Amended and Restated Employment Agreement, by and between Registrant and Noah Glass, dated January 1, 2021
This Employment Agreement (the Agreement) is made between Olo Inc. (the Company) and Noah Glass (the Executive) (collectively, the Parties), and is effective as of January 1, 2021 (the Effective Date).
Whereas, the Company and Executive are parties to an Amended and Restated Employment Agreement, effective as of January 12, 2016 (the Original Agreement);
Whereas, the Company desires for Executive to continue to provide services to the Company on the terms and conditions of this Agreement from and after the Effective Date, and wishes to provide Executive with certain compensation and benefits in return for such continued employment services; and
Whereas, Executive wishes to continue to be employed by the Company and to provide personal services to the Company in return for certain compensation and benefits;
Now, Therefore, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:
1. Employment by the Company.
1.1 Position. Executive shall continue to serve as the Companys Chief Executive Officer. During the term of Executives employment with the Company, Executive will continue to devote Executives best efforts and substantially all of Executives business time and attention to the business of the Company, except for approved time off permitted by the Companys general employment policies. Executive shall continue to serve as a Director of the Board of Directors of the Company (the Board) at the pleasure of the Board in accordance with the governing documents and applicable law.
1.2 Duties and Location. Executive shall perform such duties as are required by the Board to whom Executive reports. The Company reserves the right to reasonably require Executive to perform Executives duties at places other than Executives primary office location from time to time, and to require reasonable business travel.
1.3 Policies and Procedures. The employment relationship between the Parties shall be governed by the general employment policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Companys general employment policies or practices, this Agreement shall control.
2.1 Salary. For services to be rendered hereunder, Executive shall receive a base salary at the rate of $443,000 per year (the Base Salary), subject to standard payroll deductions and withholdings and payable in accordance with the Companys regular payroll schedule.
2.2 Annual Cash Bonus. Executive will be eligible for an annual cash bonus (the Annual Bonus) of 80% of Executives Base Salary (the Target Annual Bonus). Whether Executive receives an Annual Bonus for any given year, and the amount of any such Annual Bonus, will be determined by the Board (or the Compensation Committee of the Board) in its sole discretion based upon the Companys and Executives achievement of objectives and milestones as set forth in the Companys Performance Bonus Plan (the Bonus Plan). Any Annual Bonus that is awarded will be paid in the calendar year following the applicable bonus year, but in no event later than March 15th of such year. Executive will not be eligible for, and will not earn, any Annual Bonus (including a prorated bonus, if any) if Executives employment terminates for any reason before the last day of the year to which such Annual Bonus relates, except as set forth herein. If Executives employment terminates for any reason, other than by the Company for Cause, after the last day of such year, but prior to payment of the applicable Annual Bonus for such year, Executive shall remain eligible to receive an Annual Bonus with respect to such completed year in accordance with the terms of this Section and the Bonus Plan.
2.3 Company Equity Awards. Executive remains eligible to be considered for future equity awards as may be determined by the Board (or the Compensation Committee of the Board) in its discretion in accordance with the terms of any applicable equity plan or arrangement that may be in effect from time to time.
2.4 Make Whole Bonus. If the Company consummates a Company Exit on or prior to January 12, 2026 and Executive is employed with the Company on the date the Company Exit is consummated, and (A) for a Company Exit that is a Deemed Liquidation Event, the proceeds of the holders of Series C Preferred Stock with respect to their shares of Series C Preferred Stock in the Company Exit equals or exceeds $35.5197 per share (whether based on share price or the entitlement of the holders of such Shares to receive distributions of cash or cash equivalents, which value shall be determined on an as converted basis and based on all amounts actually received by the holders of the Series C Preferred Stock, including without limitation, escrows, installment payments, earnout payments, milestone payments and other payments to be received by the holders following the closing of the Deemed Liquidation Event) and (B) for a Company Exit that is a Qualifying Public Offering, the closing price of a share of Common Stock on the exchange or market the Company is listed on equals or exceeds $35.5197 per share on the 180th day following the closing of such Qualifying Public Offering, then the Company will pay Executive a bonus equal to the product of (i) 91,051 and (ii) the difference between (1) the value of a share of the Companys Common Stock in the Company Exit and (2) $2.73, up to a maximum aggregate amount of $2,335,484.00 (the Make Whole Bonus). If earned, the Company will pay Executive the Make Whole Bonus in U.S. Dollars within 30 days following the consummation of the Company Exit that constituted a Deemed Liquidation Event (or 30 days following the holders of Series C Preferred Stock actually receiving at least $35.5197 per share in such Deemed Liquidation Event) or 30 days following the 180th day following the closing of the Companys Qualifying Public Offering. If the Company
Exit is a Deemed Liquidation Event, the Deemed Liquidation Event constitutes a change in ownership or a change in the ownership of substantial assets of the Company as defined in Treasury Regulation Section 1.409A-3(i)(5) and all or a portion of consideration received by the Company or its shareholders in connection with such Company Exit consists of contingent or deferred consideration (including any amounts placed in escrow, and regardless of the form of such contingent or deferred consideration), then the Company will pay Executive any additional Make Whole Bonus earned in connection with the payment of the contingent or deferred consideration within 30 days after the date such amounts are actually received by the Company or its shareholders (if at all). No Make Whole Bonus will be due to the Executive on any consideration paid in connection with the Company Exit after the fifth anniversary of the closing date of the Company Exit. For purposes of this Paragraph, a Company Exit means (i) a Deemed Liquidation Event or (ii) a Qualifying Public Offering, each as defined in the Companys Amended and Restated Certificate of Incorporation, as may be amended, restated or otherwise modified from time to time; provided that a bona fide equity financing shall under no circumstances constitute a Company Exit.
3. Standard Company Benefits. Executive shall be entitled to participate in all employee benefit programs for which Executive is eligible under the terms and conditions of the benefit plans that may be in effect from time to time and provided by the Company to its employees. The Company reserves the right to cancel or change the benefit plans or programs it offers to its employees at any time.
4. Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in furtherance or in connection with the performance of Executives duties hereunder, in accordance with the Companys expense reimbursement policy as in effect from time to time.
5. Termination of Employment; Severance
5.1 At-Will Employment. Executives employment relationship is at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without cause or advance notice.
5.2 Termination Without Cause; Resignation for Good Reason.
(i) The Company may terminate Executives employment with the Company at any time without Cause (as defined below). Further, Executive may resign at any time for Good Reason (as defined below).
(ii) In the event Executives employment with the Company is terminated by the Company without Cause, or Executive resigns for Good Reason, and provided that Executive remains in compliance with the terms of this Agreement, the Company shall provide Executive with the following severance benefits:
(a) Severance in an amount equal to twelve (12) months of Executives base salary in effect as of the date of Executives employment termination, subject to standard payroll deductions and withholdings (the Severance). The Severance will be paid in equal installments on the Companys regular payroll schedule over the twelve (12) month period following Executives termination of employment, commencing within 60 days following Executives termination of employment; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance shall begin to be paid in the second calendar year by the last day of such 60-day period, and such initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Executives date of termination.
(b) Provided Executive timely elects continued coverage under COBRA, the Company shall pay Executives COBRA premiums to continue Executives coverage (including coverage for eligible dependents, if applicable) (COBRA Premiums) through the period (the COBRA Premium Period) starting on Executives termination of employment and ending on the earliest to occur of: (i) twelve (12) months following Executives termination of employment; (ii) the date Executive becomes eligible for group health insurance coverage through a new employer; or (iii) the date Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event Executive becomes covered under another employers group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, Executive must immediately notify the Company of such event. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the COBRA Premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay to Executive, on the first day of each calendar month, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including premiums for Executive and Executives eligible dependents who have elected and remain enrolled in such COBRA coverage), subject to applicable tax withholdings (such amount, the Special Cash Payment), for the remainder of the COBRA Premium Period. Executive may, but is not obligated to, use such Special Cash Payments toward the cost of COBRA premiums.
(c) A portion of Executives Target Annual Bonus for the calendar year in which Executives termination of employment occurs, pro-rated for the period from the beginning of the calendar year up to the Termination Date, and payable on the date the first installment of the Severance is payable hereunder.
(iii) If the Company terminates Executives employment with the Company without Cause, or Executive resigns for Good Reason, in either case within three (3) months prior to or eighteen (18) months following the closing of a Change in Control (as defined in the 2015 Equity Incentive Plan), provided such transaction constitutes a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the Companys assets within the meaning of Section 409A of the Code, and provided that Executive remains in compliance with the terms of this Agreement, then in lieu of the payments and benefits described in Section 5.2(ii), above, the Company (or its successor) shall provide Executive with the following severance payments and benefits:
(a) Severance in an amount equal to eighteen (18) months of Executives base salary in effect as of the date of Executives employment termination, subject to standard payroll deductions and withholdings (the CIC Severance). The CIC Severance will be paid in a single lump sum within 60 days following Executives termination of employment; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the CIC Severance shall be paid in the second calendar year by the last day of such 60-day period. Notwithstanding the foregoing, if such termination occurs prior to a Change in Control, the CIC Severance shall commence to be paid in installments in accordance with Section 5.2(ii)(a), above, and upon the occurrence of such Change in Control, the remainder of the CIC Severance shall be payable in a lump-sum in accordance with this section.
(b) Provided Executive timely elects continued coverage under COBRA, the Company shall pay Executives COBRA premiums to continue Executives coverage (including coverage for eligible dependents, if applicable) (CIC COBRA Premiums) through the period (the CIC COBRA Premium Period) starting on Executives termination of employment and ending on the earliest to occur of: (i) eighteen (18) months following Executives termination of employment; (ii) the date Executive becomes eligible for group health insurance coverage through a new employer; or (iii) the date Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event Executive becomes covered under another employers group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, Executive must immediately notify the Company of such event. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot pay the CIC COBRA Premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay to Executive, the Special Cash Payment for the remainder of the CIC COBRA Premium Period. Executive may, but is not obligated to, use such Special Cash Payments toward the cost of CIC COBRA premiums.
(c) A portion of Executives Target Annual Bonus for the calendar year in which Executives termination of employment occurs, pro-rated for the period from the beginning of the calendar year up to the Termination Date, and payable on the date the first installment of the CIC Severance is payable hereunder.
(d) Effective as of Executives termination date or, if later, the date of such Change in Control, the vesting and exercisability of all outstanding equity awards held by Executive immediately prior to the termination date (if any) that are subject to time-based vesting requirements, shall be accelerated in full and the vesting and exercisability of all outstanding equity awards subject to performance-based vesting will be treated as set forth in Executives equity award agreement governing such award.
5.3 Termination for Cause; Resignation Without Good Reason; Death or Disability.
(i) The Company may terminate Executives employment with the Company at any time for Cause. Further, Executive may resign at any time without Good Reason. Executives employment with the Company may also be terminated due to Executives death or Permanent Disability. For purposes of this Agreement, Permanent Disability means Executive is unable to perform the essential functions of Executives position, with reasonable accommodation, for a period of at least 180 consecutive days because of a physical or mental impairment as determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(ii) If Executive resigns without Good Reason, or the Company terminates Executives employment for Cause, or upon Executives death or Permanent Disability, then (i) Executive will cease to vest in any time-based vesting equity awards, (ii) any equity awards subject to performance-based vesting will be treated as set forth in Executives equity award agreement governing such award, (iii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned and vested benefits as required by law), and (iv) Executive will not be entitled to any severance benefits, including (without limitation) the payments and benefits described in Section 5.2, above. Notwithstanding the foregoing, Executive is entitled to any continuation of benefits required by COBRA or applicable law and, in the case of termination upon Executives death or Permanent Disability, payment of Executives Target Annual Bonus for the calendar year in which Executives termination of employment occurs, pro-rated for the period from the beginning of the calendar year up to the Termination Date, and payable in accordance with the terms of the Bonus Plan.
6. Conditions to Receipt of Severance Payments and Benefits. The receipt of the severance payments and benefits described in Section 5.2, above, will be subject to Executive signing and not revoking a separation agreement and release of claims (including non-disparagement and cooperation provisions) in the form provided by the Company (the Separation Agreement) within a time period specified by the Company, but not to exceed fifty-three (53) days (such deadline, the Release Deadline). No such payments or benefits will be paid or provided until the Separation Agreement becomes effective. If the Separation Agreement does not become effective by the Release Deadline, Executive will forfeit any rights to receive or retain the severance payments and benefits described in Section 5.2, or other benefits under this Separation Agreement. Executive shall also resign from all positions and terminate any relationships as an employee, advisor, officer or director with the Company and any of its affiliates, each effective on the date of termination.
7. Section 409A. It is intended that all of the severance benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1896, as amended (the Code) provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executives right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. To the extent that any payment or benefit described in this Agreement constitutes non-qualified deferred compensation under Section 409A of the Code, and to the extent that such payment
or benefit is payable upon the Executives termination of employment, then such payments or benefits shall be payable only upon the Executives separation from service (Executives Separation from Service). The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h). Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the payments upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be deferred compensation, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to the earliest of (i) the expiration of the six-month period measured from the date of Executives Separation from Service with the Company, (ii) the date of Executives death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A(a)(2)(B)(i) of the Code period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
(i) Cause. For purposes of this Agreement, Cause means and only means any of the following: (i) a conviction of, or plea of guilty or no contest to, a felony or any crime involving fraudulent conduct under the laws of the United States or any State by Executive; (ii) any unauthorized use or disclosure by Executive of confidential information or trade secrets of the Company or any successor or affiliate thereof that causes material harm to such entity, but excluding any disclosure required by subpoena, court order or applicable law; (iii) Executives fraud, gross negligence or willful misconduct that causes material harm to the Company; (iv) Executives continuing failure to perform Executives assigned material duties, after receiving written notification of such failure from the Board that specifies such failure and such failure is not materially cured by Executive within thirty (30) days thereafter; (v) Executives material breach of any written agreement between Executive and the Company if such breach is not cured by Executive within thirty (30) days of written notice thereof from the Company that specifies such material breach; (vi) Executives material failure to comply with the Companys reasonable and legal written policies or rules applicable to all executives if such failure is not cured by Executive within thirty (30) days of notice thereof from the Company that specifies such material failure; or (vii) Executives failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested Executives cooperation. The foregoing definition shall not in any way preclude or restrict the right of the Company or any successor or affiliate thereof to discharge or dismiss
Executive for any other acts or omissions, but such other acts or omissions shall not be deemed or construed, for purposes of this Agreement, to constitute grounds for termination for Cause. It is understood and agreed that, where a cure period is specified above, but the condition constituting Cause is legally incapable of being cured, Executive shall not be entitled to such cure period. Whether a termination is for Cause shall be determined by the Board in its judgment and discretion, which shall be exercised in good faith.
(ii) Good Reason. For purposes of this Agreement Good Reason means that Executive resigns as set forth in this Agreement after the Executive has first learned that one or more of the following conditions has come into existence without Executives prior written consent: (i) a material diminution of Executives base salary, bonus target or benefits (for the avoidance of doubt, a reduction in Executives base salary by more than 10% shall be considered a material diminution); (ii) a material diminution of Executives authority, duties or responsibilities (including reporting responsibilities), provided, however, that a change in Executives title shall not, in and of itself, constitute Good Reason; (iii) a change in the primary geographic location at which Executive must perform Executives services for the Company that is outside of a twenty-five (25) mile radius of the Borough of Manhattan, City of New York or of Executives primary location of employment; or (iv) a material breach by the Company of this Agreement or of any other agreement between the Company and Executive. A condition will not be considered Good Reason unless Executive gives the Company written notice of the condition within 90 days after Executive has learned that the condition has come into existence, the Company fails to remedy the condition within 30 days after receiving Executives written notice and Executive resigns Executives employment within 60 days after the Company receives Executives written notice.
9. Proprietary Information Obligations.
9.1 Confidential Information Agreement. As a condition of employment, Executive acknowledges Executives continuing obligations pursuant to Executives Restrictive Covenant and Proprietary Information and Inventions Assignment Agreement with the Company, dated as of the date hereof (the Confidentiality Agreement).
9.2 Third-Party Agreements and Information. Executive represents and warrants that Executives employment by the Company does not conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executives duties to the Company without violating any such agreement. Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, that would be used in connection with Executives employment by the Company, except as expressly authorized by that third party. During Executives employment by the Company, Executive will use in the performance of Executives duties only information which is generally known and used by persons with training and experience comparable to Executives own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executives work for the Company.
10. Outside Activities During Employment.
10.1 Non-Company Business. Except with the prior written consent of the Board, Executive will not during the term of Executives employment with the Company undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor. The Company acknowledges that the Board has consented to Executives continuing to engage in the activities set forth on Schedule 1, subject to his compliance with the other provisions of this Agreement. In any event, Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executives duties hereunder.
10.2 No Adverse Interests. Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise.
11. Dispute Resolution. To ensure the timely and economical resolution of disputes that may arise in connection with Executives employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, the Confidential Information Agreement, or Executives employment, or the termination of Executives employment, including but not limited to all statutory claims, with the exception of discrimination and harassment claims, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16 (the FAA), and to the fullest extent permitted by law, by final, binding and confidential arbitration by a single arbitrator conducted in New York, New York by Judicial Arbitration and Mediation Services Inc. (JAMS) under the then applicable JAMS rules (at the following web address: https://www.jamsadr.com/rules-employment-arbitration/); provided, however, this arbitration provision shall not apply to sexual harassment and discrimination claims to the extent prohibited by applicable law that is not preempted by the FAA. A hard copy of the rules will be provided to Executive upon request. A hard copy of the rules will be provided to Executive upon request. By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. In addition, all claims, disputes, or causes of action under this section, whether by Executive or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The Arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. The Company acknowledges that Executive will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration under this Agreement) shall be decided by a federal court in the State of New York. However, procedural questions which grow out of the dispute and bear on the final disposition are matters for the arbitrator. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief
as would otherwise be permitted by law; (b) issue a written arbitration decision, to include the arbitrators essential findings and conclusions and a statement of the award; and (c) be authorized to award any or all remedies that Executive or the Company would be entitled to seek in a court of law. Executive and the Company shall equally share all JAMS arbitration fees. To the extent JAMS does not collect or Executive otherwise does not pay to JAMS an equal share of all JAMS arbitration fees for any reason, and the Company pays JAMS Executives share, Executive acknowledges and agrees that the Company shall be entitled to recover from Executive half of the JAMS arbitration fees invoiced to the parties (less any amounts Executive paid to JAMS) in a federal or state court of competent jurisdiction. Except as modified in the Confidential Information Agreement, each party is responsible for its own attorneys fees. Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. To the extent applicable law prohibits mandatory arbitration of sexual harassment or discrimination claims and is not preempted by the FAA, in the event Executive intends to bring multiple claims, including a sexual harassment or discrimination claim, the sexual harassment and/or discrimination claims may be publicly filed with a court, while any other claims will remain subject to mandatory arbitration.
12. Section 280G Matters.
12.1 If any payment or benefit Executive will or may receive from the Company or otherwise (a 280G Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code, and (ii) but for this Section, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then any such 280G Payment provided pursuant to this Agreement (a Payment) shall be equal to the Reduced Amount. The Reduced Amount shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executives receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method).
12.2 Notwithstanding any provision of this Section 12 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A
as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
12.3 Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control transaction, the Company shall appoint a nationally-recognized accounting or law firm to make the determinations required by this Section 12. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executives right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
12.4 If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Paragraph 12.1 and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 12(i)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 12(i), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
13. General Provisions.
13.1 Notices. Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by email) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executive at the address as listed on the Company payroll.
13.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the parties.
13.3 Waiver. Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
13.4 Complete Agreement. This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between Executive and the Company with regard to this subject matter and is the complete, final, and exclusive embodiment of the Parties agreement with regard to this subject matter and supersede any prior oral discussions or written communications and agreements, including the Original Agreement. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. It is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by a duly authorized officer of the Company.
13.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.
13.6 Headings. The headings of the paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
13.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executives duties hereunder and Executive may not assign any of Executives rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.
13.8 Tax Withholding and Indemnification. All payments and awards contemplated or made pursuant to this Agreement will be subject to withholdings of applicable taxes in compliance with all relevant laws and regulations of all appropriate government authorities. Executive acknowledges and agrees that the Company has neither made any assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant to this Agreement. Executive has had the opportunity to retain a tax and financial advisor and fully understands the tax and economic consequences of all payments and awards made pursuant to the Agreement.
13.9 Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of New York.
In Witness Whereof, the Parties have executed this Agreement to be effective as of the Effective Date on the day and year written below.
|Name Noah H. Glass||Name Nithya B. Das|
|Title Founder and Chief Executive Officer||Title Chief Legal Officer|
|Date Feb 4, 2021||Date Feb 4, 2021|
Executive may continue to engage in following outside activities:
|Portillos||Board Member and Advisor|
|Founder Collective||Founder Partner|
|Culinary Institute of America||Trustee|
|Share Our Strength - No Kid Hungry||Board Member|
|Young Presidents Organization||Member|
|Noah Glass (Feb 4, 2021 15:28 EST)||Nithya Das (Feb 4, 2021 15:36 EST)|