Exit Agreement: Definition, Terms, Example
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What is an Exit Agreement?
An exit agreement is a contract between an employer and employee where both parties consent to their separation and agree on the terms and conditions of it. The contract includes details about why the separation is occuring, when it will be effective, and what obligations each party will assume under the contract. Unlike a severance agreement, in order for an exit agreement to be used, the termination of employment must be mutually agreed upon by both parties. Consequently, it is typically much easier for employers and employees to collaborate on the terms of this type of agreement. However, many of the terms, such as severance pay, are the same across both types of agreements.
Common Sections in Exit Agreements
Below is a list of common sections included in Exit Agreements. These sections are linked to the below sample agreement for you to explore.
Exit Agreement Sample
a. | Vesting Benefits. Exhibit A hereto sets forth each outstanding restricted share unit (“RSU”) award and performance share unit (“PSU”) award previously granted to Retiree under the Kosmos Energy Ltd. Long Term Incentive Plan (as amended from time to time, the “LTIP”) and described in applicable award agreements (“Award Agreements”). With respect to each outstanding RSU award and PSU award held by Retiree that, as of the Retirement Date, has been outstanding for at least one year following the applicable grant date (collectively, the “Eligible Awards”), Company hereby agrees to amend and waive, in accordance with the terms of the LTIP and the individual RSU and PSU Award Agreements granted to Retiree thereunder, all or any portion of the continued service-based vesting conditions applicable to such Eligible Awards (the “Vesting Benefits”) and delete any forfeiture requirements based on Retiree’s termination of service; provided that (i) in the case of any Eligible Award that is subject to performance-vesting conditions, the vesting of such award will remain subject to the satisfaction of the applicable performance-vesting conditions in accordance with its terms, (ii) the Eligible Awards will remain subject to all other terms and conditions applicable to such Eligible Awards pursuant to the LTIP and the applicable Award Agreements, and (iii) the Eligible Awards will convert into common stock of Company in accordance with their original vesting/settlement schedule (the latest date on which any Eligible Award (or any portion thereof) will convert into common stock of Company, the “Last Full Vest Date”). |
b. | General Release. In exchange for the Post-Termination Benefit, Retiree releases, acquits, and forever discharges (i) Company, (ii) any parent, subsidiary, or affiliated entity of Company, (iii) any current or former officer, stockholder, member, director, partner, agent, manager, employee, representative, insurer, or attorney of the entities described in (i) or (ii), (iv) any employee benefit plan sponsored or administered by any person or entity described in (i), (ii), or (iii), and (v) any successor or assign of any person or entity described in (i), (ii), (iii), or (iv) (collectively, the “Company Parties”) from, and waive to the maximum extent permitted by applicable law, any and all claims, liabilities, demands, and causes of action of whatever character, whether known or unknown, fixed or contingent, or vicarious, derivative, or direct, that Retiree may have or claim against Company or any of the other Company Parties. Retiree understands that this general release includes, but is not limited to, any and all claims arising under federal, state, or local laws prohibiting employment discrimination, including the Age Discrimination in Employment Act, or other claims growing out of, resulting from, or connected in any way with Retiree’s employment with or retirement from Company. Retiree understands that this Agreement does not waive any rights or claims against Company or any of the other Company Parties that may arise after the date on which Retiree signs it. Retiree further understands that nothing in this Agreement waives (i) any benefits to which Retiree has a vested entitlement under the terms of the applicable employee benefit plans established by Company, (ii) any rights or claims arising after the Effective Date, or (iii) any right or claim to indemnification or defense of any claims arising out Retiree’s prior employment with the Company. |
c. | Effective Date. Retiree understands that the terms of this Agreement will become effective and enforceable eight days after Retiree signs it (the “Effective Date”), unless before then Retiree revokes Retiree’s acceptance in writing and delivers Retiree’s written revocation to Amy Wynn-Steffek by email to awynn-steffek@kosmosenergy.com or at the address above, in which case Retiree will not be entitled to receive the Post-Termination Benefit. Retiree acknowledges and agrees that Company has no legal obligation to provide the Post-Termination Benefit to Retiree. Signing this Agreement constitutes Retiree’s agreement to all terms and conditions set forth in it and is in consideration of Company’s agreement to provide the Post-Termination Benefit. |
d. | Permitted Activities. Retiree understands that nothing in this Agreement precludes Retiree from (i) voluntarily filing a charge or complaint with, providing truthful information to, or cooperating with an investigation conducted by a government |
e. | Jury Waiver. Retiree irrevocably waives the right to trial by jury with respect to any claim or cause of action against Company or any of the other Company Parties arising from Retiree’s employment with or retirement from Company or from this Agreement (either for alleged breach or enforcement). |
f. | Voluntary Agreement. Retiree acknowledges that (i) Retiree read this Agreement (ii) by this paragraph, Company specifically has advised Retiree to consult an attorney and Retiree has had the opportunity to consult an attorney, (iii) Retiree has had at least 21 days to consider and fully understand the meaning and effect of Retiree’s action in signing this Agreement, (iv) Retiree’s signing of this Agreement is knowing, voluntary, and based solely on Retiree’s own judgment in consultation with Retiree’s attorney, if any, and (v) Retiree is not relying on any written or oral statement or promise other than as set out in this Agreement or the Advisory Agreement. |
g. | Miscellaneous. This Agreement contains and constitutes the entire understanding and agreement between Company and Retiree with respect to its subject matter and may not be released, discharged, abandoned, supplemented, changed, or modified in any manner except by a writing of concurrent or subsequent date signed by both an authorized Company official and Retiree. This Agreement is governed by and construed in accordance with the laws of the State of Texas without regard to its rules regarding conflict of laws. Exclusive venue for purposes of any dispute, controversy, claim, or cause of action between the Parties concerning, arising out of, or related to this Agreement or Retiree’s employment with or retirement from Company is in any state district of competent jurisdiction presiding over Dallas County, Texas. Retiree further consents to receive service of process related to any such action by any method permitted by statute or rule and—whether or not expressly authorized by statute or rule—through any email or social-media account established, maintained, or used by Retiree. |
RETIREE /s/ Brian F. Maxted | KOSMOS ENERGY, LLC /s/ Jason E. Doughty | ||||
Brian F. Maxted | By: Jason E. Doughty | ||||
Date: 1 March 2019 | Date: 1 March 2019 | ||||
Type of Eligible Award | Grant Date | Vesting Date | Number of Shares |
RSU | January 23, 2017 | January 1, 2020 | 29,834 |
PSU | January 23, 2017 | January 3, 2020 | 134,500* |
RSU | January 31, 2018 | January 2, 2020 | 29,833 |
RSU | January 31, 2018 | January 2, 2021 | 29,833 |
PSU | January 31, 2018 | January 4, 2021 | 134,500* |
Reference:
Security Exchange Commission - Edgar Database, EX-10.1 2 kos-3312019xex1001.htm EXHIBIT 10.1, Viewed October 25, 2022, View Source on SEC.
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Lawyers with backgrounds working on exit agreements work with clients to help. Do you need help with an exit agreement?
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Meet some of our Exit Agreement Lawyers
Dean F.
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Jason P.
Jason is a self-starting, go-getting lawyer who takes a pragmatic approach to helping his clients. He co-founded Fortify Law because he was not satisfied with the traditional approach to providing legal services. He firmly believes that legal costs should be predictable, transparent and value-driven. Jason’s entrepreneurial mindset enables him to better understand his clients’ needs. His first taste of entrepreneurship came from an early age when he helped manage his family’s small free range cattle farm. Every morning, before school, he would deliver hay to a herd of 50 hungry cows. In addition, he was responsible for sweeping "the shop" at his parent's 40-employee HVAC business. Before becoming a lawyer, he clerked at the Lewis & Clark Small Business Legal Clinic where he handled a diverse range of legal issues including establishing new businesses, registering trademarks, and drafting contracts. He also spent time working with the in-house team at adidas® where, among other things, he reviewed and negotiated complex agreements and created training materials for employees. He also previously worked with Meriwether Group, a Portland-based business consulting firm focused on accelerating the growth of disruptive consumer brands and facilitating founder exits. These experiences have enabled Jason to not only understand the unique legal hurdles that can threaten a business, but also help position them for growth. Jason's practice focuses on Business and Intellectual Property Law, including: -Reviewing and negotiating contracts -Resolving internal corporate disputes -Creating employment and HR policies -Registering and protecting intellectual property -Forming new businesses and subsidiaries -Facilitating Business mergers, acquisitions, and exit strategies -Conducting international business transactions In his free time, Jason is an adventure junkie and gear-head. He especially enjoys backpacking, kayaking, and snowboarding. He is also a technology enthusiast, craft beer connoisseur, and avid soccer player.
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