Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL
RELEASE
This Separation Agreement and
General Release (this “ Separation Agreement ”)
is made and entered into on this 11th day of September, 2009 by and
between Cypress Sharpridge Investments, Inc, a Maryland corporation
(“ CYS ”), Cypress Sharpridge Advisors LLC, a
Delaware limited liability company (the “ Manager
”), and Sharpridge Capital Management, L.P., a Delaware
Limited Partnership (“ Sharpridge ”, and
collectively with CYS and the Manager, the “ Company
”), on the one hand, and William J. Hayes (the “
Executive ”), on the other hand. The Company and the
Executive are collectively referred to as the “
Parties ”.
WHEREAS , Sharpridge has terminated the
Executive’s employment with Sharpridge effective as of
August 12, 2009 (the “ Separation Date
”);
WHEREAS , each of the Board of Directors of CYS and the
Managing Members of the Manager have elected not to have the
Executive continue to serve as their Chief Financial Officer and
Treasurer effective as of the Separation Date; and
WHEREAS , except as provided herein, this Separation
Agreement shall supersede and replace in all respects any and all
agreements and understandings between Sharpridge and the Executive
relating to the Executive’s employment by and/or separation
from Sharpridge, and any and all agreements and understandings
between CYS or the Manager and the Executive relating to the
Executive serving as an officer of such entity.
NOW , THEREFORE , in consideration of the
mutual covenants and agreements herein contained, the Parties agree
as follows:
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1.
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Effective
Date of Agreement . This
Separation Agreement shall become effective and enforceable on the
8th day after the date first written above (the “
Effective Date ”). Once effective, all of the terms,
conditions, benefits and restrictions of this Separation Agreement
shall be fully enforceable and binding on the Parties.
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2.
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Terms of
Termination of Employment .
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a.
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Resignation
from Positions . The
Executive hereby resigns his employment and any and all positions
(the “ Positions ”) he holds with Sharpridge,
CYS, and the Manager and each of their subsidiaries and affiliates,
including without limitation, Sharpridge TRS, Inc., a Delaware
corporation. Such Positions include, but are not limited to his
positions as Chief Financial Officer of Sharpridge, Chief Financial
Officer and Treasurer of CYS, and Chief Financial Officer and
Treasurer of the Manager, in each case effective as of the
Separation Date. As of the Separation Date, the Executive shall
have no further duties or responsibilities to be performed for
Sharpridge, CYS, and the Manager and each of their subsidiaries and
affiliates, other than as specified herein; he shall have no
authority to act or endeavor to act on behalf of Sharpridge, CYS,
and the Manager and each of their subsidiaries and affiliates for
any reason whatsoever; and Executive no longer shall have signing
or other authority with respect to Sharpridge’s, CYS’s,
and the Manager’s and each of their subsidiaries’ and
affiliates’ accounts, books or records.
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b.
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No Further
Compensation or Benefits . The Executive will not receive any
compensation or benefits from Sharpridge, CYS or the Manager after
the Separation Date, except as expressly hereinafter provided in
this Separation Agreement. The Executive and each of Sharpridge,
CYS and the Manager acknowledge and agree that valid consideration
exists for the promises contained in this Separation
Agreement.
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3.
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Consideration to Executive
.
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a.
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The Executive
acknowledges that (i) Sharpridge has paid the
Executive’s accrued annual salary that is payable, and
accrued and unpaid vacation through and including the Separation
Date in accordance with Sharpridge’s normal payroll
practices, and (ii) he is not owed any compensation, accrued
unpaid vacation, or any other compensation or benefits from CYS or
the Manager, or their respective subsidiaries or
affiliates.
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After the Effective Date, the
Sharpridge shall continue to pay the Executive his monthly base
salary through February 28, 2010 (the period from the
Separation Date to February 28, 2010 being the “
Separation Period ”), payable in accordance with the
Sharpridge’s monthly payroll practice, and subject to all
applicable Federal and State withholdings (the “
Separation Payments ”). The first Separation Payment
shall be made on or about September 21, 2009, after the
Executive’s right to revoke this Agreement has expired. The
five subsequent Separation Payments shall be made on or about the
1 st
of each month after the date hereof,
in accordance with Sharpridge’s payroll practice.
Accordingly, the final Separation Payment shall be due and payable
on or about February 1, 2010.
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b.
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For the period
from the Separation Date until the earlier of February 28,
2010 and the date on which the Executive is eligible to receive
coverage under another employer’s group health insurance
plan, the Executive shall be eligible to continue coverage for
himself and his dependents under the existing group health
insurance plan maintained by Sharpridge for the benefit of its
officers and employees, provided that the Executive timely
provides the requisite election notice required under the
Consolidated Omnibus Budget Reconciliation Act (“
COBRA ”). During the period that the Executive elects
to continue such coverage, the Executive shall pay the monthly
premiums for such coverage and Sharpridge shall reimburse such
premium payments within five (5) business days after the
Executive presents to Sharpridge evidence of his payment of the
premiums. The Executive shall promptly notify Sharpridge in writing
when he becomes eligible to receive health coverage under another
employer’s group health insurance plan.
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c.
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CYS agrees to
maintain Director and Officer Insurance Coverage for the Executive
during the Separation Period for his acts and omissions while an
officer of CYS on a basis no less favorable to him than coverage
provided to current officers of CYS.
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d.
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Sharpridge and
CYS agree to reimburse Executive for the actual reasonable out of
pocket business expenses incurred by the Executive in connection
with the performance of his duties as Chief Financial Officer of
Sharpridge and Chief Financial Officer and Treasurer of CYS,
respectively, prior to the date of this Agreement, subject to
delivery by the Executive to Sharpridge or CYS, as the case may be,
of receipts and other appropriate supporting documentation on or
before August 20, 2009.
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e.
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The Executive
understands and agrees that the payments payable to Executive under
Sections 3(a), 3(b) and 3(c) will be treated by Sharpridge as
compensation expense.
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Page 2 of 9
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4.
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Waiver,
Release of Claims, and Covenant Not to Sue .
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a.
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The Executive,
for himself, his agents, personal representatives, heirs and
assigns, hereby unconditionally releases and forever discharges
Sharpridge, CYS, the Manager, and any and all of their affiliated
entities and subsidiaries, as well as their respective officers,
directors, partners, owners, employees, agents, representatives,
financial advisors, predecessors and successors, and all of their
respective affiliates, whether in their individual or
representative capacities (collectively “ Released
Parties ”), from any and all liability of every kind and
nature whatsoever arising out of or connected in any way with the
Executive’s employment, or termination of employment, by the
Company and any of its affiliates or subsidiaries, or any other
matter relating to the Company or any of its affiliates or
subsidiaries, or the business or assets of any of them, both as to
matters now known and those discovered hereafter, including,
without limitation, any and all claims for monetary relief,
injunctive relief, attorney fees, costs, back pay or unpaid wages,
fringe benefits, employment or reinstatement that co
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