Exhibit 10.115
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
FOR
XXXXX X. XXXXXX
TABLE OF CONTENTS
PAGE
----
1. EMPLOYMENT.................................................... 4
2. EMPLOYMENT PERIOD............................................. 4
3. SERVICES / PLACE OF EMPLOYMENT................................ 5
4. COMPENSATION AND BENEFITS..................................... 6
5. TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL............... 8
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY
FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON................. 11
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT UPON DEATH OR
DISABILITY.................................................... 12
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON................. 15
9. CHANGE IN CONTROL............................................. 16
10. MITIGATION / EFFECT ON EMPLOYEE BENEFIT PLANS AND PROGRAMS.... 19
11. CONFIDENTIAL INFORMATION...................................... 20
12. RETURN OF DOCUMENTS........................................... 21
13. NONCOMPETE.................................................... 21
14. REMEDIES...................................................... 23
15. INDEMNIFICATION/LEGAL FEES.................................... 23
16. SUCCESSORS AND ASSIGNS........................................ 24
17. TIMING OF AND NO DUPLICATION OF PAYMENTS...................... 26
18. MODIFICATION OR WAIVER........................................ 26
19. NOTICES....................................................... 27
20. GOVERNING LAW................................................. 27
21. SEVERABILITY.................................................. 27
22. LEGAL REPRESENTATION.......................................... 29
23. COUNTERPARTS.................................................. 29
24. HEADINGS...................................................... 29
25. ENTIRE AGREEMENT.............................................. 29
26. SURVIVAL OF AGREEMENTS........................................ 00
XXXXXX X. XXXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into as of December , 1997, by and between Xxxxx X. Xxxxxx, an
individual residing at #PHA, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Executive"), and Xxxx-Xxxx Realty Corporation, a Maryland corporation with
offices at 00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company").
RECITALS
WHEREAS, Executive has served as Executive Vice President, General
Counsel and Assistant Secretary of the Company pursuant to his prior
employment agreement dated as of January 21, 1997 (the "Prior Agreement") and
prior thereto and, through such service, has acquired special and unique
knowledge, abilities and expertise;
WHEREAS, in connection with the combination of Cali Realty Corporation
with the Xxxx Companies (the "Xxxx Combination") the Prior Agreement is
hereby amended and restated in its entirety as of the closing of the Xxxx
Combination; and
WHEREAS, the Company desires to continue to employ Executive as Executive
Vice President, General Counsel and Assistant Secretary, and Executive
desires to continue to be employed by the Company as Executive Vice
President, General Counsel and Assistant Secretary, pursuant to the amended
and restated terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ Executive, and Executive hereby
agrees to accept such employment during the period and upon the terms and
conditions set forth in this Agreement.
2. EMPLOYMENT PERIOD.
(a) Except as otherwise provided in this Agreement to the contrary, the
terms and conditions of this Agreement shall be and remain in effect during
the period of employment (the "Employment Period") established under this
Paragraph 2. The initial Employment Period shall be for a term commencing on
the date of this Agreement and ending on the fifth anniversary of the date of
this Agreement provided, however, that commencing on the day after the date
of this Agreement and on each day thereafter, the Employment Period shall be
extended for one additional day so that a constant five (5) year Employment
Period shall be in effect, unless (i) the Company or Executive elects not to
extend the term of this Agreement by giving written notice to the other party
in accordance with Paragraph 19, in which case, subject to the provisions of
sub-paragraph 5(a)(iv) below, the term of this Agreement shall become fixed
and shall end on the fifth anniversary of the date of such written notice
("Notice of Non-Renewal"), or (ii) Executive's employment terminates
hereunder.
(b) Notwithstanding anything contained herein to the contrary: (i)
Executive's employment with the Company may be terminated by the Company or
Executive during the Employment Period, subject to the terms and conditions
of this Agreement; and (ii) nothing in this Agreement shall mandate or
prohibit a continuation
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of Executive's employment following the expiration of the Employment Period
upon such terms and conditions as the Board of Directors of the Company (the
"Board") and Executive may mutually agree.
(c) If Executive's employment with the Company is terminated, for
purposes of this Agreement the term "Unexpired Employment Period" shall mean
the period commencing on the date of such termination and ending on the last
day of the Employment Period.
3. SERVICES / PLACE OF EMPLOYMENT.
(a) SERVICES. During the Employment Period, Executive shall hold the
positions of Executive Vice President, General Counsel and Assistant
Secretary of the Company. Executive shall devote his best efforts and
substantially all of his business time, skill and attention to the business
of the Company (other than absences due to vacation, illness, disability or
approved leave of absence), and shall perform such duties as are customarily
performed by similar executive officers and as may be more specifically
enumerated from time to time by the Chief Executive Officer and President;
PROVIDED, HOWEVER, that the foregoing is not intended to (a) preclude
Executive from (i) owning and managing personal investments, including real
estate investments, subject to the restrictions set forth in Paragraph 13
hereof or (ii) engaging in charitable activities and community affairs, or
(b) restrict or otherwise limit Executive from conducting real estate
development, acquisition or management activities with respect to those
properties described in Schedule A, attached hereto, (the "Excluded
Properties"), provided that the performance of the activities referred to in
clauses (a) and (b) does
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not prevent Executive from devoting substantially all of his business time to
the Company.
(b) PLACE OF EMPLOYMENT. The principal place of employment of Executive
shall be at the Company's principal executive offices in Cranford, New Jersey.
4. COMPENSATION AND BENEFITS.
(a) SALARY. During the Employment Period, the Company shall pay Executive
a minimum annual base salary in the amount of $300,000 (the "Annual Base
Salary") payable in accordance with the Company's regular payroll practices.
Executive's Annual Base Salary shall be reviewed annually in accordance with
the policy of the Company from time to time and may be subject to upward
adjustment based upon, among other things, Executive's performance, as
determined in the sole discretion of the Chief Executive Officer and the
President. In no event shall Executive's Annual Base Salary in effect at a
particular time be reduced without his prior written consent.
(b) INCENTIVE COMPENSATION/BONUSES. In addition, Executive shall be
eligible for incentive compensation payable each year in such amounts as may
be determined by the Option and Executive Compensation Committee of the Board
(the "Compensation Committee") based upon, among other factors, growth in
Funds from Operations per Common Share (as hereinafter defined) for the year.
Executive shall be entitled to receive such bonuses and options to purchase
shares of common stock, par value $0.01 per share, of the Company (the
"Common Stock") as the Board or the
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Compensation Committee as the case may be shall approve, in its sole
discretion, including, without limitation, options and bonuses contingent
upon Executive's performance and the achievement of specified financial and
operating objectives for Funds from Operations per Common Share. For purposes
of this Agreement, "Funds from Operations per Common Share" for any period
shall mean (i) net income (loss) before minority interest of unit holders,
computed in accordance with generally accepted accounting principles
("GAAP"), excluding gains (or losses) from debt restructuring and sale of
property, plus real estate return, depreciation and amortization as
calculated in accordance with the National Association of Real Estate
Investment Trusts definition published in March 1995, as amended from time to
time, and as applied in accordance with the accounting practices and policies
of the Company in effect from time to time on a consistent basis to the
entire Employment Period, divided by (ii) the sum of (A) the primary weighted
average number of outstanding shares of Common Stock as it appears in the
Company's financial statement for the applicable period and (B) the primary
weighted average number of outstanding common limited partnership units
("Common OP Units") of Xxxx-Xxxx Realty, L.P., a Delaware limited partnership
(the "Partnership") of which the Company is the sole general partner, for the
applicable period. All classes of preferred stock which are convertible into
Common Stock and all classes of preferred or other units which are
convertible into Common OP Units shall be treated as if they have been
converted into Common Stock or Common OP Units and shall be included in the
denominator, irrespective of any waiting period which must elapse prior to
conversion.
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(c) TAXES AND WITHHOLDING. The Company shall have the right to deduct and
withhold from all compensation all social security and other federal, state
and local taxes and charges which currently are or which hereafter may be
required by law to be so deducted and withheld.
(d) ADDITIONAL BENEFITS. In addition to the compensation specified above
and other benefits provided pursuant to this Paragraph 4, Executive shall be
entitled to the following benefits:
(i) participation in the Employee Stock Option Plan of Cali Realty
Corporation, the Cali Realty Corporation 401(k) Savings and Retirement
Plan (subject to statutory rules and maximum contributions and
non-discrimination requirements applicable to 401(k) plans) and such
other benefit plans and programs , including but not limited to
restricted stock, phantom stock and/or unit awards, loan programs and any
other incentive compensation plans or programs (whether or not employee
benefit plans or programs), as maintained by the Company from time to
time and made generally available to executives of the Company with such
participation to be consistent with reasonable Company guidelines;
(ii) participation in any health insurance, disability insurance,
paid vacation, group life insurance or other welfare benefit program made
generally available to executives of the Company; and
(iii) reimbursement for reasonable business expenses incurred by
Executive in furtherance of the interests of the Company including a
monthly allowance of twelve hundred ($1,200) which is intended to cover
the cost of local business-related travel expenses exclusive of amounts
paid to third-parties (e.g. taxi service).
5. TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL.
(a) Executive's employment hereunder may be terminated during the
Employment Period under the following circumstances:
(i) CAUSE. The Company shall have the right to terminate Executive's
employment for Cause upon Executive's: (A) willful and continued
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failure to use best efforts to substantially perform his duties hereunder
(other than any such failure resulting from Executive's incapacity due to
physical or mental illness) for a period of thirty (30) days after
written demand for substantial performance is delivered by the Company
specifically identifying the manner in which the Company believes
Executive has not substantially performed his duties; (B) willful
misconduct and/or willful violation of Paragraph 11 hereof, which is
materially economically injurious to the Company and the Partnership
taken as a whole; (C) the willful violation of the provisions of
Paragraph 13 hereof; or (D) conviction of, or plea of guilty to a felony.
For purposes of this sub-paragraph 5(a), no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or omitted to
be done, by him (I) not in good faith and (II) without reasonable belief
that his action or omission was in furtherance of the interests of the
Company.
(ii) DEATH. Executive's employment hereunder shall terminate upon his
death.
(iii) DISABILITY. The Company shall have the right to terminate
Executive's employment due to "Disability" in the event that there is a
determination by the Company, upon the advice of an independent qualified
physician, reasonably acceptable to Executive, that Executive has become
physically or mentally incapable of performing his duties under this
Agreement and such disability has disabled Executive for a cumulative
period of one hundred eighty (180) days within a twelve (12) month
period.
(iv) GOOD REASON. Executive shall have the right to terminate his
employment for "Good Reason": (A) upon the occurrence of any material
breach of this Agreement by the Company which shall include but not be
limited to; an assignment to Executive of duties materially and adversely
inconsistent with Executive's status as Executive Vice President, General
Counsel or Assistant Secretary or a material or adverse alteration in the
nature of or diminution in Executive's duties and/or responsibilities,
reporting obligations, titles or authority; (B) upon a reduction in
Executive's Annual Base Salary or a material reduction in other benefits
(except for bonuses or similar discretionary payments) as in effect at
the time in question, a failure to pay such amounts when due or any other
failure by the Company to comply with Paragraph 4 hereof; (C) within six
(6) months following the date a Notice of Non-Renewal is issued by the
Company pursuant to Paragraph 2 hereof; (D) on or within six (6) months
following a Change in Control (as hereinafter defined) in accordance with
the provisions set forth in sub-
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paragraph 5(a)(vii) hereof; (E) any purported termination of Executive's
employment for Cause which is not effected pursuant to the procedures of
sub-paragraph 5(a)(i) (and for purposes of this Agreement, in the event
of such failure to comply, no such purported termination shall be
effective); or (F) upon the relocation of the Company's principal
executive offices or Executive's own office location to a location more
than thirty (30) miles away from Cranford, New Jersey.
(v) WITHOUT CAUSE. The Company shall have the right to terminate the
Executive's employment hereunder without Cause subject to the terms and
conditions of this Agreement.
(vi) WITHOUT GOOD REASON. The Executive shall have the right to
terminate his employment hereunder without Good Reason subject to the
terms and conditions of this Agreement.
(vii) CHANGE IN CONTROL. Executive shall have the right to terminate
his employment hereunder on or within six (6) months following a Change
in Control. Such termination shall be deemed a termination for Good
Reason hereunder. For purposes of this Agreement "Change in Control"
shall mean that any of the following events has occurred: (A) any
"person" or "group" of persons, as such terms are used in Sections 13 and
14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee benefit plan sponsored by the Company,
becomes the "beneficial owner", as such term is used in Section 13 of the
Exchange Act, (irrespective of any vesting or waiting periods) of (I)
Common Stock or any class of stock convertible into Common Stock and/or
(II) Common OP Units or preferred units or any other class of units
convertible into Common OP Units, in an amount equal to twenty (20%)
percent or more of the sum total of the Common Stock and the Common OP
Units (treating all classes of outstanding stock, units or other
securities convertible into stock units as if they were converted into
Common Stock or Common OP Units as the case may be and then treating
Common Stock and Common OP Units as if they were a single class) issued
and outstanding immediately prior to such acquisition as if they were a
single class and disregarding any equity raise in connection with the
financing of such transaction; (B) any Common Stock is purchased pursuant
to a tender or exchange offer other than an offer by the Company; (C) the
dissolution or liquidation of the Company or the consummation of any
merger or consolidation of the Company or any sale or other disposition
of all or substantially all of its assets, if the shareholders of the
Company and unitholders
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of the Partnership taken as a whole and considered as one class
immediately before such transaction own, immediately after consummation
of such transaction, equity securities and partnership units possessing
less than fifty (50%) percent of the surviving or acquiring company and
partnership taken as a whole; or (D) a turnover, during any two (2) year
period, of the majority of the members of the Board, without the consent
of the remaining members of the Board as to the appointment of the new
Board members.
(b) NOTICE OF TERMINATION. Any termination of Executive's employment by
the Company or any such termination by Executive (other than on account of
death) shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated. In the event of the termination
of Executive's employment on account of death, written Notice of Termination
shall be deemed to have been provided on the date of death.
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY FOR CAUSE
OR BY EXECUTIVE WITHOUT GOOD REASON.
In the event the Company terminates Executive's employment for Cause or
Executive terminates his employment without Good Reason, the Company shall
pay Executive any unpaid Annual Base Salary at the rate then in effect
accrued through and including the date of termination. In addition, in such
event, Executive shall be entitled (i) to receive any earned but unpaid
incentive compensation or bonuses and (ii) to
9
exercise any options which have vested and are exercisable in accordance with
the terms of the applicable option grant agreement or plan.
Except for any rights which Executive may have to unpaid salary amounts
through and including the date of termination, earned but unpaid incentive
compensation or bonuses and vested options, the Company shall have no further
obligations hereunder following such termination. The aforesaid amounts shall
be payable in full immediately upon such termination.
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT UPON DEATH OR DISABILITY.
In the event of termination of Executive's employment as a result of
either Executive's death or Disability, the Company shall pay to Executive,
his estate or his personal representative (i) the unpaid Annual Base Salary
at the rate then in effect through the end of the Unexpired Employment Period
(the "Annual Base Salary Payment"); (ii) a pro-rata portion, based upon the
number of days in the period beginning with the date of the termination of
Executive's employment due to death or Disability and ending with the last
day of the Unexpired Employment Period, of the cash equivalent of the average
annual amount of all other compensation based on the average of the last two
(2) calendar years immediately preceding the year in which Executive's
termination of employment occurs including, without limitation, incentive
compensation payments, bonuses and stock based compensation (e.g., stock
options, restricted stock awards, etc.) paid, granted or accreted to
Executive during such years (the "Pro-Rata Portion of Other Compensation")
and (iii) reimbursement of expenses incurred prior to date of termination
("Expense Reimbursement"). The aforesaid
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amounts shall be payable in cash without discount for early payment, at the
option of Executive, his estate or his personal representative, either in
full immediately upon such termination or monthly over the Unexpired
Employment Period (the "Payment Election"). In the event of termination of
employment due to Disability, Executive shall also receive continuation of
health coverage through the end of the Unexpired Employment Period on the
same basis as health coverage is provided by the Company for active employees
and as may be amended from time to time ("Medical Continuation").
In addition, all (A) incentive compensation payments or programs of any
nature whether stock based or otherwise that are subject to a vesting
schedule including, without limitation, restricted stock, phantom stock,
units and any loan forgiveness arrangements granted to Executive ("Incentive
Compensation") shall immediately vest as of the date of such termination
("Vested Incentive Compensation") and (B) options granted to Executive shall
immediately vest as of the date of such termination (the "Vested Options")
and Executive shall be entitled at the option of Executive, his estate or his
personal representative, within one (1) year of the date of such termination,
to exercise any options which have vested (including, without limitation, by
acceleration in accordance with the terms of this Agreement, the applicable
option grant agreement or plan) and are exercisable in accordance with the
terms of the applicable option grant agreement or plan and/or any other
methods or procedures for exercise applicable to optionees or to require the
Company (upon written notice delivered within one hundred eighty (180) days
following the date of Executive's termination) to repurchase all or any
portion of Executive's vested options to purchase shares of Common Stock at a
price
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equal to the difference between the Repurchase Fair Market Value (as
hereinafter defined) of the shares of Common Stock for which the options to
be repurchased are exercisable and the exercise price of such options as of
the date of Executive's termination of employment (the "Vested Option
Exercise Election"). In the event of a conflict between any option grant
agreement or plan and this Agreement, the terms of this Agreement shall
control.
Except for any rights which Executive may have to all of the above
including the Annual Base Salary Payment, the Pro-Rata Portion of Other
Compensation, Vested Incentive Compensation, Vested Options, Expense
Reimbursement and in the event of a termination of employment due to
Disability, Medical Continuation, the Company shall have no further
obligations hereunder following such termination.
For purposes of this Agreement, "Repurchase Fair Market Value" shall mean
the average of the closing price on the New York Stock Exchange (or such
other exchange on which the Common Stock is primarily traded) of the Common
Stock on each of the trading days within the thirty (30) days immediately
preceding the date of termination of Executive's employment.
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT
CAUSE OR BY EXECUTIVE FOR GOOD REASON.
In the event the Company terminates Executive's employment for any reason
other than Cause or Executive terminates his employment for Good Reason, the
Company shall pay to Executive and Executive shall be entitled to receive the
greater of (i) three million dollars ($3,000,000) with such amount subject
only to upwards
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adjustment from time to time by the Compensation Committee (the "Fixed
Amount") or (ii) the sum total of (A) the Annual Base Salary Payment and (B)
the Pro-Rata Portion of Other Compensation. The aforesaid amount shall be
payable in cash without discount for early payment, at the option of
Executive, either in full immediately upon such termination or monthly over
the Unexpired Employment Period.
In addition, the Executive shall be entitled to receive Vested Incentive
Compensation, Vested Options exercisable pursuant to the Vested Option
Exercise Election, Medical Continuation, and Expense Reimbursement. Executive
understands that any options exercised more than ninety (90) days following
the date of his termination of employment which were granted as incentive
stock options shall automatically be converted into non-qualified options.
Except for any rights which Executive may have to Vested Incentive
Compensation, Vested Options, Medical Continuation and Expense Reimbursement
and either the Fixed Amount or in lieu thereof to the Annual Base Salary
Payment, and the Pro-Rata Portion of Other Compensation (as defined in
Paragraph 7), the Company shall have no further obligations hereunder
following such termination. The parties both agree that the agreement to make
these payments was consideration and an inducement to obtain Executive's
consent to enter into this Agreement. The payments are not a penalty and
neither party will claim them to be a penalty. Rather, the payments represent
a fair approximation of reasonable amounts due to Executive for the
Employment Period.
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9. CHANGE IN CONTROL.
(a) OPTIONS. Any Incentive Compensation and options granted to Executive
that have not vested as of the date of a Change in Control shall immediately
vest upon the date of the Change in Control. Neither the occurrence of a
Change in Control, nor the vesting in any options as a result thereof shall
require Executive to exercise any options. In the event of a conflict between
any Incentive Compensation grant agreement or program or any option grant
agreement or plan and this Agreement, the terms of this Agreement shall
control.
(b) UPON TERMINATION. In the event Executive terminates his employment on
or following a Change in Control as set forth in sub-paragraph 5(a)(vii), the
Company shall pay to Executive and Executive shall be entitled to all the
payments and rights Executive would have had if Executive had terminated his
employment with Good Reason as set forth in Paragraph 8.
The aforesaid amount shall be payable in accordance with Executive's
Payment Election.
Except for any rights which Executive may have to Vested Incentive
Compensation, Vested Options (including, without limitation, by acceleration
in accordance with sub-paragraph 9(a)), Medical Continuation, Expense
Reimbursement and the Excise Tax Gross Up set forth in subparagraph 9(d), and
either the Fixed Amount or in lieu thereof to the Annual Base Salary Payment,
and the Pro-Rata Portion of Other Compensation (as defined in Paragraph 7),
the Company shall have no further obligations hereunder following such
termination.
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(c) RETENTION PAYMENT. Prior to the date of a Change in Control and
subject to the approval of the Board, Executive may make an election to
receive, as a retention payment, the payments and rights set forth
sub-paragraph 9(b) above (the "Retention Payment") and remain in the employ
of the successor after the Change in Control. In the event that Executive
makes such election and the Board approves the same, this Agreement shall
remain in full force and effect except that (i) simultaneously with the
receipt of the Retention Payment, Executive shall waive any right to receive
any additional payment as a direct result of such Change in Control, and (ii)
other than with respect to the consummation of a subsequent transaction which
constitutes a Change in Control and is unrelated to the Change in Control
with respect to which the Retention Payment was paid, termination payments
otherwise due subsequently under this Agreement for any event requiring
payment of termination payments under this Agreement which occurs within the
six (6) month period immediately following the date of the Change In Control
as to which the Retention Payment was paid shall be reduced by the Retention
Payment paid to Executive on the date of the Change in Control.
Any cash payments owed to Executive pursuant to this sub-paragraph 9(c)
shall be paid to Executive in a single sum without discount for early payment
at the time of the Change in Control but prior to the consummation of the
transaction with any successor.
(d) EXCISE TAX GROSS UP. In addition, if it is determined by an independent
accountant mutually acceptable to the Company and Executive that as a result of
any payment in the nature of compensation made by the Company to (or for the
benefit of) Executive pursuant to this Agreement or otherwise, an excise tax may
be
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imposed on Executive pursuant to Section 4999 of the Code (or any successor
provisions), the Company shall pay Executive in cash an amount equal to X
determined under the following formula: (the "Excise Tax Gross Up"):
E x P
X = --------------------------------------------
1-[(FI x (1-SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under Section 4999 of
the Code (or any successor provisions);
P = the amount with respect to which such excise tax is assessed,
determined without regard to the Excise Tax Gross Up;
FI = the highest effective marginal rate of income tax applicable to
Executive under the Code for the taxable year in question (taking
into account any phase-out or loss of deductions, personal
exemptions or other similar adjustments);
SLI = the sum of the highest effective marginal rates of income tax
applicable to Executive under all applicable state and local laws
for the taxable year in question (taking into account any
phase-out or loss of deductions, personal exemptions and other
similar adjustments); and
M = the highest marginal rate of Medicare tax applicable to Executive
under the Code for the taxable year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise
and on which an excise tax under Section 4999 of the Code (or any successor
provisions) may be assessed, the payment determined under this sub-paragraph
9(d) shall be paid to Executive at the time of the Change in Control but
prior to the consummation of the transaction with any successor. It is the
intention of the parties that the Company
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provide Executive with a full tax gross-up under the provisions of this
Paragraph, so that on a net after-tax basis, the result to Executive shall be
the same as if the excise tax under Section 4999 of the Code (or any
successor provisions) had not been imposed. The Excise Tax Gross Up may be
adjusted if alternative minimum tax rules are applicable to Executive.
10. MITIGATION / EFFECT ON EMPLOYEE BENEFIT PLANS AND PROGRAMS.
(a) MITIGATION. Executive shall not be required to mitigate amounts
payable under this Agreement by seeking other employment or otherwise, and
there shall be no offset against amounts due Executive under this Agreement
on account of subsequent employment. Amounts owed to Executive under this
Agreement shall not be offset by any claims the Company may have against
Executive and such payment shall not be affected by any other circumstances,
including, without limitation, any counterclaim, recoupment, defense, or
other right which the Company may have against Executive or others.
(b) EFFECT ON EMPLOYEE BENEFIT PROGRAMS. The termination of Executive's
employment hereunder, whether by the Company or Executive, shall have no effect
on the rights and obligations of the parties hereto under the Company's (i)
welfare benefit plans including, without limitation, Medical Continuation as
provided for herein and, health coverage thereafter but only to the extent
required by law, and on the same basis applicable to other employees and (ii)
401(k) Plan but only to the extent required by law and pursuant to the terms of
the 401(k) Plan.
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11. CONFIDENTIAL INFORMATION.
(a) Executive understands and acknowledges that during his employment
with the Company, he will be exposed to Confidential Information (as defined
below), all of which is proprietary and which will rightfully belong to the
Company. Executive shall hold in a fiduciary capacity for the benefit of the
Company such Confidential Information obtained by Executive during his
employment with the Company and shall not, directly or indirectly, at any
time, either during or after his employment with the Company, without the
Company's prior written consent, use any of such Confidential Information or
disclose any of such Confidential Information to any individual or entity
other than the Company or its employees, attorneys, accountants, financial
advisors, consultants, or investment bankers except as required in the
performance of his duties for the Company or as otherwise required by law.
Executive shall take all reasonable steps to safeguard such Confidential
Information and to protect such Confidential Information against disclosure,
misuse, loss or theft.
(b) The term "Confidential Information" shall mean any information not
generally known in the relevant trade or industry or otherwise not generally
available to the public, which was obtained from the Company or its
predecessors or which was learned, discovered, developed, conceived,
originated or prepared during or as a result of the performance of any
services by Executive on behalf of the Company or its predecessors. For
purposes of this Paragraph 11, the Company shall be deemed to include any
entity which is controlled, directly or indirectly, by the Company and any
18
entity of which a majority of the economic interest is owned, directly or
indirectly, by the Company.
12. RETURN OF DOCUMENTS.
Except for such items which are of a personal nature to Executive (e.g.,
daily business planner), all writings, records, and other documents and
things containing any Confidential Information shall be the exclusive
property of the Company, shall not be copied, summarized, extracted from, or
removed from the premises of the Company, except in pursuit of the business
of the Company and at the direction of the Company, and shall be delivered to
the Company, without retaining any copies, upon the termination of
Executive's employment or at any time as requested by the Company.
13. NONCOMPETE.
Executive agrees that:
(a) During the Employment Period and, in the event (i) the Company
terminates Executive's employment for Cause, or (ii) Executive terminates his
employment without Good Reason, for a one (1) year period thereafter,
Executive shall not, directly or indirectly, within the continental United
States, engage in, or own, invest in, manage or control any venture or
enterprise primarily engaged in any office-service, flex, or office property
development, acquisition or management activities without regard to whether
or not such activities compete with the Company. Nothing herein shall
prohibit Executive from being a passive owner of not more than five percent
(5%) of the outstanding stock of any class of securities of a corporation or
other entity
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engaged in such business which is publicly traded, so long as he has no
active participation in the business of such corporation or other entity.
Moreover, the foregoing limitations shall not be deemed to restrict or
otherwise limit Executive from conducting real estate development,
acquisition or management activities with respect to the Excluded Properties,
if any, provided that during the Employment Period the performance of such
activities does not prevent Executive from devoting substantially all of his
business time to the Company.
(b) If, at the time of enforcement of this Paragraph 13, a court shall
hold that the duration, scope, area or other restrictions stated herein are
unreasonable, the parties agree that reasonable maximum duration, scope, area
or other restrictions may be substituted by such court for the stated
duration, scope, area or other restrictions and upon substitution by such
court, this Agreement shall be automatically modified without further action
by the parties hereto.
(c) For purposes of this Paragraph 13, the Company shall be deemed to
include any entity which is controlled, directly or indirectly, by the
Company and any entity of which a majority of the economic interest is owned,
directly or indirectly, by the Company.
14. REMEDIES.
The parties hereto agree that the Company would suffer irreparable harm
from a breach by Executive of any of the covenants or agreements contained in
Paragraphs 11, 12 or 13 of this Agreement. Therefore, in the event of the
actual or threatened breach by Executive of any of the provisions of
Paragraphs 11, 12 or 13 of this
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Agreement, the Company may, in addition and supplementary to other rights and
remedies existing in its favor, apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violation of the provisions thereof.
15. INDEMNIFICATION/LEGAL FEES.
(a) INDEMNIFICATION. In the event the Executive is made party or
threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason
of Executive's employment with or serving as an officer or director of the
Company, whether or not the basis of such Proceeding is alleged action in an
official capacity, the Company shall indemnify, hold harmless and defend
Executive to the fullest extent authorized by Maryland law, as the same
exists and may hereafter be amended, against any and all claims, demands,
suits, judgments, assessments and settlements including all expenses incurred
or suffered by Executive in connection therewith (including, without
limitation, all legal fees incurred using counsel reasonably acceptable to
Executive) and such indemnification shall continue as to Executive even after
Executive is no longer employed by the Company and shall inure to the benefit
of his heirs, executors, and administrators. Expenses incurred by Executive
in connection with any Proceeding shall be paid by the Company in advance
upon request of Executive that the Company pay such expenses; but, only in
the event that Executive shall have delivered in writing to the Company an
undertaking to reimburse the Company for expenses with respect to which
Executive is not entitled to indemnification. The provisions of this
Paragraph
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shall remain in effect after this Agreement is terminated irrespective of the
reasons for termination. The indemnification provisions of this Paragraph
shall not supersede or reduce any indemnification provided to Executive under
any separate agreement, or the by-laws of the Company since it is intended
that this Agreement shall expand and extend the Executive's rights to receive
indemnity.
(b) LEGAL FEES. If any contest or dispute shall arise between the Company
and Executive regarding or as a result of any provision of this Agreement,
the Company shall reimburse Executive for all legal fees and expenses
reasonably incurred by Executive in connection with such contest or dispute,
but only if Executive is successful in respect of substantially all of
Executive's claims pursued or defended in connection with such contest or
dispute. Such reimbursement shall be made as soon as practicable following
the resolution of such contest or dispute (whether or not appealed).
16. SUCCESSORS AND ASSIGNS.
(a) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in form and
substance satisfactory to Executive, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
an such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the Company in the
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same amount and on the same terms as he would be entitled to hereunder if
Executive terminated his employment hereunder within six (6) months of a
Change in Control as set forth in Paragraph 9, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the date of termination. In the event of such a
breach of this Agreement, the Notice of Termination shall specify such date
as the date of termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to all or substantially
all of its business and/or its assets as aforesaid which executes and
delivers the agreement provided for in this Paragraph 16 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation
of law. Any cash payments owed to Executive pursuant to this Paragraph 16
shall be paid to Executive in a single sum without discount for early payment
immediately prior to the consummation of the transaction with such successor.
(b) This Agreement and all rights of Executive hereunder may be
transferred only by will or the laws of descent and distribution. Upon
Executive's death, this Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent
any such person succeeds to Executive's interests under this Agreement.
Executive shall be entitled to select and change a beneficiary or
beneficiaries to receive any benefit or compensation payable hereunder
following Executive's death by giving Company written notice thereof. If
Executive should die following the date of termination while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided
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herein, shall be paid in accordance with the terms of this Agreement to such
person or persons so appointed in writing by Executive, including, without
limitation, under any applicable plan, or otherwise to his legal
representatives or estate.
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17. TIMING OF AND NO DUPLICATION OF PAYMENTS.
All payments payable to Executive pursuant to this Agreement shall be
paid as soon as practicable after such amounts have become fully vested and
determinable. In addition, Executive shall not be entitled to receive
duplicate payments under any of the provisions of this Agreement.
18. MODIFICATION OR WAIVER.
No amendment, modification, waiver, termination or cancellation of this
Agreement shall be binding or effective for any purpose unless it is made in
a writing signed by the party against whom enforcement of such amendment,
modification, waiver, termination or cancellation is sought. No course of
dealing between or among the parties to this Agreement shall be deemed to
affect or to modify, amend or discharge any provision or term of this
Agreement. No delay on the part of the Company or Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by the Company or Executive of any
such right or remedy shall preclude other or further exercise thereof. A
waiver of right or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right or remedy on any other occasion.
The respective rights and obligations of the parties hereunder shall
survive the Executive's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such
rights and obligations.
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19. NOTICES.
All notices or other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered
by hand or delivered by a recognized delivery service or mailed, postage
prepaid, by express, certified or registered mail, return receipt requested,
and addressed to the Company or Executive, as applicable, at the address set
forth above (or to such other address as shall have been previously provided
in accordance with this Paragraph 19).
20. GOVERNING LAW.
This agreement will be governed by and construed in accordance with the
laws of the State of New Jersey except as to Paragraph 15(a), without regard
to principles of conflicts of laws thereunder.
21. SEVERABILITY.
Whenever possible, each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement shall be held to be prohibited
by or invalid under such applicable law, then, subject to the provisions of
sub-paragraph 13(b) above, such provision or term shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating or
affecting in any manner whatsoever the remainder of such provisions or term
or the remaining provisions or terms of this Agreement.
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22. LEGAL REPRESENTATION.
Each of the Company and Executive have been represented by counsel with
respect to this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and both of which taken together shall constitute
one and the same agreement.
24. HEADINGS.
The headings of the Paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof and
shall not affect the construction or interpretation of this Agreement.
25. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof. The parties recognize that the Prior
Agreement has been amended and restated in its entirety by this Agreement and
the terms of the Prior Agreement are of no further force and effect.
26. SURVIVAL OF AGREEMENTS.
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The covenants made in Paragraphs 5 through 15 and 21 each shall survive
the termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
XXXX-XXXX REALTY CORPORATION
By: --------------------------------------
Name:
Title:
--------------------------------------
Xxxxx X. Xxxxxx
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SCHEDULE A
61,342 square foot Shopping Center located at 000-00 Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxx Xxxx.
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