Document:

Exhibit 10.3

 

SUNRISE SENIOR LIVING, INC.

2008 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

PERFORMANCE UNIT AGREEMENT

 

Sunrise Senior Living, Inc., a Delaware corporation (the “Company”), hereby grants Performance Units relating to shares of its common stock, $0.01 par value (the “Stock”), to the Grantee named below, the shares of Stock subject thereto being subject to achieving the performance criteria and the vesting conditions set forth in the attached agreement (the “Agreement”).  Additional terms and conditions of the grant are set forth in this cover sheet to the Agreement, in the Agreement, and in the Company’s 2008 Omnibus Incentive Plan, as amended (the “Plan”).

 

Grant Date:                                      , 2012

 

Name of Grantee:

 

Grantee’s Social Security Number:           -        -

 

Threshold Number of Performance Units:

 

Target Number of Performance Units:

 

Maximum Number of Performance Units:

 

By checking the “Read and Acknowledge Award Documents” box on the Morgan Stanley Smith Barney website, you agree to all of the terms and conditions described in this Agreement, your employment agreement with the Company and in the Plan, a copy of which is also attached.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement is inconsistent with the Plan.  Certain capitalized terms used in this Agreement are defined in your employment agreement with the Company, and have the meaning set forth in such agreement.

 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 

 

SUNRISE SENIOR LIVING, INC.

2008 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

PERFORMANCE UNIT AGREEMENT

 

	
Award   of Performance Units Issuable upon Achievement of Performance Criteria and   Vesting
    	
 
    	
This grant is an   award of Performance Units (the “Performance Units”) entitling you to the   number of shares of Stock to be determined as set forth below. 

 

Subject to   satisfaction of the time-vesting requirements set out in “Vesting” below,   (a) 60% of the number of shares of Stock, if any, that may be issued   pursuant to the terms of this Agreement shall be calculated based on the   attainment as determined by the Compensation Committee of specified adjusted   EBITDA performance goals, as set forth on the attached Exhibit A,   as of December 31, 2012, and the attainment as determined by the   Compensation Committee of specified adjusted EBITDA performance goals to be   established by the Compensation Committee for calendar year 2013 and calendar   year 2014 to be set forth on the attached Exhibits B and C (the   “Performance Periods”) within 90 days of the commencement of calendar years   2013 and 2014, respectively, and will be promptly communicated to you   (collectively, the “Adjusted EBITDA Performance Goals”), and (b) 40% of   the number of shares of Stock, if any, that may be issued pursuant to the   terms of this Agreement shall be calculated based on the attainment as   determined by the Compensation Committee of specified three-year TSR   performance goals set forth on the attached Exhibit D (the   “3-Year TSR Performance Goals”). The maximum number of shares of Stock that   may be issued to you hereunder is the Maximum Number of Performance Units on   the cover sheet, which number has been determined by multiplying your Target   Number of Performance Units from the cover sheet by 200% [150%   for Messrs. Haddock and Richards with corresponding change to exhibit].   The threshold number of shares of Stock that may be issued to you hereunder   is the Threshold Number of Performance Units on the cover sheet, which number   has been determined by multiplying your Target Number of Performance Units   from the cover sheet by 50%. The Threshold, Target and Maximum Number of   Performance Units relating to the attainment of the Adjusted EBITDA   Performance Goals are allocated among the three Performance Periods (2012,   2013 and 2014) 25%, 25% and 50%.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
Your right to the   Stock under this Performance Unit vests as to 100% of such shares on the   third anniversary of the Grant Date, provided you then continue in Service   and only to the extent that the specified performance goals have been   satisfied, subject to acceleration as 
    

 

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provided below in   “Termination of Service; Change in Control.”

 

Service for   purposes of this Agreement shall be limited to Service as an employee of the   Company or an Affiliate.
    
	
 
    	
 
    	
 
    
	
Nontransferability   and Forfeiture
    	
 
    	
Your Performance   Units granted hereby may not be sold, transferred, assigned, pledged or   otherwise encumbered or disposed of, whether by operation of law or   otherwise.

 

In the event that   you voluntarily terminate your employment (other than as provided below in   “Termination of Service; Change in Control”) or your Service terminates for   Cause (as defined in your employment agreement) prior to the third   anniversary of the Grant Date, you will forfeit to the Company all of the   Performance Units.

 

In addition, you   will forfeit all Performance Units allocable to the calendar year Performance   Period as of the end of such Performance Period to the extent the specified   adjusted EBITDA performance goal has not been achieved, you will forfeit all   Performance Units relating to the 3-Year TSR Performance Goal to the extent   the specified 3-Year TSR Performance Goal has not been achieved and to the   extent provided under “Termination of Service; Change in Control” below.
    
	
 
    	
 
    	
 
    
	
Termination   of Service; Change in Control

 

 
    	
 
    	
Notwithstanding   any provisions in your employment agreement with the Company to the contrary,   in the event that your Service terminates without Cause or for Good Reason   (as defined in your employment agreement), other than in connection with, or   within two years after, a Change in Control (as defined in the Plan) or your   Service terminates due to death or Disability (as defined in your employment   agreement), you will vest in a pro-rata portion of the Performance Units   subject to this grant based on (a) actual achievement of the Adjusted   EBITDA Performance Goals for the Performance Periods determined as of   December 31, 2014, and (b) actual achievement of the 3-Year TSR   Performance Goals determined as of December 31, 2014, in each case as if   your Service continued for an additional 12 months after your date of   termination of employment. You will forfeit all other Performance Units.

 

Notwithstanding   any provisions in your employment agreement with the Company, in the event   that your Service terminates without Cause or for Good Reason in connection   with or within two years after a Change in Control or a Change in Control   occurs or the Performance Units are not assumed and continued in the   transaction, you will vest (a) in a portion of the Performance Units for   any calendar year or calendar years in the Performance Periods that have been   completed based on actual achievement of the Adjusted EBITDA Performance   Goals and for any calendar year and calendar years in the Performance Periods   that have not been completed, based on the assumption that target performance   of the Adjusted EBITDA Performance Goals has been achieved as of your   termination of Service or earlier closing of the Change in Control   transaction if the 
    

 

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Performance Units   are not assumed and continued, and (b) in a portion of the Performance   Units corresponding with target achievement with regard to the 3-year TSR   Performance Goals. You will forfeit all other Performance Units.

 

Notwithstanding   any provisions in your employment agreement with the Company, in the event   that your Service terminates without Cause or for Good Reason in connection   with but prior to a Change in Control, you will vest (a) in a portion of   the Performance Units for any calendar year or calendar years in the   Performance Periods that have been completed prior to the closing of the Change   in Control transaction based on actual achievement of the Adjusted EBITDA   performance goals and for any calendar year or calendar years in the   Performance Periods that have not been completed at the time of the closing   of the Change in Control transaction, based on the assumption that target   performance of the Adjusted EBITDA Performance Goals has been achieved, and   (b) in a portion of the Performance Units corresponding with target   achievement with regard to the 3-year TSR Performance Goals. You will forfeit   all other Performance Units.
    
	
 
    	
 
    	
 
    
	
Issuance   of Stock
    	
 
    	
The Performance   Units awarded hereby are evidenced solely by this Agreement and the cover   sheet. The Company will issue any Stock earned pursuant hereto in your name   as of the date that you vest in the Performance Units. Such delivery will be   made as soon as practicable after the date on which vesting occurs and, in   any event, within 30 days thereafter. Notwithstanding the foregoing, if the   shares relating to the Performance Units would otherwise be delivered during   a period in which you are (i) subject to a lock-up agreement restricting   your ability to sell shares of Stock in the open market or   (ii) restricted from selling shares of Stock in the open market because   you are not then eligible to sell under the Company’s insider trading or   similar plan as then in effect (whether because a trading window is not open   or you are otherwise restricted from trading) and   the Company determines not to satisfy tax withholding requirements by   withholding shares that are otherwise issuable to you in connection with your   Performance Units, delivery of the shares related to the Performance Units   may be delayed until no earlier than the first date on which you are no   longer prohibited from selling shares of Stock due to a lock-up agreement or   insider trading plan restriction; provided, however, that the delivery of the   shares related to your Performance Units will be made by December 31 of   the taxable year in which the Performance Units vest or such other time as is   required to comply with the requirements of Section 409A of the Internal   Revenue Code.
    
	
 
    	
 
    	
 
    
	
Book   Entry Restrictions
    	
 
    	
Any Stock issued   hereunder may be issued in book entry form. In such event, the Company shall   cause the transfer agent for the shares of its Stock to make a book entry   record showing ownership for the shares of Stock in your name subject to the   terms and conditions of this Agreement. The Company shall issue or cause to   be issued to you an account statement acknowledging your ownership of the   shares of 
    

 

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such Stock.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
You agree, as a   condition of this grant, that you will make acceptable arrangements to pay   any withholding or other taxes that may be due as a result of the delivery of   shares of Stock acquired under this grant. In the event that the Company   determines that any federal, state, or local tax or withholding payment is   required relating to the payment of dividends or the delivery of shares   arising from this grant, the Company shall have the right to require such   payments from you, or withhold such amounts from other payments due to you.   Subject to the prior approval of the Compensation Committee, which may be   withheld by the Compensation Committee, in its sole discretion, you may elect   to satisfy this withholding obligation, in whole or in part, by causing the   Company to withhold shares of Stock otherwise issuable to you or by   delivering to the Company shares of Stock already owned by you. The shares of   Stock so delivered or withheld must have an aggregate Fair Market Value equal   to the withholding obligation and may not be subject to any repurchase,   forfeiture, unfulfilled vesting, or other similar requirements.
    
	
 
    	
 
    	
 
    
	
Repurchase   Rights
    	
 
    	
The Company has   the right to reacquire any or all of the shares of Stock acquired pursuant to   this Performance Unit Grant for two years after such shares of Stock are   delivered to you, at a price equal to the par value of such shares,   (i) if you violate any agreement covering (a) non-competition with   the Company or an Affiliate or (b) non-disclosure of confidential   information of the Company or an Affiliate, (ii) if you are terminated   for Cause or (iii) if, subsequent to termination of your Service with   the Company or an Affiliate, the Board determines that you committed acts or   omissions which would have been the basis for a termination of your Service   for Cause had such acts or omissions been discovered prior to termination of   your Service. A notice of repurchase shall specify the date of closing of   such repurchase, which shall be no later than 30 days from the date the   Company exercises such right. In the event any such repurchase right is   exercised, you shall be obligated to sell such stock to the Company. If the   shares of Stock have been sold prior to the Board’s determination, you shall   be required to pay to the Company an amount equal to the gross amount   realized on such sale by you. This repurchase right is not considered a   “repurchase” right for purposes of Section 18.3 of the Plan or this   Agreement.
    
	
 
    	
 
    	
 
    
	
Recoupment
    	
 
    	
The Performance   Units are subject to Company’s recoupment policy dated July 15, 2008 and   the recoupment provisions set forth in your employment agreement.
    
	
 
    	
 
    	
 
    
	
Retention   Rights
    	
 
    	
This Agreement   does not give you the right to be retained by the Company (or any parent,   Subsidiaries or affiliates) in any capacity. The Company (and any Affiliates)   reserves the right to terminate your Service at any time and for any reason.
    
	
 
    	
 
    	
 
    
	
Shareholder   Rights
    	
 
    	
You, or your   estate or heirs, do not have any of the rights of a 
    

 

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stockholder of the   Company, including, without limitation, the right to vote or receive   dividends declared or paid on the Stock, unless and until the Performance   Units granted to you pursuant to this Agreement are paid in Stock and a   certificate for such shares of Stock has been issued or an appropriate book   entry has been made.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of   any stock dividend, stock split, change in the corporate structure affecting   the Stock, or any change in the corporate structure that is not a Change in   Control, the number or kind of shares covered by this grant may be adjusted   pursuant to the Plan so that thereafter, subject to the terms and conditions   of the adjusted Awards, such Awards shall entitle you to receive the kind and   amount of securities or property or cash receivable upon any such event by a   holder of the number of Performance Units that would have been receivable   with respect to such Award immediately prior thereto. Your Performance Units,   as applicable, shall be subject to the terms of any such agreement of merger,   liquidation or reorganization in the event the Company is subject to such   corporate activity.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This Agreement   will be interpreted and enforced under the laws of the State of Delaware,   other than any conflicts or choice of law rule or principle that might   otherwise refer construction or interpretation of this Agreement to the   substantive law of another jurisdiction.
    
	
 
    	
 
    	
 
    
	
The   Plan
    	
 
    	
The text of the   Plan is incorporated in this Agreement by reference. Certain capitalized   terms used in this Agreement are defined in the Plan, and have the meaning   set forth in the Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This Agreement,   the cover page and the Plan constitute the entire understanding between   you and the Company regarding this grant of Performance Units and any shares   of underlying Stock. Any prior agreements, commitments or negotiations   concerning this grant are superseded.
    
	
 
    	
 
    	
 
    
	
Data   Privacy
    	
 
    	
In order to administer   the Plan, the Company may process personal data about you. Such data   includes, but is not limited to, the information provided in this Agreement   and any changes thereto, other appropriate personal and financial data about   you such as home address and business addresses and other contact   information, payroll information and any other information that might be   deemed appropriate by the Company to facilitate the administration of the   Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By accepting this   grant, you give explicit consent to the Company to process any such personal   data. You also give explicit consent to the Company to transfer any such   personal data to transferees who shall include the Company and other persons   who are designated by the Company to administer the Plan.
    
	
 
    	
 
    	
 
    
	
Consent   to Electronic Delivery
    	
 
    	
The Company may   choose to deliver certain statutory materials relating to the Plan in   electronic form. By accepting this grant, you 
    

 

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agree that the   Company may deliver the Plan prospectus and the Company’s annual report to   you in an electronic format. If at any time you would prefer to receive paper   copies of these documents, as you are entitled to, the Company would be   pleased to provide copies. Please contact the General Counsel at 703-273-7500   to request paper copies of these documents.
    
	
 
    	
 
    	
 
    
	
Electronic   Signature
    	
 
    	
All references to   signatures and delivery of documents in this Agreement can be satisfied by   procedures the Company has established or may establish for an electronic   signature system for delivery and acceptance of any such documents, including   this Agreement. Your electronic signature is the same as, and shall have the   same force and effect as, your manual signature. Any such procedures and   delivery may be effected by a third party engaged by the Company to provide   administrative services related to the Plan.
    

 

By checking the “Read and Acknowledge Award Documents” box on the Morgan Stanley Smith Barney website, you agree to all of the terms and conditions described above, in your employment agreement and in the Plan.

 

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EXHIBIT A

 

2012 PERFORMANCE GOAL

 

AND NUMBER OF SHARES OF STOCK

 

	
Adjusted EBITDA*
    	
 
    	
Shares of Stock**
    
	
Threshold:   $94.2 million
    	
 
    	
7.5% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Target:   $119.3 million
    	
 
    	
15% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Maximum   $138.8 million
    	
 
    	
30% of   Target Performance Units
    

 

* “Adjusted EBITDA” is intended to serve as a measure of free cash flow available for debt service and starts with net income (loss) attributable to common shareholders with the following adjustments:

 

Included:

 

·    Proportionate share of joint venture interest, taxes, depreciation, rent and amortization

·    Incremental recurring cash flow from unbudgeted acquisitions (to be determined by arriving at net income per generally accepted accounting principles and excluding depreciation and amortization expenses;

 

Excluded:

 

·   Depreciation and amortization

·   Interest income and expense

·   (Provision for) benefit from income taxes

·   Litigation costs

·   Buyout fees

·   Restructuring costs

·   Write-off of capitalized project costs

·   Allowance for uncollectible receivables from owners

·   Impairment of long-lived assets

·   Gain (loss) on investments

·    Gain (loss) on financial guarantees and other contracts

·    Gain on fair value of liquidating trust note

·   Stock compensation

·   Gain on the sale and development of real estate and equity interests

·   Loss from investments accounted for under the profit-sharing method

·   Discontinued operations (net of tax)

·   Any incremental Adjusted EBITDA from the acquisition of real estate or venture interests (including related transaction costs) that was not contemplated in arriving at the specified adjusted EBITDA targets for 2012

·   Any contractual or Board approved transaction not contemplated in arriving at the specified adjusted EBITDA targets for 2012

 

**Earned amounts interpolated on a straight line basis if actual Adjusted EBITDA falls between the specified Adjusted EBITDA amounts for threshold and target achievement or between target and maximum achievement with the number of units rounded down to the nearest whole unit.

 

[The percentage for the maximum award is 22.5% for Messrs. Haddock and Richards.]

 

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EXHIBIT B

 

2013 PERFORMANCE GOAL

 

AND NUMBER OF SHARES OF STOCK

 

	
Adjusted EBITDA*
    	
 
    	
Shares of Stock**
    
	
Threshold:   $      million
    	
 
    	
7.5% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Target:   $        million
    	
 
    	
15% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Maximum   $          million
    	
 
    	
30% of   Target Performance Units
    

 

* “Adjusted EBITDA” is intended to serve as a measure of free cash flow available for debt service and starts with net income (loss) attributable to common shareholders with the following adjustments:

 

Included:

 

·    Proportionate share of joint venture interest, taxes, depreciation, rent and amortization

·    Incremental recurring cash flow from unbudgeted acquisitions (to be determined by arriving at net income per generally accepted accounting principles and excluding depreciation and amortization expenses;

 

Excluded:

 

·   Depreciation and amortization

·   Interest income and expense

·   (Provision for) benefit from income taxes

·   Litigation costs

·   Buyout fees

·   Restructuring costs

·   Write-off of capitalized project costs

·   Allowance for uncollectible receivables from owners

·   Impairment of long-lived assets

·   Gain (loss) on investments

·    Gain (loss) on financial guarantees and other contracts

·    Gain on fair value of liquidating trust note

·   Stock compensation

·   Gain on the sale and development of real estate and equity interests

·   Loss from investments accounted for under the profit-sharing method

·   Discontinued operations (net of tax)

·   Any incremental Adjusted EBITDA from the acquisition of real estate or venture interests (including related transaction costs) that was not contemplated in arriving at the specified adjusted EBITDA targets for 2013

·   Any contractual or Board approved transaction not contemplated in arriving at the specified adjusted EBITDA targets for 2013

 

**Earned amounts interpolated on a straight line basis if actual Adjusted EBITDA falls between the specified Adjusted EBITDA amounts for threshold and target achievement or between target and maximum achievement with the number of units rounded down to the nearest whole unit.

 

Notwithstanding, the foregoing definition of Adjusted EBITDA may be revised at the same time the performance goal is set for 2013 as long as such revised definition, and adjustments, are within the

 

 

performance goals in the 2008 Omnibus Incentive Plan, as amended, and qualify as a measure of free cash flow available for debt service.

 

[The percentage for the maximum award is 22.5% for Messrs. Haddock and Richards.]

 

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EXHIBIT C

 

2014 PERFORMANCE GOALS

 

AND NUMBER OF SHARES OF STOCK

 

	
Adjusted EBITDA*
    	
 
    	
Shares of Stock**
    
	
 
    	
 
    	
 
    
	
Threshold:   $    million
    	
 
    	
15% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Target:   $    million
    	
 
    	
30% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Maximum:   $    million
    	
 
    	
60% of Target   Performance Units
    

 

* “Adjusted EBITDA” is intended to serve as a measure of free cash flow available for debt service and starts with net income (loss) attributable to common shareholders with the following adjustments:

 

Included:

 

·    Proportionate share of joint venture interest, taxes, depreciation, rent and amortization

·    Incremental recurring cash flow from unbudgeted acquisitions (to be determined by arriving at net income per generally accepted accounting principles and excluding depreciation and amortization expenses;

 

Excluded:

 

·   Depreciation and amortization

·   Interest income and expense

·   (Provision for) benefit from income taxes

·   Litigation costs

·   Buyout fees

·   Restructuring costs

·   Write-off of capitalized project costs

·   Allowance for uncollectible receivables from owners

·   Impairment of long-lived assets

·   Gain (loss) on investments

·    Gain (loss) on financial guarantees and other contracts

·    Gain on fair value of liquidating trust note

·   Stock compensation

·   Gain on the sale and development of real estate and equity interests

·   Loss from investments accounted for under the profit-sharing method

·   Discontinued operations (net of tax)

·   Any incremental Adjusted EBITDA from the acquisition of real estate or venture interests (including related transaction costs) that was not contemplated in arriving at the specified adjusted EBITDA targets for 2014

·   Any contractual or Board approved transaction not contemplated in arriving at the specified adjusted EBITDA targets for 2014

 

**Earned amounts interpolated on a straight line basis if actual Adjusted EBITDA falls between the specified Adjusted EBITDA amounts for threshold and target achievement or between target and maximum achievement with the number of units rounded down to the nearest whole unit.

 

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Notwithstanding, the foregoing definition of Adjusted EBITDA may be revised at the same time the performance goal is set for 2014 as long as such revised definition, and adjustments, are within the performance goals in the 2008 Omnibus Incentive Plan, as amended, and qualify as a measure of free cash flow available for debt service.

 

[The percentage for the maximum award is 45% for Messrs. Haddock and Richards.]

 

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EXHIBIT D

 

2012-2014 PERFORMANCE GOALS

 

AND NUMBER OF SHARES OF STOCK

 

	
Actual 3-year TSR Performance Compared to
   Peer Group
    	
 
    	
Shares of Stock
    
	
 
    	
 
    	
 
    
	
Threshold:   40th percentile
    	
 
    	
20% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Target: 50th percentile
    	
 
    	
40% of   Target Performance Units
    
	
 
    	
 
    	
 
    
	
Maximum: 80th percentile
    	
 
    	
80% of   Target Performance Units
    

 

Performance in-between specific goals will be interpolated.

 

“TSR” means the change in common stock price during the three-year performance period ending December 31, 2014 (assuming dividend reinvestment, if any), with the baseline determined by reference to the average closing price during the 20 trading days prior to the commencement of such performance period versus the average closing price during the 20 trading days prior to the completion of such performance period.

 

“Peer Group” means the following 13 companies:

 

	
·      Brookdale Senior Living, Inc.
    	
 
    	
·    Kindred Healthcare, Inc.
    
	
·    Emeritus Corporation
    	
 
    	
·    Lifepoint Hospitals, Inc.
    
	
·    Five Star Quality Care, Inc.
    	
 
    	
·    National Healthcare Corporation
    
	
·    Forest City Enterprises, Inc.
    	
 
    	
·    Skilled Healthcare Group
    
	
·    Gaylord Entertainment Company
    	
 
    	
·    Sun Healthcare Group, Inc.
    
	
·    Gentiva Health Services
    	
 
    	
·    Wyndham Worldwide Corporation
    
	
·    HealthSouth Corporation
    	
 
    	
 
    

 

“Performance Compared to Peer Group” means, with respect to calendar years 2012 through 2014, the Company’s TSR compared to the average of the TSR for the members of its Peer Group whose stock remained publicly traded during such period.

 

[The percentage for the maximum award is 60% for Messrs. Haddock and Richards.]

 

13Exhibit 10.74

 

SEPARATION AGREEMENT AND RELEASE OF CLAIMS
 William R. Wolff

 

I.                                        Definitions.  I intend all words used in this Separation Agreement and Release of Claims (“Agreement”) to have their plain meanings in ordinary English.  Specific terms that I use in this Agreement have the following meanings:

 

A.                                    I, me, and my include both me (William R. Wolff) and anyone who has or obtains any legal rights or claims through me.

 

B.                                    Analysts International means Analysts International Corporation and any related or affiliated business entities in the present or past, including without limitation, its or their predecessors, successors, parents, subsidiaries, affiliates, joint venture partners, and divisions.

 

C.                                    Company means Analysts International; the present and past Board of Directors, shareholders, officers and employees of Analysts International; Analysts International’s insurers; and anyone who acted on behalf of Analysts International or on instructions from Analysts International.

 

D.                                    Employment Agreement means the Employment Agreement between the Company and myself that I signed on or about July 29, 2011 with an “Effective Date” of August 8, 2011 (the “Employment Agreement”).

 

E.                                     My Claims means any and all claims, actions, rights, causes of action and demands, known or unknown, arising at law, in equity, or otherwise, from the beginning of time and continuing through and up to the date on which I sign this Agreement, which I have or may have against the Company, including without limitation:

 

1.                                      all claims arising out of or relating to my employment with Analysts International or the termination of that employment, including but not limited to any claims based on, relating to or arising out of my Employment Agreement; and

 

2.                                      all claims arising out of or relating to the statements, actions or omissions of the Company; and

 

3.                                      all claims for any alleged unlawful discrimination, harassment, retaliation or reprisal, or other alleged unlawful practices arising under any federal, state, or local statute, ordinance, or regulation, including without limitation claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, 42 U.S.C. § 2000e et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.;  the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Civil Rights Act of 1991, 42 U.S.C. § 1981a; the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.; the National Labor Relations Act, 29 U.S.C. § 151 et seq.; the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq.; the Sarbanes-Oxley Act, 15 U.S.C. § 7201 et seq.; the Genetic Information Nondiscrimination Act of 2008, Pub. L. No. 110-233, 122 Stat. 881 (codified as amended in scattered sections of 29 U.S.C. and 42 U.S.C.); the Employee Retirement Income Security Act (except for any vested claim for benefits under a qualified retirement plan that may be brought pursuant to 502(a)(1)(B) of

 

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ERISA), 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.; the Equal Pay Act (codified in scattered sections of 29 U.S.C.); the Minnesota Human Rights Act, Minn. Stat. § 363A.01 et seq.; any applicable local human rights ordinance; and any claim arising under Minn. Stat. Chapters 177 and 181; and

 

4.                                      all claims for alleged wrongful discharge; breach of contract; breach of implied contract; failure to keep any promise; breach of a covenant of good faith and fair dealing; breach of fiduciary duty; estoppel; my activities, if any, as a “whistleblower”; defamation; infliction of emotional distress; fraud; misrepresentation; negligence; harassment; retaliation or reprisal; constructive discharge; assault; battery; false imprisonment; invasion of privacy; interference with contractual or business relationships; any other wrongful employment practices; and violation of any other principle of common law; and

 

5.                                      all claims for compensation or reimbursement of any kind, including without limitation, salary, wages, bonuses, commissions, stock-based compensation, vacation pay, paid time off, fringe benefits, and expense reimbursements; and

 

6.                                      all claims for reinstatement or other equitable relief; back pay, front pay, compensatory damages, damages for alleged personal injury, liquidated damages and punitive damages; and

 

7.                                      all claims for attorneys’ fees, costs and interest.

 

However, My Claims does not include any claims that the law does not allow to be waived or any claims that may arise after the date on which I sign this Agreement.

 

II.                                   Resignation from Employment and Agreement to Release My Claims.

 

A.                                    I have resigned from my employment with (and my position as Senior Vice President, Chief Financial Officer of) Analysts International effective as of the close of business on June 29, 2012.  Between the date on which I sign this Agreement and June 29, 2012, I will continue as a full-time employee of Analysts International in my current capacity of Senior Vice President, Chief Financial Officer, although I understand, and the Company acknowledges, that I will not be expected to work at my current level of effort during that period of time.

 

B.                                    Provided I perform all of my obligations under this Agreement and do not revoke this Agreement within the fifteen (15) day revocation period as set forth below, I will receive severance (“Severance Compensation”) from Analysts International as follows:

 

i.                                          Analysts International will continue to pay my regular base salary of $230,000 per annum through (and ending on) December 7, 2012, at the same time and on the same schedule as salary payments are generally made to employees of Analysts International, at my current rate of pay and subject to normal withholdings; and

 

ii.                                       Analysts International will reimburse my medical insurance premium payments made under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) through December 31, 2012, provided that Analysts International receives sufficient evidence of proof of such payments by me during said COBRA period and, provided further, that during such period of time the amount of my monthly 

 

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COBRA reimbursement shall not exceed $1,800 per month.

 

C.                                    I understand that I may continue my COBRA coverage at my own expense for any remaining period of COBRA eligibility after Analysts International stops its monthly premium payments.  I understand that the date of my employment termination, June 29, 2012, is my qualifying event for COBRA purposes.  I understand that I will have three months following June 29, 2012, to exercise any of my vested stock options of Analysts International.  I understand that pursuant to the terms of the applicable Analysts International plan documents, all of my unvested stock options are forfeited.

 

D.                                    My Severance Compensation is contingent upon me signing and not revoking this Agreement as provided below.  I understand and acknowledge that the Severance Compensation is in addition to anything of value that I would be entitled to receive from Analysts International if I did not sign this Agreement or if I revoked this Agreement.

 

E.                                     In exchange for the Severance Compensation, I give up, settle and release all of My Claims and I agree to abide by this Agreement in all respects.  I understand and agree that through this release I am extinguishing all of My Claims occurring up to the date on which I sign this Agreement.  The Severance Compensation that I am receiving is a fair compromise for my undertakings in this Agreement.

 

F.                                      Notwithstanding the foregoing, I understand that nothing contained in this Agreement purports to limit any right I may have to file a charge with the Equal Employment Opportunity Commission or other administrative agency or to participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or other investigative agency.  This Agreement does, however, waive and release any right to recover monetary damages resulting from such investigation or litigation.

 

III.                              No Admission of Liability.  Even though Analysts International will provide Severance Compensation for me to settle and release My Claims and to otherwise abide by this Agreement, the Company does not admit that it is responsible or legally obligated to me.  In fact, the Company denies that it is responsible or legally obligated to me for My Claims, denies that it engaged in any unlawful or improper conduct toward me, and denies that it treated me unfairly or acted wrongfully.

 

IV.                               Acknowledgement of Risk of Change in Facts or Law.  I acknowledge that the facts and the law material to this Agreement may turn out to be different from or contrary to my present belief, and I assume the risk that such differences may arise.  I acknowledge and represent that I have not relied on any representations of the Company or the Company’s counsel in entering into this Agreement.  Once the fifteen (15) day revocation period below has expired, I intend that the release granted herein shall be final, complete, irrevocable and binding in all events and circumstances whatsoever.

 

V.                                    Advice to Consult with an Attorney.  My decision whether to sign this Agreement is my own voluntary decision made with full knowledge that the Company has advised me to consult with an attorney.

 

VI.                               Period to Consider this Agreement.  I understand that I have through July 20, 2012 (which, I acknowledge, is no less than twenty-one (21) calendar days from the date I first received a draft of this Agreement) to consider whether I wish to sign this Agreement.  I understand that if I sign this Agreement prior to July 20, 2012, or choose to forego the advice of legal counsel, I do so freely and knowingly, and I waive any and all further claims that such action or actions would affect the validity of this Agreement.  I understand that any changes to this Agreement, whether material or not material, do not restart the period during which I can consider whether to sign this Agreement.

 

If I elect not to execute and return this Agreement on or before July 20, 2012, I further understand that the offer contained herein shall terminate and Analysts International shall be under no obligation to provide

 

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the Severance Compensation and the benefits provided herein.

 

VII.                          My Right to Revoke this Agreement.  I understand that I have the right to revoke the release of claims contained in Paragraph II with regard to claims arising under the Minnesota Human Rights Act, Minnesota Statutes Chapter 363A, within fifteen (15) calendar days of my signing this Agreement, and with regard to my rights arising under the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., within seven (7) calendar days of my signing this Agreement.  The two revocation periods shall run concurrently.  This Agreement will not become effective or enforceable unless and until the fifteen (15) day revocation period has expired without my revoking it.  I understand that if I revoke this Agreement, all of Analysts International’s obligations to me under this Agreement will immediately cease and terminate, and Analysts International will owe me no amounts hereunder.  If I do not revoke this Agreement within said fifteen (15) day period, I understand that Analysts International will begin to pay the Severance Compensation to me shortly after that fifteen (15) day period expires.

 

VIII.                     Procedure for Accepting or Revoking this Agreement.  To accept the terms of this Agreement, I must deliver the Agreement, after I have signed and dated it, to Analysts International by hand or by certified mail, return receipt requested on or before July 20, 2012.  To revoke my acceptance, I must deliver a written, signed statement that I revoke my acceptance by hand or by certified mail, return receipt requested, within the fifteen (15) day revocation period.  All certified mailings and hand deliveries must be made to Analysts International at the following address:

 

Jill Dose
 Analysts International Corporation
 7700 France Avenue South, Suite 500
 Edina, MN 55435

 

If I choose to deliver my acceptance or the revocation of my acceptance by mail, it must be:

 

1.                                      postmarked within the period stated above; and

 

2.                                      properly addressed to Jill Dose, Analysts International, at the address stated above.

 

IX.                              Non-Disparagement.  I agree not to make negative or disparaging remarks or comments about the Company including about its officers, directors, management, employees, representatives, products or services.

 

X.                                   Non-Solicitation and Non-Interference.  I acknowledge and agree to abide by the Restrictions against Solicitation and Non-Interference provisions of Section 9 of the Employment Agreement, for which I acknowledge sufficient prior consideration was given.

 

XI.                              Restrictions Against Competition.  I acknowledge and agree to abide by the Restrictions against Competition provisions of Section 9 of my Employment Agreement, for which I acknowledge sufficient prior consideration was given.

 

XII.                         Confidentiality.  I agree that I will keep confidential, and will not use for my benefit or for the benefit of any other company or person, confidential Analysts International business information (including, but not limited to, the identity of Analysts International customers and prospective customers and their requirements for IT consulting and other services provided by Analysts International), salary information, contract rates and contract expiration dates, details of Analysts International projects, business, marketing and strategic plans, and Company or office financial information.  I recognize that the Company 

 

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has furnished any information of this type to me in confidence on the understanding that I would not disclose or use it for the advantage of myself or anyone other than Analysts International.  I acknowledge and agree to abide by the confidentiality provisions of Section 11 of the Employment Agreement, for which I acknowledge sufficient prior consideration was given.

 

XIII.                    Return of Property.  I agree that I will not retain any copies of Company property or documents.  I agree that this obligation is ongoing and that if I subsequently discover any additional Company property that I will promptly return any such property to Analysts International.

 

XIV.                     No Other Promises or Representations.  I agree that no promise or representation, other than the promises and representations expressly contained in this Agreement, has been made to me by the Company.

 

XV.                          Interpretation of this Agreement.  This Agreement should be interpreted as broadly as possible to achieve my intention to resolve all of My Claims against the Company and to otherwise fulfill my obligations under this Agreement.  If any provision of this Agreement is found to be illegal and/or unenforceable, such provision shall be severed and modified to the extent necessary to make it enforceable; and as so severed or modified, the remainder of this Agreement shall remain in full force and effect and enforceable with respect to the release of all the remainder of My Claims.

 

XVI.                     Voluntary Release.  I have read this Agreement carefully.  I understand all of its terms.  In signing this Agreement, I have not relied on any statements or explanations made by the Company or its attorneys except as specifically set forth in this Agreement.  I am voluntarily releasing My Claims against the Company without coercion, duress or reliance on any representations by the Company including, but not limited to, any Analysts International employee, agent or attorney and I am voluntarily undertaking my other obligations under this Agreement without coercion, duress or reliance on any representations by any Analysts International employee, agent or attorney.  I intend this Agreement to be legally binding.

 

XVII.                Disclosure of this Agreement.  I understand that the Company will make a filing on Form 8-K with the Securities and Exchange Commission regarding my resignation from the Company.

 

XVIII.           Governing Law; Jurisdiction and Venue.  This Agreement is governed by and shall be construed in accordance with the laws of the State of Minnesota and any dispute related thereto shall be exclusively venued in the state courts of Minnesota located in Hennepin County, Minnesota.  In the event litigation results involving this Agreement, the unsuccessful party agrees to pay the prevailing party’s reasonable attorneys’ fees and costs.

 

XIX.                    Other Agreements.  I understand that this Separation Agreement and Release of Claims and the employee benefit plans of Analysts International in which I may continue as a participant following my termination from employment contain all of the agreements between the Company and me.  Except as expressly provided herein, these agreements (this Separation Agreement and Release of Claims and the employee benefit plans of Analysts International in which I may continue as a participant following my termination from employment) expressly supersede all other written and oral agreements the Company and I may have, including, but not limited to, the my Employment Agreement).  I fully understand and acknowledge that this Agreement completely supersedes and replaces my Employment Agreement and that, from and after the effective date of this Agreement, except as expressly provided herein, I will not have any rights under my Employment Agreement (or any exhibit thereto), whether to severance, change of control payments, stock options, or otherwise.  Except as expressly provided herein, the only provision of the Employment Agreement that shall have any force or effect after the effective date of this Agreement shall be the provisions in Section 3 thereof pertaining to the survival of obligations.  Any additions or changes to this Agreement must be in writing and signed by both parties.

 

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XX.                         Survival.  I understand that the provisions of this Agreement that, by their nature and content, must survive the completion, revocation, termination or expiration of this Agreement in order to achieve the fundamental purposes of this Agreement (including but not limited to the provisions of paragraphs II, IX, X, XI, XII, XIII, XV and XVIII of this Agreement) will survive the termination of my employment and the termination, for any reason, of this Agreement.

 

XXI.                    Release as Evidence.  I understand and agree that in the event that any claim, suit or action shall be commenced by me against the Company, including, but not limited to, claims, suits or actions relating to my employment with Analysts International through this date, this Agreement shall constitute a complete defense to any such claims, suits or actions so instituted.

 

By signing below, I, William R. Wolff, acknowledge and agree to the following:

 

·                                          I have had adequate time to consider whether or not to sign this Separation Agreement and Release of Claims.

 

·                                          I have read this Separation Agreement and Release of Claims carefully.

 

·                                          I understand and agree to all of the terms of this Separation Agreement and Release of Claims.

 

·                                          I am knowingly and voluntarily releasing My Claims against the Company (as defined herein) to the extent expressly set forth in this Separation Agreement and Release of Claims.

 

·                                          I have not, in signing this Separation Agreement and Release of Claims, relied upon any statements or explanations made by the Company except as for those specifically set forth in this Separation Agreement and Release of Claims.

 

·                                          I intend this Separation Agreement and Release of Claims to be legally binding.

 

·                                          The effective date of this Separation Agreement and Release of Claims shall be the date on which it is last signed by one of the parties to this Agreement.

 

The foregoing is agreed and accepted.

 

	
William   R. Wolff
    	
 
    	
Analysts   International Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Brittany B. McKinney
    
	
 
    	
 
    	
 
    
	
/s/ William R.   Wolff
    	
 
    	
Title:
    	
President   & CEO
    
	
 
    	
 
    	
 
    
	
Date   signed:
    	
6-12-12
    	
 
    	
Date   signed:
    	
6-12-2012
    
						

 

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