EMPLOYMENT CONTRACT UNIVERSITY PRESIDENT -
This contract of employment is entered into between the Board of Regents of the University of Washington (“the Board”) and Dr. Mark Emmert (“Dr. Emmert”). It is effective July 16, 2009, replacing and superseding his employment contract dated June 14, 2004. A. Appointment and Duties The Board hereby extends for five years Dr. Emmert’s appointment to be the President of the University of Washington (the “University”). As President, Dr. Emmert shall act as chief executive officer of the University and be directly responsible to the Board for the management and conduct of all the affairs of the University except those which by law, the Board’s By-laws, the Standing Orders, or other orders of the Board are the specific responsibility of other persons or bodies. Dr. Emmert shall also perform such duties and responsibilities as may be assigned or delegated by the Board or as may be set forth in the administrative policy or directives of the institution concerning duties of the President. Dr. Emmert agrees to respect and obey all laws, rules and regulations of the State of Washington and behave at all times in a thoroughly professional manner so as not to bring discredit upon the President or injure the reputation of the University. B. Term The term of this contract shall be for five years, commencing July 16, 2009, with the opportunity to renew or extend this term to be mutually discussed no later than the end of the fourth year of this contract. C. Compensation and Benefits 1. Dr. Emmert shall receive an annual base salary of $620,000, subject to whatever increases may be provided by the Board periodically during the term of this contract. The base salary shall be paid in accordance with the state’s scheduled payroll dates. 2. The Board will conduct an annual evaluation of Dr. Emmert’s performance no later than th 30 of each calendar year, Dr. Emmert will of each calendar year. On or before June July initiate the evaluation process for the academic year just ending by submitting to the Board a selfappraisal. To aid the Board in its annual performance evaluation, Dr. Emmert will furnish the Board with additional oral or written information as it may request. The Board will review Dr. Emmett’s base salary in connection with the annual evaluation of his performance and provide base salary increases as appropriate to this evaluation. s1 31
3. Dr. Emmett shall be entitled to take six months of paid sabbatical leave after June 14, 2012, provided Dr. Emmett is employed as President of the University at the time such leave is taken. Use of such leave shall be scheduled in consultation with the Chair of the Board. The sabbatical pay shall be paid in accordance with the state’s scheduled payroll dates. Dr. Emmett is expected to return to service at the University following his sabbatical leave.
4. Dr. Emmert shall be eligible to receive all present and future normal University faculty benefits, including, but not limited to, health insurance, dental insurance, life insurance, disability insurance, retirement plans, tax-deferred savings plans, flexible spending accounts and vacation and sick leave. 5. The University shall provide Dr. Emmert an automobile allowance of $1,000 per month in lieu of reimbursement for the use of personal vehicles for University purposes. When useful to accommodate Dr. Emmert’s work schedule and safety, the University may from time to time provide a student or other appropriate individual to drive his or a University vehicle when on University business. 6. The University shall provide Dr. Emmert with $2 million dollars of term life insurance and $300,000 of long term disability insurance during the period of this contract, in addition to the group coverage for which he is eligible under this contract. 7. The University shall reimburse Dr. Emmert for expenses incurred in the performance of the duties set forth in this contract and reasonable business expenses, including professional dues, meetings, business travel and entertainment. The University shall also pay the reasonable travel and entertainment expenses of Dr. Emmert’ s spouse when she is traveling or entertaining for University business. 8. The University will provide Dr. Emmert with certain memberships as the Board deems useful to the performance of his duties. 9. Any reimbursements or in-kind benefits provided under this contract shall be subject to the attached reimbursement policy. All amounts under this contract will be subject to applicable reporting and withholding requirements. D. Deferred Compensation In addition to the salary provided above, deferred compensation will be provided, as described herein. The three programs of deferred compensation provided in the original employment contract and subsequent amendments shall be replaced by a new program. Under this new program, deferred compensation in the amount of $250,000 will be credited annually, beginning on the first anniversary of this contract through the final anniversary date, to a University account established for that purpose. With respect to the first half of each amount so credited annually and any investment earnings thereon, Dr. Emmert shall not have a vested right, unless and until he has completed two years of service as President of the University following each annual credit under this contract. With respect to the other half of each amount so credited and any investment earnings thereon, Dr. Emmett shall not have a vested right, unless and until he has completed five years of service as President of the University under this contract. These limitations on vesting are subject to the following:
(a) in the event his service as President is terminated by the Board for a reason that would constitute neither a breach of this contract nor grounds for loss of his faculty appointment under this contract, he shall immediately be entitled to the vested and unvested balance in the account; and (b) in the event his service as President is terminated due to his death or permanent disability (as defined below), he (or his designated beneficiary) will immediately be entitled to the vested and unvested amount of the account balance; and (c) if he continues to serve as President through the term of this contract, he shall immediately be entitled to the vested and unvested amount of the account balance. The detailed terms of these deferred compensation arrangements will be set forth in a separate letter agreement. Amounts already credited under the existing three programs will be paid in accordance with the terms of those programs as provided in the separate written agreement. E. Outside Compensation Dr. Emmert may accept outside compensation for private consultant services and board responsibilities with private for-profit or non-profit companies or organizations, so director of long as these are consistent with the University’s Policy on Outside Professional Work for Compensation and the Washington State Executive Ethics Act and have the prior approval of the Chair of the Board. Any and all income or other compensation earned by Dr. Emmett in connection with approved outside business activities shall be paid to and retained by him, and such income or other compensation shall have no effect on the amount of salary, compensation, and benefits he is otherwise entitled to receive hereunder. F. Housing As requested by the University, Dr. Emmett agrees to live in the University-owned th Avenue East, in Seattle, Washington. Cleaning and maintenance of the residence at 808 36 residence shall be performed by the University at its expense. The University shall bear the cost of reasonable and customary expenses for University-related entertainment at the residence. Services and meals for the benefit of Dr. Emmett, family members residing at the residence, and their personal guests shall be provided according to a policy approved, and modified from time to time, by the Chair and Vice Chair of the Board. -
G. Faculty Appointment In accordance with University faculty appointment procedures, the Board will appoint Dr. Emmett as a professor, with joint tenure, in the Daniel J. Evans School of Public Affairs and the Foster School of Business. Thereafter, at all times, Dr. Emmett’s faculty tenure and status will be subject to the same University rules and regulations as other tenured faculty. At such time as Dr. Emmett no longer serves as President of the University, the employment as a tenured professor in the Daniel J. Evans School of Public Affairs and the Foster School of Business shall continue, consistent with the Faculty Code, at Dr. Emmett’s option, except that he shall lose this
faculty appointment in the event the Board terminates him for an act of dishonesty or for a reason that would constitute cause for termination of a tenured faculty member. During Dr. Emmert’s service as President, Dr. Emmert will not receive a salary for the tenured faculty appointment, nor will he be expected to perform substantial faculty duties. However, at such time as Dr. Emmert’s service as President of the University may end and Dr. Emmert elects to continue employment as a faculty member in the Daniel J. Evans School of Public Affairs or the Foster School of Business, Dr. Emmert will carry out the normal duties of a faculty member, as established by the dean. His salary as a tenured professor shall be at a level equal to the monthly base salary (on a nine-month basis) of highest paid professor in the Daniel J. Evans School of Public Affairs or the Foster School of Business on a nine month basis at the time of the return to faculty duties, not to exceed fifty-percent of his highest base salary as President. H. Termination 1. Termination For Cause. Notwithstanding anything in this contract to the contrary, the Board may terminate Dr. Emmert’s employment as President at any time for cause. For purposes of this contract “cause” shall be defined as a breach of this contract or any act or omission that would be grounds for loss of faculty tenure. In the event of termination of employment as President for cause by the Board, Dr. Emmert’s employment with the University as its President shall cease, and he shall not be entitled to any further compensation or benefits as President. 2. Termination Without Cause. The Board may terminate Dr. Emmert’s employment as President without cause at any time for the convenience of the University upon thirty (30) days prior written notice to Dr. Emmert. If Dr. Emmert’s employment as President is terminated without cause, other than for death or permanent disability (defined below) prior to the expiration of the term of this contract, Dr. Emmert shall be paid liquidated damages in a lump sum amount equal to: (a) $200,000 per year (or pro rata portion thereof) for every year of his service as President after the effective date of this contract (for any partial year) plus (b) the then-current base salary that would have been paid to Dr. Emmert through the scheduled expiration of the term of the contract, less the amount of minimum base salary he would be entitled to earn for that period as a faculty member under Section G (regardless of whether he does in fact return to faculty duties). This lump sum amount shall be conditioned, however, on Dr. Emmert’s signing and returning to the University (without revoking) a timely and effective release of claims in the form provided by the University by the 60 ( th) day deadline specified therein, which in all events shall be no later than the sixtieth following the date of termination. The lump sum amount to which Dr. Emmert is entitled hereunder shall be payable on the University’s next regular payday that follows the expiration of sixty (60) days from the date Dr. Emmert’s employment as President terminates. 3. Death or Disability. Dr. Emmert’s death or permanent disability prior to the expiration date of this contract shall terminate this contract. For purposes of this section, “permanent disability” shall be defined as Dr. Emmert’s inability to perform the duties specified in Section A of this contract for at least three continuous months.
In the event of Dr. Emmert’ s death during his service as President, his spouse, or if none, his estate, shall be paid any amounts to which he is entitled under this contract. In addition, his spouse shall be entitled to remain in the University-owned President’s residence for up to 90 days after Dr. Emmert’s death. Termination under this section shall not affect Dr. Emmert’ s right to receive any benefits to which he is entitled under any applicable disability plan. I. Resignation Dr. Emmert may terminate his employment as President at any time upon a minimum of 180 days prior written notice to the Chair of the Board. Dr. Emmert’s employment as President shall cease on the effective date of his resignation, and he shall not be entitled to any further compensation or benefits as President, except as set forth in the University’s various benefits plans with respect to vesting and rights after termination of employment. For each month or portion thereof that such notice is less than the required 180 days, Dr. Emmert shall pay the University as liquidated damages an amount equal to one month of his base salary at the rate in effect at the time of the notice. J. Dispute Resolution If any dispute arises concerning this contract the parties will first attempt in good faith to resolve the dispute to their mutual satisfaction. If they are unable to do so, the parties agree that they will submit the dispute to confidential, binding arbitration in Seattle, Washington in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The parties agree that no arbitrator may be a University faculty member or have any material ongoing relationship with the University. K. General Provisions 1. No modification, alteration, or variation of the terms and conditions of appointment set forth herein shall be binding unless made in writing and signed by an authorized member of the Board and Dr. Emmert. No oral understandings or agreements not incorporated herein shall be binding unless made in writing between authorized member of the Board and Dr. Emmert. 2. This contract will be governed by and construed in accordance with the laws of the state of Washington. 3. Whenever possible, each provision of this contract will be interpreted in such manner as to be enforceable, valid, and legal under applicable law. If any provision of this contract is held by a court of competent jurisdiction to be unenforceable, invalid, or illegal in any respect under applicable law, such unenforceability, invalidity, or illegality will not affect any other provision of this contract, and this contract will be construed as if such unenforceable, invalid, or illegal provision had never been contained in this contract.
4. This contract shall not be assigned by either party. BOARD OF REGENTS
ir,oar of R nts Craig Cole, as authorized by thepard qfRegents August 19,2009
Dr. Mark Emmert
Approved as to form:
REIMBURSEMENT POLICY The reimbursement policy set forth herein (the “Policy”) shall govern all reimbursements by the University of Washington (the “UW”) of eligible 409A expenses and eligible separation expenses incurred in connection with the employment of the UW President (the “Employee”). The Policy is intended to comply with the requirements of, or the requirements for exemption from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) as applicable to reimbursements and similar benefits (including applicable regulations and other guidance, “Section 409A”). To the extent provided in Section 409A, the Policy shall apply also to in-kind benefits provided by the UW and to direct payment by the UW of applicable expenses, with references herein to reimbursements being construed, as applicable, to include such in-kind benefits and payments. The Policy shall be treated as part of each nonqualified deferred compensation plan and separation pay plan of the UW that provides for a reimbursement (including an in-kind benefit or direct payment) described herein. 1. Eligible 409A Expense. Eligible 409A expenses incurred by the Employee shall be administered under this Paragraph 1. a) Definition of Eligible 409A Expense. An eligible 409A expense is an expense of a type identified in writing by the Administrator as eligible for reimbursement, if the reimbursement would be includable in whole or in part in the Employee’s income for federal income tax purposes and the expense is not an eligible separation expense as hereinafter defined. Each identification of an eligible 409A expense shall provide an objectively determinable and nondiscretionary definition of the eligible expense. b) When Eligible 409A Expense Must be Incurred. An eligible 409A expense incurred by a Employee shall be eligible for reimbursement only if incurred during the period that ends one year after the death of the Employee or during such shorter period as the Administrator may objectively and specifically determine in writing. c) Period for Reimbursement. Subject to satisfaction by the Employee of such substantiation and procedural requirements as the Administrator may prescribe, an eligible 409A expense shall be reimbursed not later than by December 31 of the calendar year following the calendar year in which the expense was incurred (or the tax paid, in the case of an eligible 409A expense that consists of a payment of taxes or a tax gross up). d) No Carryovers. The amount of eligible 409A expenses eligible for reimbursement in any calendar year shall not affect the amount of eligible 409A expenses eligible for reimbursement in any subsequent calendar year. The foregoing limitation shall be construed and applied consistent with Section 409A. e) No Liquidation. No right to reimbursement of an eligible 409A expense shall be subject to liquidation or exchange for any other benefit. 2. Eligible Separation Expense. Separation-related expenditures may be reimbursed without regard to the rules set forth in Paragraph 1 to the extent they qualify as eligible separation expenses as defined in this Paragraph 2. Eligible separation expenses shall be administered under this Paragraph 2.
a) Definition of “Eligible Separation Expense.” An eligible separation expense is an expense, incurred by a Employee in connection with a separation from service, that is of a type identified in writing by the Administrator as eligible for reimbursement and that satisfies the further requirements set forth below: (i) Separation expenses not exceeding in the aggregate the dollar limit in effect for the year of the separation from service under Section 402(g)(1)(B) of the Code may be treated as eligible separation expenses. (ii) Medical expenses incurred and paid by the Employee, but not reimbursed by a person other than the UW, may be treated as eligible separation expenses if they would be allowable as a deduction to the Employee without regard to the 7.5%-of-adjusted gross income limitation of Section 213 of the Code, but only to the extent incurred within the so-called “COBRA” coverage-continuation period applicable to the Employee (whether or not the Employee elects such coverage). (iii) A separation expense incurred not later than December 31 of the second calendar year following the calendar year in which the Employee’s separation from service occurs may be treated as an eligible separation expense if reimbursed not later than by December 31 of the third calendar year following the calendar year in which separation from service occurs, but only if the expenditure either (A) is or would be deductible under Section 162 or Section 167 of the Code (determined without regard to adjusted gross income limitations), or (B) is for reasonable outplacement expenses and/or reasonable moving expenses (as described in Section 409A) that are directly related to the termination of services for the UW. b) Treatment of Separation-Related Expenditures That Are Not Eligible Separation Expenses. A separation-related expenditure that does not qualify as an eligible separation expense under this Paragraph 2 may nevertheless qualify as an eligible 409A expense subject to Paragraph 1. 3. Definitions. As used herein, the terms “nonqualified deferred compensation plan,” “separation pay plan” and “separation from service” shall have the meanings given those terms under Section 409A. 4. Administration. The Policy shall be administered by the UW acting through its duly authorized officers and their delegates (the “Administrator”). The Administrator shall have full discretionary authority to construe the Policy, to determine eligibility for reimbursement of any expense, and to take all such other actions as are necessary or appropriate to administer the Policy. The Policy shall be construed and applied in accordance with Section 409A. 5. Substantiation. etc. No expenditure shall be eligible for reimbursement or payment unless the Employee substantiates the expenditure to the satisfaction of the Administrator and complies with such other procedural requirements as the Administrator may from time to time prescribe. 6. Amendment. The Administrator may modify or supplement the Policy at any time and from time to time by written action signed by the Administrator. 7. Miscellaneous. Neither the Administrator nor the UW, nor any officer or other representative of the UW, nor any other person, shall have any liability to the Employee for any taxes or increased taxes, or related interest or penalties, incurred by reason of the failure of any reimbursement to comply with any applicable requirements of Section 409A.