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HomeMy WebLinkAbout19 - City Manager Employment AgreementCITY OF o m s J J _� W P _ j BEACH M City Council Staff Report Agenda Item No. 19 June 11, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Council Working Group (Council Members Mike Henn, Nancy Gardner and Mayor Keith Curry) PREPARED BY: Terri L. Cassidy, Deputy City Manager /Human Resources Director APPROVED: r� TITLE: Second Amended and Restated Employment Agreement for City Manager ABSTRACT: The City Council recently finalized its evaluation of the City Manager's performance and has assessed his performance to be fully satisfactory. At this time, the Council Working Group is recommending only that the City Manager's Employment Agreement be modified to ensure consistency between said agreement and the agreements with the City Attorney and City Clerk. As to Mr. Kiff's compensation, the Council Working Group is recommending that consideration of modifications to compensation be delayed as noted below. RECOMMENDATION: Approve and authorize the Mayor and City Clerk to execute the attached Second Amended and Restated Employment Agreement ( "Agreement ") (Attachment A) for the City Manager. DISCUSSION: As to Mr. Kiff's compensation, the Council Working Group is recommending that consideration of modifications to compensation be delayed pending completion of Council's consideration of the recommendations from the City's compensation consultant, Fox Lawson, which is currently in the process of conducting a comprehensive review of all City employee salaries and benefits, including senior executive compensation. It is expected that Council will complete its compensation Second Amended and Restated Employment Agreement for City Manager June 11, 2013 Page 2 considerations later this year, following which Council will address potential changes to Mr. Kiff's compensation. Mr. Kiff's performance has been judged by Council to be fully satisfactory, and this delay is purely related to the completion of the Fox Lawson considerations. The Agreement conforms the required PERS pension contributions to be made by Mr. Kiff to the recently re- negotiated labor contract for Key and Executive employees. Mr. Kiffs contributions have previously been set at 9% of pay which, was above the required 8% level. Under the new contribution schedule, this will be increased to 12.45% of pay by June 30, 2014. At that level, Mr. Kiff will be contributing approximately 50% of the total cost of his pension benefit, consistent with the Council - adopted Compensation Philosophy goal of 50 %. The Agreement also brings the City Manager's Agreement into conformance with the City Attorney's and City Clerk's employment agreements that were recently approved by the City Council in January and March of 2013, respectively. Specifically, the Agree- ment incorporates changes to Government Code Section 53260(a) that limit the amount of severance that may be paid to a City employee at the City Manager's level upon separation. Under this provision, the maximum severance pay that an executive employee of the City may receive is an amount equal to the monthly salary of the City employee multiplied by the number of months left on the unexpired term of the employment agreement. The City Manager's current agreement has an indefinite term. Under the attached Agreement, the City Council will retain the right to terminate the Agreement without cause at any time, triggering severance in return for a general release. To be sure this is legally possible, upon termination without cause, to pay the City Manager the six -month severance provided in his current agreement, the attached Agreement has a fixed two year term. Further, the Agreement includes an automatic twelve -month extension of the term, on each annual anniversary of the Agreement's effective date. The result of using this "evergreen" term is that there will always be a sufficient unexpired term on the Agreement to justify a six -month severance payment. However, upon thirteen months notice, the City Council may elect not to renew the City Manager's Agreement at its then effective expiration. In that event, no severance would be due. This "evergreen" approach is commonly being used by cities to assure compliance with Government Code Section 53260(a). Also, the proposed Agreement: (1) adjusts the City Manager's flex leave to the same level as other Executive Management employees; and (ii) includes other changes to a number of provisions, to ensure conformance between the City Manager's Agreement and the agreements with the City Attorney and City Clerk. A redline version of the Agreement showing all of the revisions is attached hereto as Attachment B. 4 Second Amended and Restated Employment Agreement for City Manager June 11, 2013 Page 3 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: This agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: 4 It, Lc:: w � : � Tern L. Cassidy, Deputy City Man er City Manager's Office On behalf of the Council Working Group Attachments: A. Recommended Amended and Restated Employment Agreement B. Redline of Recommended Amended and Restated Employment Agreement SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ( "Agreement ") is made effective as of June 11, 2013 ( "Effective Date ") and is entered into by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City ( "Employer" or "City ") and DAVID KIFF ( "Employee ") an individual (sometimes collectively referred to herein as "the Parties "). RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Employee has been continuously employed by City as City Manager since September 12, 2009. Employee is currently employed under an Amended and Restated Employment Agreement dated November 13, 2012 ( "Employment Agreement "). C. The Parties mutually agree that they intend for this Agreement to supersede the Employment Agreement, and that upon execution of this Agreement, the Employment Agreement shall have no force or effect. D. The Parties also mutually agree that this form of Agreement reflects the terms and conditions under which the Parties intend and desire to continue Employee's employment. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: Page 1 4 SECTION 1: Term and Notice of Non - Renewal This Agreement shall become effective June 11, 2013 ( "Effective Date "). Subject to City's right to terminate Employee's employment at any time, as provided for in this Agreement, the Term of this Agreement is two (2) years from the Effective Date, and shall automatically be extended for one additional twelve (12) month period on each annual anniversary of the Effective Date of the Agreement unless City notifies Employee of its intent not to extend the Agreement at least thirteen (13) months prior to expiration of the original Term or any subsequent automatic extension of the Term. City's election not to. extend this Agreement shall not entitle Employee to severance pursuant to Section 7 of this Agreement. SECTION 2: Duties and Authoritv Employer agrees to employ Employee as City Manager to exercise the powers and authority and to perform the functions and duties specified in the Newport Beach City Charter, the Municipal Code and all relevant resolutions, rules, regulations, procedures, applicable job description(s) and state codes, as they currently or may in the future exist. Employee shall exercise such power and authority and perform such other functions and duties, not inconsistent with this Agreement, as Employer, by its City Council, may legally assign. SECTION 3: Compensation and Performance Evaluation. A. Employer agrees to pay Employee at the rate of an annual base salary of $231,750.00 (Two Hundred Thirty -One Thousand Seven Hundred Fifty Dollars), subject to deduction and withholding of any and all sums required for federal or state income tax, pension contributions, and all other taxes, deductions or withholdings required by then current state, federal or local law, prorated and paid on Employer's normal paydays for the City Manager, City Attorney, City Clerk, and any Department Directors not covered by collective bargaining agreements ( "Executive Management Employees "). Employer shall also deduct sums Employee is obligated to pay because of participation in plans or programs Page 2 6 described in Section 4 of this Agreement. The annual base salary of Employee is within the approved salary range adopted by resolution of the City Council. This Agreement shall be deemed amended whenever the City Council adopts a resolution changing the base salary of Executive Management Employees or the manner (but not the amount) by which Executive Management Employees are paid. B. Employer, by the City Council, and Employee may set mutually- agreed upon objectives for each year under this Agreement. Employer, by the City Council, may elect to conduct an evaluation of Employee's performance at any time or times during the period in which this Agreement remains in effect. C. Employee's compensation as discussed under this Section is not tied to the compensation of any other City employee or group of City employees, except as expressly provided in this Agreement. SECTION 4: Employee Benefits A. Benefit Balances Carried Over. Employee shall not have a break in his employment service between the Employment Agreement and this Agreement. All of Employee's accrued leave and other benefit balances shall carry over, and his leave and benefit balances shall continue to accrue under the terms of applicable City policies and this Agreement. B. Flex Leave. Employee shall accumulate Flex Leave as provided in the City's Key and Management Compensation Plan, Executive Management category ( "Compensation Plan "), at the current rate of 9.69 hours per Pay Period. Employee's Maximum accrual for Flex Leave is limited to 400 (four hundred) hours. The right to sell back accumulated Flex Leave shall be consistent with the Compensation Plan. Page 3 ;y C. Administrative Leave. Employee shall be entitled to 40 (forty) hours of administrative leave per calendar year. Administrative leave will not accrue from calendar year to calendar year and must be used or lost at the conclusion of each calendar year. Consistent with the Compensation Plan, there is no right to sell back any accumulated Administrative Leave. D. Additional Benefits. Except as expressly provided herein, Employee shall receive the same health insurance and retirement benefits, and be entitled to participate in plans and programs such as short term and long term disability plans, life insurance plans, and deferred compensation plans, as are available under the Compensation Plan. This Agreement shall be deemed amended as to these benefits, and these benefits only, whenever the City Council adopts a resolution or takes action changing these benefits under the Compensation Plan. E. Annual Physical Exam. Employee may undergo an annual physical examination and City shall reimburse Employee for the actual cost of the examination up to a maximum of $1,250 (one thousand two hundred fifty dollars). F. Automobile Allowance. Employee's duties require him to be available and respond to demands of City business at all times and outside of regular business hours, including weekends. Employer shall, therefore, pay to Employee $500 per month as an automobile allowance so that Employee may respond to these demands of City business. G. Phone Allowance. Employee shall be entitled to the same phone allowance as provided to any Executive Management member. H. Amendment of Benefits. Employee's benefits provided under this Section 4 are not tied to the compensation of any other City employee or group of City employees except as expressly provided in this Section. Page 4 N I. PERS. From the Effective Date of this Agreement, Employee will pay 9% of pensionable pay toward retirement costs (3.42% employer cost sharing [ "ER side "] and 5.58% employee normal member contribution [ "EE side "]) on a pre -tax basis pursuant to IRS Code Section 414(h)(2). Effective the pay period including June 30, 2013, Employee shall contribute an additional .45% of pensionable pay toward retirement costs, for a total contribution of 9.45 %. Effective the pay period including June 30, 2014, Employee shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total contribution of 10.90 %. Effective the pay period including June 30, 2015, Employee shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total contribution of 12.35 %. The Parties agree that the City will not report the value of any Employer Paid Member Contribution as special compensation. SECTION 5: General Business Expenses A. Employer recognizes that Employee may incur expenses of a non - personal, job related nature that are reasonably necessary to Employee's service to Employer. Employer agrees to either pay such expenses in advance or to reimburse the expenses, so long as the expenses are incurred and submitted according to Employer's normal expense reimbursement procedures or such other procedure as may be designated by the City Council. To be eligible for reimbursement, all expenses must be supported by documentation meeting Employer's normal requirements and must be submitted within time limits established by Employer. B. Employer agrees to budget and pay for professional dues, membership and subscriptions of Employee necessary for continuation and participation in the International City /County Management Association (ICMA), Cal -ICMA, the California City Manager's Foundation (CCMF), and state and national League of Cities and such other organizations as Employer and Employee may agree from time to time. Employer also agrees to pay the cost of a corporate surety bond as contemplated by section 503 of the City Charter. Page 5 s C. Employer agrees to budget and to reimburse or pay for reasonable costs for attendance and participation in meetings, institutes, training programs, conferences, conventions and similar gatherings that support leadership development and the advancement of Employer and Employee's mutually agreed upon goals, and which are related to Employee's duties or Employer's operations and held in the continental United States. For purposes of this paragraph, reasonable expenses are limited to the reasonable and actual cost of registration, coach -class airfare (where applicable), ground transportation and meals. Reasonable expenses will also include the reasonable and actual cost of lodging for meetings outside of Orange County. D. The expenses to be budgeted and paid in the Section 5, Paragraphs A, B, and C above, are exclusive of reasonable expenses related to events, participation in organizations, or attendance at events or meetings on behalf of the City as required by the City Council. Employer will separately budget and pay for membership and participation in community, civic or other organizations or events in which Employer requires Employee to participate. SECTION 6: At -Will Employment Relationship A. Consistent with Article VI of the City Charter, Section 600, Employee is appointed by, and serves at the pleasure of, the City Council. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employer to terminate this Agreement and the employment of Employee at any time, with or without Cause (as defined below), and with or without notice. Employer shall pay Employee for all services through the Effective Date of termination and Employee shall have no right to any additional compensation or payment, except as provided in Section 7, Severance and Benefit Payoff at Termination, and General Release Agreement, below. B. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employee to resign from his employment with Employer, subject only to Page 6 9 Employee providing forty -five (45) calendar days prior written notice to Employer of the effective date of his resignation. SECTION 7: Severance and Benefit Payoff at Termination. and General Release Aareement A. If Employer terminates this Agreement (thereby terminating Employee's Employment) without Cause, as determined by the affirmative votes of a majority of the members of the City Council at a meeting of the City Council, and if Employee signs, delivers to the City Council, and does not revoke, the General Release Agreement in the form attached hereto as Exhibit A, Employer shall pay Employee a lump sum benefit equal to six (6) months of his then applicable base salary, and shall provide six (6) months of medical benefits as provided under the Compensation Plan beginning on the effective date of termination (collectively "Severance "). B. If Employer terminates this Agreement (thereby terminating Employee's Employment) with Cause, as determined by the affirmative votes of a majority of the members of the City Council at a Regular Meeting of the City Council, Employee shall not be entitled to any additional compensation or payment, including Severance. If the City Council intends to terminate with Cause, based on a reason or reasons set forth in subpart 5 or 6, immediately below, the Council shall first deliver to Employee a written Notice of Intent to Terminate, stating the reason or reasons for the proposed termination, and providing a thirty (30) day period for Employee to cure. If, in the City Council's independent judgment, Employee cures the identified reason or reasons for Cause termination, Employee shall not be terminated therefor. As used in this Agreement, Cause shall mean any of the following: 1. Conviction of a felony; 2. Conviction of a misdemeanor arising out of Employee's duties under this Agreement and involving a willful or intentional violation of law; Page 7 1111 3. Conviction of any crime involving an "abuse of office or position," as that term is defined in Government Code section 53243.4; 4. Willful abandonment of duties; 5. Repeated failure to carry out a directive or directives of the City Council made by the City Council as a body; and 6. Any grossly negligent action or inaction by Employee that materially and adversely: (a) impedes or disrupts the operations of Employer or its organizational units; (b) is detrimental to employees or public safety; or (c) violates properly established rules or procedures of Employer. C. In no event may Employee be terminated within ninety (90) days after any municipal election for the selection or recall of one or more of the members of the City Council. D. If Employee terminates this Agreement (thereby terminating Employee's employment), Employee shall not be entitled to any additional compensation or payment, including Severance. E. Upon termination (regardless of reason), Employee shall be compensated for all accrued but unused Flex Leave. No compensation shall be paid for any accrued but unused administrative leave. SECTION 8: Employee's Obligations and Hours of Work Employee shall devote his full energies, interest, abilities and productive time to the performance of this Agreement and utilize his best efforts to promote Employer's interests. Employee's duties may involve expenditures of time in excess of the regularly established workday or in excess of a forty (40) hour workweek and may also include time outside normal office hours (including attendance at City Council meetings). Employee's base salary includes compensation for all hours worked and Employee shall Page S 11 be classified as an exempt employee for purposes of overtime and shall not be entitled to any form of compensation for overtime. In recognition of the significant time Employee will need to devote outside normal office hours to business activities of Employer and the exempt, salaried nature of the employment, employee is permitted to exercise a flexible work schedule. However, consistent with this flexibility and Employee's participation in activities out of the office, Employee will generally be expected to keep office hours at City Hall, Monday through Friday during normal business hours. SECTION 9: Confidentiality and Non - Disparagement A. Employee acknowledges that in the course of his employment contemplated herein, Employee will be given or will have access to confidential and proprietary documents and information, relating to the City, its residents, businesses, employees, and customers ( "Confidential Information "). Such Confidential Information may include, but is not limited to, all information given to or otherwise accessible to Employee that is not public information or would be exempt from public disclosure as confidential, protected, exempt or privileged information. Employee shall hold the Confidential Information in trust for City's benefit, and shall not disclose the Confidential Information to others without the express written consent of City. B. Except as otherwise required by law, in the event the City terminates Employee with or without Cause, the City and Employee agree that no member of the City Council, the city management staff, nor the Employee shall make any written, oral, or electronic statement to any member of the public, the press, or any City employee concerning the Employee's termination except in the form of a joint press release or statement, which is mutually agreeable to City and Employee. The joint press release or statement shall not contain any text or information that is disparaging to either Party. Either Party may verbally repeat the substance of the joint press release or statement in response to any inquiry. Page 9 12 C. The obligations of Employer and Employee under this Section 9 shall survive the termination of this Agreement. SECTION 10: Outside Activities Employee shall not engage in any activity, consulting service or enterprise, for compensation or otherwise, which is actually or potentially in conflict with or inimical to, or which materially interferes with his duties and responsibilities to Employer. SECTION 11: Indemnification Consistent with the California Government Code, Employer shall defend and indemnify Employee, using legal counsel of Employer's choosing, against expense or legal liability for acts or omissions by Employee occurring within the course and scope of Employee's employment under this Agreement. In the event there is a conflict of interest between Employer and Employee in such a case so that independent counsel is required for Employee, Employer may select the independent counsel after having considered the input of Employee and shall pay the reasonable fees of such independent counsel consistent with City litigation guidelines and standard rates received by City from its chosen special counsel. Notwithstanding the foregoing, and consistent with Sections 53243 through 53243.3 of the Government Code, Employee shall be required, if convicted of a crime involving an abuse of his office or position, to fully reimburse the City for: (1) any paid leave salary offered by the City to the Employee; (2) any funds provided for the legal criminal defense of the Employee; (3) any cash settlement related to the termination that Employee may receive; and (4) any other payments received by Employee from City that in any way relate to the foregoing. SECTION 12: Other Terms and Conditions of Employment Employer may fix other terms and conditions of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms and Page 10 13 conditions are not inconsistent with or in conflict with the provisions of this Agreement or applicable law. SECTION 13: Notices Notice pursuant to this Agreement shall be given by depositing written notification in the custody of the United States Postal Service, postage prepaid, addressed as follows: (1) EMPLOYER: City of Newport Beach c/o City Clerk 100 Civic Center Drive Newport Beach, California 92660 (2) EMPLOYEE: David Kiff at the home address then shown in Employer's files Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable in civil judicial practice. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the course of transmission in the United States Postal Service as provided by law. SECTION 14: General Provisions A. Integration: This Agreement sets forth the final, complete and exclusive agreement between Employer and Employee relating to the employment of Employee by Employer. Any prior discussions or representations by or between the parties are merged into this Agreement or are otherwise rendered null and void. The Parties by mutual written agreement may amend any provision of this Agreement. Such amendments shall be incorporated and made a part of this Agreement. The foregoing notwithstanding, Employee acknowledges that, except as expressly provided in this Agreement, his employment is subject to Employer's generally applicable rules and policies pertaining to employment matters, such as those addressing equal employment opportunity, sexual harassment and violence in the workplace, as they currently or may in the future Page 11 14 exist, and his employment is, and will continue to be, at the will of the City Council. B. Binding Effect: This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest. C. Choice of Law: This Agreement shall be interpreted and construed pursuant to and in accordance with the laws of the State of California and all applicable City Charter provisions, Codes, Ordinances, Policies and Resolutions. D. Severability: If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. E. Conflict with City Charter or Municipal Code. The City personnel ordinances, resolutions, rules and policies shall apply to Employee in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Agreement and the City Charter, or this Agreement and the Municipal Code, the City Charter or the Municipal Code shall prevail over this Agreement. F. Employee's Independent Review: Employee acknowledges that he has had the opportunity and has conducted an independent review of the financial and legal effects of this Agreement. Employee acknowledges that he has made an independent judgment upon the financial and legal effects of this Agreement and has not relied upon any representation of Employer, its officers, agents or employees other than those expressly set forth in this Agreement. Employee acknowledges that he has been advised to obtain, and has availed himself of, legal advice with respect to the terms and provisions of this Agreement. Page 12 15 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates reflected below each signature. EMPLOYER CITY OF NEWPORT BEACH, EMPLOYEE, A Municipal Corporation An Individual In Keith Curry, Mayor APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE By: C. - Aar n C. Harp, City Attorney Date: 6/11 e/ ( 3 ATTEST: A Leilani Brown, Deputy City Clerk Date: M David Kiff Date: Page 13 16 GENERAL RELEASE AGREEMENT This General Release Agreement ( "Agreement ") is entered into by and between DAVID KIFF ( "Employee ") and CITY OF NEWPORT BEACH ( "Employer "), in light of the following facts: A. Employee's employment with Employer concluded on B. Certain disputes have arisen between Employer and Employee. C. Employer and Employee each deny any liability whatsoever to the other. D. Employer and Employee wish to fully and finally resolve any and all disputes they may have with each other. E. Employee is hereby informed that he has twenty -one (21) days from receipt of this Agreement to consider it. Employer hereby advises Employee to consult with his legal counsel before signing this Agreement. F. Employee acknowledges that for a period of seven (7) days following the signing of this Agreement ( "Revocation Period "), he may revoke the Agreement. This Agreement shall not become effective or enforceable until the day the Revocation Period has expired. G. Employee acknowledges that the Salary Payment referenced in paragraph 1 of this Agreement represents all compensation, including salary, accrued benefit balances and reimbursed expenses, due and payable to him through the date of employment termination. Employee also acknowledges that Employer has made this Salary Payment without regard to whether he signs this Agreement. The Salary Payment does not constitute consideration for this Agreement. Employee acknow- ledges that the Severance referenced in paragraph 2 of this Agreement is in excess of all amounts that are due and owing to him as a result of his employment by Employer. 1. Receipt of Salary Payment. Employee hereby acknowledges receipt of a check or checks for all compensation owing to him, including salary, accrued benefit balances and reimbursed expenses ( "Salary Payment ") from Employer. 2. Severance. Within ten (10) days following Employee's signing, delivering to the City Council, and not revoking this Agreement, City shall pay Employee the gross amount provided for in Section 7 of the Employment Agreement effective December 22, 2010, less applicable deductions, and shall provide the months of medical benefits as EXHIBIT A — Page 1 m provided in that same Section 7 ( "Severance'). Employee acknowledges that the Severance is in excess of all amounts due and owing him as a result of his employment by Employer. 3. General Release. In consideration of the Severance to be paid and provided to Employee, and other good and valuable consideration, Employee hereby releases and discharges Employer and its past and present City Council Members, employees, representatives and agents, from all rights, claims, causes of action, and damages, both known and unknown, in law or in equity, concerning and /or arising out of his employment with Employer which he now has, or ever had, including but not limited to any rights, claims, causes of action or damages arising under Title VII of the Civil Rights Act of 1964, the Vocational Rehabilitation Act of 1973, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Family and Medical Leave Act of 1993, the Domestic Partners Act of 2003, the California Labor Code, the Private Attorneys General Act of 2004, the California Moore- Brown - Roberti Family Rights Act, the Califomia Unruh Civil Rights Act, the California Fair Employment and Housing Act, any other federal, state, or local employment practice legislation, or any federal or state common law, including wrongful discharge, breach of express or implied contract, or breach of public policy. Employee hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of California. Employee understands and acknowledges the significance and consequences of this specific waiver of Section 1542. Section 1542 of the Civil Code of California states as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of Employer and its past and present City Council Members, employees, representatives and agents, Employee expressly acknowledges that this General Release is intended to include in its effect, without limitation, all claims which he does not know or suspect to exist in his favor. Employee further acknowledges that he has read this General Release and that he understands that this is a general release, and that he intends to be legally bound by the same. EXHIBIT A — Page 2 18 4. Fees and Costs. Employee and Employer agree that in the event of litigation relating to this General Release Agreement, the prevailing party shall be entitled to recover his /its reasonable attorneys' fees and costs. Dated , 20_ CITY OF NEWPORT BEACH Dated: 20 APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE IN Aaron C. Harp, City Attorney Date: ATTEST: Leilani Brown, City Clerk M DAVID KIFF EXHIBIT A — Page 3 19 SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ( "Agreement ") is made effective as of June 11, 2013Novembnor =, 201' ( "Effective Date') and is entered into by and between the CITY OF NEWPORT BEACH, a California municipal corporation and Charter City ( "Employer' or "City ") and DAVID KIFF ( "Employee ") an individual, (sometimes collectively referred to herein as "the Parties "). RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Employee has been continuously employed by City as City Manager since September 11• .. One to Employment Agree ent Between the Gity of Newport Beanh and David Kiff dated September 27 2911 ("Amendment Qnel) Employee IS currently employed under an Amended and Restated Employment Agreement dated November 13. 2012 ("Employment Agreement'). C. The Parties mutually agree that they intend for this Agreement to supersede the Employment Agreement an.el nmenelment One and that upon execution of this Agreement, the Employment Agreement shall have no force or effect. Page 1 pill D. The Parties also mutually agree that this form of Agreement reflects the terms and conditions under which the Parties intend and desire to continue Employee's employment. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: SECTION 1: Term and Notice of Non - Renewal This Agreement shall become effective June 11, 2013 ( "Effective Date "). Sublect to City's right to terminate Employee's employment at any time, as provided for in this Agreement the Term of this Agreement is two (2) years from the Effective Date, and shall automatically be extended for one additional twelve (12) month period on each annual anniversary of the Effective Date of the Agreement unless City notifies Employee of its intent not to extend the Agreement at least thirteen (13) months prior to expiration of the original Term or any subsequent automatic extension of the Term. City's election not to extend this Agreement shall not entitle Employee to severance pursuant to Section 7 of this Agreement.be f,,F aR '^,1efgR48 tGFF 6611. eGt to termination SECTION 2: Duties and Authorit Employer agrees to employ Employee as City Manager to exercise the powers and authority and to perform the functions and duties specified in the Newport Beach City Charter, the Municipal Code and all relevant resolutions, rules, regulations, procedures, applicable job description(s) and state codes, as they currently or may in the future exist. Employee shall exercise such power and authority and perform such other functions and duties, not inconsistent with this Agreement, as Employer, by its City Council, may legally assign. SECTION 3: Compensation and Performance Evaluation. Page 2 21 A. Employer agrees to pay Employee {i) -_at the rate of an annual base salary at-t#e rate of $231,750.00 (Two Hundred Thirty -One Thousand Seven Hundred Fifty Dollars); and / "1 a a time merit payment in the amni mt of $25,96 enty Five DellaPs and N.Rety Six Gents) fer eaGh paid work dayfmm jaRuary 1, 2012 te the CffeGt*Ve Date of this A„rnenaent, subject to deduction and withholding of any and all sums required for federal or state income tax, pension contributions, and all other taxes, deductions or withholdings required by then current state, federal or local law, prorated and paid on Employer's normal paydays for the City Manager, City Attorney, City Clerk, and any Department Directors not covered by collective bargaining agreements ( "Executive Management Employees'). Employer shall also deduct sums Employee is obligated to pay because of participation in plans or programs described in Section 4 of this Agreement. The annual base salary of Employee is within the approved salary range adopted shall be establis by resolution of the City Council. This Agreement shall be deemed amended whenever the City Council adopts a resolution changing the base salary of Executive Management Employees or the manner (but not the amount) by which Executive Management Employees are paid. B. Employer, by the City Council, and Employee may set mutually- agreed upon objectives for each year under this Agreement. Employer, by the City Council, may elect to conduct an evaluation of Employee's performance at any time or times during the period in which this Agreement remains in effect. C. Employee's compensation as discussed under this Section is not tied to the compensation of any other City employee or group of City employees, except as expressly provided in this Agreement. SECTION 4: Employee Benefits A. Benefit Balances Carried Over. Employee shall not have a break in his employment service between the 4n#iA -- Employment Agreement and this Agreement. All of Employee's accrued leave and other benefit balances shall Page 3 PA carry over, and his leave and benefit balances shall continue to accrue under the terms of applicable City policies and this Agreement. B. Flex Leave. Employee shall accumulate Flex Leave as provided in the City's Key and Management Compensation Plan, Executive Management category ( "Compensation Plan "), at the current rate of 25 (twen ty five) days -9.69 hours per Pay Period^^ � ^^ 4s- Employee's Mrnaximum accrual for Flex Leave is limited to 400fouF hundred _(408four hundred) hours. The right to sell back accumulated Flex Leave shall be consistent with the Compensation Plan. C. Administrative Leave. Employee shall be entitled to ferty40 (48forty) hours of administrative leave per calendar year. Administrative leave will not accrue from calendar year to calendar year and must be used or lost at the conclusion of each calendar year. Consistent with the Compensation Plan, there is no right to sell back any accumulated Administrative Leave. D. Additional Benefits. Except as expressly provided herein, Employee shall receive the same health insurance and retirement benefits, and be entitled to participate in plans and programs such as short term and long term disability plans, life insurance plans, and deferred compensation plans, as are available under the Compensation Plan. This Agreement shall be deemed amended as to these benefits, and these benefits only, whenever the City Council adopts a resolution or takes action changing these benefits under the Compensation Plan. E. Annual Physical Exam. Employee may undergo an annual physical examination and City shall reimburse Employee for the actual cost of the examination up to a maximum of 11 250 tars (one thousand two hundred fifty dollars$ 1,080.09). F. Automobile Allowance. Employee's duties require him to be available and respond to demands of City business at all times and outside of regular business hours, including weekends. Employer shall, therefore, pay to Employee $500 per Page 4 23 month as an automobile allowance so that Employee may respond to these demands of City business. G. Phone Allowance. Employee shall be entitled to the same phone allowance as provided to any Executive Management member. H. Amendment of Benefits. Employee's benefits provided under this Section 4 are not tied to the compensation of any other City employee or group of City employees except as expressly provided in this Section. PERS. From the Effective Date of this Agreement, Employee will pay 9% of pensionable pay toward retirement costs (3.42 % employer cost sharing f "ER side"] and 5.58% employee normal member contribution [TE side "11 on a pre -tax basis pursuant to IRS Code Section 414(h)(2). Effective the pay period including June 30, 2013, Employee shall contribute an additional .45% of pensionable pay toward retirement costs, for a total contribution of 9.45 %. Effective the pay period including June 30, 2014, Employee shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total contribution of 10.90 %. Effective the pay period including June 30, 2015, Employee shall contribute an additional 1.45% of pensionable pay toward retirement costs, for a total contribution of 12.35 %. The Parties agree that the City will not report the value of any Employer Paid Member Contribution as special compensation.R, -P,;l aRt -te a separate agreement, FRi6GGllaRe96is (ReR safety) members have agreed to have 3.42% of the employer refire ent rests added- to the a nleyee's rate pursuaRt to Calrfernia Government Cede Cect'on 'lo_r6v— The ,Parties -agree that Empleyec° shall pay a total of nine neroent (9%) of the Employee's retirement costs (3.42% emnlovGr ost shar'ner ["ER sirJo_ "7\ anef C. C.QO% employee normal member (.ontri,Fibbutio,�r ["EE side "]) GR a pre tax basis pursuant to IRS QGde SeGtieii 414(h)P9\ In the event the City !'o ,ns��O!aaepts a Gomnensat'on Plan 'n urh1c-h the toward retirement by the Key and ManagemGRt GF961p is gFeater tahaR none per_ -ent (901.) but net less th awn nine noroent (9%) that set forth herein this Agreement shall he-deemed- amended u...-d _ Emnlnvee will he s ,bier# to the Page 5 24 SECTION 5: General Business Expenses A. Employer recognizes that Employee may incur expenses of a non - personal, job related nature that are reasonably necessary to Employee's service to Employer. Employer agrees to either pay such expenses in advance or to reimburse the expenses, so long as the expenses are incurred and submitted according to Employer's normal expense reimbursement procedures or such other procedure as may be designated by the City Council. To be eligible for reimbursement, all expenses must be supported by documentation meeting Employer's normal requirements and must be submitted within time limits established by Employer. B. Employer agrees to budget and pay for professional dues, membership and subscriptions of Employee necessary for continuation and participation in the International City /County Management Association (ICMA), Cal -ICMA, the California City Manager's Foundation (CCMF), and state and national League of Cities and such other organizations as Employer and Employee may agree from time to time. Employer also agrees to pay the cost of a corporate surety bond as contemplated by section 503 of the City Charter. C. Employer agrees to budget and to reimburse or pay for reasonable costs for attendance and participation in meetings, institutes, training programs, conferences, conventions and similar gatherings that support leadership development and the advancement of Employer and Employee's mutually agreed upon goals, and which are related to Employee's duties or Employer's operations and held in the continental United States. For purposes of this paragraph, reasonable expenses are limited to the reasonable and actual cost of registration, coach -class airfare (where applicable), ground transportation and Page 6 W meals. Reasonable expenses will also include the reasonable and actual cost of lodging for meetings outside of Orange County. D. The expenses to be budgeted and paid in the Section 5, Paragraphs A, B, and C above, are exclusive of reasonable expenses related to events, participation in organizations, or attendance at events or meetings on behalf of the City as required by the City Council. Employer will separately budget and pay for membership and participation in community, civic or other organizations or events in which Employer requires Employee to participate. SECTION 6: At-Will Employment Relationship A. Consistent with Article VI of the City Charter, Section 600, Employee is appointed by, and serves at the pleasure of, the City Council. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employer to terminate this Agreement and the employment of Employee at any time, with or without Cause (as defined below), and with or without notice. Employer shall pay Employee for all services through the Effective Date of termination and Employee shall have no right to any additional compensation or payment, except as provided in Section 7, Severance and Benefit Payoff at Termination, and General Release Agreement, below. B. Nothing in this Agreement shall prevent, limit or otherwise interfere with the right of Employee to resign from his employment with Employer, subject only to Employee providing forty -five (45) calendar days prior written notice to Employer of the effective date of his resignation. SECTION 7: Severance and Benefit Payoff at Termination, and General Release Agreement A. If Employer terminates this Agreement (thereby terminating Employee's Employment) without Cause, as determined by the affirmative votes of a majority of the members of the City Council at a +regular IVimeeting of the City Council, Page 7 0zy and if Employee signs, delivers to the City Council, and does not revoke, the General Release Agreement in the form attached hereto as Exhibit A, Employer shall pay and - provide Employee a lump sum SGVGFaRGe benefit equal to six (6) months of his then applicable base salary, and shall provide six (6) months of medical benefits as provided under the Compensation Plan beginning on the effective date of termination (collectively "Severance "). B. If Employer terminates this Agreement (thereby terminating Employee's Employment) with Cause, as determined by the affirmative votes of a majority of the members of the City Council at a Regular Meeting of the City Council, Employee shall not be entitled to any additional compensation or payment, including Severance. If the City Council intends to terminate with Cause, based on a reason or reasons set forth in subpart 5 or 6, immediately below, the Council shall first deliver to Employee a written Notice of Intent to Terminate, stating the reason or reasons for the proposed termination, and providing a thirty (30) day period for Employee to cure. If, in the City Council's independent judgment, Employee cures the identified reason or reasons for Cause termination, Employee shall not be terminated therefor. As used in this Agreement, Cause shall mean any of the following: 1. Conviction of a felony; 2. Conviction of a misdemeanor arising out of Employee's duties under this Agreement and involving a willful or intentional violation of law; 3. Conviction of any crime involving an "abuse of office or position," as that term is defined in Government Code section 53243.4; 4. Willful abandonment of duties; 5. Repeated failure to carry out a directive or directives of the City Council made by the City Council as a body; and Page 8 ON 6. Any grossly negligent action or inaction by Employee that materially and adversely: (a) impedes or disrupts the operations of Employer or its organizational units; (b) is detrimental to employees or public safety; or (c) violates properly established rules or procedures of Employer. C. In no event may Employee be terminated within ninety (90) days after any municipal election for the selection or recall of one or more of the members of the City Council. D. If Employee terminates this Agreement (thereby terminating Employee's employment), Employee shall not be entitled to any additional compensation or payment, including Severance. E. Upon termination (regardless of reason), Employee shall be compensated for all accrued but unused Flex Leave. No compensation shall be paid for any accrued but unused administrative leave. SECTION 8: Employee's Obligations and Hours of Work Employee shall devote his full energies, interest, abilities and productive time to the performance of this Agreement and utilize his best efforts to promote Employer's interests. Employee's duties may involve expenditures of time in excess of the regularly established workday or in excess of a forty (40) hour workweek and may also include time outside normal office hours (including attendance at City Council meetings). Employee's base salary includes compensation for all hours worked and Employee shall be classified as an exempt employee for purposes of overtime and shall not be entitled to any form of compensation for overtime. In recognition of the significant time Employee will need to devote outside normal office hours to business activities of Employer and the exempt, salaried nature of the employment, employee is permitted to exercise a flexible work schedule. However, consistent with this flexibility and Employee's participation in activities out of the office, Employee will generally be Page 9 04:3 expected to keep office hours at City Hall, Monday through Friday during normal business hours. SECTION 9: Confidentiality and Non - Disparagement A. Employee acknowledges that in the course of his employment contemplated herein, Employee will be given or will have access to confidential and proprietary documents and information, relating to the City, its residents, businesses, employees, and customers ( "Confidential Information "). Such Confidential Information may include, but is not limited to, all information given to or otherwise accessible to Employee that is not public information or would be exempt from public disclosure as confidential, protected, exempt or privileged information. Employee shall hold the Confidential Information in trust for City's benefit, and shall not disclose the Confidential Information to others without the express written consent of City. B. Except as otherwise required by law, in the event the City terminates Employee with or without Cause, the City and Employee agree that no member of the City Council, the city management staff, nor the Employee shall make any written, oral, or electronic statement to any member of the public, the press, or any City employee concerning the Employee's termination except in the form of a joint press release or statement, which is mutually agreeable to City and Employee. The joint press release or statement shall not contain any text or information that is disparaging to either Party. Either Party may verbally repeat the substance of the joint press release or statement in response to any inquiry. C. The obligations of Employer and Employee under this Section 9 shall survive the termination of this Agreement. SECTION 10: Outside Activities Page 10 29 Employee shall not engage in any activity, consulting service or enterprise, for compensation or otherwise, which is actually or potentially in conflict with or inimical to, or which materially interferes with his duties and responsibilities to Employer. SECTION 11: Indemnification Consistent with the California Government Code, Employer shall defend and indemnify Employee, using legal counsel of Employer's choosing, against expense or legal liability for acts or omissions by Employee occurring within the course and scope of Employee's employment under this Agreement. In the event there is a conflict of interest between Employer and Employee in such a case so that independent counsel is required for Employee, Employer may select the independent counsel after having considered the input of Employee and shall pay the reasonable fees of such independent counsel consistent .with City litigation guidelines and standard rates received by City from its chosen special counsel. Notwithstanding the foregoing, and consistent with ASections 53243 through 53243.3 of the Government Codgssembly R•n 1344 (StatS 2011_o rog.2 addiRg AhiGle 2.6 (Gemmnnn'n with Qnnfnn 532= of (`hnn }Pr 2 of Dort 1 of Dyicinn 2 of Totip 5 of +ho Employee shall be required, if convicted of a crime involving an abuse of his office or position, to fully reimburse the City for: (1) any paid leave salary offered by the City to the Employee; (2) any funds provided for the legal criminal defense of the Employee; (3) any cash settlement related to the termination that Employee may receive; and (4) any other payments received by Employee from City that in any way relate to the foregoing. SECTION 12: Other Terms and Conditions of Employment Employer may fix other terms and conditions of employment, as it may determine from time to time, relating to the performance of the Employee, provided such terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement or applicable law. Page 11 30 SECTION 13: Notices Notice pursuant to this Agreement shall be given by depositing written notification in the custody of the United States Postal Service, postage prepaid, addressed as follows: (1) EMPLOYER: City of Newport Beach c/o City Clerk 3300 NewpaFt Blvd-. PO Box 176 100 Civic Center Drive Newport Beach, California 92668 69x660 (2) EMPLOYEE: David Kiff at the home address then shown in Employer's files Alternatively, notice required pursuant to this Agreement may be personally served in the same manner as is applicable in civil judicial practice. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the course of transmission in the United States Postal Service as provided by law. SECTION 14: General Provisions A. Integration: This Agreement sets forth the final, complete and exclusive agreement between Employer and Employee relating to the employment of Employee by Employer. Any prior discussions or representations by or between the parties are merged into this Agreement or are otherwise rendered null and void. The Pparties by mutual written agreement may amend any provision of this Agreement during the life of the Agr,,em r+ Such amendments shall be incorporated and made a part of this Agreement. The foregoing notwithstanding, Employee acknowledges that, except as expressly provided in this Agreement, his employment is subject to Employer's generally applicable rules and policies pertaining to employment matters, such as those addressing equal employment opportunity, sexual harassment and violence in the workplace, as they currently or may in the future exist, and his employment is, and will continue to be, at the will of the City Council. Page 12 31 B. Binding Effect: This Agreement shall be binding on the Employer and the Employee as well as their heirs, assigns, executors, personal representatives and successors in interest. C. Choice of Law: This Agreement shall be interpreted and construed pursuant to and in accordance with the laws of the State of California and all applicable City Charter provisions, Codes, Ordinances, Policies and Resolutions. D. Severability: If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. E. Conflict with City Charter or Municipal Code. The City personnel ordinances, resolutions, rules and policies shall apply to Employee in the same manner as applied to other management employees, provided, however, in the event of a conflict between the provisions of this Agreement and the City Charter, or this Agreement and the Municipal Code, the City Charter or the Municipal Code shall prevail over this Agreement. F. Employee's Independent Review: Employee acknowledges that he has had the opportunity and has conducted an independent review of the financial and legal effects of this Agreement. Employee acknowledges that he has made an independent judgment upon the financial and legal effects of this Agreement and has not relied upon any representation of Employer, its officers, agents or employees other than those expressly set forth in this Agreement. Employee acknowledges that he has been advised to obtain, and has availed himself of, legal advice with respect to the terms and provisions of this Agreement. Page 13 ON IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates reflected below each signature. EMPLOYER CITY OF NEWPORT BEACH, EMPLOYEE,, A Municipal Corporation An Individual By: By: NanE aerKeith Cur rv, Mayor David Kiff APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp, City Attorney Date: ATTEST: M Lillian HaFrisLeilani Brown, Deputy City Clerk I9kf%7i Page 14 33 GENERAL RELEASE AGREEMENT This General Release Agreement ( "Agreement ") is entered into by and between DAVID KIFF ( "Employee ") and CITY OF NEWPORT BEACH ( "Employer "), in light of the following facts: A. Employee's employment with Employer concluded on B. Certain disputes have arisen between Employer and Employee. C. Employer and Employee each deny any liability whatsoever to the other. D. Employer and Employee wish to fully and finally resolve any and all disputes they may have with each other. E. Employee is hereby informed that he has twenty -one (21) days from receipt of this Agreement to consider it. Employer hereby advises Employee to consult with his legal counsel before signing this Agreement. F. Employee acknowledges that for a period of seven (7) days following the signing of this Agreement ( "Revocation Period "), he may revoke the Agreement. This Agreement shall not become effective or enforceable until the day the Revocation Period has expired. G. Employee acknowledges that the Salary Payment referenced in paragraph 1 of this Agreement represents all compensation, including salary, accrued benefit balances and reimbursed expenses, due and payable to him through the date of employment termination. Employee also acknowledges that Employer has made this Salary Payment without regard to whether he signs this Agreement. The Salary Payment does not constitute consideration for this Agreement. Employee acknowledges that the Severance referenced in paragraph 2 of this Agreement is in excess of all amounts that are due and owing to him as a result of his employment by Employer. 1. Receipt of Salary Payment. Employee hereby acknowledges receipt of a check or checks for all compensation owing to him, including salary, accrued benefit balances and reimbursed expenses ( "Salary Payment ") from Employer. 2. Severance. Within ten (10) days following Employee's signing, delivering to the City Council, and not revoking this Agreement, City shall pay Employee the gross amount provided for in Section 7 of the Employment Agreement effective December 22, 2010, less applicable deductions, and shall provide the months of medical benefits as EXHIBIT A — Page 1 34 provided in that same Section 7 ( "Severance "). Employee acknowledges that the Severance is in excess of all amounts due and owing him as a result of his employment by Employer. 3. General Release. In consideration of the Severance to be paid and provided to Employee, and other good and valuable consideration, Employee hereby releases and discharges Employer and its past and present City Council Members, employees, representatives and agents, from all rights, claims, causes of action, and damages, both known and unknown, in law or in equity, concerning and /or arising out of his employment with Employer which he now has, or ever had, including but not limited to any rights, claims, causes of action or damages arising under Title VII of the Civil Rights Act of 1964, the Vocational Rehabilitation Act of 1973, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Family and Medical Leave Act of 1993, the Domestic Partners Act of 2003, the California Labor Code, the Private Attorneys General Act of 2004, the California Moore- Brown - Roberti Family Rights Act, the California Unruh Civil Rights Act, the California Fair Employment and Housing Act, any other federal, state, or local employment practice legislation, or any federal or state common law, including wrongful discharge, breach of express or implied contract, or breach of public policy. Employee hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of California. Employee understands and acknowledges the significance and consequences of this specific waiver of Section 1542. Section 1542 of the Civil Code of California states as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of Employer and its past and present City Council Members, employees, representatives and agents, Employee expressly acknowledges that this General Release is intended to include in its effect, without limitation, all claims which he does not know or suspect to exist in his favor. Employee further acknowledges that he has read this General Release and that he understands that this is a general release, and that he intends to be legally bound by the same. EXHIBIT A — Page 2 Oil 4. Fees and Costs. Employee and Employer agree that in the event of litigation relating to this General Release Agreement, the prevailing party shall be entitled to recover his /its reasonable attorneys' fees and costs. Dated 20_ CITY OF NEWPORT BEACH Dated: , 20 APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE 0 Aaron C. Harp, City Attorney Date: ATTEST: in Leilani Brown, City Clerk Date: DAVID KIFF EXHIBIT A — Page 3 tyy