STATE OF NORTH CAROLINA )
) SEVERANCE AGREEMENT
COUNTY OF WAKE )
This Agreement is made as of the 1st day of June, 1999, by and between
KONOVER PROPERTY TRUST, INC., a Maryland corporation (the "Company"), and
XXXXXXX X. XXXXXXXX ("Xx. Xxxxxxxx").
W I T N E S S E T H:
WHEREAS, the Company and Xx. Xxxxxxxx entered into that certain undated
Employment Agreement entered into as of the date of the Company's Registration
Statement on Form S-11, May 14, 1993 (the "Employment Agreement"); and
WHEREAS, the Employment Agreement expired on May 13, 1995, and Xx.
Xxxxxxxx has continued to work for the Company since such date without benefit
of any written employment agreement;
WHEREAS, Xx. Xxxxxxxx has requested, and the Company has agreed, that
the parties will terminate their employment relationship in an amicable and
definitive manner; and
WHEREAS, the terms of this Severance Agreement have been approved by
the Board of Directors and Executive Compensation Committee of the Company;
NOW, THEREFORE, for good and valuable consideration as prescribed
herein, the Company and Xx. Xxxxxxxx agree to termination of their employment
relationship in accordance with the terms set forth hereafter:
1. Termination of Employment. For benefit and vesting purposes only,
the employment relationship between the parties will terminate as of February
29, 2000 (the "Effective Date"); provided, however, that from and after June 2,
1999 and continuing through the Effective Date, Xx. Xxxxxxxx shall hold himself
out to the public and to other employees of the Company that he is employed
solely by 1st Carolina Properties, LLC, a North Carolina limited liability
company.
2. Covenants and Confidential Information. Xx. Xxxxxxxx and the Company
affirm that the restrictive provisions of Paragraph 6(a)(ii), 6(b) and 6(c) of
the Employment Agreement, entitled "Covenants and Confidential Information,"
will be deemed to continue in full force and effect in accordance with their
terms as modified by this Agreement, and will survive the Effective Date and
that the one year term prescribed in the first paragraph of Paragraph 6(a) of
the Employment Agreement is hereby increased by one year for a total of two
years and will commence as of the Effective Date. The parties acknowledge that
Paragraph 6(a)(i) of the Employment Agreement shall not be deemed to continue
and Xx. Xxxxxxxx may thus be engaged in the shopping center or factory outlet
business either individually or with entities or individuals other than the
Company
3. Compensation
a. The Company will pay Xx. Xxxxxxxx a lump sum amount of One
hundred fifty-five thousand, nine hundred ninety-nine and 97/100
Dollars ($155,999.97) payable in three installments; the first on June
29, 1999 in the amount of Sixty thousand six hundred sixty-six and
65/100 Dollars ($60,666.65); the second in the amount of Sixty thousand
six hundred sixty-six and 66/100 Dollars ($60,666.66) within 5 business
days after the date that both of the following have occurred: (i) the
Town of Xxxx has granted site plan approval for the Company's Millpond
project and (ii) the Company has fully executed a Lease agreement with
Xxxxx Xxxxxx and Sons, Inc. for a Hannaford grocery store at the
Company's Millpond Project; and the third in the amount of Thirty four
thousand six hundred sixty-six and 66/00 Dollars ($34,666.66) on the
later: (i) of January 1, 2000 or (ii) the date the Kohl's Department
Stores, Inc. closes on the purchase of property from the Company
located at the intersection of Falls of the Neuse and Xxxxxx Roads in
Raleigh, North Carolina, in consideration for Xx. Xxxxxxxx'x agreement
to terminate his employment relationship with the Company and to extend
the provisions of Paragraph 6 of the Employment Agreement as described
in Section 2 of this Agreement. All amounts paid to Xx. Xxxxxxxx will
be subject to withholding of federal and state income and employment
taxes, in accordance with United States and North Carolina laws.
b. All of Xx. Xxxxxxxx'x bonus-related restricted stock held
pursuant to the Company's KEYSOP Plan, 42,100 shares, shall vest on the
Effective Date.
c. The Company-matched moneys in Xx. Xxxxxxxx'x 401K account
have vested.
d. The Company will allow Xx. Xxxxxxxx to use office space at
000-X Xxxxxxxxx Xxx, Xxxxxxx Place Shopping Center in Cary, NC
("Waverly Office") through the Effective Date. The Company agrees that
Xx. Xxxxxxxx may continue to use his current office space in the
Company's home office until June 15, 1999. Xx. Xxxxxxxx shall not have
to pay any rent, utility, copier, fax or furniture rental charges
associated with the Waverly Office, but shall be responsible for
payment of his telephone charges.
e. The Company agrees that Jo Xxxx Xxxxxxxx (or her
replacement, if ever applicable) will continue to act as an
administrative assistant for Xx. Xxxxxxxx through the Effective Date.
f. The Company will pay Xx. Xxxxxxxx'x ICSC (International
Council of Shopping Centers)-related expenses and dues and will provide
Xx. Xxxxxxxx with booth space in any Company booth at an ICSC-sponsored
event through June 1, 1999.
g. Xx. Xxxxxxxx shall be permitted to maintain his
participating interest in the Company's development in Brunswick, North
Carolina comparable to the participating interest offered to or
accepted by any of the Company's Executive Vice Presidents.
Unless otherwise determined by the Company, Xx. Xxxxxxxx will be entitled to no
compensation from the Company in addition to the sums provided in this Section 3
and in Section 4, below.
4. Incentive Stock Options. Xx. Xxxxxxxx'x incentive stock options
granted on February 28, 1998, for 50,000 shares ("Option Shares") of the
Company's Common Stock, (20,000 shares of which vested on February 28, 1999)
will be, and hereby are, amended pursuant to action of the Company's Board of
Directors, such that from and after the date hereof, Xx. Xxxxxxxx shall be
eligible to receive any declared dividends on the 50,000 option shares through
the Effective Date. Thereafter he shall be eligible to receive any dividends on
the 30,000 vested shares through February 28, 2001. The options on the Option
Shares must be exercised by Xx. Xxxxxxxx on or before February 28, 2001, after
which date, if they remain unexercised, they shall expire.
5. Employee Benefits. The Company will continue Xx. Xxxxxxxx as a
participant in the Company's medical and dental benefits plans through the
Effective Date, at no out-of-pocket cost to Xx. Xxxxxxxx, other than the
standard deductibles and co-pays contained in the plans, and will continue Xx.
Xxxxxxxx'x eligible dependents under such coverage provided Xx. Xxxxxxxx pays to
the Company any normal premiums for dependent coverage under the plans should
the Company assess its officers for any such
3
premiums prior to the Effective Date. Coverage of Xx. Xxxxxxxx and his
dependents under any other employee benefit plan will expire as of the Effective
Date, except that Xx. Xxxxxxxx may elect COBRA continuation coverage after the
Effective Date.
6. Arbitration. If there is a dispute under this Agreement between Xx.
Xxxxxxxx and the Company with respect to the subject matter and terms of this
Agreement (including the applicability of this section), either party may submit
that dispute to binding arbitration in Raleigh, North Carolina, under the rules
of the American Arbitration Association then in effect in Raleigh, North
Carolina, and pursuant to Chapter 1, Article 45A of the General Statutes of
North Carolina which applies to this provision. The decision of the
arbitrator(s) will be binding on all parties to the arbitration, and their
heirs, successors, and assigns.
7. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the matters deals with herein, and no
agreements, representations, or statements of any party not contained herein
shall be binding on that party.
8. Controlling Law. This Agreement is governed by and to be construed
in accordance with the laws of the State of North Carolina, as they are applied
to contracts made and to be wholly performed in this state, regardless of choice
of law principles to the contrary.
IN WITNESS WHEREOF, the Company and Xx. Xxxxxxxx have executed this
Agreement under seal on the day and year first written above.
_________________________________ (SEAL)
XXXXXXX X. XXXXXXXX
KONOVER PROPERTY TRUST, INC.
By: ___________________________________
Xxxxxxx X. Xxxxxxxx
Executive Vice President & Chief Financial
Officer
(CORPORATE SEAL)
ATTEST:
-------------------------
Secretary
