Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made
this 27th day
of October, 2010, by Walker & Dunlop, Inc., a Maryland
corporation (the “Company”) with its principal place of business at 7501
Wisconsin Avenue, Suite 1200, Bethesda, MD 20814, and William M. Walker,
residing at  the address on file with the
Company (the “Executive”).

 

WHEREAS, the parties desire to enter into this
Agreement to reflect the Executive’s executive capacities in the Company’s
business and to provide for the Company’s employment of the Executive; and

 

WHEREAS, the parties wish to set forth the terms
and conditions of that employment;

 

NOW THEREFORE, in consideration of the mutual
covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:

 

1.                                      Term of Employment

 

The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement. 
Unless terminated earlier pursuant to Section 5, the Executive’s
employment pursuant to this Agreement shall be for the three (3) year
period commencing on the date of effectiveness of the Company’s registration
statement on Form S-1 (the “Commencement Date”) and ending on the third
anniversary of the Commencement Date (the “Initial Term”).  The Initial Term shall be extended for an
additional twelve (12) months on the third and each subsequent anniversary of
the Commencement Date unless the Company or the Executive provides written
notice to the contrary at least sixty (60) days before the applicable
anniversary of the Commencement Date. 
The Initial Term, together with any such extensions, shall be referred
to herein as the “Employment Period.” In the event that the Board of Directors
of the Company (the “Board of Directors”) determines that active efforts to
complete the closing of the initial public offering have been abandoned, this
Agreement shall become null and void.

 

2.                                      Title; Duties

 

The Executive shall be employed as Chairman,
President and Chief Executive Officer of the Company.  The Executive shall report to the Board of
Directors, who shall have the authority to direct, control and supervise the
activities of the Executive.  The
Executive shall perform such services consistent with his position as may be
assigned to him from time to time by the Board of Directors and are consistent
with the bylaws of the Company as it may be amended from time to time,
including, but not limited to, managing the affairs of the Company.

 

3.                                      Extent of Services

 

(a)                                  General.  The Executive agrees not to engage in any
business activities during the Employment Period except those which are for the
sole benefit of the Company and its subsidiaries, and to devote his entire
business time, attention, skill and 

 

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effort
to the performance of his duties under this Agreement.  Notwithstanding the foregoing, the Executive
may, without impairing or otherwise adversely affecting the Executive’s
performance of his duties to the Company, (i) engage in personal
investments and charitable, professional and civic activities, and (ii) with
the prior approval of the Board of Directors, serve on the boards of directors
of corporations other than the Company, provided, however, that no such
approval shall be necessary for the Executive’s continued service on any board
of directors on which he was serving on the date of this Agreement, all of
which have been previously disclosed to the Board of Directors in writing and
provided further, that in no event shall the Executive be permitted to serve on
the board of directors of any other entity that competes with the Company in
the multifamily finance business.  The
Executive shall perform his duties to the best of his ability, shall adhere to
the Company’s published policies and procedures, and shall use his best efforts
to promote the Company’s interests, reputation, business and welfare.

 

(b)                                 Corporate Opportunities.  The Executive agrees that he will not take
personal advantage of any business opportunities which arise during his
employment with the Company and which may be of benefit to the Company.  All material facts regarding such opportunities
must be promptly reported by the Executive to the Board of Directors for
consideration by the Company.

 

4.                                      Compensation and Benefits

 

(a)                                  Salary.  The Company shall pay the Executive a gross
base annual salary (“Base Salary”) of $500,000.00.  The Base Salary shall be payable in arrears in
approximately equal semi-monthly installments (except that the first and last
such semi-monthly installments may be prorated if necessary) on the Company’s
regularly scheduled payroll dates, minus such deductions as may be required by
law or reasonably requested by the Executive. 
The Company’s Compensation Committee (the “Compensation Committee”)
shall review his Base Salary annually in conjunction with its regular review of
employee salaries and may increase (but not decrease) his Base Salary as in
effect from time to time as the Compensation Committee shall deem appropriate.

 

(b)                                 Annual Bonus. Executive shall be
entitled to earn bonuses with respect to each fiscal year (or partial fiscal
year), based upon Executive’s and the Company’s achievement of performance
objectives set by the Company within the first three (3) months of each
fiscal year of the Employment Period, with a target bonus of 100% of Executive’s
Base Salary for such fiscal year (or partial fiscal year).  Any such bonus earned by the Executive shall
be paid annually by March 15 of the year following the end of the year for
which the bonus was earned.

 

(c)                                  Options and Restricted Stock Grants.  The Executive will be eligible for grants of
options to purchase the Company’s common stock and grants of restricted shares
of the Company’s common stock subject to certain time vesting requirements and
other conditions set forth in the applicable award agreement.

 

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(d)                                 Other Benefits.  The Executive shall be entitled to paid time
off and holiday pay in accordance with the Company’s policies in effect from
time to time and shall be eligible to participate in such life, health, and
disability insurance, pension, deferred compensation and incentive plans,
options and awards, performance bonuses and other benefits as the Company
extends, as a matter of policy, to its executive employees.  Incentive compensation under the Company’s
2008, 2009 and 2010 long term incentive arrangements are independent of the
annual bonuses and will be governed under the terms of those arrangements.

 

(e)                                  Reimbursement of Business Expenses.  The Company shall reimburse the Executive for
all reasonable travel, entertainment and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation by the
Executive of documentation, expense statements, vouchers, and/or such other
supporting information as the Company may reasonably request.

 

(f)                                Timing of Reimbursements.  Any reimbursement under this Agreement that
is taxable to the Executive shall be made in no event later than sixty (60)
days following the calendar year in which the Executive incurred the expense.

 

5.                                      Termination

 

(a)                                  Termination by the Company for Cause.  The Company may terminate the Executive’s
employment under this Agreement at any time for Cause, upon written notice by
the Company to the Executive.  For purposes
of this Agreement, “Cause” for termination shall mean any of the following: (i) the
conviction of the Executive of, or the entry of a plea of guilty or nolo
contendere by the Executive to, any felony; (ii) fraud, misappropriation
or embezzlement by the Executive; (iii) the Executive’s willful failure or
gross negligence in the performance of his assigned duties for the Company,
which failure or negligence continues for more than fifteen (15) calendar days
following the Executive’s receipt of written notice of such willful failure or
gross negligence; (iv) the Executive’s breach of any of his fiduciary
duties to the Company; (v) a material violation of a material Company
policy which, if such violation is curable, such failure is not cured within
fifteen (15) calendar days following the Executive’s receipt of written notice
of such failure, with such detail as 
sufficient to apprise Executive of the nature and extent of such
failure; or (vi) the material breach by the Executive of any material term
of this Agreement, which, if such breach is curable, such breach is not cured
within fifteen (15) calendar days following the Executive’s receipt of written
notice of such breach, with such detail as sufficient to apprise Executive of
the nature and extent of such breach.

 

(b)                                 Termination by the Company Without Cause or by the Executive Without
Good Reason.  Either party may terminate this Agreement at
any time without Cause (in the case of the Company) or without Good Reason (in
the case of the Executive), upon giving the other party sixty (60) days’
written notice.  At the Company’s sole 

 

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discretion,
it may substitute sixty (60) days’ Base Salary (or any lesser portion for any
shortened period provided) in lieu of notice. 
Any Base Salary paid to the Executive in lieu of notice shall not be
offset against any entitlement the Executive may have to the Severance Payment
pursuant to Section 6(c).  For
purposes of this Agreement, in the event the Company elects not to extend the
Employment Period in accordance with Section 1 hereof, Executive’s
employment shall terminate on the last day of the Employment Period and such
election shall be deemed a termination by the Company without Cause.

 

(c)                                  Termination by Executive for Good Reason.  The Executive may terminate his employment
under this Agreement at any time for Good Reason, upon written notice by the
Executive to the Company.  For purposes
of this Agreement, Good Reason for termination shall mean, without the Executive’s
consent: (i) the assignment to the Executive of substantial duties or
responsibilities inconsistent with the Executive’s position at the Company, or
any other action by the Company which results in a substantial diminution of
the Executive’s duties or responsibilities other than any such reduction which
is remedied by the Company within thirty (30) days of receipt of written notice
thereof from the Executive; (ii) a requirement that the Executive work
principally from a location that is twenty (20) miles further from the
Executive’s residence than the Company’s address first written above; (iii) a
ten (10) percent or greater reduction in the Executive’s aggregate Base
Salary and other compensation (including the target bonus amount and retirement
plan, welfare plans and fringe benefits) taken as a whole, excluding any
reductions caused by the failure to achieve performance targets; or (iv) any
material breach by the Company of this Agreement.  Good Reason shall not exist pursuant to any
subsection of this Section 5(c) unless (A) the Executive shall
have delivered notice to the Board within ninety (90) days of the occurrence of
such event constituting Good Reason, and (B) the Board fails to remedy the
circumstances giving rise to the Executive’s notice within thirty (30) days of
receipt of notice.  The Executive must
terminate his employment under this Section 5(c) at a time agreed
reasonably with the Company, but in any event within one hundred fifty (150)
days  from the occurrence of an event
constituting Good Reason.  For purposes
of Good Reason, the Company shall be defined to include any successor to the
Company which has assumed the obligations of the Company through merger,
acquisition, stock purchase, asset purchase or otherwise.

 

(d)                                 Executive’s Death or Disability.  The Executive’s employment shall terminate
immediately upon his death or, upon written notice as set forth below, his
Disability.  As used in this Agreement, “Disability”
shall mean such physical or mental impairment as would render the Executive
unable to perform each of the essential duties of the Executive’s position by
reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a
continuous period of not less than twelve (12) months.  If the Employment Period is terminated by
reason of the Executive’s 

 

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Disability, either party
shall give thirty (30) days’ advance written notice to that effect to the
other.

 

(e)                                  Executive’s Retirement.  The Executive’s employment shall terminate
upon his Retirement.  As used in this
Agreement, “Retirement” shall mean the point in which the Executive has reached
the age of sixty five (65) and has decided to exit the workforce
completely.  If the Employment Period is
terminated by reason of the Executive’s Retirement, the Executive shall give
one hundred eighty (180) days’ advance notice to the effect to the Company.

 

6.                                      Effect of Termination

 

(a)                                  General.  Regardless of the reason for any termination
of this Agreement and subject to this Section 6, the Executive (or the
Executive’s estate if the Employment Period ends on account of the Executive’s
death) shall be entitled to (i) payment of any unpaid portion of his Base Salary
through the effective date of termination; (ii) reimbursement for any
outstanding reasonable business expense he has incurred in performing his
duties hereunder in accordance with Company policy; (iii) continued
insurance benefits to the extent required by law; (iv) payment of any
vested but unpaid rights as required independent of this Agreement by the terms
of any bonus or other incentive pay or equity plan, or any other employee
benefit plan or program of the Company; and (v) except in the case of
Termination by the Company for Cause, any bonus or incentive compensation
amount that had been accrued through the effective date of termination but not
paid.  Upon termination of this Agreement
for any reason, the Executive shall resign from all boards and committees of
the Company, its affiliates and its subsidiaries.

 

(b)                                 Termination by the Company for Cause or by Executive Without Good Reason.  If the Company terminates the
Executive’s employment for Cause or the Executive terminates his employment without
Good Reason, the Executive shall have no rights or claims against the Company
except to receive the payments and benefits described in Section 6(a).

 

(c)                                  Termination by the Company Without Cause or by the Executive with Good
Reason.  If
the Company terminates the Executive’s employment without Cause pursuant to Section 5(b),
or the Executive terminates employment with Good Reason pursuant to Section 5(c),
the Executive shall be entitled to receive, in addition to the items referenced
in Section 6(a) (other than any bonus or incentive compensation as to
which a pro rata amount shall be paid only to the extent performance goals for
the calendar year of termination are achieved), the following:

 

(i)                                     continued payment of his Base Salary, at the
rate in effect on his last day of employment (but in no event in an annual
amount less than as set forth 

 

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in Section 4(a)), for a period of twelve (12)
months.  Such amount shall be paid in
approximately equal installments on the Company’s regularly scheduled payroll
dates, subject to all legally required payroll deductions and withholdings for
sums owed by the Executive to the Company;

 

(ii)                                  continued payment by the Company for the
Executive’s life and health insurance coverage for twelve (12) months to the
same extent that the Company paid for such coverage immediately prior to the
termination of the Executive’s employment and subject to the eligibility
requirements and other terms and conditions of such insurance coverage;

 

(iii)                               payments equal to two (2) times the
average annual bonus earned by the Executive over the two (2) preceding
calendar years (or if the Executive has not been employed for two (2) prior
calendar years, payments equal to two (2) times the Executive’s target
bonus for the year of termination).  For
example: if the Executive’s annual bonus over the preceding two (2) years
was $300,000 and $0, the average would be $150,000 and the payments would equal
$300,000.  An amount equal to the average
annual bonus (or target bonus, as applicable), and the pro rata bonus for the
year of termination, if any, payable under Section 6(a) shall be paid
to the Executive within sixty (60) days following the end of the fiscal year in
which such termination occurs and an amount equal to the average annual bonus,
if any (or target bonus, as applicable) shall be paid to the Executive within
ten (10) days after the end of the Restricted Period; and

 

(iv)                              vesting as of the last day of his employment
in any unvested portion of any option and restricted stock previously granted
to the Executive by the Company.

 

None
of the benefits described in this Section 6(c) (the “Severance
Payment”) will be payable unless the Executive has signed a general release
(attached hereto as Exhibit A) within forty five (45) days of date
of termination, which has (and not until it has) become irrevocable,
satisfactory to the Company in the reasonable exercise of its discretion,
releasing the Company, its affiliates, and their Directors, officers and
employees, from any and all claims or potential claims arising from or related
to the Executive’s employment or termination of employment.

 

(d)                                 Termination In the Event of Death, Disability or Retirement.

 

In the event of a termination of employment due to
death, disability or Retirement, the Executive shall be entitled to receive the
items referenced in Section 6(a) (except, in the case of a
termination due to Retirement, any bonus or incentive compensation, as to which
a pro rata amount shall be paid only to the extent performance goals for the
calendar year of termination are achieved and which 

 

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amount, if any, shall be paid to the Executive
within sixty (60) days following the end of the fiscal year in which such
termination occurs).

 

(i)                                     If the Executive’s employment terminates
because of his death, any unvested portion of any option and restricted stock
previously granted to the Executive by the Company shall become fully vested as
of the date of his death.  In addition,
the Executive’s estate shall be entitled to receive a pro-rata share of any
performance bonus to which he otherwise would have been entitled for the fiscal
year in which his death occurs.

 

(ii)                                  In the event the Executive’s employment
terminates due to his Disability, he shall be entitled to receive his Base
Salary through the effective date of termination.  In addition, as of the effective date of the
termination notice specified in Section 5(d), the Executive shall vest in
any unvested portion of any option and restricted stock previously granted to
the Executive by the Company and the Executive shall be entitled to receive a
pro-rata share of any performance bonus to which he otherwise would have been
entitled for the fiscal year in which his disability occurs.

 

(iii)                               In the event the Executive’s employment
terminates due to his Retirement, any unvested portion of any option and
restricted stock previously granted to the Executive by the Company shall
become fully vested as of the date of his termination.

 

7.                                      Confidentiality

 

(a)                                  Definition of Proprietary Information.  The Executive acknowledges that he may be
furnished or may otherwise receive or have access to confidential information
which relates to the Company’s past, present or future business activities,
strategies, services or products, research and development; financial analysis
and data; improvements, inventions, processes, techniques, designs or other
technical data; profit margins and other financial information; fee arrangements;
compilations for marketing or development; confidential personnel and payroll
information; or other information regarding administrative, management, or
financial activities of the Company, or of a third party which provided
proprietary information to the Company on a confidential basis.  All such information, including in any
electronic form, and including any materials or documents containing such
information, shall be considered by the Company and the Executive as
proprietary and confidential (the “Proprietary Information”).

 

(b)                                 Exclusions.  Notwithstanding the foregoing, Proprietary
Information shall not include information in the public domain not as a result
of a breach of any duty by the Executive or any other person.

 

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(c)                                  Obligations.  Both during and after the Employment Period,
the Executive agrees to preserve and protect the confidentiality of the
Proprietary Information and all physical forms thereof, whether disclosed to
him before this Agreement is signed or afterward.  In addition, the Executive shall not (i) disclose
or disseminate the Proprietary Information to any third party, including
employees of the Company (or its affiliates) without a legitimate business need
to know during the Employment Period; (ii) remove the Proprietary
Information from the Company’s premises without a valid business purpose; or (iii) use
the Proprietary Information for his own benefit or for the benefit of any third
party.

 

(d)                                 Return of Proprietary Information.  The Executive acknowledges and agrees that
all the Proprietary Information used or generated during the course of working
for the Company is the property of the Company. 
The Executive agrees to deliver to the Company all documents and other
tangibles containing the Proprietary Information at any time upon request by
the Board of Directors during his employment and immediately upon termination
of his employment.

 

8.                                      Noncompetition

 

(a)                                  Restriction on Competition.  For the period of the Executive’s employment
with the Company and for twelve (12) months following the expiration or
termination of the Executive’s employment by the Company (the “Restricted
Period”), the Executive agrees not to engage, directly or indirectly, as a
manager, employee, consultant, partner, principal, agent, representative, or in
any other individual or representative capacity in any material business that
the Company conducts as of the date of the Executive’s termination of
employment, including but not limited to the multifamily finance business,
where material is defined as fifteen (15) percent of the gross revenues of the
Company based on the most recent quarterly earnings.  Executive further agrees that for the period
of the Executive’s employment with the Company and for the Restricted Period,
the Executive will not engage, directly or indirectly, as an owner, director,
trustee, member, stockholder, or in any other corporate capacity in any
material business that the Company conducts as of the date of the Executive’s
termination of employment. 
Notwithstanding the foregoing, the Executive shall not be deemed to have
violated this Section 8(a) solely (i) by reason of his passive
ownership of 1% or less of the outstanding stock of any publicly traded
corporation or other entity, (ii) by providing legal, accounting or audit
services as an employee or partner of a professional services organization or (iii) by
providing services to any investment banking or other institution that do not
relate to any material business that the Company conducts as of the date of the
Executive’s termination of employment.

 

(b)                                 Non-Solicitation of Clients.  During the Restricted Period, the Executive
agrees not to solicit, directly or indirectly, on his own behalf or on behalf
of any other person(s), any client of the Company to whom the Company had
provided services at any time during the Executive’s employment with the
Company in any line of business that the Company conducts as of the date of the
Executive’s 

 

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termination
of employment or that the Company is actively soliciting, for the purpose of
marketing or providing any service competitive with any service then offered by
the Company.

 

(c)                                  Non-Solicitation of Employees.  During the Restricted Period, the Executive
agrees that he will not, directly or indirectly, hire or attempt to hire or
cause any business, other than an affiliate of the Company, to hire any person
who is then or was at any time during the preceding six (6) months an
employee of the Company and who is at the time of such hire or attempted hire,
or was at the date of such employee’s separation from the Company a vice
president, senior vice president or executive vice president or other senior
executive employee of the Company.

 

(d)                                 Acknowledgement.  The Executive acknowledges that he will
acquire much Proprietary Information concerning the past, present and future
business of the Company as the result of his employment, as well as access to
the relationships between the Company and its clients and employees.  The Executive further acknowledges that the
business of the Company is very competitive and that competition by him in that
business during his employment, or after his employment terminates, would
severely injure the Company.  The
Executive understands and agrees that the restrictions contained in this Section 8
are reasonable and are required for the Company’s legitimate protection, and do
not unduly limit his ability to earn a livelihood.

 

(e)                                  Rights and Remedies upon Breach.  The Executive acknowledges and agrees that
any breach by him of any of the provisions of Sections 7 and 8 (the “Restrictive
Covenants”) would result in irreparable injury and damage for which money
damages would not provide an adequate remedy. 
Therefore, if the Executive breaches, or threatens to commit a breach
of, any of the provisions of the Restrictive Covenants, the Company and its
affiliates, including the Company, shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company and its affiliates, including the Company, under law or in equity
(including, without limitation, the recovery of damages):

 

(i)                                     The right and remedy to have the Restrictive
Covenants specifically enforced (without posting bond and without the need to
prove damages) by any court of competent jurisdiction, including, without
limitation, the right to an entry against the Executive of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants; and

 

(ii)                                  The right and remedy to require the Executive
to account for and pay over to the Company and its affiliates all compensation,
profits, monies, accruals, increments or other benefits (collectively, “Benefits”)
derived or 

 

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received by him as the result of any transactions
constituting a breach of the Restrictive Covenants, and the Executive shall
account for and pay over such Benefits to the Company and, if applicable, its
affected affiliates.

 

(f)                                    Without limiting Section 13(j), if any court or other
decision-maker of competent jurisdiction determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
geographical scope of such provision, then, after such determination has become
final and unappealable, the duration or scope of such provision, as the case
may be, shall be reduced so that such provision becomes enforceable and, in its
reduced form, such provision shall then be enforceable and shall be enforced.

 

9.                                      Executive Representation

 

The Executive represents and warrants to the
Company that he is not now under any obligation of a contractual or other
nature to any person, business or other entity which is inconsistent or in
conflict with this Agreement or which would prevent him from performing his
obligations under this Agreement.

 

10.                               Mediation and Arbitration

 

(a)                                  Except as provided in Section 10(b) and 10(c), any disputes
between the Company and the Executive in any way concerning the Executive’s
employment, the termination of his employment, this Agreement or its
enforcement shall be subject to mediation. 
If the Company and the Executive
cannot agree upon a mediator, each shall select one name from a list of
mediators maintained by any bona fide dispute resolution provider or other
private mediator; the two selected shall then choose a third person who will
serve as the sole mediator. The first mediation session shall occur within
forty five (45) calendar days following the notice of a dispute.  If within sixty (60) days of the first
mediation session the claim is not resolved, either party may request that the
dispute be settled exclusively by arbitration in the state of Maryland
by a single arbitrator, selected in the same manner as the mediator, in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association in effect at the time of
submission to arbitration.  Judgment may
be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an
award rendered by the arbitrators, any or all of the following courts have
jurisdiction:  (i) the United States
District Court for the Fourth Circuit, (ii) any of the courts of the State
of Maryland, or (iii) any other court having jurisdiction.  Any service of process or notice requirements
in any such proceeding shall be satisfied if the rules of such court
relating thereto have been substantially satisfied.  The Company and the Executive waive to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to such jurisdiction and any defense of inconvenient forum.  A judgment upon an award rendered by the
arbitrators may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. 
Each party shall

 

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bear
its or his costs and expenses arising in connection with any arbitration
proceeding.

 

(b)                                 Notwithstanding the foregoing, the Company, in its sole discretion, may
bring an action in any court of competent jurisdiction to seek injunctive
relief and such other relief as the Company shall elect to enforce the
Restrictive Covenants.  If the courts of
any one or more of such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of breadth of scope or otherwise it is the intention of
the Company and the Executive that such determination not bar or in any way
affect the Company’s right, or the right of any of its affiliates, to the
relief provided in Section 8(e) above in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable, diverse and independent covenants, subject, where
appropriate, to the doctrine of res judicata. 
The parties hereby agree to waive any right to a trial by jury for any
and all disputes hereunder (whether or not relating to the Restrictive
Covenants).

 

(c)                                  Notwithstanding the foregoing, the Company or the Executive may bring an
action in any court of competent jurisdiction to resolve any dispute under or
seek the enforcement of Section 6.

 

11.                               Section 409A.

 

To the extent the Executive would be subject to the
additional twenty (20) percent tax imposed on certain deferred compensation
arrangements pursuant to Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), as a result of any provision of this Agreement,
such provision shall be deemed amended to the minimum extent necessary to avoid
application of such tax and preserve to the maximum extent possible the
original intent and economic benefit to the Executive and the Company, and the
parties shall promptly execute any amendment reasonably necessary to implement
this Section 11.

 

(a)                                  For purposes of Section 409A, the Executive’s right to receive
installment payments pursuant to this Agreement including, without limitation,
each severance payment and health insurance payment shall be treated as a right
to receive a series of separate and distinct payments.

 

(b)                                 The Executive will be deemed to have a date of termination for purposes
of determining the timing of any payments or benefits hereunder that are
classified as deferred compensation only upon a “separation from service” within
the meaning of Section 409A

 

(c)                                  Notwithstanding any other provision of this Agreement to the contrary,
if at the time of the Executive’s separation from service, (i) the
Executive is a specified employee (within the meaning of Section 409A and
using the identification methodology selected by the Company from time to
time), and (ii) the Company 

 

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makes a good faith determination that an amount
payable on account of such separation from service to the Executive constitutes
deferred compensation (within the meaning of Section 409A) the payment of
which is required to be delayed pursuant to the six (6) month delay rule set
forth in Section 409A in order to avoid taxes or penalties under Section 409A
(the “Delay Period”), then the Company will not pay such amount on the
otherwise scheduled payment date but will instead pay it in a lump sum on the
first business day after such six (6) month period (or upon the Executive’s
death, if earlier), together with interest for the period of delay, compounded
annually, equal to the prime rate (as published in the Wall Street Journal) in
effect as of the dates the payments should otherwise have been provided.   To the extent that any benefits to be
provided during the Delay Period are considered deferred compensation under Section 409A
provided on account of a “separation from service,” and such benefits are not
otherwise exempt from Section 409A, the Executive shall pay the cost of
such benefit during the Delay Period, and the Company shall reimburse the
Executive, to the extent that such costs would otherwise have been paid by the
Company or to the extent that such benefits would otherwise have been provided
by the Company at no cost to the Executive, the Company’s share of the cost of
such benefits upon expiration of the Delay Period, and any remaining benefits
shall be reimbursed or provided by the Company in accordance with the
procedures specified herein.

 

(d)                                 (A) Any amount that the Executive is entitled to be reimbursed
under this Agreement will be reimbursed to the Executive as promptly as
practical and in any event not later than the last day of the calendar year
after the calendar year in which the expenses are incurred, (B) any right
to reimbursement or in kind benefits will not be subject to liquidation or
exchange for another benefit, and (C) the amount of the expenses eligible
for reimbursement during any taxable year will not affect the amount of
expenses eligible for reimbursement in any other taxable year.

 

(e)                                  Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

 

12.                               Clawback Policies

 

The Executive is subject to any recoupment or
clawback policies that the Company may implement or maintain at any time
regarding incentive-based compensation, which is granted or awarded to
Executive on or after the date of this Agreement.  Such policies may include the right to
recover incentive-based compensation (including stock options awarded as
compensation) awarded or received during the three-year period preceding the
date on which the Company is required to prepare an accounting restatement due
to material noncompliance with any financial reporting requirement under
federal securities laws.  The Executive
agrees to amend any awards 

 

12

 

and agreements entered into on or after the date of
this Agreement as the Company may request to reasonably implement to policies.

 

13.                               Miscellaneous

 

(a)                                  Notices.  All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective (i) upon
personal delivery, (ii) upon deposit with the United States Postal
Service, by registered or certified mail, postage prepaid, or (iii) in the
case of facsimile transmission or delivery by nationally recognized overnight
delivery service, when received, addressed as follows:

 

(b)                                 If to the Company or the Company, to:

 

Walker & Dunlop, Inc.

7501 Wisconsin Avenue

Suite 1200

Bethesda, MD 20814

Attention: Deborah A.
Wilson

Fax: (301) 634-2150

 

(i)                                     If to the Executive, to:

 

William M. Walker

Address on file with the Company

 

or to such other address or addresses as either
party shall designate to the other in writing from time to time by like notice.

 

(c)                                  Pronouns.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.

 

(d)                                 Entire Agreement.  This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.

 

(e)                                  Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Executive,
which amendment or modification is consented to by the Company.

 

(f)                                    Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland,
without regard to its conflicts of laws principles.

 

(g)                                 Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any 

 

13

 

entity
with which or into which the Company or the Company may be merged or which may
succeed to its assets or business or any entity to which the Company or the
Company may assign its rights and obligations under this Agreement; provided,
however, that the obligations of the Executive are personal and shall not be
assigned or delegated by him.

 

(h)                                 Waiver.  No delays or omission by the Company, the
Company or the Executive in exercising any right under this Agreement shall
operate as a waiver of that or any other right. 
A waiver or consent by the Company shall not be effective unless
consented to by the Company.  A waiver or
consent given by the Company or the Executive on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.

 

(i)                                     Captions.  The captions appearing in this Agreement are
for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.

 

(j)                                     Severability.  In case any provision of this Agreement shall
be held by a court or arbitrator with jurisdiction over the parties to this
Agreement to be invalid, illegal or otherwise unenforceable, such provision
shall be restated to reflect as nearly as possible the original intentions of
the parties in accordance with applicable law, and the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.

 

(k)                                  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

14

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above written.

 

	
   

  	
  WALKER & DUNLOP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Deborah A. Wilson

  
	
   

  	
  Name:

  	
  Deborah A. Wilson

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILLIAM M. WALKER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  William M. Walker

  

 

 

Exhibit A

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [                        ] (the
“Effective Date”), by William M.
Walker (“Executive”) in
consideration of severance pay (the “Severance
Payment”) provided to Executive by Walker & Dunlop, Inc.,
a Maryland corporation (the “Company”),
pursuant to the Employment Agreement by and between the Company and Executive
(the “Employment Agreement”).

 

1.             Waiver and Release.  Subject
to the last sentence of the first paragraph of this Section 1, Executive,
on his own behalf and on behalf of his heirs, executors, administrators,
attorneys and assigns, hereby unconditionally and irrevocably releases, waives
and forever discharges the Company and each of its affiliates, parents,
successors, predecessors, and the subsidiaries, directors, Directors, owners,
members, shareholders, officers, agents, and employees of the Company and its
affiliates, parents, successors, predecessors, and subsidiaries (collectively,
all of the foregoing are referred to as the “Employer”),
from any and all causes of action, claims and damages, including attorneys’
fees, whether known or unknown, foreseen or unforeseen, presently asserted or
otherwise arising through the date of his signing of this Release, concerning
his employment or separation from employment. 
Subject to the last sentence of the first paragraph of this Section 1,
this Release includes, but is not limited to, any payments, benefits or damages
arising under any federal law (including, but not limited to, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and
the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws
whatsoever as may be created or amended from time to time); any claim
arising under any state or local laws, ordinances or regulations (including,
but not limited to, any state or local laws, ordinances or regulations
requiring that advance notice be given of certain workforce reductions); and
any claim arising under any common law principle or public policy, including,
but not limited to, all suits in tort or contract, such as wrongful
termination, defamation, emotional distress, invasion of privacy or loss of
consortium.  Notwithstanding any other
provision of this Release to the contrary, this Release does not encompass, and
Executive does not release, waive or discharge, the obligations of the Company (a) to
make the payments and provide the other benefits contemplated by the Employment
Agreement, or (b) under any restricted stock agreement, option agreement
or other agreement pertaining to Executive’s equity ownership, or (c) under
any indemnification or similar agreement with Executive or indemnification
under the Articles of Incorporation, Bylaws or other governing instruments of
the Company .

 

Executive understands that by signing this
Release, he is not waiving any claims or administrative charges which cannot be
waived by law.  He is waiving, however,
any right to monetary recovery or individual relief should any federal, state
or local agency (including the Equal Employment Opportunity Commission) pursue
any claim on his behalf

 

 

arising out of or related to his employment with
and/or separation from employment with the Company.

 

Executive further agrees without any
reservation whatsoever, never to sue the Employer or become a party to a
lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Release.

 

2.             Acknowledgments.  Executive is signing this Release
knowingly and voluntarily.  He
acknowledges that:

 

(a)                                  He is hereby advised in writing to consult an attorney before signing this
Release;

 

(b)                                 He has relied solely on his own judgment and/or that of his attorney
regarding the consideration for and the terms of this Release and is signing
this Release knowingly and voluntarily of his own free will;

 

(c)                                  He is not entitled to the Severance Payment unless he agrees to and
honors the terms of this Release;

 

(d)                                 He has been given at least twenty-one
(21) calendar days to consider this Release, or he expressly waives his
right to have at least twenty-one (21)  days to consider this Release;

 

(e)                                  He may revoke this Release within seven (7) calendar days after
signing it by submitting a written notice of revocation to the Employer.  He further understands that this Release is
not effective or enforceable until after the seven (7) day period of
revocation has expired without revocation, and that if he revokes this Release
within the seven (7) day revocation period, he will not receive the
Severance Payment;

 

(f)                                    He has read and understands the Release and further understands that,
subject to the limitations contained herein, it includes a general release of
any and all known and unknown, foreseen or unforeseen claims presently asserted
or otherwise arising through the date of his signing of this Release that he
may have against the Employer; and

 

(g)                                 No statements made or conduct by the Employer has in any way coerced or
unduly influenced him to execute this Release.

 

3.             No Admission of Liability.  This Release does not constitute an
admission of liability or wrongdoing on the part of the Employer, the Employer
does not admit 

 

 

there has been any wrongdoing whatsoever against
the Executive, and the Employer expressly denies that any wrongdoing has
occurred.

 

4.             Entire Agreement.  There are no other agreements of any
nature between the Employer and Executive with respect to the matters discussed
in this Release, except as expressly stated herein, and in signing this
Release, Executive is not relying on any agreements or representations, except
those expressly contained in this Release.

 

5.             Execution. 
It is not necessary that the Employer sign this Release following
Executive’s full and complete execution of it for it to become fully effective
and enforceable.

 

6.             Severability.  If any provision of this Release is
found, held or deemed by a court of competent jurisdiction to be void, unlawful
or unenforceable under any applicable statute or controlling law, the remainder
of this Release shall continue in full force and effect.

 

7.             Governing Law.  This Release shall be governed by the
laws of the State of Maryland, excluding the choice of law rules thereof.

 

8.             Headings. 
Section and subsection headings contained in this Release are
inserted for the convenience of reference only. 
Section and subsection headings shall not be deemed to be a part of
this Release for any purpose, and they shall not in any way define or affect
the meaning, construction or scope of any of the provisions hereof.

 

IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day
and year first herein above written.

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  William M. WalkerExhibit 10.3

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made
this 27th day
of October, 2010, by Walker & Dunlop, Inc., a Maryland
corporation (the “Company”) with its principal place of business at 7501
Wisconsin Avenue, Suite 1200, Bethesda, MD 20814, and Howard W. Smith, III,
residing at  the address on file with the
Company (the “Executive”).

 

WHEREAS, the parties desire to enter into this
Agreement to reflect the Executive’s executive capacities in the Company’s
business and to provide for the Company’s employment of the Executive; and

 

WHEREAS, the parties wish to set forth the terms
and conditions of that employment;

 

NOW THEREFORE, in consideration of the mutual
covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:

 

1.                                      Term of Employment

 

The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement. 
Unless terminated earlier pursuant to Section 5, the Executive’s
employment pursuant to this Agreement shall be for the three (3) year
period commencing on the date of effectiveness of the Company’s registration
statement on Form S-1 (the “Commencement Date”) and ending on the third
anniversary of the Commencement Date (the “Initial Term”).  The Initial Term shall be extended for an
additional twelve (12) months on the third and each subsequent anniversary of
the Commencement Date unless the Company or the Executive provides written
notice to the contrary at least sixty (60) days before the applicable
anniversary of the Commencement Date. 
The Initial Term, together with any such extensions, shall be referred
to herein as the “Employment Period.” In the event that the Board of Directors
of the Company (the “Board of Directors”) determines that active efforts to
complete the closing of the initial public offering have been abandoned, this
Agreement shall become null and void.

 

2.                                      Title; Duties

 

The Executive shall be employed as Executive Vice
President and Chief Operating Officer of the Company.  The Executive shall report to Chief Executive
Officer, who shall have the authority to direct, control and supervise the
activities of the Executive.  The
Executive shall perform such services consistent with his position as may be
assigned to him from time to time by the Chief Executive Officer and are
consistent with the bylaws of the Company as it may be amended from time to
time, including, but not limited to, managing the affairs of the Company.

 

3.                                      Extent of Services

 

(a)                                  General.  The Executive agrees not to engage in any
business activities during the Employment Period except those which are for the
sole benefit of the Company and its subsidiaries, and to devote his entire
business time, attention, skill and 

 

1

 

effort
to the performance of his duties under this Agreement.  Notwithstanding the foregoing, the Executive
may, without impairing or otherwise adversely affecting the Executive’s
performance of his duties to the Company, (i) engage in personal
investments and charitable, professional and civic activities, and (ii) with
the prior approval of the Board of Directors, serve on the boards of directors
of corporations other than the Company, provided, however, that no such
approval shall be necessary for the Executive’s continued service on any board
of directors on which he was serving on the date of this Agreement, all of
which have been previously disclosed to the Board of Directors in writing and
provided further, that in no event shall the Executive be permitted to serve on
the board of directors of any other entity that competes with the Company in
the multifamily finance business.  The
Executive shall perform his duties to the best of his ability, shall adhere to
the Company’s published policies and procedures, and shall use his best efforts
to promote the Company’s interests, reputation, business and welfare.

 

(b)                                 Corporate Opportunities.  The Executive agrees that he will not take
personal advantage of any business opportunities which arise during his
employment with the Company and which may be of benefit to the Company.  All material facts regarding such
opportunities must be promptly reported by the Executive to the Board of
Directors for consideration by the Company.

 

4.                                      Compensation and Benefits

 

(a)                                  Salary.  The Company shall pay the Executive a gross
base annual salary (“Base Salary”) of $400,000.00.  The Base Salary shall be payable in arrears
in approximately equal semi-monthly installments (except that the first and
last such semi-monthly installments may be prorated if necessary) on the
Company’s regularly scheduled payroll dates, minus such deductions as may be
required by law or reasonably requested by the Executive.  The Company’s Compensation Committee (the “Compensation
Committee”) shall review his Base Salary annually in conjunction with its
regular review of employee salaries and may increase (but not decrease) his
Base Salary as in effect from time to time as the Compensation Committee shall
deem appropriate.

 

(b)                                 Annual Bonus. Executive shall be
entitled to earn bonuses with respect to each fiscal year (or partial fiscal
year), based upon Executive’s and the Company’s achievement of performance
objectives set by the Company within the first three (3) months of each
fiscal year of the Employment Period, with a target bonus of 100% of Executive’s
Base Salary for such fiscal year (or partial fiscal year).  Any such bonus earned by the Executive shall
be paid annually by March 15 of the year following the end of the year for
which the bonus was earned.

 

(c)                                  Options and Restricted Stock Grants.  The Executive will be eligible for grants of
options to purchase the Company’s common stock and grants of restricted shares
of the Company’s common stock subject to certain time vesting requirements and
other conditions set forth in the applicable award agreement.

 

2

 

(d)                                 Other Benefits.  The Executive shall be entitled to paid time
off and holiday pay in accordance with the Company’s policies in effect from
time to time and shall be eligible to participate in such life, health, and
disability insurance, pension, deferred compensation and incentive plans,
options and awards, performance bonuses and other benefits as the Company
extends, as a matter of policy, to its executive employees.  Incentive compensation under the Company’s
2008, 2009 and 2010 long term incentive arrangements are independent of the
annual bonuses and will be governed under the terms of those arrangements.

 

(e)                                  Reimbursement of Business Expenses.  The Company shall reimburse the Executive for
all reasonable travel, entertainment and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation by the
Executive of documentation, expense statements, vouchers, and/or such other
supporting information as the Company may reasonably request.

 

(f)                                Timing of Reimbursements.  Any reimbursement under this Agreement that
is taxable to the Executive shall be made in no event later than sixty (60)
days following the calendar year in which the Executive incurred the expense.

 

5.                                      Termination

 

(a)                                  Termination by the Company for Cause.  The Company may terminate the Executive’s
employment under this Agreement at any time for Cause, upon written notice by
the Company to the Executive.  For
purposes of this Agreement, “Cause” for termination shall mean any of the
following: (i) the conviction of the Executive of, or the entry of a plea
of guilty or nolo contendere by the Executive to, any felony; (ii) fraud,
misappropriation or embezzlement by the Executive; (iii) the Executive’s
willful failure or gross negligence in the performance of his assigned duties
for the Company, which failure or negligence continues for more than fifteen
(15) calendar days following the Executive’s receipt of written notice of such
willful failure or gross negligence; (iv) the Executive’s breach of any of
his fiduciary duties to the Company; (v) a material violation of a
material Company policy which, if such violation is curable, such failure is
not cured within fifteen (15) calendar days following the Executive’s receipt
of written notice of such failure, with such detail as  sufficient to apprise Executive of the nature
and extent of such failure; or (vi) the material breach by the Executive
of any material term of this Agreement, which, if such breach is curable, such
breach is not cured within fifteen (15) calendar days following the Executive’s
receipt of written notice of such breach, with such detail as sufficient to
apprise Executive of the nature and extent of such breach.

 

(b)                                 Termination by the Company Without Cause or by the Executive Without
Good Reason.  Either party may terminate this Agreement at
any time without Cause (in the case of the Company) or without Good Reason (in
the case of the Executive), upon giving the other party sixty (60) days’
written notice.  At the Company’s sole 

 

3

 

discretion,
it may substitute sixty (60) days’ Base Salary (or any lesser portion for any
shortened period provided) in lieu of notice. 
Any Base Salary paid to the Executive in lieu of notice shall not be
offset against any entitlement the Executive may have to the Severance Payment
pursuant to Section 6(c).  For
purposes of this Agreement, in the event the Company elects not to extend the
Employment Period in accordance with Section 1 hereof, Executive’s
employment shall terminate on the last day of the Employment Period and such
election shall be deemed a termination by the Company without Cause.

 

(c)                                  Termination by Executive for Good Reason.  The Executive may terminate his employment
under this Agreement at any time for Good Reason, upon written notice by the
Executive to the Company.  For purposes
of this Agreement, Good Reason for termination shall mean, without the
Executive’s consent: (i) the assignment to the Executive of substantial
duties or responsibilities inconsistent with the Executive’s position at the
Company, or any other action by the Company which results in a substantial
diminution of the Executive’s duties or responsibilities other than any such
reduction which is remedied by the Company within thirty (30) days of receipt
of written notice thereof from the Executive; (ii) a requirement that the
Executive work principally from a location that is twenty (20) miles further
from the Executive’s residence than the Company’s address first written above; (iii) a
ten (10) percent or greater reduction in the Executive’s aggregate Base
Salary and other compensation (including the target bonus amount and retirement
plan, welfare plans and fringe benefits) taken as a whole, excluding any
reductions caused by the failure to achieve performance targets; or (iv) any
material breach by the Company of this Agreement.  Good Reason shall not exist pursuant to any subsection
of this Section 5(c) unless (A) the Executive shall have
delivered notice to the Board within ninety (90) days of the occurrence of such
event constituting Good Reason, and (B) the Board fails to remedy the
circumstances giving rise to the Executive’s notice within thirty (30) days of
receipt of notice.  The Executive must
terminate his employment under this Section 5(c) at a time agreed
reasonably with the Company, but in any event within one hundred fifty (150)
days  from the occurrence of an event
constituting Good Reason.  For purposes
of Good Reason, the Company shall be defined to include any successor to the
Company which has assumed the obligations of the Company through merger,
acquisition, stock purchase, asset purchase or otherwise.

 

(d)                                 Executive’s Death or Disability.  The Executive’s employment shall terminate
immediately upon his death or, upon written notice as set forth below, his
Disability.  As used in this Agreement, “Disability”
shall mean such physical or mental impairment as would render the Executive
unable to perform each of the essential duties of the Executive’s position by
reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a continuous
period of not less than twelve (12) months. 
If the Employment Period is terminated by reason of the Executive’s 

 

4

 

Disability, either party
shall give thirty (30) days’ advance written notice to that effect to the
other.

 

(e)                                  Executive’s Retirement.  The Executive’s employment shall terminate
upon his Retirement.  As used in this
Agreement, “Retirement” shall mean the point in which the Executive has reached
the age of sixty five (65) and has decided to exit the workforce
completely.  If the Employment Period is
terminated by reason of the Executive’s Retirement, the Executive shall give
one hundred eighty (180) days’ advance notice to the effect to the Company.

 

6.                                      Effect of Termination

 

(a)                                  General.  Regardless of the reason for any termination
of this Agreement and subject to this Section 6, the Executive (or the
Executive’s estate if the Employment Period ends on account of the Executive’s
death) shall be entitled to (i) payment of any unpaid portion of his Base
Salary through the effective date of termination; (ii) reimbursement for
any outstanding reasonable business expense he has incurred in performing his
duties hereunder in accordance with Company policy; (iii) continued
insurance benefits to the extent required by law; (iv) payment of any
vested but unpaid rights as required independent of this Agreement by the terms
of any bonus or other incentive pay or equity plan, or any other employee
benefit plan or program of the Company; and (v) except in the case of
Termination by the Company for Cause, any bonus or incentive compensation
amount that had been accrued through the effective date of termination but not
paid.  Upon termination of this Agreement
for any reason, the Executive shall resign from all boards and committees of
the Company, its affiliates and its subsidiaries.

 

(b)                                 Termination by the Company for Cause or by Executive Without Good Reason.  If the Company terminates the
Executive’s employment for Cause or the Executive terminates his employment
without Good Reason, the Executive shall have no rights or claims against the
Company except to receive the payments and benefits described in Section 6(a).

 

(c)                                  Termination by the Company Without Cause or by the Executive with Good
Reason.  If the
Company terminates the Executive’s employment without Cause pursuant to Section 5(b),
or the Executive terminates employment with Good Reason pursuant to Section 5(c),
the Executive shall be entitled to receive, in addition to the items referenced
in Section 6(a) (other than any bonus or incentive compensation as to
which a pro rata amount shall be paid only to the extent performance goals for
the calendar year of termination are achieved), the following:

 

(i)                                     continued payment of his Base Salary, at the
rate in effect on his last day of employment (but in no event in an annual
amount less than as set forth 

 

5

 

in Section 4(a)), for a period of twelve (12)
months.  Such amount shall be paid in
approximately equal installments on the Company’s regularly scheduled payroll
dates, subject to all legally required payroll deductions and withholdings for
sums owed by the Executive to the Company;

 

(ii)                                  continued payment by the Company for the
Executive’s life and health insurance coverage for twelve (12) months to the
same extent that the Company paid for such coverage immediately prior to the
termination of the Executive’s employment and subject to the eligibility
requirements and other terms and conditions of such insurance coverage;

 

(iii)                               payments equal to two (2) times the
average annual bonus earned by the Executive over the two (2) preceding
calendar years (or if the Executive has not been employed for two (2) prior
calendar years, payments equal to two (2) times the Executive’s target
bonus for the year of termination).  For
example: if the Executive’s annual bonus over the preceding two (2) years
was $300,000 and $0, the average would be $150,000 and the payments would equal
$300,000.  An amount equal to the average
annual bonus (or target bonus, as applicable), and the pro rata bonus for the
year of termination, if any, payable under Section 6(a) shall be paid
to the Executive within sixty (60) days following the end of the fiscal year in
which such termination occurs and an amount equal to the average annual bonus,
if any (or target bonus, as applicable) shall be paid to the Executive within
ten (10) days after the end of the Restricted Period; and

 

(iv)                              vesting as of the last day of his employment
in any unvested portion of any option and restricted stock previously granted
to the Executive by the Company.

 

None
of the benefits described in this Section 6(c) (the “Severance
Payment”) will be payable unless the Executive has signed a general release
(attached hereto as Exhibit A) within forty five (45) days of date
of termination, which has (and not until it has) become irrevocable,
satisfactory to the Company in the reasonable exercise of its discretion,
releasing the Company, its affiliates, and their Directors, officers and
employees, from any and all claims or potential claims arising from or related
to the Executive’s employment or termination of employment.

 

(d)                                 Termination In the Event of Death, Disability or Retirement.

 

In the event of a termination of employment due to
death, disability or Retirement, the Executive shall be entitled to receive the
items referenced in Section 6(a) (except, in the case of a
termination due to Retirement, any bonus or incentive compensation, as to which
a pro rata amount shall be paid only to the extent performance goals for the
calendar year of termination are achieved and which 

 

6

 

amount, if any, shall be paid to the Executive
within sixty (60) days following the end of the fiscal year in which such
termination occurs).

 

(i)                                     If the Executive’s employment terminates
because of his death, any unvested portion of any option and restricted stock
previously granted to the Executive by the Company shall become fully vested as
of the date of his death.  In addition,
the Executive’s estate shall be entitled to receive a pro-rata share of any
performance bonus to which he otherwise would have been entitled for the fiscal
year in which his death occurs.

 

(ii)                                  In the event the Executive’s employment
terminates due to his Disability, he shall be entitled to receive his Base
Salary through the effective date of termination.  In addition, as of the effective date of the
termination notice specified in Section 5(d), the Executive shall vest in
any unvested portion of any option and restricted stock previously granted to
the Executive by the Company and the Executive shall be entitled to receive a
pro-rata share of any performance bonus to which he otherwise would have been
entitled for the fiscal year in which his disability occurs.

 

(iii)                               In the event the Executive’s employment
terminates due to his Retirement, any unvested portion of any option and
restricted stock previously granted to the Executive by the Company shall
become fully vested as of the date of his termination.

 

7.                                      Confidentiality

 

(a)                                  Definition of Proprietary Information.  The Executive acknowledges that he may be
furnished or may otherwise receive or have access to confidential information
which relates to the Company’s past, present or future business activities,
strategies, services or products, research and development; financial analysis
and data; improvements, inventions, processes, techniques, designs or other
technical data; profit margins and other financial information; fee
arrangements; compilations for marketing or development; confidential personnel
and payroll information; or other information regarding administrative,
management, or financial activities of the Company, or of a third party which
provided proprietary information to the Company on a confidential basis.  All such information, including in any
electronic form, and including any materials or documents containing such
information, shall be considered by the Company and the Executive as
proprietary and confidential (the “Proprietary Information”).

 

(b)                                 Exclusions.  Notwithstanding the foregoing, Proprietary
Information shall not include information in the public domain not as a result
of a breach of any duty by the Executive or any other person.

 

7

 

(c)                                  Obligations.  Both during and after the Employment Period,
the Executive agrees to preserve and protect the confidentiality of the
Proprietary Information and all physical forms thereof, whether disclosed to him
before this Agreement is signed or afterward. 
In addition, the Executive shall not (i) disclose or disseminate
the Proprietary Information to any third party, including employees of the
Company (or its affiliates) without a legitimate business need to know during
the Employment Period; (ii) remove the Proprietary Information from the
Company’s premises without a valid business purpose; or (iii) use the
Proprietary Information for his own benefit or for the benefit of any third
party.

 

(d)                                 Return of Proprietary Information.  The Executive acknowledges and agrees that
all the Proprietary Information used or generated during the course of working
for the Company is the property of the Company. 
The Executive agrees to deliver to the Company all documents and other
tangibles containing the Proprietary Information at any time upon request by
the Board of Directors during his employment and immediately upon termination
of his employment.

 

8.                                      Noncompetition

 

(a)                                  Restriction on Competition.  For the period of the Executive’s employment
with the Company and for twelve (12) months following the expiration or
termination of the Executive’s employment by the Company (the “Restricted
Period”), the Executive agrees not to engage, directly or indirectly, as a
manager, employee, consultant, partner, principal, agent, representative, or in
any other individual or representative capacity in any material business that
the Company conducts as of the date of the Executive’s termination of
employment, including but not limited to the multifamily finance business,
where material is defined as fifteen (15) percent of the gross revenues of the
Company based on the most recent quarterly earnings.  Executive further agrees that for the period
of the Executive’s employment with the Company and for the Restricted Period,
the Executive will not engage, directly or indirectly, as an owner, director,
trustee, member, stockholder, or in any other corporate capacity in any
material business that the Company conducts as of the date of the Executive’s
termination of employment. 
Notwithstanding the foregoing, the Executive shall not be deemed to have
violated this Section 8(a) solely (i) by reason of his passive
ownership of 1% or less of the outstanding stock of any publicly traded
corporation or other entity, (ii) by providing legal, accounting or audit
services as an employee or partner of a professional services organization or (iii) by
providing services to any investment banking or other institution that do not
relate to any material business that the Company conducts as of the date of the
Executive’s termination of employment.

 

(b)                                 Non-Solicitation of Clients.  During the Restricted Period, the Executive
agrees not to solicit, directly or indirectly, on his own behalf or on behalf
of any other person(s), any client of the Company to whom the Company had
provided services at any time during the Executive’s employment with the
Company in any line of business that the Company conducts as of the date of the
Executive’s 

 

8

 

termination
of employment or that the Company is actively soliciting, for the purpose of
marketing or providing any service competitive with any service then offered by
the Company.

 

(c)                                  Non-Solicitation of Employees.  During the Restricted Period, the Executive
agrees that he will not, directly or indirectly, hire or attempt to hire or
cause any business, other than an affiliate of the Company, to hire any person
who is then or was at any time during the preceding six (6) months an
employee of the Company and who is at the time of such hire or attempted hire,
or was at the date of such employee’s separation from the Company a vice
president, senior vice president or executive vice president or other senior
executive employee of the Company.

 

(d)                                 Acknowledgement.  The Executive acknowledges that he will
acquire much Proprietary Information concerning the past, present and future
business of the Company as the result of his employment, as well as access to
the relationships between the Company and its clients and employees.  The Executive further acknowledges that the
business of the Company is very competitive and that competition by him in that
business during his employment, or after his employment terminates, would
severely injure the Company.  The
Executive understands and agrees that the restrictions contained in this Section 8
are reasonable and are required for the Company’s legitimate protection, and do
not unduly limit his ability to earn a livelihood.

 

(e)                                  Rights and Remedies upon Breach.  The Executive acknowledges and agrees that
any breach by him of any of the provisions of Sections 7 and 8 (the “Restrictive
Covenants”) would result in irreparable injury and damage for which money
damages would not provide an adequate remedy. 
Therefore, if the Executive breaches, or threatens to commit a breach
of, any of the provisions of the Restrictive Covenants, the Company and its
affiliates, including the Company, shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company and its affiliates, including the Company, under law or in equity
(including, without limitation, the recovery of damages):

 

(i)                                     The right and remedy to have the Restrictive
Covenants specifically enforced (without posting bond and without the need to
prove damages) by any court of competent jurisdiction, including, without
limitation, the right to an entry against the Executive of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants; and

 

(ii)                                  The right and remedy to require the Executive
to account for and pay over to the Company and its affiliates all compensation,
profits, monies, accruals, increments or other benefits (collectively, “Benefits”)
derived or 

 

9

 

received by him as the result of any transactions
constituting a breach of the Restrictive Covenants, and the Executive shall
account for and pay over such Benefits to the Company and, if applicable, its
affected affiliates.

 

(f)                                    Without limiting Section 13(j), if any court or other
decision-maker of competent jurisdiction determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
geographical scope of such provision, then, after such determination has become
final and unappealable, the duration or scope of such provision, as the case
may be, shall be reduced so that such provision becomes enforceable and, in its
reduced form, such provision shall then be enforceable and shall be enforced.

 

9.                                      Executive Representation

 

The Executive represents and warrants to the
Company that he is not now under any obligation of a contractual or other
nature to any person, business or other entity which is inconsistent or in
conflict with this Agreement or which would prevent him from performing his
obligations under this Agreement.

 

10.                               Mediation and Arbitration

 

(a)                                  Except as provided in Section 10(b) and 10(c), any disputes
between the Company and the Executive in any way concerning the Executive’s
employment, the termination of his employment, this Agreement or its
enforcement shall be subject to mediation. 
If the Company and the Executive
cannot agree upon a mediator, each shall select one name from a list of
mediators maintained by any bona fide dispute resolution provider or other
private mediator; the two selected shall then choose a third person who will
serve as the sole mediator. The first mediation session shall occur within
forty five (45) calendar days following the notice of a dispute.  If within sixty (60) days of the first
mediation session the claim is not resolved, either party may request that the
dispute be settled exclusively by arbitration in the state of Maryland
by a single arbitrator, selected in the same manner as the mediator, in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association in effect at the time of
submission to arbitration.  Judgment may
be entered on the arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an
award rendered by the arbitrators, any or all of the following courts have
jurisdiction:  (i) the United States
District Court for the Fourth Circuit, (ii) any of the courts of the State
of Maryland, or (iii) any other court having jurisdiction.  Any service of process or notice requirements
in any such proceeding shall be satisfied if the rules of such court
relating thereto have been substantially satisfied.  The Company and the Executive waive to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to such jurisdiction and any defense of inconvenient forum.  A judgment upon an award rendered by the
arbitrators may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. 
Each party shall

 

10

 

bear
its or his costs and expenses arising in connection with any arbitration
proceeding.

 

(b)                                 Notwithstanding the foregoing, the Company, in its sole discretion, may
bring an action in any court of competent jurisdiction to seek injunctive
relief and such other relief as the Company shall elect to enforce the
Restrictive Covenants.  If the courts of
any one or more of such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of breadth of scope or otherwise it is the intention of
the Company and the Executive that such determination not bar or in any way
affect the Company’s right, or the right of any of its affiliates, to the
relief provided in Section 8(e) above in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable, diverse and independent covenants, subject, where
appropriate, to the doctrine of res judicata. 
The parties hereby agree to waive any right to a trial by jury for any
and all disputes hereunder (whether or not relating to the Restrictive
Covenants).

 

(c)                                  Notwithstanding the foregoing, the Company or the Executive may bring an
action in any court of competent jurisdiction to resolve any dispute under or
seek the enforcement of Section 6.

 

11.                               Section 409A.

 

To the extent the Executive would be subject to the
additional twenty (20) percent tax imposed on certain deferred compensation
arrangements pursuant to Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), as a result of any provision of this Agreement,
such provision shall be deemed amended to the minimum extent necessary to avoid
application of such tax and preserve to the maximum extent possible the
original intent and economic benefit to the Executive and the Company, and the
parties shall promptly execute any amendment reasonably necessary to implement
this Section 11.

 

(a)                              For purposes of Section 409A, the Executive’s right to receive
installment payments pursuant to this Agreement including, without limitation,
each severance payment and health insurance payment shall be treated as a right
to receive a series of separate and distinct payments.

 

(b)                                 The Executive will be deemed to have a date of termination for purposes
of determining the timing of any payments or benefits hereunder that are
classified as deferred compensation only upon a “separation from service” within
the meaning of Section 409A

 

(c)                                  Notwithstanding any other provision of this Agreement to the contrary,
if at the time of the Executive’s separation from service, (i) the
Executive is a specified employee (within the meaning of Section 409A and
using the identification methodology selected by the Company from time to
time), and (ii) the Company 

 

11

 

makes a good faith determination that an amount
payable on account of such separation from service to the Executive constitutes
deferred compensation (within the meaning of Section 409A) the payment of
which is required to be delayed pursuant to the six (6) month delay rule set
forth in Section 409A in order to avoid taxes or penalties under Section 409A
(the “Delay Period”), then the Company will not pay such amount on the
otherwise scheduled payment date but will instead pay it in a lump sum on the
first business day after such six (6) month period (or upon the Executive’s
death, if earlier), together with interest for the period of delay, compounded
annually, equal to the prime rate (as published in the Wall Street Journal) in
effect as of the dates the payments should otherwise have been provided.   To the extent that any benefits to be
provided during the Delay Period are considered deferred compensation under Section 409A
provided on account of a “separation from service,” and such benefits are not
otherwise exempt from Section 409A, the Executive shall pay the cost of
such benefit during the Delay Period, and the Company shall reimburse the
Executive, to the extent that such costs would otherwise have been paid by the
Company or to the extent that such benefits would otherwise have been provided
by the Company at no cost to the Executive, the Company’s share of the cost of
such benefits upon expiration of the Delay Period, and any remaining benefits
shall be reimbursed or provided by the Company in accordance with the
procedures specified herein.

 

(d)                                 (A) Any amount that the Executive is entitled to be reimbursed
under this Agreement will be reimbursed to the Executive as promptly as
practical and in any event not later than the last day of the calendar year
after the calendar year in which the expenses are incurred, (B) any right
to reimbursement or in kind benefits will not be subject to liquidation or
exchange for another benefit, and (C) the amount of the expenses eligible
for reimbursement during any taxable year will not affect the amount of
expenses eligible for reimbursement in any other taxable year.

 

(e)                                  Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

 

12.                               Clawback Policies

 

The Executive is subject to any recoupment or
clawback policies that the Company may implement or maintain at any time
regarding incentive-based compensation, which is granted or awarded to
Executive on or after the date of this Agreement.  Such policies may include the right to
recover incentive-based compensation (including stock options awarded as
compensation) awarded or received during the three-year period preceding the
date on which the Company is required to prepare an accounting restatement due
to material noncompliance with any financial reporting requirement under
federal securities laws.  The Executive
agrees to amend any awards 

 

12

 

and agreements entered into on or after the date of
this Agreement as the Company may request to reasonably implement to policies.

 

13.                               Miscellaneous

 

(a)                                 Notices.  All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective (i) upon
personal delivery, (ii) upon deposit with the United States Postal
Service, by registered or certified mail, postage prepaid, or (iii) in the
case of facsimile transmission or delivery by nationally recognized overnight
delivery service, when received, addressed as follows:

 

(b)                                 If to the Company or the Company, to:

 

Walker & Dunlop, Inc.

7501 Wisconsin Avenue

Suite 1200

Bethesda, MD 20814

Attention: William M.
Walker

Fax: (301) 634-2149

 

(i)                                     If to the Executive, to:

 

Howard W. Smith, III

Address on file with the Company

 

or to such other address or addresses as either
party shall designate to the other in writing from time to time by like notice.

 

(c)                                  Pronouns.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.

 

(d)                                 Entire Agreement.  This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.

 

(e)                                  Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Executive,
which amendment or modification is consented to by the Company.

 

(f)                                   Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland,
without regard to its conflicts of laws principles.

 

(g)                                  Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any 

 

13

 

entity
with which or into which the Company or the Company may be merged or which may
succeed to its assets or business or any entity to which the Company or the
Company may assign its rights and obligations under this Agreement; provided,
however, that the obligations of the Executive are personal and shall not be
assigned or delegated by him.

 

(h)                                 Waiver.  No delays or omission by the Company, the
Company or the Executive in exercising any right under this Agreement shall
operate as a waiver of that or any other right. 
A waiver or consent by the Company shall not be effective unless
consented to by the Company.  A waiver or
consent given by the Company or the Executive on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.

 

(i)                                     Captions.  The captions appearing in this Agreement are
for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.

 

(j)                                    Severability.  In case any provision of this Agreement shall
be held by a court or arbitrator with jurisdiction over the parties to this
Agreement to be invalid, illegal or otherwise unenforceable, such provision
shall be restated to reflect as nearly as possible the original intentions of the
parties in accordance with applicable law, and the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.

 

(k)                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

14

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above written.

 

	
   

  	
  WALKER & DUNLOP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William M. Walker

  
	
   

  	
  Name:

  	
  William M. Walker

  
	
   

  	
  Title:

  	
  Chairman, President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOWARD W. SMITH, III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Howard W. Smith, III

  

 

 

Exhibit A

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [                        ] (the
“Effective Date”), by Howard W.
Smith, III (“Executive”) in
consideration of severance pay (the “Severance
Payment”) provided to Executive by Walker & Dunlop, Inc.,
a Maryland corporation (the “Company”),
pursuant to the Employment Agreement by and between the Company and Executive
(the “Employment Agreement”).

 

1.             Waiver and Release.  Subject
to the last sentence of the first paragraph of this Section 1, Executive,
on his own behalf and on behalf of his heirs, executors, administrators,
attorneys and assigns, hereby unconditionally and irrevocably releases, waives
and forever discharges the Company and each of its affiliates, parents,
successors, predecessors, and the subsidiaries, directors, Directors, owners,
members, shareholders, officers, agents, and employees of the Company and its
affiliates, parents, successors, predecessors, and subsidiaries (collectively,
all of the foregoing are referred to as the “Employer”),
from any and all causes of action, claims and damages, including attorneys’
fees, whether known or unknown, foreseen or unforeseen, presently asserted or
otherwise arising through the date of his signing of this Release, concerning
his employment or separation from employment. 
Subject to the last sentence of the first paragraph of this Section 1,
this Release includes, but is not limited to, any payments, benefits or damages
arising under any federal law (including, but not limited to, Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and
the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws
whatsoever as may be created or amended from time to time); any claim
arising under any state or local laws, ordinances or regulations (including,
but not limited to, any state or local laws, ordinances or regulations
requiring that advance notice be given of certain workforce reductions); and
any claim arising under any common law principle or public policy, including,
but not limited to, all suits in tort or contract, such as wrongful
termination, defamation, emotional distress, invasion of privacy or loss of
consortium.  Notwithstanding any other
provision of this Release to the contrary, this Release does not encompass, and
Executive does not release, waive or discharge, the obligations of the Company (a) to
make the payments and provide the other benefits contemplated by the Employment
Agreement, or (b) under any restricted stock agreement, option agreement
or other agreement pertaining to Executive’s equity ownership, or (c) under
any indemnification or similar agreement with Executive or indemnification
under the Articles of Incorporation, Bylaws or other governing instruments of
the Company .

 

Executive understands that by signing this
Release, he is not waiving any claims or administrative charges which cannot be
waived by law.  He is waiving, however,
any right to monetary recovery or individual relief should any federal, state
or local agency (including the Equal Employment Opportunity Commission) pursue
any claim on his behalf

 

 

arising out of or related to his employment with
and/or separation from employment with the Company.

 

Executive further agrees without any
reservation whatsoever, never to sue the Employer or become a party to a
lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Release.

 

2.             Acknowledgments.  Executive is signing this Release
knowingly and voluntarily.  He
acknowledges that:

 

(a)                                 He is hereby advised in writing to consult an attorney before signing
this Release;

 

(b)                                 He has relied solely on his own judgment and/or that of his attorney
regarding the consideration for and the terms of this Release and is signing
this Release knowingly and voluntarily of his own free will;

 

(c)                                  He is not entitled to the Severance Payment unless he agrees to and
honors the terms of this Release;

 

(d)                                 He has been given at least twenty-one
(21) calendar days to consider this Release, or he expressly waives his
right to have at least twenty-one (21)  days to consider this Release;

 

(e)                                  He may revoke this Release within seven (7) calendar days after
signing it by submitting a written notice of revocation to the Employer.  He further understands that this Release is
not effective or enforceable until after the seven (7) day period of
revocation has expired without revocation, and that if he revokes this Release
within the seven (7) day revocation period, he will not receive the
Severance Payment;

 

(f)                                   He has read and understands the Release and further understands that,
subject to the limitations contained herein, it includes a general release of
any and all known and unknown, foreseen or unforeseen claims presently asserted
or otherwise arising through the date of his signing of this Release that he
may have against the Employer; and

 

(g)                                  No statements made or conduct by the Employer has in any way coerced or
unduly influenced him to execute this Release.

 

3.             No Admission of Liability.  This Release does not constitute an
admission of liability or wrongdoing on the part of the Employer, the Employer
does not admit 

 

 

there has been any wrongdoing whatsoever against
the Executive, and the Employer expressly denies that any wrongdoing has
occurred.

 

4.             Entire Agreement.  There are no other agreements of any
nature between the Employer and Executive with respect to the matters discussed
in this Release, except as expressly stated herein, and in signing this
Release, Executive is not relying on any agreements or representations, except
those expressly contained in this Release.

 

5.             Execution. 
It is not necessary that the Employer sign this Release following
Executive’s full and complete execution of it for it to become fully effective
and enforceable.

 

6.             Severability.  If any provision of this Release is
found, held or deemed by a court of competent jurisdiction to be void, unlawful
or unenforceable under any applicable statute or controlling law, the remainder
of this Release shall continue in full force and effect.

 

7.             Governing Law.  This Release shall be governed by the laws
of the State of Maryland, excluding the choice of law rules thereof.

 

8.             Headings. 
Section and subsection headings contained in this Release are
inserted for the convenience of reference only. 
Section and subsection headings shall not be deemed to be a part of
this Release for any purpose, and they shall not in any way define or affect
the meaning, construction or scope of any of the provisions hereof.

 

IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day
and year first herein above written.

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Howard W. Smith, III

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