Exhibit 10.56
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”), dated as of February 14, 2024, is by and between JBG SMITH Properties, a Maryland real estate investment trust (together with its affiliates, the “Company”), with its principal offices in Bethesda, Maryland and David Ritchey (“Executive”).
Recitals
Executive is currently employed by the Company; and
The Company and Executive desire to enter into this Agreement to set forth the terms of Executive’s continued employment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
Agreement
which has been disclosed to the Company on a list provided to the Company by Executive coincident with the execution of this Agreement), will be deemed not to interfere with the performance by Executive of his duties and responsibilities under this Agreement).
5. | Compensation and Related Matters. |
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(a) | Death. Executive’s employment hereunder will terminate upon his death. |
(i) | conviction of, or plea of guilty or nolo contendere to, a felony; |
For purposes of this Section 6(c), no act, or failure to act, by Executive will be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company.
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Executive’s continued employment during the 90-day period referred to above in this paragraph (d) shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Executive’s right to terminate his employment hereunder for Good Reason shall not be affected by his incapacity due to physical or mental illness.
7. | Termination Procedure. |
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board of trustees or directors of any subsidiary of the Company and/or any other board to which he has been appointed or nominated by or on behalf of the Company (including the Board), and (ii) from any position with the Company or any subsidiary of the Company, including, but not limited to, as an officer and trustee or director of the Company and any of its subsidiaries.
Upon any termination of Executive’s employment hereunder, except as otherwise provided herein, Executive (or his beneficiary, legal representative or estate, as the case may be, in the event of his death) shall be entitled to such rights in respect of any equity awards theretofore made to Executive, and to only such rights, as are provided by the plan or the award agreement pursuant to which such equity awards have been granted to Executive or other written agreement or arrangement between Executive and the Company.
(i) | The “Severance Amount” will be equal to: |
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following, a Change in Control of the Company (and such Change in Control does in fact occur) (a “Qualifying CIC Termination”), three times the sum of Executive’s: (x) current Base Salary, and (y) target Annual Bonus, payable in a lump sum within 60 days after the Date of Termination; or
(ii) | The “Pro Rata Bonus” will be equal to: |
in either case such amount will be prorated based on the number of days in the year up to and including the Date of Termination and divided by 365.
(iv) | The “Equity Vesting Benefits” mean: |
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measured at performance specified in the award agreement (e.g., if 300 units are granted on January 1, 2025, the award vests in three annual installments, and the Date of Termination is July 1, 2026, then 50% of the 100 units that would vest on January 1, 2027 will vest (if earned based on performance) and the remaining unvested units will be forfeited); provided, however, that if the terms of the award agreement pursuant to which such Performance LTIP Units or other performance-based award have been granted would provide more favorable treatment in the specific circumstance, such terms shall govern and (iii) full vesting of any outstanding unvested LTIP Units and other equity awards without performance-vesting conditions (excluding the Initial Formation Award);
(v) | “Change in Control” shall mean: |
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beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then- outstanding voting securities entitled to vote generally in the election of directors or trustees, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors or trustees of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
As a condition to the payments and other benefits pursuant to Section 8(b), Executive must execute a separation and general release agreement in the form attached hereto as Exhibit A (the “Release”), which must become effective within 55 days following the Date of Termination; provided, however, that if Executive’s Date of Termination occurs on or after November 1 of a given calendar year, any such payments (except as provided in Section 8(b)(ii)(B)) shall, subject to Section 9 hereof, be paid (or commence to be paid) in January of the immediately following calendar year.
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(y) target Annual Bonus, payable in equal installments over 12 months in accordance with the Company’s regular payroll procedures, commencing within 60 days after the Date of Termination, (ii) the Pro Rata Bonus, (iii) the Equity Vesting Benefits and (iv) the Unpaid Prior Year Bonus. Notwithstanding the foregoing, if upon mutual agreement with Executive to continue Executive’s employment with the Company, the Company repudiates the notice described in the preceding sentence, Executive shall not be entitled to any payments described in this Section 8(e). For the avoidance of doubt, following a nonrenewal of the Agreement by the Company, Executive shall continue to be subject to those provisions that survive the termination of this Agreement, including without limitation, those provided in Section 11.
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Company shall request the Accountants to perform all necessary calculations promptly in connection with the applicable Change in Control or termination of employment. For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Executive agree to furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision. Any reduction in payments and/or benefits required by this provision will occur in the following order: (1) reduction of cash payments; (2) reduction of vesting acceleration of equity awards; and (3) reduction of other benefits paid or provided to Executive. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant for equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. To the extent requested by Executive, the Company shall cooperate with Executive in good faith in valuing, and the Accountants shall take into account the value of, services to be provided by Executive (including Executive agreeing to refrain from performing services pursuant to a covenant not to compete) before, on or after the date of the transaction which causes the application of Section 280G of the Code such that payments in respect of such services may be considered to be “reasonable compensation” within the meaning of Q&A-9 and Q&A-40 to Q&A 44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of such final regulations in accordance with Q&A-5(a) of such final regulations.
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carrying out his duties under this Agreement and, if so removed, they will be returned to the Company promptly after termination of Executive’s employment hereunder, or otherwise promptly after removal if such removal occurs following termination of employment. Executive shall and hereby does assign to the Company all rights to trade secrets and other products relating to the Company’s business developed by his alone or in conjunction with others at any time while employed by the Company. In the event of any conflict between the provision of this paragraph and of any applicable employee manual or similar policy of the Company, the provisions of this paragraph will govern.
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12. | Indemnification. |
13. | Successors; Binding Agreement. |
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If to Executive:
Address on file with the Company
If to the Company:
JBG SMITH Properties
4747 Bethesda Avenue, Suite 200
Bethesda, MD 20814 Attention: Chief Legal Officer
16. | Miscellaneous. |
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18. | 409A Compliance. |
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the parties reflected hereon as the signatories. Photographic, faxed or PDF copies of such signed counterparts may be used in lieu of the originals for any purpose.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
COMPANY: JBG SMITH Properties, a Maryland real estate investment trust |
| EXECUTIVE: | |
By: | /s/ Steven A. Museles | | /s/ David Richey |
| Name: Steven A. Museles | | David Ritchey |
| Title: Chief Legal Officer and Corporate Secretary | | |
EXHIBIT A
GENERAL RELEASE AND WAIVER OF CLAIMS
General Release AND WAIVER OF CLAIMS (this “Release”), by David Ritchey (“Executive”) in favor of JBG SMITH Properties, a Maryland real estate investment trust (together with its affiliates, the “Company”), stockholders, beneficial owners of its stock, its current or former officers, directors, employees, members, attorneys and agents, and their predecessors (including Vornado Realty Trust, a Maryland real estate investment trust and Vornado Realty L.P., a Delaware limited partnership (the “Vornado Parties”), and JBG Properties Inc., a Maryland corporation and JBG/Operating Partners, L.P., a Delaware limited partnership), successors and assigns, individually and in their official capacities (together, the “Released Parties”).
WHEREAS, Executive has been employed as Chief Commercial Officer; WHEREAS, Executive’s employment with the Company was terminated,
effective as of (the “Termination Date”); and
WHEREAS, Executive is seeking certain payments under Section 8[(b)][(e)] of the Employment Agreement entered into by JBG SMITH Properties and the Executive dated as of February 14, 2024 (the “Employment Agreement”), with Company that are conditioned on the effectiveness of this Release.
NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties agree as follows:
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laws of any jurisdiction in the United States, or any other country, that limit a general release to those Claims that are known or suspected to exist in Executive’s favor as of the Effective Date (as defined below).
(i) | release any Claims for payment of amounts payable under the Employment Agreement (including under Section 8[(b)][(e)] thereof); |
(ii) | release any Claims for employee benefits under plans covered by ERISA to the extent any such Claim may not lawfully be waived or for any payments or benefits under any plans of the Company that have vested in accordance with the terms of such plans; |
(iii) | release any Claim that may not lawfully be waived; |
(iv) | release any Claim for indemnification and D&O insurance in accordance with the Employment Agreement and with applicable laws and the corporate governance documents of the Company; or |
(v) | prohibit Executive from reporting possible violations of federal law or regulation or making other disclosures that are protected under (or claiming any award under) the whistleblower provisions of federal law or regulation. |
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(i) | this Release does not release, waive or discharge any rights or Claims that may arise for actions or omissions after the Effective Date of this Release and Executive acknowledges that he is not releasing, waiving or discharging any ADEA Claims that may arise after the Effective Date of this Release; |
(ii) | Executive is entering into this Release and releasing, waiving and discharging rights or Claims only in exchange for consideration which he is not already entitled to receive; |
(iii) | Executive has been advised, and is being advised by the Release, to consult with an attorney before executing this Release; Executive acknowledges that he has consulted with counsel of his choice concerning the terms and conditions of this Release; |
(iv) | Executive has been advised, and is being advised by this Release, that he has been given at least [21][45] days within which to consider the Release, but Executive can execute this Release at any time prior to the expiration of such review period; and |
(v) | Executive is aware that this Release shall become null and void if he revokes his agreement to this Release within seven (7) days following the date of execution of this Release. Executive may revoke this Release at any time during such seven-day period by delivering (or causing to be delivered) to the Company written notice of his revocation of this Release no later than 5:00 p.m. Eastern time on the seventh (7th) full day following the date of execution of this Release (the “Effective Date”). Executive agrees and acknowledges that a letter of revocation that is not received by such date and time will be invalid and will not revoke this Release. |
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the Executive from providing truthful information in response to a subpoena, other legal process or valid governmental inquiry.
in Section 2 hereof or restrict or limit the Executive from providing truthful information in response to a subpoena, other legal process or valid governmental inquiry or in the event of litigation between the Executive and the Company or its affiliates.
IN WITNESS WHEREOF, Executive has signed this Release on
, 20 . [To be dated on or after the Termination Date.]
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