Document:

FDO EX-10.36-2012.8.25

EXHIBIT 10.36
SEVERANCE AGREEMENT
This Severance Agreement is effective this ________ day of _______, _____ by and between _______________ (“Employee”) and Family Dollar Stores, Inc., and its subsidiaries and affiliated companies (collectively, the “Company”). 
1.Recitals.  Employee and the Company recite the following:  
A.Employee is employed by the Company in a position of senior leadership. 
 
B.The Company desires to obtain the agreement of Employee to certain restrictive covenants and other provisions as set forth herein in exchange for Employee's receipt of good and valuable consideration to which Employee was not previously entitled, including without limitation: (i) the Company's agreement to provide certain severance payments as described herein, (ii) the Company's employment of Employee effective as of ____________, ________, (iii) [To be filled in based on Employee's offer of employment] or [for existing employees, consideration provided e.g., “a compensation increase, effective_____, in the amount of_____)”].  
C.Notwithstanding any provision of this Severance Agreement, the Company and Employee agree that Employee's employment with the Company is “at will” and may be terminated at any time with or without “Cause” without any liability or obligation of the Company except as expressly set forth herein.  
2.Definitions.  When used in this Severance Agreement the following terms and provisions shall have the meanings set forth herein:
A.“Cause” - “Cause” means any of the following acts by Employee, if the act or acts of Employee are determined by the Company to constitute “Cause”:  (a) gross neglect of duty; (b) intentionally engaging in any activity that is in conflict with or adverse to the business or reputation of the Company; (c) engaging in any act involving moral turpitude; (d) conviction of a felony, or conviction of a misdemeanor 

where active imprisonment is imposed; (e) falsification of any Company records or engaging in any misappropriation, fraud, breach of fiduciary duty or dishonesty that affects the Company's business or reputation; (f) disclosure of the Company's  confidential or proprietary information in violation of this Agreement or applicable law; (g) Employee's failure to comply with reasonable written directives of the individual to whom Employee reports or of the Chairman of the Board or the Board of Directors of the Company, after reasonable notice of the deficiency and a reasonable opportunity to cure; (h) chronic and unexcused absenteeism; (i) willful or intentional violation of any law or regulations to which the Company is subject; (j) failure to comply with the material terms of this Agreement after reasonable notice and a reasonable opportunity to cure; (k) the willful and material violation of the Company's policies, including its Code of Ethics; and (l) the willful failure to cooperate with any investigation authorized by the General Counsel or the Board of Directors of the Company.  The determination of the Company as to the extension of “Cause” shall be in the sole discretion of the Company and shall be conclusive on the parties to the Agreement.
B.“Change in Control” - Change in Control shall have the meaning set forth in Section 2.1(f) of the 2006 Incentive Plan; provided, however, that to the extent applicable under Section 409A of the Code, for purposes of paying certain severance payments within 24 months after a Change in Control under Paragraph 4 below, Change in Control shall have the same meaning as set forth in any regulations, revenue procedure, revenue rulings or other pronouncements issued by the Secretary of the United States Treasury pursuant to Section 409A of the Code.
C.“Code” - Code means the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the underlying final regulations.
D.“Company's Business” - The Company's Business means the operation of multi-merchandise retail stores, the majority of which stores each have 25,000 square feet or less of total selling space, and that sell or that offer for sale basic merchandise for family and home needs, including perishable and non-perishable goods.  

E. “Competitor” - Competitor means: 
		
	(i)
	any of the following entities: Dollar General, Dollar Tree, Fred's, Big Lots, 99 Cent Stores, Walgreens, CVS, Rite Aid, Wal-Mart, Kmart, five Below, and Target;

		
	(ii)
	any person or entity who owns or operates multi merchandise retail stores that each have 25,000 square feet, or less, of total selling space, and that sell, or offer for sale, merchandise that is the same or substantially similar to merchandise sold or offered for sale by the Company; 

		
	(iii)
	any person or entity who owns or operates or has developed plans to own or operate multi-merchandise retail stores that have 25,000 square feet, or less, of total selling space, and that will sell, or offer for sale merchandise that is the same as or substantially similar to merchandise offered for sale by the Company.

F. “Confidential Company Information” - Confidential Company Information means, unless otherwise available to the public (provided the information has not become available to the public as a result of any unauthorized action on the part of Employee), (i) any and all information relating to the Company's methods of operation, source of merchandise supply, organizational details, personnel information (including, but not limited to, information related to employee compensation), marketing plans, market assessments, business plans, strategic plans, forecasts, or financial information or data; (ii) any and all information relating to the Company's real estate activities including, but not limited to, landlords, prospective landlords, and lease data; (iii) the specific terms of the Company's agreements or arrangements with any officers, directors, employees, vendors, suppliers, or any other entity with which the Company may be affiliated from time to time, including, but not limited to, the value of any consideration provided or received by the Company or the expiration date of any such agreement or arrangement; and (iv) any and all information of a technical or proprietary nature developed by or acquired by the Company or made available to the 

Company and its employees by vendors, suppliers, contractors, or other employees of the Company, on a confidential basis, including, but not limited to, ideas, concepts, designs, specifications, prototypes, techniques, technical data or know-how, formulae, methods, research and development, and inventions, as such Confidential Company Information may exist from time to time and whether in electronic, print or other form and all copies, notes, or other reproductions thereof.  
G.“Disability” - Disability shall have the meaning set forth in Section 2.1(m) of the 2006 Incentive Plan.
H.“Employee's Termination Date” - Employee's Termination Date means the date of Employee's termination of employment with the Company, regardless of:  (i) the date, cause, or manner of such termination of employment; (ii) whether such termination is with or without Cause or is a result of Employee's resignation; or (iii) whether the Company provides severance benefits to Employee under this Agreement.  

I.“Good Reason” shall mean any of the following conditions (each a “Condition”) that arises without the consent of Employee during the twenty-four (24) month period beginning on the effective date of a Change in Control as defined in this Agreement, and the Condition has not been cured as set out below: 
i.     A material diminution in Employee's base compensation.
ii.    A material diminution in Employee's authority, duties, or responsibilities, or the authority, duties, or responsibilities of the supervisor (including the Board of Directors of the Company, if applicable) to whom Employee is required to report. 
iii.    A material diminution in the budget over which Employee retains authority.
iv.    A material change in the geographic location at which Employee must perform the services required pursuant to this Agreement.

v.    Any other action or inaction that constitutes a material breach by the Company of this Agreement.
Within thirty (30) days of the initial existence of the Condition, Employee must provide notice to the Company of the existence of the Condition, and the Company shall have forty-five (45) days following receipt of such notice to cure the Condition.  If the Condition is cured within forty-five (45) days of such notice, Employee is not entitled to any payment as the result of a termination of employment based on that occurrence of the circumstances that would otherwise constitute Good Reason.
J.  “Incentive Bonus Plan” - The annual cash incentive bonus plan established pursuant to the Guidelines for Annual Cash Bonus adopted under the 2006 Incentive Plan.
K. “Restricted Territory” - Restricted Territory means any state in the United States of America, or any state in Mexico, in which (i) the Company is conducting the Company's Business on Employee's Termination Date, (ii) the Company is conducting the Company's Business on the Date of this Agreement; or (iii) the Company has existing plans to conduct the Company's Business on Employee's Termination Date and Employee has knowledge, or should have knowledge of such Company plans.  For purposes of this definition, the District of Columbia and each of any commonwealths, territories, or possessions of the United States shall be regarded as a “state of the United States of America.” 
L. “Target Bonus” - Target Bonus means Employee's “target bonus” for the applicable fiscal year within the meaning of Section 4 of the Incentive Bonus Plan.
M.  “Trade Secret” - Trade Secret means any item of Confidential Company Information that constitutes a trade secret under the common law or statutory law of the State of Delaware or the State of North Carolina, namely N.C. Gen. Stat. §§ 66-152 et seq., but such definition of “Trade Secret” shall not alter either the Company's rights or Employee's obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices.

N.  “2006 Incentive Plan” - The Family Dollar Stores, Inc. 2006 Incentive Plan, as in effect from time to time, as amended, or any successor to such plan. 
3.     Severance Upon Termination Without Cause Prior to a Change in Control. Subject to the provisions of this Agreement, in the event of the termination of Employee's employment (a) by the Company without Cause, (b) following Employee's Disability or (c) upon Employee's death, in each case prior to a Change in Control, the Company shall provide Employee with the following severance benefits: 
A.    The Company shall continue the payment of Employee's base salary in effect on Employee's Termination Date for a period of twelve (12) months.  Such salary continuation payments shall be paid in a series of substantially equal installments in accordance with the regular payroll practices of the Company as in effect as of Employee's Termination Date over said period, commencing as soon as administratively practicable, but in no event more than sixty (60) days, following Employee's Termination Date (except as otherwise required by Paragraph 16).  Such salary continuation payments shall not be considered eligible compensation under any of the Company's employee benefit plans. 
B.    If Employee's Termination Date is after the end of the Company's fiscal year but prior to the payment date of any bonus under the Incentive Bonus Plan for such fiscal year, the Company shall pay Employee the portion of the Target Bonus earned by Employee for such fiscal year according to the terms of the Incentive Bonus Plan (i.e., based on the Company's applicable performance level and, to the extent applicable, Employee's performance rating for the fiscal year), without regard to any requirement in the Incentive Bonus Plan otherwise requiring Employee to remain employed through the bonus payment date.  In addition, Employee shall be eligible to receive a pro rated bonus under the Incentive Bonus Plan for the fiscal year of the Company in which such termination of employment occurs, without regard to any requirement in the Incentive Bonus Plan otherwise requiring Employee to remain employed through the bonus payment date, based on the number of 

completed weeks during the applicable fiscal year through Employee's Termination Date and further based on the Company's applicable performance level for the fiscal year and, if available and to the extent applicable, Employee's performance rating for the fiscal year (or if no such performance rating is available, assuming a performance rating of “satisfactory” or its equivalent).  Any such payment shall be made to Employee at the same time the Company makes payments to other participants in the Incentive Bonus Plan.  Notwithstanding the preceding or any provision of the Incentive Bonus Plan to the contrary, any bonus payment pursuant to the Incentive Bonus Plan payable to Employee under the terms of that plan and/or this Agreement shall be paid as soon as administratively practicable following the end of the relevant performance period but in no event later than two and one half (21⁄2) months following the end of the Company's fiscal year in which the relevant performance period ends.   
 
C.    If Employee elects continuing group health coverage under a group health plan sponsored by the Company pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then for the number of months set forth in clause A above after Employee's Termination Date, but not to exceed the shorter of eighteen (18) months or date on which Employee becomes eligible to participate in another employer-sponsored group health benefit plan, the Company shall pay for the same proportion of the monthly cost of such COBRA continuation coverage as the Company paid for the monthly cost of group health coverage under such plan during the last calendar month prior to Employee's Termination Date for Employee and Employee's dependents who elect COBRA continuation coverage, subject to applicable laws and the provisions of the group health plan, as amended from time to time by the Company at its sole discretion. 
Such payments and benefits provided by the Company to Employee as set forth in Paragraphs 3 A, B and C are herein called “Termination Compensation.”  Such Termination Compensation shall be reduced, in whole or in part, by: (x) all other salary, bonus, consulting fees or other compensation received by or payable to 

Employee for services rendered in any capacity to any third party during the period that such Termination Compensation is paid, with the exception of any compensation received for service on a board of directors at the time of termination or other similar arrangement that existed at the time of termination and (y) all disability or life insurance payments made pursuant to disability or life insurance policies provided by and paid for by the Company to Employee and which payments are received during the period that such Termination Compensation is paid.  Employee agrees to pursue reasonable, good faith efforts to obtain other employment in a position suitable to Employee's background and experience.  Moreover, Employee agrees to notify the Company within three business days of obtaining other employment during the time period in which Employee is receiving Termination Compensation.  Such notification to the Company shall include Employee's salary in the new position, when employment will commence, the amount of any signing bonus, when health insurance with the new employer will commence, and any other information necessary for the Company to calculate any reduction in Termination Compensation under the provisions of this paragraph.  Notwithstanding any of the foregoing, Employee's Termination Compensation shall be subject to forfeiture as set forth below in Paragraph Five.  
4.        Severance Upon Termination Without Cause Following a Change in Control. Subject to the provisions of this Agreement, in the event of the termination of Employee's employment (a) by the Company without Cause, (b) by Employee for Good Reason, (c) following Employee's Disability or (d) upon Employee's death, in each case within twenty-four (24) months after a Change in Control, the Company shall provide Employee with the following severance benefits:   
A.     The Company shall pay to Employee in a lump sum in cash within thirty (30) days after the date of such termination of employment an amount equal to the product of (x) one and one-half (11⁄2) and (y) the sum of (A) Employee's base salary at the highest annual rate in effect during the period beginning immediately prior to the Change in Control through Employee's Termination Date and (B) the average of the bonuses, if any, paid or payable to Employee under the Incentive Bonus Plan for each of the three (3) fiscal years preceding the fiscal year in which Employee's 

Termination Date occurs (or such fewer number of fiscal years for which Employee was eligible to receive a bonus under the Incentive Bonus Plan). 
B.     If Employee elects continuing group health coverage under a group health plan sponsored by the Company pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then for the number of years represented by the multiple set forth in clause A (x) above after Employee's Termination Date, but not to exceed the shorter of eighteen (18) months or the date on which Employee becomes eligible to participate in another employer-sponsored group health benefit plan, the Company shall pay for the same proportion of the monthly cost of such COBRA continuation coverage as the Company paid for the monthly cost of group health coverage under such plan during the last calendar month prior to Employee's Termination Date for Employee and Employee's dependents who elect COBRA continuation coverage, subject to applicable laws and the provisions of the group health plan as amended from time to time by the Company at its sole discretion.  Employee's right in connection with or following a Change in Control to receive a pro rata bonus under the Incentive Bonus Plan or any other incentive compensation program under the 2006 Incentive Plan shall be determined in accordance with the provisions of Section 15.7 or such successor provisions of the 2006 Incentive Plan.  Notwithstanding the preceding or any provision of the Incentive Bonus Plan to the contrary, any bonus payment pursuant to the Incentive Bonus Plan payable to Employee under the terms of that plan and/or this Agreement shall be paid as soon as administratively practicable following the end of the relevant performance period but in no event later than two and one half (21⁄2) months following the end of the Company's fiscal year in which the relevant performance period ends.      
5.     Restrictive Covenants; Non-Disclosure Obligations; Forfeiture of Termination Compensation.  Employee and the Company understand and agree that the purpose of the provisions of this Paragraph 5 is to protect the legitimate business interests of the Company, especially within the multi-merchandise retail industry, in light of Employee's leadership position with the Company and exposure and 

access to Confidential Company Information and Trade Secrets.  Employee and the Company further agree and understand that the multi-merchandise retail industry and the Company's Business are national in scope and that the Company has plans to expand the Company's Business internationally.  Employee acknowledges that the employment and post-employment restrictions set forth in this Paragraph 5 are therefore reasonable, legitimately protect the Company's Business, and do not, and will not, unduly impair Employee's ability to earn a living during or after Employee's employment with the Company.  As a result of Employee's educational background, prior work experience, and Employee's employment and position with the Company, Employee possesses general skills and knowledge enabling Employee, if need be, to pursue profitable work in businesses not competitive with the Company's Business. [[Only included in new hire Agreements] Employee acknowledges that Employee does not have an agreement with a previous employer restricting, or that could be construed as restricting, Employee from working for the Company.]  
Therefore, in consideration of good and valuable consideration to which Employee was not previously entitled, including, without limitation, as is set forth in Paragraph 1.B above, Employee agrees as follows:
A.Covenant Not to Compete.  
(i)    Employee agrees that during Employee's employment with the Company and for the period of twelve (12) months immediately following Employee's Termination Date (such period not to include any period(s) of violation or period(s) of time required for litigation to enforce the provisions of this Paragraph 5.A(i)) (the “Restricted Period”), Employee shall not, without the prior written authorization of the Company, accept, obtain, or hold a position as an employee, consultant, agent or contractor or invest in or provide financing to a Competitor within the Restricted Territory. 
(ii)      Should Employee violate the provisions of Paragraph 5.A (i), the Company shall be entitled to remedies set forth in Paragraph 8 hereof, as well as to all other remedies allowed by law.

(iii)    Notwithstanding the foregoing, Employee may, solely as a passive investor, own capital stock of a publicly held corporation, which is actively traded in the over-the-counter market or is listed and traded on a national securities exchange, which constitutes or is affiliated with a Competitor, so long as Employee's ownership is not in excess of five percent (5%) of the total outstanding capital stock of the Competitor.
B.Non-Solicitation of Company Employees.      
(i)    Employee understands and agrees that the relationship between the Company and each of its employees constitutes a valuable asset of the Company and may not be converted to Employee's own use or benefit, or for the use or benefit of any other third party.  Accordingly, Employee hereby agrees that during Employee's employment and during the Restricted Period, Employee shall not, without the Company's prior written consent, directly or through any other person (A) solicit or recruit for employment; hire; attempt to solicit or recruit for employment; attempt to hire; or accept as an employee, consultant, contractor, or otherwise, any Company employee, or (B) urge; encourage; induce; or attempt to urge, encourage, or induce, any Company employee to terminate his or her employment with Company; or (C) otherwise interfere with the Company's relationship with any Company employee. 
(ii)    Should Employee violate the provisions of Paragraph 5.B (i), the Company shall be entitled to remedies set forth in Paragraph 8 hereof, as well as to all other remedies allowed by law.
C.Non-Disclosure of Confidential Company Information; Trade Secret Protections.  Employee recognizes and acknowledges that during the course of Employee's employment, the Company has provided and will continue to provide Employee with exposure and access to Confidential Company Information and Trade Secrets of the Company, or confidential information belonging to other third parties who may have furnished such information to the Company under obligations of confidentiality.  Employee, therefore, agrees that during Employee's employment with the Company and at all times after Employee's Termination Date, Employee shall not disclose any such Confidential Company Information or Trade Secrets, or other information subject to an 

obligation of the Company to keep confidential, to any third party not employed by or otherwise expressly affiliated with the Company for any reason or purpose whatsoever, and shall not use such Confidential Company Information or Trade Secrets except on behalf of the Company.
D.Employee Acknowledgement.  Employee acknowledges and agrees that (i) the restrictive covenants in this Paragraph 5 are reasonable in time, territory and scope, and in all other respects; (ii) should any part or provision of any covenant be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness, or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement; and (iii) if any portion of the foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, territory, definition of activities or definition of information covered is considered to be invalid or unreasonable in scope, the invalid or unreasonable terms shall be redefined, or a new enforceable term provided, such that the intent of the Company and Employee in agreeing to the provisions of this Agreement will not be impaired and the provision in question shall be enforceable to the fullest extent of the applicable laws.  The restrictive covenants contained herein shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of this restrictive covenant.  Any decision in one state or jurisdiction invalidating or holding unenforceable any provision of this Paragraph 5 shall not be binding in any other state or jurisdiction.
6.      Other Post-Termination Covenants.
A.    Employee agrees that Employee shall resign and does resign from all positions as an officer and director of the Company and from any other positions affiliated with the Company, with such resignations to be effective upon Employee's Termination Date.
B.    Upon Employee's Termination Date, Employee agrees not to make any statements to the Company's employees, customers, vendors, or suppliers or to any public or media source, whether written or oral, regarding Employee's employment or termination from the Company's employment, 

except as may be approved in writing by an executive officer of the Company.  Employee further agrees not to make any statement (including to any media source, or to the Company's suppliers, customers or employees) or take any action that would disrupt, impair, embarrass, harm or affect adversely the Company or any of the employees, officers, directors, or customers of the Company or place the Company or such individuals in any negative light.
C.     Following Employee's Termination Date, Employee covenants to provide further advice and assistance to the Company as may be required from time to time, and to provide all information available to Employee on matters handled by and through Employee while employed by the Company or of which Employee has personal knowledge, and by making available to the Company at reasonable times and circumstances, upon request by the Company, information pertinent to its operations in Employee's possession; and, to the extent that it is necessary, to cooperate with and assist the Company to conclude any matters that are pending and which may require Employee's assistance; provided, that Employee shall be paid reasonable compensation (according to the Company's regular payroll practices for Senior Vice Presidents) by the Company in the event Employee is required to expend substantial time in the performance of such services; and provided further, that Employee may perform such services in a manner that does not unreasonably interfere with other employment obtained by Employee.  Employee shall be reimbursed for any expenses reasonably incurred by Employee in the performance of the covenants herein set forth in this Paragraph 6.C, provided, however, that the Company shall not have any duty to reimburse any expenses unless such expenses are documented (in a manner required of Senior Vice Presidents making claims for reimbursement of business-related expenses) within 90 days of being incurred.  Expenses payable pursuant to the immediately preceding sentence shall be paid on the 30th day following Company's receipt of the required documentation.
In addition, Employee agrees to cooperate with and provide assistance to the Company and its legal counsel in connection with any litigation (including arbitration or administrative hearings) or investigation affecting the Company, in which, in the reasonable judgment of the Company's counsel, 

Employee's assistance or cooperation is needed.  Employee shall, when requested by the Company, provide testimony or other assistance and shall travel at the Company's request in order to fulfill this obligation.  In connection with such litigation or investigation, the Company shall attempt to accommodate Employee's schedule, shall reimburse Employee (unless prohibited by law) for any actual loss of wages in connection therewith, shall provide Employee with reasonable notice in advance of the times in which Employee's cooperation or assistance is needed, and shall reimburse Employee for any reasonable expenses incurred in connection with such matters, provided, however, that the Company shall not have any duty to reimburse any loss of wages and/or expenses unless such wages and/or expenses are documented (in a manner required of Senior Vice Presidents making claims for reimbursement of business-related expenses) within 90 days of being incurred.  Lost wages and/or expenses payable pursuant to the immediately preceding sentence shall be paid on the 30th day following Company's receipt of the required documentation. 
7.    Delivery of Property upon Termination.  Upon Employee's Termination Date, Employee shall, as soon as possible but no later than two (2) days from Employee's Termination Date, surrender to the Company all Confidential Company Information and Trade Secrets in Employee's possession and return to the Company all Company property in Employee's possession or control, including but not limited to, all paper records and documents, laptop,  computer disks, flash drives and access cards and keys to any Company facilities. 
8.        Enforcement of Restrictions in Paragraphs 5 and 6.  Because Employee's services to the Company are special and unique and because Employee has been exposed to and has had access to Confidential Company Information and Trade Secrets, Employee and the Company agree that any breach or threatened breach of the provisions of Paragraphs 5.A(i), 5.B(i), 5.C, and 6 would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.  In the event of a breach or threatened breach of Paragraphs 5.A(i), 5.B(i), 5.C, or 6 of this Agreement, the Company or its successors or assigns may, in addition to any other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance; temporary, preliminary, and permanent injunctive relief; 

expedited discovery; or other equitable relief in order to enforce or prevent any violations of any such provisions (without posting a bond or other security).  The Company shall be specifically entitled to an injunction restraining Employee from disclosing any Confidential Company Information or Trade Secrets, and, further, from accepting or continuing any employment with or rendering any services, or continuing to render services, to any such third-party to whom any Confidential Company Information or Trade Secret has been disclosed or is threatened to be disclosed by Employee.  
In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available to the Company, if Employee violates any provision of Paragraphs 5.A(i), 5.B(i), 5.C, and 6 of this Agreement: (i) any compensation, benefits and/or Termination Compensation then or thereafter due from the Company to Employee shall be terminated forthwith; (ii) the Company's obligation to pay or provide and Employee's right to receive such compensation, benefits and/or Termination Compensation shall terminate and be of no further force or effect; and (iii) upon demand by the Company, Employee shall repay to the Company any such compensation, benefits and/or Termination Compensation previously paid by the Company; in each case without limiting or affecting Employee's obligations under such Paragraphs 5.A(i), 5.B(i), 5.C, or 6 or the Company's other rights and remedies available at law or in equity, and provided that at least $20,000 of such compensation, benefits and/or Termination Compensation shall be retained by Employee representing the consideration Employee received in exchange for Employee's release and waiver of rights or claims under Paragraph 10 of this Agreement.    
9.    Employee's Disclosure Obligation. Employee shall notify any prospective employer with whom Employee seeks to be employed of the restrictive covenants included in this Agreement.  Absent such notification by Employee, the Company may provide the prospective employer with notification.
10.    Waiver and Release.  In consideration for the payments and benefits provided and to be provided hereunder, Employee agrees that Employee will, upon termination of employment, and in no event later than 60 days after Employee's Termination Date, as a condition to the Company's obligation to pay any 

severance benefits under this Agreement, deliver to the Company a fully executed release agreement in a form acceptable to the Company and which shall fully and irrevocably release and discharge the Company, its directors, officers, agents and employees from any and all claims, charges, complaints, liabilities of any kind, known or unknown, owed to Employee. 
11.      Special Provisions. This Agreement shall be binding on and inure to the benefit of any successor to or assignee of the Company, and Employee specifically agrees on demand to execute any and all necessary documents in connection with the performance of this Agreement.  No waiver by either party of any breach by the other of any provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any such or other provision of this Agreement.  If any provision of this Agreement shall be declared invalid or unenforceable as a matter of law, such invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement or of the remainder of this Agreement as a whole.
12.     Complete Agreement.  This Agreement sets forth all of the terms of the understanding between the parties with reference to the subject matter set forth herein and may not be waived, changed, discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. This Agreement revokes and supersedes all prior or contemporaneous agreements, representations, promises and understandings, whether written or oral, between the parties [to be filled in as applicable: “except for that Agreement(s) dated _______ and entitled __________” or “including without limitation the __________ Agreement between Employee and Company dated _____”].
13.    Choice of Law; Consent to Jurisdiction.  This Agreement shall be governed by and construed under the substantive laws of the State of Delaware without regard to its choice of law or conflict of law principles.  Employee hereby expressly and irrevocably consents to the exclusive venue and jurisdiction of 

the United States District Court for the Western District of North Carolina, or any state court in Mecklenburg County, North Carolina.
14.    Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, if mailed by registered, certified or express mail, postage prepaid, or if delivered to a recognized courier service, addressed to Employee at the address shown on the Company's records for tax reporting purposes or to the Company as follows (or in either case to such other address as one party shall give the other in the manner provided herein):
Family Dollar Stores, Inc.        Chairman of the Board 
Post Office Box 1017
Charlotte, NC  28201-1017
                        
With copy to:    General Counsel
Family Dollar Stores, Inc.
Post Office Box 1017
Charlotte, NC  28201-1017
15.    Section 280G Policy.  In accordance with the Family Dollar Stores, Inc. Policy Regarding Tax Adjustments for Certain Severance Benefits, dated November 18, 2008, notwithstanding anything in this Agreement or the 2006 Incentive Plan to the contrary, in the event it shall be determined that any payment or distribution of any type to Employee, pursuant to this Agreement or the 2006 Incentive Plan, is or will be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax, such payments shall be reduced (but not below zero) if and to the extent that such reduction would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the excise tax), than if Employee received all of the payments.  The Company shall reduce or eliminate the payments, by first reducing or eliminating the portion of the payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination.  All determinations concerning the application of this Section 

shall be made by a nationally recognized firm of independent accountants or any nationally recognized financial planning and benefits consulting company, selected by the Company and reasonably satisfactory to Employee, whose determination shall be conclusive and binding on all parties. The fees and expenses of such accountants shall be borne by the Company.  The Company shall hold in confidence and not disclose, without Employee's prior written consent, any information with regard to Employee's tax position which the Company obtains pursuant to this provision.
16.    Compliance with Code Section 409A.  This Agreement is intended to comply with Code Section 409A, to the extent applicable.  Notwithstanding any provision herein to the contrary, this Agreement shall be interpreted, operated and administered consistent with this intent.  Each separate installment under this Agreement shall be treated as a separate payment for purposes of determining whether such payment is subject to or exempt from compliance with the requirements of Code Section 409A.  In addition, in the event that Employee is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the date of termination of Employee's employment), any payment or benefits hereunder that are nonqualified deferred compensation subject to the requirements of Section 409A of the Code shall be provided to Employee no earlier than six (6) months after the date of Employee's “separation from service” within the meaning of Section 409A of the Code.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement all as of the day and year first above written.
FAMILY DOLLAR STORES, INC.    
By:________________________________
Title:    
Attest:
__________________________    
EMPLOYEE
______________________________exhibit_10-7.htm

 

WALGREEN CO.

LONG-TERM PERFORMANCE INCENTIVE PLAN

RESTRICTED SHARE UNIT AWARD AGREEMENT

 

These materials, which may include descriptions of company stock plans, prospectuses and other information and documents, and the information they contain, are provided by Walgreen Co., not by Fidelity, and are not an offer or solicitation by Fidelity for the purchase of any securities or financial instruments.  These materials were prepared by Walgreen Co., which is solely responsible for their contents and for compliance with legal and regulatory requirements.  Fidelity is not connected with any offering or acting as an underwriter in connection with any offering of securities or financial instruments of Walgreen Co.  Fidelity does not review, approve or endorse the contents of these materials and is not responsible for their content.

  

 

WALGREEN CO.

LONG-TERM PERFORMANCE INCENTIVE PLAN

RESTRICTED SHARE UNIT AWARD AGREEMENT

Participant Name:

Participant ID:

Grant Date:  November 1, 2012

Units Granted:

Vesting Date:  [November 1, 2015, provided the Performance Goal described in Section 4 is met]

Acceptance Date:

Electronic Signature:

 

This document (referred to below as the “Agreement” or the “Award Agreement”) spells out the terms and conditions of the Restricted Share Unit Award provided by Walgreen Co., an Illinois corporation (the “Company”), to the individual employee designated above (the “Employee”) pursuant to the Walgreen Co. Long-Term Performance Incentive Plan and related plan documents (the “Plan”) on and as of the Award Date designated above.  Except as otherwise defined herein, capitalized terms used in this Agreement have the respective meanings set forth in the Plan.

The parties hereto agree as follows:

1. Grant of Restricted Share Units.  Pursuant to the approval and direction of the Compensation Committee of the Company’s Board of Directors (the “Committee”) under Sections 3.2, 5 and 6 of the Plan, the Company hereby grants to the Employee, the number of restricted share units specified above (the “Restricted Share Units”), subject to the terms and conditions of the Plan and this Agreement.

 

2. Restrictions.  The Restricted Share Units may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether voluntarily or involuntarily or by operation of law.  The Employee shall have no rights in the shares of Company common stock (the “Common Stock”) underlying the Restricted Share Units until the termination of the applicable Period of Restriction (as defined in Section 4 below) or as otherwise provided in the Plan or this Agreement.  The Employee shall not have any voting rights with respect to the Restricted Share Units.

 

3. Restricted Share Unit Account and Dividend Equivalents.  The Company shall maintain an account (the “Account”) on its books in the name of the Employee.  Such Account shall reflect the number of Restricted Share Units awarded to the Employee as well as any additional Restricted Share Units credited as a result of dividend equivalents, administered as follows:

 

(a) The Account shall be for recordkeeping purposes only, and no assets or other amounts shall be set aside from the Company’s general assets with respect to such Account.

 

(b) As of each record date with respect to which a cash dividend is to paid with respect to shares of Common Stock, the Company shall credit the Employee’s Account with an equivalent amount of Restricted Share Units based upon the value of Common Stock on such date.

 

(c) If dividends are paid in the form of shares of Common Stock rather than cash, then the Employee will be credited with one additional Restricted Share Unit for each share of Common Stock that would have been received as a dividend had the Employee’s outstanding Restricted Share Units been shares of Common Stock.

 

(d) Additional Restricted Share Units credited via dividend equivalents shall vest or be forfeited at the same time as the Restricted Share Units to which they relate.

 

4. Period of Restriction.  The period prior to the date the Restricted Share Units become vested is referred to as the “Period of Restriction.”  Subject to the provisions of the Plan and this Agreement, unless vested or forfeited earlier as described in Section 5, 6, 7 or 8 of this Agreement, as applicable, the Period of Restriction for the Restricted Share Units awarded hereunder shall end, and the Restricted Share Units shall become vested and settled as described in Section 9 below, as of November 1, 2015, provided the performance goal described below in this Section 4 (“Performance Goal”) is satisfied in the fiscal year ending August 31, 2013.  The Performance Goal is attainment of 50% of threshold FIFO Adjusted EBIT established as a goal for the fiscal year ending August 31, 2013, as determined under the Management Incentive Plan and certified by the Committee.  If the Performance Goal is not attained as of the end of the 2013 fiscal year, the Restricted Share Units awarded hereunder shall be thereupon forfeited.

 

5. Vesting upon Termination due to Disability or Death.  If (a) on or prior to August 31, 2013, or (b) after August 31, 2013 but solely if the Performance Goal has been attained, the Employee terminates employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) by reason of Disability (as defined in the Plan) or death during the Period of Restriction, then the Restricted Share Units shall become fully vested as of the date of employment termination without regard to the Period of Restriction.  The term “Subsidiary” is defined in the Plan and means a corporation with respect to which the Company directly or indirectly owns 50% or more of the voting power. Any Restricted Share Units becoming vested by reason of the Employee’s death or Disability shall be settled on the date of the Employee’s separation from service (within the meaning of Internal Revenue Code (“Code”) Section 409A), or as soon as practicable thereafter, but in no event later than 90 days after such date; provided, however, to the extent required under Code Section 409A, if the Employee is a specified employee (within the meaning of Code Section 409A at the time of separation from service), payment shall not be made until the date which is six months after the Employee’s separation from service.

 

6. Vesting upon Termination due to Retirement.  If (a) on or prior to August 31, 2013, or (b) after August 31, 2013 but solely if the Performance Goal has been attained, the Employee terminates employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) by reason of Retirement (as defined in the Plan) during the Period of Restriction, then a pro-rated portion of the Restricted Stock Units subject to the Period of Restriction shall become fully vested as of the date of employment termination, and the Period of Restriction shall end with respect to those units.  Such pro-rated portion shall equal the number of Restricted Stock Units, multiplied by a fraction equal to the number of full months completed between the Award Date and the Employee’s retirement date, divided by thirty six (36).  The remaining Restricted Stock Units shall be forfeited as of the Employee’s termination of employment due to Retirement. Any Restricted Stock Units becoming vested by reason of the Employee’s Retirement shall be settled on the date of the Employee’s separation from service (within the meaning of Internal Revenue Code Section 409A), or as soon as practicable thereafter, but in no event later than 90 days after such date; provided, however, to the extent required under Code Section 409A, if the Employee is a specified employee (within the meaning of Code Section 409A), payment shall not be made until date which is six months after the Employee’s separation from service.

 

7. Forfeiture upon Termination due to Reason other than Retirement, Disability or Death.  If, while the Restricted Share Units are subject to a Period of Restriction, the Employee’s employment with the Company (or a Subsidiary of the Company if the Employee is then in the employ of such Subsidiary) terminates for a reason other than the Employee’s Disability or death, then the Employee shall forfeit any portion of the Restricted Share Units that is subject to a Period of Restriction on the date of such employment termination.

 

8. Vesting upon Change in Control.  In the event of a “Change in Control” of the Company, as defined in Section 11.2 of the Plan, occurring either (a) on or prior to August 31, 2013, or (b) after August 31, 2013, but solely if the Performance Goal has been attained, then, pursuant to Section 11.1 of the Plan the Restricted Share Units shall cease to be subject to the Period of Restriction and shall be settled in accordance with Section 10; provided that, if the Change in Control is not also considered a change in control within the meaning of Internal Revenue Code Section 409A, then the Restricted Share Units shall become vested and the Period of Restriction shall lapse on the date of the Change in Control, but settlement shall not occur until the earlier of the Participant’s separation from service (within the meaning of Code Section 409A), or November 1, 2015.

 

9. Settlement of Vested Restricted Share Units.  Subject to the requirements of Sections 12 and 13 below, as promptly as practicable after the [lapse of the Restriction Period, but in no event later than 90 days after such date, the Company shall transfer to the Employee one share of Common Stock for each Restricted Share Unit becoming vested at such time net of any applicable tax withholding requirements that are necessary to satisfy withholding taxes in accordance with Section 12 below; provided, however, that if settlement is triggered by the employee’s separation from service, then, to the extent required under Code Section 409A, if the Employee is a specified employee (within the meaning of Code Section 409A at the time of separation from service), payment shall not be made until the date which is six months after the Employee’s separation from service.  The Employee shall have no rights as a stockholder with respect to the Restricted Share Units awarded hereunder prior to the date of issuance to the Employee of a certificate or certificates for such shares.  Certificates for the shares of Common Stock shall be issued and delivered to the Employee, the Employee’s legal representative, or a brokerage account for the benefit of the Employee, as the case may be, or such shares may be held in book entry form.

 

10. Settlement Following Change in Control.  Notwithstanding any provision of this Agreement to the contrary, in connection with or after the occurrence of a Change in Control as defined in Section 11.2 of the Plan, the Company may, in its sole discretion, fulfill its obligation with respect to all or any portion of the Restricted Share Units that cease to be subject to a Period of Restriction in accordance with Section 8 above, by:

 

(a) delivery of (i) the number of shares of Common Stock that corresponds with the number of Restricted Share Units that have ceased to be subject to a Period of Restriction or (ii) such other ownership interest as such shares of Common Stock that correspond with the vested Restricted Share Units may be converted into by virtue of the Change in Control transaction in accordance with Section 9 above;

 

(b) payment of cash in an amount equal to the fair market value of the Common Stock that corresponds with the number of vested Restricted Share Units at that time; or

 

(c) delivery of any combination of shares of Common Stock (or other converted ownership interest) and cash having an aggregate fair market value equal to the fair market value of the Common Stock that corresponds with the number of Restricted Share Units that have become vested at that time.

 

11. Adjustment in Capitalization.  In the event of any change in the Common Stock of the Company, the provisions of Section 10.2 of the Plan shall govern such that the number of Restricted Share Units subject to this Agreement shall be equitably adjusted by the Committee.

 

12. Tax Withholding.  Whenever a Period of Restriction applicable to the Employee’s rights to some or all of the Restricted Share Units lapses as provided in Section 4, 5, 6 or 8 of this Agreement, the Company or its agent shall notify the Employee of the related amount of tax that must be withheld under applicable tax laws. Regardless of any action the Company, any Subsidiary of the Company, or the Employee’s employer takes with respect to any or all income tax, social security, payroll tax, payment on account or other tax-related withholding (“Tax”) that the Employee is required to bear pursuant to all applicable laws, the Employee hereby acknowledges and agrees that the ultimate liability for all Tax is and remains the responsibility of the Employee.

 

Prior to receipt of any shares that correspond to Restricted Share Units that vest in accordance with this Agreement, the Employee shall pay or make adequate arrangements satisfactory to the Company and/or any Subsidiary of the Company to satisfy all withholding and payment on account obligations of the Company and/or any Subsidiary of the Company.  In this regard, the Company shall sell or arrange for the sale of Common Stock that the Employee is due to acquire to satisfy the withholding obligation for Tax and/or withhold any Common Stock.  Finally, the Employee agrees to pay the Company or any Subsidiary of the Company any amount of any Tax that the Company or any Subsidiary of the Company may be required to withhold as a result of the Employee’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver Common Stock if the Employee fails to comply with its obligations in connection with the tax as described in this section.

The Company advises the Employee to consult his or her legal and/or tax advisors with respect to the tax consequences for the Employee under the Plan.

13. Securities Laws.  This award may be accepted only by an individual who is an employee of the Company or a Subsidiary of the Company and who satisfies the eligibility requirements outlined in the Plan and the Committee’s administrative procedures.  If a Registration Statement under the Securities Act of 1933, as amended, is not in effect with respect to the shares of Common Stock to be issued pursuant to this Agreement, the Employee hereby represents that he or she is acquiring the shares of Common Stock for investment and with no present intention of selling or transferring them and that he or she will not sell or otherwise transfer the shares except in compliance with all applicable securities laws and requirements of any stock exchange on which the shares of Common Stock may then be listed.

 

14. No Employment or Compensation Rights.  Participation in the Plan is subject to all of the terms and conditions of the Plan and this Agreement.  This Agreement shall not confer upon the Employee any right to continuation of employment by the Company or its Subsidiaries, nor shall this Agreement interfere in any way with the Company’s or its Subsidiaries’ right to terminate Employee’s employment at any time.  Neither the Plan nor this Agreement forms any part of any contract of employment between the Company or any Subsidiary and the Employee, and neither the Plan nor this Agreement confers on the Employee any legal or equitable rights (other than those related to the Restricted Share Unit award) against the Company or any Subsidiary or directly or indirectly gives rise to any cause of action in law or in equity against the Company or any Subsidiary.

 

15. Plan Terms and Committee Authority.  This Agreement and the rights of the Employee hereunder are subject to all of the terms and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan.  It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate for the administration of the Plan and this Agreement, all of which shall be binding upon Employee, including the enforcement of any recoupment policy.  Any inconsistency between this Agreement and the Plan shall be resolved in favor of the Plan.  The Employee hereby acknowledges receipt of a copy of the Plan and this Agreement.

 

16. Non-Competition, Non-Solicitation and Confidentiality.  As a condition to the receipt of this Restricted Share Unit award, the Employee must agree to the terms and conditions set forth in the Non-Competition, Non-Solicitation and Confidentiality Agreement attached hereto as Exhibit A by executing that Agreement.  Failure to execute and return the Non-Competition, Non-Solicitation and Confidentiality Agreement within 120 days of the Award Date shall constitute a decision by the Employee to decline to accept this Restricted Share Unit award.

 

17. Amendment or Modification, Waiver.  Except as set forth in the Plan, no provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing, signed by the Employee and by a duly authorized officer of the Company. No waiver of any condition or provision of this Agreement shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.

 

18. Governing Law and Jurisdiction.  This Agreement is governed by the substantive and procedural laws of the state of Illinois.  The Employee and the Company shall submit to the exclusive jurisdiction of, and venue in, the courts in Illinois in any dispute relating to this Agreement.

 

****

 

Please read the attached Exhibit A.  Once you have read the agreement, please click the acceptance box to certify and confirm your agreement to be bound by the terms and conditions set forth in Exhibit A, and to acknowledge your receipt of the Plan and this Award Agreement and your acceptance of the Restricted Share Unit award issued hereunder.

 

 

                                                           Very truly yours,

                /s/ Gregory Wasson

  

 

EXHIBIT A

WALGREEN CO. NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

This Exhibit forms a part of the Restricted Share Unit Award Agreement covering Restricted Share Units awarded to an employee of Walgreen Co., on behalf of itself, its affiliates, subsidiaries, and successors (collectively referred to as “Employee” and the “Company”).

 

WHEREAS, the Company develops and/or uses valuable business, technical, proprietary, customer and patient information it protects by limiting its disclosure and by keeping it secret or confidential;

 

WHEREAS, Employee acknowledges that during the course of employment, he or she has or will receive, contribute, or develop such confidential information; and

 

WHEREAS, the Company desires to protect from its competitors such confidential information and also desires to protect its legitimate business interests and goodwill in maintaining its employee and customer relationships.

 

NOW THEREFORE, in consideration of the Restricted Share Unit award issued to Employee pursuant the Award Agreement to which this is attached as Exhibit A, Employee agrees to be bound by the terms of this Agreement:

 

1.           Confidentiality.  I understand that during the course of my employment with the Company, I have or will have access to the Company’s Confidential Information, meaning information which is not generally ascertainable by proper means by the public, or which has limited disclosure within the Company, or which is treated or designated as confidential; the disclosure of which could reasonably be harmful to the Company’s legitimate business interests.

 

I understand that “Confidential Information” includes, but is not limited to, the following:

	
  

	
(a)

	
business or marketing plans, trade secrets, selling and pricing procedures and techniques, customer records,

	
  

	
(b)

	
customer lists, requirements, and information,

	
  

	
(c)

	
databases and software developed or used by the Company, financial information and projections, and other information for which the Company has assumed an obligation of confidentiality.

I agree to only use the Company’s Confidential Information as necessary to perform my job during my employment with the Company.  I agree not to disclose any Confidential Information to anyone outside the Company without the Company’s prior written consent, unless as necessary to perform my job during my employment with the Company.  I agree that these obligations apply during my employment with the Company and at all times thereafter.

2.         Non-Competition.  I agree that during my employment with the Company and for one year after the termination of my employment, I will not, directly or indirectly, invest in, own, operate, finance, control, or provide Competing Services to any Competing Business Line, in both cases as defined below.  I understand that the restrictions in this paragraph apply no matter whether my employment is terminated by me or the Company and no matter whether that termination is voluntary or involuntary.  The above restrictions shall not apply to passive investments of less than 5% ownership interest in any entity. I understand that the term “Competing Business Line” used in this Agreement means any business that is in competition with any business engaged in by the Company with respect to which I provide substantial services during the last two years of my employment with the Company.

I understand that I will be deemed to be providing “Competing Services” if the nature of such services are sufficiently similar in position scope and geographic scope to any position held by me during the last two years of my employment with the Company, such that my engaging in such services on behalf of a Competing Business Line may pose competitive harm to the Company.

4.           Non-Solicitation.  I agree that during my employment with the Company and for two years after the termination of my employment, I will not solicit or service any of the Company’s customers or referral sources for a Competing Business Line; solicit or otherwise encourage any Company employees to leave the Company to work for a Competing Business Line; or hire any Company employees on behalf of a Competing Business Line.  I understand that the restrictions in this paragraph apply no matter whether my employment is terminated by me or the Company and no matter whether that termination is voluntary or involuntary.  I understand that the term “customer” used in this Agreement means any patient or other customer or prospective customer of any Company business unit with respect to which I provide substantial services during the last two years of my employment with the Company.

 

5.           Non-Inducement.  I will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by me.

 

6.           Nondisparagment.  I agree (whether or not then an Employee) not to make negative comments or otherwise disparage the Company, its Affiliates, or any of their officers, directors, employees, shareholders, members, agents or products other than in the good faith performance of my duties to the Company and its Affiliates while I am employed by the Company and its Affiliates and thereafter.  The foregoing shall not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

 

7.           Return of Company Property.  I agree that I will not take any of the Company’s property or information with me when I leave the Company’s employ, no matter what form that property or information is in and no matter how I acquired it.  When my employment with the Company terminates, I will immediately return to the Company any and all Company information, documents, and electronics.

 

8.           Consideration and Acknowledgments.  Employee acknowledges and agrees that the covenants described in this Agreement are essential terms, and the underlying Restricted Share unit award would not be provided by the Company in the absence of these covenants.  Employee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Employee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Employee and are not in conflict with any public interest.  Employee further acknowledges and agrees that Employee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term.  Employee agrees that in the event he or she is offered employment with a Competing Business at any time in the future, Employee shall immediately notify the Competing Business of the existence of the covenants set forth above.

 

9.           Enforceability; General Provisions.

 

	
  

	
(a)

	
I agree that the restrictions contained in this Agreement are reasonable and necessary to protect the Company’s legitimate business interests and that full compliance with the terms of this Agreement will not prevent me from earning a livelihood following the termination of my employment, and that these covenants do not place undue restraint on me.

	
  

	
(b)

	
Because the Company’scurrent base of operations is in Illinois, I consent to the jurisdiction of the state and federal courts of Illinois with respect to any claim arising out of this Agreement.

	
  

	
(c)

	
Because the Company’scurrent base of operations is in Illinois, I agree that this Agreement shall be governed by the laws of Illinois without regard to its choice of law rules.

	
  

	
(d)

	
In the event of a breach or a threatened breach of this Agreement, I acknowledge that the Company will face irreparable injury which may be difficult to calculate in dollar terms and that the Company shall be entitled, in addition to all remedies otherwise available in law or in equity, to temporary restraining orders and preliminary and final injunctions enjoining such breach or threatened breach in any court of competent jurisdiction without the necessity of posting a surety bond, as well as to obtain an equitable accounting of all profits or benefits arising out of any violation of this Agreement.

	
  

	
(e)

	
I agree that if a court determines that any of the provisions in this Agreement is unenforceable or unreasonable in duration, territory, or scope, then that court shall modify those provisions so they are reasonable and enforceable, and enforce those provisions as modified.

	
  

	
(f)

	
If any phrase or provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, that phrase, clause or provision shall be deemed severed from this Agreement, and will not affect the enforceability of any other provisions of this Agreement, which shall otherwise remain in full force and effect.

	
  

	
(g)

	
Notwithstanding the foregoing provisions of this Agreement, the non-competition provisions of Paragraph 2 above shall not restrict Employee from performing legal services as a licensed attorney for a Competing Business to the extent that the attorney licensure requirements in the applicable jurisdiction do not permit Employee to agree to the otherwise applicable restrictions of Paragraph 2.

	
  

	
(h)

	
Waiver of any of the provisions of this Agreement by the Company in any particular instance shall not be deemed to be a waiver of any provision in any other instance and/or of the Company’s other rights at law or under this Agreement.

 

	
  

	
(i)

	
I agree that the Company may assign this Agreement to its successors and that any such successor may stand in the Company’s shoes for purposes of enforcing this Agreement.

 

	
  

	
(j)

	
I agree to reimburse Company for all attorneys’ fees, costs, and expenses that it reasonably incurs in connection with enforcing its rights and remedies under this Agreement, but only to the extent the Company is ultimately the prevailing party in the applicable legal proceedings.

	
  

	
(k)

	
If I violate this Agreement, then the restrictions set out in Paragraphs 2 - 5 shall be extended by the same period of time as the period of time during which the violation(s) occurred.

	
  

	
(l)

	
I fully understand my obligations in this Agreement, have had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, and have voluntarily agreed to comply with these covenants for their stated terms.

10.           Relationship of Parties.  I acknowledge that my relationship with the Company is “terminable at will” by either party and that the Company or I can terminate the relationship with or without cause and without following any specific procedures.  Nothing contained in this Agreement is intended to or shall be relied upon to alter the “terminable at will” relationship between the parties.

 

11.           Modifications and Other Agreements.  I agree that the terms of this Agreement may not be modified except by a written agreement signed by both me and the Company.  This Agreement shall not supersede any other restrictive covenants to which I may be subject under an employment contract, benefit program or otherwise, such that the Company may enforce the terms of any and all restrictive covenants to which I am subject.

12.           Notification.  I agree that in the event I am offered employment at any time in the future with any entity that may be considered a Competing Business Line, I shall immediately notify such Competing business of the existence and terms of this Agreement.  I also understand and agree that the Company may notify anyone later employing me of the existence and provisions of this Agreement.

 

***                    ***                    ***                    ***                    ***

By clicking the acceptance box for this grant agreement, I acknowledge receipt of the Restricted Share Unit Agreement to which this Agreement is attached as Exhibit A, and I agree to the terms and conditions expressed in this Agreement.

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