Exhibit 10.14
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX
This Employment Agreement (this "Agreement"), is made and entered into as of the
28th day of September, 1998 (the "Effective Date"), by and between
Corporate Office Management, Inc., a Maryland Corporation (the "Employer"), and
a subsidiary of Corporate Office Properties Trust ("COPT"), and Xxxxxxx X.
Xxxxxxx (the "Executive").
RECITALS
A. The Employer desires to employ the Executive as an officer of the Employer
for a specified term, and the Executive is willing to accept such employment
upon the terms and conditions hereinafter set forth.
B. The Employer recognizes that circumstances may arise in which a change of
control of the Employer, through acquisition or otherwise, may occur, thereby
causing uncertainty of employment without regard to the competence or past
contributions of the Executive, and that such uncertainty may result in the loss
of valuable services of the Executive. Accordingly, the Employer and the
Executive wish to provide reasonable security to the Executive against changes
in the employment relationship in the event of any such change of control.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between the
parties hereto as follows:
AGREEMENTS
1. POSITION AND DUTIES. The Employer hereby employs the Executive as the
President and Chief Operating Officer of the Employer, or in such other capacity
as shall be mutually agreed between the Employer and the Executive. During the
period of the Executive's employment hereunder, the Executive shall devote his
best efforts and full business time, energy, skills and attention to the
business and affairs of the Employer. The Executive's duties and authority shall
consist of and include all duties and authority customarily performed and held
by persons holding equivalent positions with business organizations similar in
nature and size to the Employer, as such duties and authority are reasonably
defined, modified and delegated from time to time by the Board of Directors of
the Employer (the "Board"). The Executive shall have the powers necessary to
perform the duties assigned to him, and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accouterments as shall be reasonably necessary and appropriate in the light of
such assigned duties.
2. COMPENSATION. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:
(a) BASE SALARY. The Executive shall receive an aggregate annual minimum "Base
Salary" at the rate
1
of Two Hundred Seventy Thousand dollars ($270,000) per annum, payable in
periodic installments in accordance with the regular payroll practices of the
Employer. Such Base Salary shall be subject to review annually by the
Compensation Committee of the Board during the term hereof, in accordance with
the Employer's established compensation policies.
(b) PERFORMANCE BONUS. The Executive shall receive an annual cash "Performance
Bonus," payable within ninety (90) days after the end of the fiscal year of the
Employer which shall be determined by the Board based upon the recommendation of
the Compensation Committee thereof.
(c)STOCK OPTIONS. Executive shall be entitled to stock options as determined by
the Compensation Committee and the Board.
(d) BENEFITS. The Executive shall be entitled to all perquisites extended to
similarly situated executives, as such are stated in the Employer's Executive
Perquisite Policy (the "Perquisite Policy") promulgated for the Board by the
Compensation Committee of the Board, and which Perquisite Policy is hereby
incorporated by reference, as amended from time to time. In addition, the
Executive shall be entitled to participate in all plans and benefits generally,
from time to time, accorded to employees of the Employer ("Benefit Plans"), all
as determined by the Board from time to time based upon the input of its
Compensation Committee. Executive shall also receive additional benefits as
follows:
(i) a one thousand dollar ($1,000) per month automobile allowance; and
(ii) four thousand dollars ($4,000) per year for personal financial planning and
personal income tax preparation.
(e) WITHHOLDING. The Employer shall be entitled to withhold, from amounts
payable to the Executive hereunder, any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold. The
Employer shall be entitled to rely upon the opinion of its independent
accountants, with regard to any question concerning the amount or requirement of
any such withholding.
2
3. TERM AND TERMINATION.
(a) BASIC TERM. The Executive's employment hereunder shall be for a continuous
and self-renewing three (3) year term, commencing as of the Effective Date,
unless terminated by either party, with or without cause, effective as of the
first (1st) business day after written notice to that effect is delivered to the
other party.
(b) PREMATURE TERMINATION.
(i) In the event of the termination of the employment of the Executive under
this Agreement by the Employer for any reason other than expiration of the term
hereof or a "for-cause" termination in accordance with the provisions of
paragraph (d) of this Section 3, then notwithstanding any actual or allegedly
available alternative employment or other mitigation of damages by or available
to the Executive, the Executive shall be entitled to a "Lump Sum Payment" equal
to the sum of: (w) his monthly Base Salary then payable, multiplied by the
remaining number of months or partial months until expiration of the Basic Term
or renewal term, if any, (but not less than 18 months), and an annualized and
proportional amount equal to the average of the two (2) most recent annual
Performance Bonuses that the Executive received; For purposes of calculating the
Lump Sum Payment amounts due, the Executive's employment with the Employer shall
be agreed to have commenced on October 1, 1998. In the event of a termination
governed by this subparagraph (b)(i) of Section 3, the Employer shall also: (y)
notwithstanding the vesting schedule otherwise applicable, fully vest all of
Executive's options outstanding under any option or stock incentive plan herein
after established by Employer ("Option Plan") and allow a period of eighteen
(18) months following the termination of employment for the Executive to
exercise any such options; and (z) continue for the Executive (provided that
such items are not available to him by virtue of other employment secured after
termination) the perquisites, plans and benefits provided under the Employer's
Perquisite Policy and Benefit Plans as of and after the date of termination,
[all items in (z) being collectively referred to as "Post-Termination
Perquisites and Benefits"], for the lesser of the number of full months the
Executive has theretofore been employed by the Employer (but not less than
twelve (12) months)or twenty four (24) months following such termination. The
payments and benefits provided under (w), (x), (y) and (z) above by the Employer
shall not be offset against or diminish any other compensation or benefits
accrued as of the date of termination.
(ii) Payment to the Executive under this Section 3(b) will be made monthly over
twelve (12) months, unless mutually agreed by the parties to minimize the
Executives' tax burden in any year.
(c) CONSTRUCTIVE TERMINATION. If at any time during the term of this Agreement,
except in connection with a "for-cause" termination pursuant to paragraph (d) of
this Section 3, the Executive is Constructively Discharged (as hereinafter
defined), then the Executive shall have the right, by written notice to the
Employer given within one hundred and twenty (120) days of such Constructive
Discharge, to terminate his services hereunder, effective as of thirty (30) days
after such notice, and the Executive shall have no rights or obligations under
this Agreement other than as provided in Section 5 hereof. The Executive shall
in such event be entitled to a Lump Sum Payment of Base Salary and Performance
Bonus compensation as well as all of the Post-Termination Prerequisites and
Benefits, as if such termination of his employment had been effectuated pursuant
to paragraph (b) of this Section 3.
For purposes of this Agreement, the Executive shall be deemed to have been
"Constructively Discharged" upon the occurrence of any one of the following
events:
(i) The Executive is not re-elected to, or is removed from, the position with
the Employer set forth in Section 1 hereof, other than as a result of the
Executive's election or appointment to positions of equal or superior scope and
responsibility; or
3
(ii) The Executive shall fail to be vested by the Employer with the powers,
authority and support services normally attendant to any of said offices; or
(iii) The Employer shall notify the Executive that the employment of the
Executive will be terminated or materially modified in the future or that the
Executive will be Constructively Discharged in the future; or
(iv) The Employer changes the primary employment location of the Executive to a
place that is more than fifty (50) miles from the primary employment location,
0000 Xxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, as of the Effective Date of
this Agreement; or
(v) The Employer otherwise commits a material breach of its obligations under
this Agreement.
(d) TERMINATION FOR CAUSE. The employment of the Executive and this Agreement
may be terminated "for-cause" as hereinafter defined. Termination "for-cause"
shall mean the termination of employment on the basis or as a result of: (i) the
Executive's death or his permanent disability, which latter term shall mean the
Executive's inability, as a result of physical or mental incapacity,
substantially to perform his duties hereunder for a period of either six (6)
consecutive months, or one hundred and twenty (120) business days within a
consecutive twelve (12) month period; (ii) a material violation by the Executive
of any applicable material law or regulation respecting the business of the
Employer; (iii) the Executive being found guilty of, or being publicly
associated with, to the Employer's detriment, a felony or an act of dishonesty
in connection with the performance of his duties as an officer of the Employer,
or the Executive's commission of an act which in the opinion of a reasonable
third party disqualifies the Executive from serving as an officer or director of
the Employer; or (iv) the willful or negligent failure of the Executive to
perform his duties hereunder in any material respect. The Executive shall be
entitled to at least thirty (30) days' prior written notice of the Employer's
intention to terminate his employment for any cause (except the Executive's
death), specifying the grounds for such termination, affording the Executive a
reasonable opportunity to cure any conduct or act (if curable) alleged as
grounds for such termination, and a reasonable opportunity to present to the
Board his position regarding any dispute relating to the existence of such
cause.
(e) TERMINATION UPON DEATH. In the event payments are due and owing under this
Agreement at the death of the Executive, such payments shall be made to such
beneficiary, designee or fiduciary as Executive may have designated in writing,
or failing such designation, to the executor or administrator of his estate, in
full settlement and satisfaction of all claims and demands on behalf of the
Executive. Such payments shall be in addition to any other death benefits of the
Employer made available for the benefit of the Executive, and in full settlement
and satisfaction of all payments provided for in this Agreement.
(f) TERMINATION UPON DISABILITY. The Employer may terminate the Executive's
employment after the Executive is determined to be disabled under the current
Employer program or by a physician engaged by the Employer and reasonably
approved by the Executive. In the event of a dispute regarding the Executive's
"disability," such dispute shall be resolved through arbitration as provided in
paragraph (d) of Section 9 hereof, except that the arbitrator appointed by the
American Arbitration Association shall be a duly licensed medical doctor. The
Executive shall be entitled to the compensation and benefits provided for under
this Agreement during any period of incapacitation occurring during the term of
this Agreement, and occurring prior to the establishment of the Executive's
"disability" during which the Executive is unable to work due to a physical or
mental infirmity. Notwithstanding anything contained in this Agreement to the
contrary, until the date specified in a notice of termination relating to the
Executive's disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement, in which event no
disability of the Executive will be deemed to have occurred.
(g) TERMINATION UPON CHANGE OF CONTROL.
4
(i) In the event of a Change in Control (as defined below) of the Employer and
the termination of the Executive's employment by Executive or by the Employer
under either 1 or 2 below, the Executive shall, be entitled to a Lump Sum
Payment equal to the sum of: (w) his monthly Base Salary then payable,
multiplied by thirty-six (36); plus (x) three (3) times the average of the three
(3) most recent annual Performance Bonuses that the Executive received;
provided, however, that if the Executive has been employed by the Employer for
fewer than three (3) years, then the amount set forth in (x) above shall be
equal to three (3) times the average of the annual Performance Bonuses that the
Executive has theretofore received from the Employer. The Employer shall also:
(y) notwithstanding the vesting schedule otherwise applicable, fully vest all of
Executive's options outstanding under any Option Plan and allow a period of
eighteen (18) months following the termination of employment of the Executive
for the Executive's exercise of such options; and (z) continue for the Executive
(provided that such items are not available to him by virtue of other employment
secured after termination) all of the perquisites, plans and benefits provided
under paragraph (c) of Section 2, for 18 months following such termination. The
payments and benefits provided under (w), (x), (y) and (z) above by the Employer
shall not be offset against or diminish any other compensation or benefits
accrued as of the date of termination. The following shall constitute
termination under this paragraph:
1. The Executive terminates his employment under this Agreement pursuant to a
written notice to that effect delivered to the Board within six (6) months after
the occurrence of the Change in Control.
2. Executive's employment is terminated, including Constructively Discharged, by
the Employer or its successor either in contemplation of or after Change in
Control, other than on a for-cause basis.
(ii) For purposes of this paragraph, the term "Change in Control" shall mean the
following occurring after the date of this Agreement:
1. The consummation of the acquisition by any person (as such term is defined in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of forty percent (40%) or more of the combined
voting power embodied in the then-outstanding voting securities of COPT or the
Employer; or
2. Approval by the stockholders of the Employer of: (1) a merger or
consolidation of the Employer, if the stockholders of COPT or the Employer
immediately before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the entity resulting from such merger or consolidation in substantially the same
proportion as was represented by their ownership of the combined voting power of
the voting securities of COPT or the Employer outstanding immediately before
such merger or consolidation; or (2) a complete or substantial liquidation or
dissolution, or an agreement for the sale or other disposition, of all or
substantially all of the assets of COPT or the Employer.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because forty percent (40%) or more of the combined voting
then-outstanding securities is acquired by: (1) a trustee or other fiduciary
holding securities under one or more employee benefit plans maintained for
employees of the entity; or (2) any corporation or other entity which,
immediately prior to such acquisition, is owned directly or in directly the
stockholders of the Employer in the same proportion as their ownership of stock
in COPT or the Employer immediately prior to such acquisition.
(iii) If it is determined, in the opinion of the Employer's independent
accountants, in consultation with the Employer's independent counsel, that any
amount payable to the Executive by the Employer under this Agreement, or any
other plan or agreement under which the Executive participates or is a party,
would constitute an "Excess Parachute Payment" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and be
subject to the excise tax imposed by Section 4999 of the
5
Code (the "Excise Tax"), the Employer shall pay to the Executive a "grossing-up"
amount equal to the amount of such Excise Tax and all federal and state income
or other taxes with respect payment of the amount of such Excise Tax, including
all such taxes with respect to any such grossing-up amount. If at a later date,
the Internal Revenue Service assesses a deficiency against the Executive for the
Excise Tax which is greater than that which was determined at the time such
amounts were paid, the Employer shall pay to the Executive the amount of such
unreimbursed Excise Tax plus any interest, penalties and professional fees or
expenses, incurred by the Executive as a result of such assessment, including
all such taxes with respect to any such additional amount. The highest marginal
tax rate applicable to individuals at the time of payment of such amounts will
be used for purposes of determining the federal and state income and other taxes
with respect thereto. The Employer shall withhold from any amounts paid under
this Agreement the amount of any Excise Tax or other federal, state or local
taxes then required to be withheld. Computations of the amount of any
grossing-up supplemental compensation paid under this subparagraph shall be made
by the Employer's independent accountants, in consultation with the Employer's
independent legal counsel. The Employer shall pay all accountant and legal
counsel fees and expenses.
4. CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that heretofore or
hereafter during the course of his employment he has produced and received, and
may hereafter produce, receive and otherwise have access to various materials,
records, data, trade secrets and information not generally available to the
public (collectively, "Confidential Information") regarding the Employer and its
subsidiaries and affiliates. Accordingly, during and subsequent to termination
of this Agreement, the Executive shall hold in confidence and not directly or
indirectly disclose, use, copy or make lists of any such Confidential
Information, except to the extent that such information is or thereafter becomes
lawfully available from public sources, or such disclosure is authorized in
writing by the Employer, required by law or by any competent administrative
agency or judicial authority, or otherwise as reasonably necessary or
appropriate in connection with the performance by the Executive of his duties
hereunder. All records, files, documents, computer diskettes, computer programs
and other computer-generated material, as well as all other materials or copies
thereof relating to the Employer's business, which the Executive shall prepare
or use, shall be and remain the sole property of the Employer, shall not be
removed from the Employer's premises without its written consent, and shall be
promptly returned to the Employer upon termination of the Executive's employment
hereunder. The Executive agrees to abide by the Employer's reasonable policies,
as in effect from time to time, respecting confidentiality and the avoidance of
interests conflicting with those of the Employer.
5. NON-COMPETITION COVENANT.
(a) RESTRICTIVE COVENANT. The Employer and the Executive have jointly reviewed
the tenant lists, property submittals, logs, broker lists, and operations of the
Employer, and have agreed that as an essential ingredient of and in
consideration of this Agreement and the payment of the amounts described in
Sections 2 and 3 hereof, the Executive hereby agrees that, except with the
express prior written consent of the Employer, for a period equal to the lesser
of the number of full months the Executive has at any time been employed by the
Employer or twenty-four (24) months after the termination of the Executive's
employment with the Employer (the "Restrictive Period"), he will not directly or
indirectly compete with the business of the Employer, including, but not by way
of limitation, by directly or indirectly owning, managing, operating,
controlling, financing, or by directly or indirectly serving as an employee,
officer or director of or consultant to, or by soliciting or inducing, or
attempting to solicit or induce, any employee or agent of Employer to terminate
employment with Employer and become employed by any person, firm, partnership,
corporation, trust or other entity which owns or operates a business similar to
that of the Employer (the "Restrictive Covenant"). For purposes of this
subparagraph (a), a business shall be considered "similar" to that of the
Employer if it is engaged in the acquisition, development, ownership, operation,
management or leasing of suburban office property (i) in any geographic market
or submarket in which the Employer owns more than 750,000 s.f. of properties
either as of the date hereof or as of the date of termination of the Executive's
employment. If the Executive violates the Restrictive Covenant and the Employer
brings legal action for injunctive or other relief, the
6
Employer shall not, as a result of the time involved in obtaining such relief,
be deprived of the benefit of the full period of the Restrictive Covenant.
Accordingly, the Restrictive Covenant shall be deemed to have the duration
specified in this paragraph (a) computed from the date the relief is granted but
reduced by the time between the period when the Restrictive Period began to run
and the date of the first violation of the Restrictive Covenant by the
Executive. In the event that a successor of the Employer assumes and agrees to
perform this Agreement or otherwise acquires the Employer, this Restrictive
Covenant shall continue to apply only to the primary service area of the
Employer as it existed immediately before such assumption or acquisition and
shall not apply to any of the successor's other offices or markets. The
foregoing Restrictive Covenant shall not prohibit the Executive from owning,
directly or indirectly, capital stock or similar securities which are listed on
a securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System which do not represent more than five percent
(5%) of the outstanding capital stock of any corporation.
(b) REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive acknowledges that
the restrictions contained in Sections 4 and 5 of this Agreement are reasonable
and necessary for the protection of the legitimate proprietary business
interests of the Employer; that any violation of these restrictions would cause
substantial injury to the Employer and such interests; that the Employer would
not have entered into this Agreement with the Executive without receiving the
additional consideration offered by the Executive in binding himself to these
restrictions; and that such restrictions were a material inducement to the
Employer to enter into this Agreement. In the event of any violation or
threatened violation of these restrictions, the Employer shall be relieved of
any further obligations under this Agreement, shall be entitled to any rights,
remedies or damages available at law, in equity or otherwise under this
Agreement, and shall be entitled to preliminary and temporary injunctive relief
granted by a court of competent jurisdiction to prevent or restrain any such
violation by the Executive and any and all persons directly or indirectly acting
for or with him, as the case may be, while awaiting the decision of the
arbitrator selected in accordance with paragraph (d) of Section 9 of this
Agreement, which decision, if rendered adverse to the Executive, may include
permanent injunctive relief to be granted by the court.
6. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily transferred
to an affiliate of the Employer, such transfer shall not be deemed to terminate
or modify this Agreement, and the employing corporation to which the Executive
shall have been transferred shall, for all purposes of this Agreement, be
construed as standing in the same place and stead as the Employer as of the date
of such transfer. For purposes hereof, an affiliate of the Employer shall mean
any corporation or other entity directly or indirectly controlling, controlled
by, or under common control with the Employer. The Employer shall be secondarily
liable to the Executive for the obligations hereunder in the event the affiliate
of the Employer cannot or refuses to honor such obligations. For all relevant
purposes hereof, the tenure of the Executive shall be deemed to include the
aggregate term of his employment by the Employer or its affiliate.
7. INTEREST IN ASSETS. Neither the Executive nor his estate shall acquire
hereunder any rights in funds or assets of the Employer, otherwise than by and
through the actual payment of amounts payable hereunder; nor shall the Executive
or his estate have any power to transfer, assign (except into a trust for
purposes of estate planning), anticipate, hypothecate or otherwise encumber in
advance any of said payments; nor shall any of such payments be subject to
seizure for the payment of any debt, judgment, alimony, separate maintenance or
be transferable by operation of law in the event of bankruptcy, insolvency or
otherwise of the Executive.
8. INDEMNIFICATION.
(a) The Employer shall provide the Executive (including his heirs, personal
representatives, executors and administrators), during the term of this
Agreement and thereafter throughout all applicable limitations periods, with
coverage under the Employer's then-current directors' and officers' liability
insurance policy, at the Employer's expense.
(b) In addition to the insurance coverage provided for in paragraph (a) of this
Section 8, the Employer shall defend, hold harmless and indemnify the Executive
(and his heirs,
7
executors and administrators) to the fullest extent permitted under applicable
law, and subject to the requirements, limitations and specifications set forth
in the Bylaws and other organizational documents of the Employer, against all
expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been an officer of the Employer (whether or not he
continues to be an officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements.
(c) In the event the Executive becomes a party, or is threatened to be made a
party, to any action, suit or proceeding for which the Employer has agreed to
provide insurance coverage or indemnification under this Section 8, the Employer
shall, to the full extent permitted under applicable law, advance all expenses
(including the reasonable attorneys' fees of the attorneys selected by Employer
and approved by Executive for the representation of the Executive), judgments,
fines and amounts paid in settlement (collectively "Expenses") incurred by the
Executive in connection with the investigation, defense, settlement, or appeal
of any threatened, pending or completed action, suit or proceeding, subject to
receipt by the Employer of a written undertaking from the Executive covenanting:
(i) to reimburse the Employer for all Expenses actually paid by the Employer to
or on behalf of the Executive in the event it shall be ultimately determined
that the Executive is not entitled to indemnification by the Employer for such
Expenses; and (ii) to assign to the Employer all rights of the Executive to
insurance proceeds, under any policy of directors' and officers' liability
insurance or otherwise, to the extent of the amount of Expenses actually paid by
the Employer to or on behalf of the Executive.
9. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the Executive, the Employer and his and its respective personal
representatives, successors and assigns, and any successor or assign of the
Employer shall be deemed the "Employer" hereunder. The Employer shall require
any successor to all or substantially all of the business and/or assets of the
Employer, whether directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Employer would be
required to perform if no such succession had taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the entire
agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by written
agreement signed by the Executive and the Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement shall be
regarded as divisible and separate; if any of said provisions should be declared
invalid or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remaining provisions shall not be affected thereby. This
Agreement shall be construed and the legal relations of the parties hereto shall
be determined in accordance with the laws of the State of Maryland as it
constitutes the situs of the corporation and the employment hereunder, without
reference to the law regarding conflicts of law.
(d) ARBITRATION. Except as provided in paragraph (b) of Section 5, any dispute
or controversy arising under or in connection with this Agreement or the
Executive's employment by the Employer shall be settled exclusively by
arbitration, conducted by a single arbitrator sitting in Baltimore, MD in
accordance with the rules of the American Arbitration Association (the "AAA")
then in effect. The arbitrator shall be selected by the parties from a list of
eleven (11) arbitrators provided by the AAA, provided that no arbitrator shall
be related to or affiliated with either of the parties. No later than ten (10)
days after the list of proposed arbitrators is received by the parties, the
parties, or their respective representatives, shall meet at a mutually
convenient location in Baltimore, Maryland, or telephonically. At that meeting,
the
8
party who sought arbitration shall eliminate one (1) proposed arbitrator and
then the other party shall eliminate one (1) proposed arbitrator. The parties
shall continue to alternatively eliminate names from the list of proposed
arbitrators in this manner until each party has eliminated five (5) proposed
arbitrators. The remaining arbitrator shall arbitrate the dispute. Each party
shall submit, in writing, the specific requested action or decision it wishes to
take, or make, with respect to the matter in dispute, and the arbitrator shall
be obligated to choose one (1) party's specific requested action or decision,
without being permitted to effectuate any compromise or "new" position;
provided, however, that the arbitrator is authorized to award amounts not in
dispute during the pendency of any dispute or controversy arising under or in
connection with this Agreement. The Employer shall bear the cost of all counsel,
experts or other representatives that are retained by both parties, together
with all costs of the arbitration proceeding, including, without limitation, the
fees, costs and expenses imposed or incurred by the arbitrator. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; including,
if applicable, entry of a permanent injunction under paragraph (b) of Section 5.
(e) PRESS RELEASES AND PUBLIC DISCLOSURE. Any press release or other public
communication by either the Executive or the Employer with any other person
concerning the terms, conditions or circumstances of Executive's employment, or
the termination of such employment, shall be subject to prior written approval
of both the Executive and the Employer, subject to the proviso that the Employer
shall be entitled to make requisite and appropriate public disclosure of the
terms of this Agreement, without the Executive's consent or approval, as
required under applicable statutes, and the rules and regulations of the
Securities and Exchange Commission and the Stock Exchange on which the shares of
Employer may from time to time be listed.
(f) WAIVER. No waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement to be
performed by the other party, shall be deemed a waiver of any similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
(g) NOTICES. Notices given pursuant to this Agreement shall be in writing, and
shall be deemed given when received, and, if mailed, shall be mailed by United
States registered or certified mail, return receipt requested, postage prepaid.
Notices to the Employer shall be addressed to the principal headquarters of the
Employer, Attention: Chairman. Notices to the Executive shall be sent to the
address set forth below the Executive's signature on this Agreement, or to such
other address as the party to be notified shall have given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Corporate Office Management, Inc., a Maryland corporation
By:
---------------------------- ----------------------------
Xxxx X. Xxxxxx, III, CEO Xxxxxxx X. Xxxxxxx
Corporate Office Properties, L.P., a Delaware
limited partnership by its general partner,
Corporate Office Properties Trust
9
By:
----------------------------
Xxxx X. Xxxxxx, III, CEO
10
