknowledge and agree that each of them understands that the facts with respect to which the releases set forth herein are given may turn out to be different from the facts now known or believed to be true by each of them, and accepts and assumes the risk of the facts turning out to be different, and agrees that this Agreement shall remain in all respects effective and not subject to termination or rescission by virtue of such difference in facts.  The parties further acknowledge and agree that each of them has been informed of and understands the provision of California Civil Code section 1542 which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

9

5.2    Each of the parties expressly waives and relinquishes any and all rights and benefits under Section 1542 of the Civil Code of the State of California and under any statute, rule, or principle of common law or equity, of any jurisdiction, that is similar to Section 1542. 

		
	6
	SPECIAL ADEA WAIVER

6.1    Mr. Rosetta hereby releases and forever discharges KRC and the KRC Released Parties, and each of them, from any and all claims under the Age Discrimination in Employment Act (the ADEA), 29 U.S.C. § 621 et seq.  Mr. Rosetta hereby acknowledges that: (i) he fully understands the terms, conditions and provisions of this Agreement; (ii) this release specifically applies to any rights or claims he may have against KRC and the KRC Released Parties under the ADEA; (iii) this provision does not waive or purport to waive rights or claims under the ADEA that may arise from acts or events occurring after the date this waiver is executed; (iv) the consideration provided for in this Agreement is in addition to that which he is already entitled; (v) he has been advised of the right to consult with his own attorney of his choice prior to signing the Agreement; (vi) he has been given twenty-one (21) days within which to consider the settlement set forth in the Agreement prior to signing the Agreement; and (vii) he understands that he has seven (7) days following the date he signs the Agreement within which to revoke the Agreement (“Revocation Period”), and that this Agreement shall not become effective or enforceable until the Revocation Period has expired.  Should Mr. Rosetta decide to revoke the Agreement, he shall deliver a written notice of revocation within the specified time period to Pauline Hudson, Vice President, Human Resources, Kilroy Realty Corporation, at 12200 W. Olympic Blvd., Suite 200, Los Angeles, CA 90064.  

6.2    Mr. Rosetta understands that he may execute the Agreement before the expiration of the twenty-one (21) day notice period, and he acknowledges and agrees that should he do so, he knowingly and voluntarily waives the full twenty-one (21) day notice period.  
	
		
	MR. ROSETTA'S INITIALS 
	SAR

		
	7
	NO PENDING CLAIMS OR OTHER CHARGES

7.1    Mr. Rosetta represents and warrants that he has no claims or charges pending against KRC or the KRC Released Parties, or any one of them, with the California Labor Commissioner, the United States Department of Labor, the California Department of Fair Employment and Housing (DFEH), the United States Equal Employment Opportunity Commission (EEOC), or any other federal, state, or local governmental agency or in any civil court in any jurisdiction.  Except as expressly set forth below, Mr. Rosetta shall not file, or cause to be filed, any claims, suits or charges against KRC or the KRC Released Parties, or any one of them.

7.2    Should either party, or anyone acting in either party’s behalf or in concert with either party bring any demand, claim, suit, charge or process (“action”) against the other party or their respective Released Parties, based on the Released Claims, whether the action is brought in Mr. Rosetta’s individual capacity or in a representative capacity on behalf of Mr. Rosetta or others, or by KRC, or as agents of disclosed or undisclosed principals, such action shall be in breach of this Agreement and the aggrieved party will be entitled to any and all remedies provided for in 

10

Section 11.  Without limitation, the aggrieved party shall be entitled to recover its reasonable attorneys’ fees, costs and expenses (including expert witness fees and costs) as a measure of its damages.  Nothing stated herein shall preclude either party from filing an action to enforce the Agreement.  Nothing stated herein shall in any way preclude a party from seeking in arbitration to enforce the Agreement. 

7.3    Each of the parties represents and warrants that there has been no assignment or transfer of any Released Claims, or portion thereof, to any other person.  The party aggrieved by a violation of this Section shall be indemnified and defended by the other party, and shall be held harmless from and against any claims arising out of or related to any such prior assignment or transfer, or any such purported assignment or transfer, of any Released Claims or other matters released herein.  Each of the parties acknowledge and agree that nothing stated in the Agreement shall modify the Charter or Bylaws of KRC regarding any provision therein respecting indemnification of a former employee by the Company.

7.4    With respect to Mr. Rosetta’s right to enforce the Agreement and to cooperate with governmental agencies and personnel, nothing in the Agreement shall prohibit or interfere with Mr. Rosetta’s right to bring any action to enforce the terms of the Agreement or to file a charge with, cooperate with, or participate in an investigation or proceeding conducted by the United States Equal Employment Opportunity Commission, or other federal, state or local agency.  However, except where otherwise prohibited by law, the consideration provided to Mr. Rosetta in the Agreement shall be the sole relief provided to him for all claims he previously asserted or could have asserted.  Mr. Rosetta is not, and shall not be, entitled to recover, and he agrees to waive, any back pay, back benefits, front pay, damages for emotional distress, other actual or compensatory damages, punitive damages, interest, and other monetary benefits or other personal relief or recovery against KRC in connection with any such action, claim, charge or proceeding of any kind without regard to which entity or person has brought such claim, charge or proceeding, except for whistleblower or informant awards as set forth, below, in Section 7.5. 

7.5    Nothing in the Agreement prohibits Mr. Rosetta from reporting possible violations of federal, state or local law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or from making other disclosures that are protected under the whistleblower provisions of federal, state or local law or regulation.  Mr. Rosetta does not need the prior authorization or approval of any officer or employee of KRC to make any such reports or disclosures and he is not required to notify KRC that he has made such reports or disclosures.  Further, nothing in the Agreement prohibits or restricts Mr. Rosetta’s ability to share confidential company information regarding possible violations of the law with any federal, state or local government agency, and to accept monetary awards for providing information about violations of the law to any such agency (sometimes referred to as whistleblower awards or informant awards) under any whistleblower law, rule or program.

		
	8
	NO ADMISSION OF LIABILITY

KRC and Mr. Rosetta expressly acknowledge and agree that this Agreement represents a settlement of disputed rights and claims and that, by entering into the Agreement, neither KRC nor 

11

any one of the KRC Released Parties nor Mr. Rosetta admits or acknowledges the existence of any liability or wrongdoing, all such liability being specifically and expressly denied.  Mr. Rosetta represents and warrants that to the best of his knowledge, he has not breached any fiduciary duty to KRC, and that he has no knowledge of any transaction which has violated or may violate or conflict with KRC’s Code of Business Conduct and Ethics (the “Code of Conduct”), including any waivers of the Code of Conduct that have been granted for his benefit or, to his knowledge, for the benefit of any other directors or executive officers of KRC.

		
	9
	NON-DISPARAGEMENT

9.1    Mr. Rosetta acknowledges and agrees that he has held, and will continue to hold through the Separation Date a prominent leadership position of trust and confidence with KRC as an officer and fiduciary of KRC.  Mr. Rosetta specially acknowledges and agrees that his obligation of non-disparagement is a material term of the Agreement and condition for the payment of Additional Consideration under the terms set forth herein.  Accordingly, before or after the Separation Date, neither Mr. Rosetta nor KRC (through its authorized officers) shall take any action, directly, indirectly or through third parties (without limitation including their respective counsel), to disparage or defame the other in the community-at-large or in the media, including the Internet, Blogs, Social Media (such as Facebook, LinkedIn, Glassdoor and Twitter), or other Internet Access forum.  Nothing in this provision purports to prevent: (1) any party from giving testimony under oath or (2) complying with any applicable laws and regulations.  

9.2    KRC shall issue the statement regarding Mr. Rosetta’s departure from KRC which is attached hereto as Exhibit “A” and is incorporated herein by this reference as though set forth in full.  The press release shall be issued by KRC by no later than four (4) business days after the execution of the Agreement by both parties.  Until the press release is actually issued, Mr. Rosetta shall make no further statements regarding his departure from KRC, and once the press release is issued, he shall make statements only as provided in Section 10.4.  KRC shall have sole discretion to prepare and file any required 8-K or 10-Q report.

		
	10
	COMPLIANCE WITH CONFIDENTIALITY AGREEMENT AND CONFIDENTIALITY OF AGREEMENT 

10.1    The parties acknowledge and agree that the Confidentiality Agreement, which is fully executed by and between them, remains in full force and to the fullest extent provided by law.  Mr. Rosetta acknowledges and agrees that his agreement to undertake and abide by the continuing obligations of the Confidentiality Agreement was a material term of his employment and that such obligations continue to be material to KRC.  Any restrictive covenants applicable to Mr. Rosetta pursuant to the Agreement are in addition to, not in lieu of, the restrictive covenants set forth in the Confidentiality Agreement.  Mr. Rosetta represents and warrants that he has complied with his obligations under the Confidentiality Agreement, that the Confidentiality Agreement remains in full force and effect, and that he will not breach the Confidentiality Agreement.

10.2    As used throughout the Agreement, the term “Confidential Information” includes that which is defined by the Confidentiality Agreement, and as well for the avoidance of doubt, 

12

information, writings, communications or materials of any nature and in any form (including but not limited to that which is electronically or digitally created, generated, transmitted or stored; email and any attachments thereto; hard copies and drafts; pictures and video; or text messages and communications on any cellular device), which have not entered the public domain (except for that Confidential Information which may have entered the public domain by virtue of a breach of the provisions herein or through any wrongdoing by any other person) about the following: confidential, privileged, proprietary, and/or trade secret information, including but not limited to all or any part of any KRC customer or tenant lists and related customer or tenant information (including but not limited to existing and prospective customer or tenant contact information and customer or tenant needs, preferences, sales and similar data); information about KRC’s current and prospective tenants and the premises or properties they have leased or occupy, or may lease or occupy; leases and lessees; property assets; acquisition targets and/or buyers; currently identified or prospective strategic markets (including but not limited to Class A office, mixed use and Life Science); sales, advertising or marketing; development plan(s) or methods; strategic plans whether or not in development or finalized; broker contracts; customary course of KRC’s dealings with brokers, computer system and internet configurations; financial data including without limitation pricing, bid information; employee confidential personnel information, audit processes and information; insurance; designs, patterns, processes, procedures, formulas, blueprints, templates and product development or testing information; company-generated computer software and source and object codes; compilation of information; improvements or inventions; business plans (including prospective and existing acquisition, disposition or development plans); joint ventures or potential joint ventures currently known to KRC, communications with company counsel in connection with KRC legal matters (whether or not a civil action has been commenced); public relations; negotiation, litigation and/or settlement strategies of KRC in connection with any matter whatsoever; financial matters and record-keeping; banking relationships; methods, know-how, research techniques; patents and patent applications; inventions and improvements, whether patentable or not; KRC’s contracts; information about KRC’s relationships, dealings or contracts with its suppliers and/or vendors; confidential personal and personnel information about KRC’s former and current employees (including without limitation the circumstances of any former employee’s departure from the company) and their family members; and all other information of a confidential, privileged, proprietary, and/or trade secret nature.  

10.3    Mr. Rosetta and KRC acknowledge that in the course of his employment, Mr. Rosetta acquired knowledge of, or otherwise was privy to, Confidential Information, which he would not have had knowledge of, or otherwise have been privy to, but for employment with KRC.  In addition to all of the other covenants and undertakings set forth herein, and without limitation, Mr. Rosetta on behalf of himself and his attorneys, agents, representatives and assigns, or indirectly through any third party or anyone acting in concert with him, understands, acknowledges and agrees that he, his attorneys, agents, representatives and assigns, or any third party at his direction, has a continuing obligation after the Separation Date, not to take, appropriate, disclose, provide, publish, transmit or use Confidential Information in any manner whatsoever for any purpose or for any other person or entity including without limitation any competitor of KRC, or while he is employed by, or performing consulting services for, any other person or entity, and that he nor any third party at his direction has not done so prior to executing the Agreement, except as may be expressly provided for by federal, state or local laws. 

13

10.4    Mr. Rosetta acknowledges and agrees that the fact of the Agreement, the negotiations leading to the Agreement and its terms constitute confidential information of KRC for purposes of the Confidentiality Agreement.  As a limited and express exception to the restrictions of the Confidentiality Agreement as to such information regarding this Agreement, the parties agree that (i) Mr. Rosetta may make disclosures about this Agreement to his spouse, attorneys and accountants, and may make statements which are consistent with the statements in the press release and Section 9.2, above; and (ii) KRC may disclose the existence of an amicable agreement as reasonably needed in the ordinary course of business to employees and to the Board of Directors, and may disclose the Agreement as required by law (without limitation including in any anticipated 8-K or 10-Q filings). 

10.5    In the event that Mr. Rosetta shall have retained Confidential Information in the course and scope of his employment, he shall promptly return any such Confidential Information to KRC on the Separation Date.  Mr. Rosetta Further represents that he understands and agrees that the protections of Confidential Information continue post-employment without limitation, except as to any Confidential Information that, for any lawful reason, loses its status as “confidential.”

10.6    Mr. Rosetta agrees that he shall advise KRC promptly if he becomes aware of any attempt to cause Confidential Information to be disclosed.  The confidentiality obligations herein do not prohibit disclosure to the extent necessary to comply with a court order or subpoena or any other obligation imposed by law.  Should Mr. Rosetta receive a court order, subpoena or request from a government agency pertaining to information that reasonably appears to be Confidential Information, Mr. Rosetta agrees to promptly, and at least five (5) business days prior to any disclosure, notify KRC’s Corporate Counsel of such request and transmit to KRC a copy of the court order, subpoena, or government request.

10.7    Further, the parties represent and agree that this Agreement is intended to fully comply with the Defend Trade Secrets Act of 2016.  Accordingly, Mr. Rosetta acknowledges and understands the following: 

(a)    An individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. 
(b)    Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

		
	11
	REMEDY FOR BREACH OF AGREEMENT

11.1    Any remedy for any threatened breach or breach provided for in the Agreement, and any remedy at law or in equity including without limitation damages and/or a temporary 

14

restraining order and/or a preliminary or permanent injunction for the purpose of restraining the other party from engaging in prohibited activities or providing such other relief as may be required to specifically enforce the terms of this Agreement, may be pursued in arbitration by or for the benefit of either party or any of their respective Released Parties, and nothing stated herein shall restrict in any way such remedies.  KRC shall be entitled, as the prevailing party, to recover the sums paid to Mr. Rosetta provided for in Section 2.1.1, except for the sum of One Hundred Fifty Thousand Dollars ($150,000.00), which sum shall be retained as consideration for the releases herein, and nothing stated herein shall restrict the remedy provided for in Section 2.1.3.

11.2    All remedies expressly provided for in the Agreement are in addition to any and all other remedies existing at contract, law or in equity.  Resort to any remedy provided for in the Agreement or the Confidentiality Agreement, or provided for by contract, law or in equity, will not prevent concurrent or subsequent award of other appropriate remedies or preclude a recovery of monetary damages and other compensation or restitution.  The prevailing party shall be entitled to recover its reasonable attorneys’ fees, costs and expenses (including the fees of experts or expert witnesses).

11.3    The parties agree that any action, dispute, controversy or claim (collectively, “Dispute”) arising out of or in any way relating to this Agreement or to the Confidentiality Agreement, or to the breach or threatened breach thereof, or to any other matters between the parties including without limitation the pursuit of relief under Section 2.1.3 or Section 11, or Mr. Rosetta’s employment with KRC, shall be resolved to the fullest extent permitted by law by final and binding arbitration administered by JAMS before a single neutral arbitrator.  The arbitration will be conducted pursuant to the Employment Arbitration Rules & Procedures and subject to the JAMS Policy on Employment Arbitration Minimum Standards of Procedural Fairness.  The rules may be accessed at: https://www.jamsadr.com/rules-employment-arbitration/english.  Under these rules, the parties acknowledge and agree that (a) the prevailing party may recover any and all damages and other relief under contract, at law or in equity, that would otherwise be available at law or in equity including without limitation the relief provided for in Section 2.1.3 or Section 11, herein; (b) each party is entitled to discovery sufficient to adequately arbitrate the Dispute, including access to essential documents and witnesses; (c) KRC shall pay the entire cost of the arbitrator and the arbitration forum costs; (d) the arbitrator must issue a written decision stating the essential findings and conclusions on which the award is based, and sufficient to allow for judicial review to the fullest extent permitted by law including for legal error; and (e) except as required for judicial review or in response to court order, any and all proceedings shall be maintained in the strictest confidence by the parties and their representatives, the arbitrator and any other participants in the arbitration proceedings.  Each of the parties hereby consent to the jurisdiction of the arbitrator and to JAMS to administer the arbitration, and to submit to said jurisdiction.  Accordingly, the parties waive their respective rights to a jury trial.  The parties agree that this Section 11 amends, in relevant part, the Confidentiality Agreement, as it provides for binding arbitration.  However, for the avoidance of doubt, the venue of the arbitration, and as set forth in the Confidentiality Agreement, shall remain in the County of Los Angeles.  The parties agree that this Arbitration Agreement shall be governed by California Civil Procedure Code section 1280 et seq. and the Federal Arbitration Act, 9 U.S.C. section 1, et. seq.

15

		
	12
	INTEGRATED AGREEMENT

This Agreement, along with the previously executed Confidentiality Agreement and Indemnification Agreement, dated April 30, 2018, constitute an integrated written contract expressing the entire agreement between KRC and Mr. Rosetta as to its subject matter.  All prior and contemporaneous discussions, negotiations and writings have been and are merged with and integrated into, and are superseded by, this Agreement.  No representations, promises, agreements or understandings, written or oral, not contained herein shall be of any force or effect.  The Agreement cannot be modified except by a writing executed by the Parties hereto.  Nothing stated herein shall amend or change any provision of the Confidentiality Agreement which remains in full force and effect and are fully enforceable.
		
	13
	SEVERABILITY

If any provision (or portion thereof) of this Agreement is declared by an arbitrator or court of competent jurisdiction to be invalid or unenforceable, the remaining provisions (including other portions of a provision having an invalid portion) shall remain in full force and effect and, to the extent possible, the disputed provision shall be construed so that it may be valid and enforceable.

		
	14
	WAIVER

No failure or delay in exercising any right, power or privilege in respect of this Agreement shall act as a waiver to a later demand for full and complete performance.

		
	15
	GOVERNING LAW; CONSTRUCTION

Construction and interpretation of this Agreement shall at all times and in all respects be governed by the laws of the State of California, without regard to the rules or principles of conflicts or choice of law that might look to any jurisdiction outside of California. 

		
	16
	MISCELLANEOUS TERMS

KRC and Mr. Rosetta each represent, warrant and agree as follows: 

16.1    Each of the parties has received, or has been given the opportunity to receive, prior independent legal advice from legal counsel and tax advisors of their choice with respect to the advisability of entering into this Agreement, and the taxability of any payments set forth herein, and therefore no ambiguity shall be resolved against any party by virtue of having participated in the drafting of this Agreement. 
16.2    Each of the parties represents that each has read this Agreement carefully, knows and understands its contents, and has investigated the facts pertaining to this Agreement to the extent that each deems necessary or desirable. 
16.3    The section headings and titles contained in this Agreement are inserted for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation of this Agreement.  Where the context requires, the singular shall 

16

include the plural, the plural shall include the singular, and any gender shall include all other genders and the neutral.  Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. 
16.4    This Agreement is personal to Mr. Rosetta and shall not be assignable by Mr. Rosetta except by operation of law, provided that upon Mr. Rosetta’s death, to the extent not yet paid or provided, the payments and benefits set forth in Sections 1 and 2 shall inure to the benefit of Mr. Rosetta’s heirs.  This Agreement shall inure to the benefit of and be binding upon KRC and its respective successors and assigns and any such successor or assignee shall be deemed substituted for KRC under the terms of this Agreement for all purposes.  As used herein, “successor” and “assignee” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires ownership of KRC or to which KRC assigns this Agreement by operation of law or otherwise. 
16.5    KRC and Mr. Rosetta shall each bear their own attorneys’ fees, costs, and expenses incurred with respect to the drafting, negotiation or execution of this Agreement. 
16.6    This Agreement may be executed in counter-parts, facsimile signatures shall be accepted as if they were originals, and there shall be a duplicate original provided for each signatory party.
		
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	EFFECTIVE DATE OF AGREEMENT

The Effective Date of the Agreement (the “Effective Date”) shall be the eighth day after the date on which Mr. Rosetta shall have executed the Agreement, provided that the Revocation Period shall have expired and Mr. Rosetta shall not have revoked the Agreement within the Revocation Period pursuant to Section 6, above; and provided further that the Agreement shall not be binding on the parties until KRC shall have delivered a fully-executed copy of the Agreement.

[Signatures Follow Next Page]

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IN WITNESS WHEREOF, this Agreement has been duly executed by KRC and Mr. Rosetta.  

	
			
	Dated: August 26, 2019
	 
	/s/ STEVEN A. ROSETTA

	 
	 
	STEVEN A . ROSETTA

	
			
	 
	KILROY REALTY CORPORATION

	 
	a Maryland Corporation

	 
	 
	 

	Dated: August 26, 2019
	By:
	/s/ Jeffrey C. Hawken

	 
	 
	Name: Jeffrey C. Hawken
Title: Executive Vice President and Chief Operating Officer

	 
	 
	 

	Dated: August 26, 2019
	By:
	/s/ Heidi R. Roth

	 
	 
	Name: Heidi R. Roth
Title: Executive Vice President and Chief Administrative Officer

	
			
	 
	KILROY REALTY, L.P.,

	 
	a Delaware limited partnership

	 
	 

	 
	By:
	KILROY REALTY CORPORATION,

	 
	 
	a Maryland Corporation,

	 
	Its:
	General Partner

	 
	 
	 

	Dated: August 26, 2019
	By:
	/s/ Jeffrey C. Hawken

	 
	 
	Name: Jeffrey C. Hawken
Title: Executive Vice President and Chief Operating Officer

	 
	 
	 

	Dated: August 26, 2019
	By:
	/s/ Heidi R. Roth

	 
	 
	Name: Heidi R. Roth
Title: Executive Vice President and Chief Administrative Officer

[Signature Page to the Confidential Separation Agreement and Release of Claims 
for Stephen A. Rosetta]

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