SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") is entered into as of
January ______, 2000, by and between Xxxxxxx X. Xxxxx, an individual residing in
the State of New York ("Senior Officer") and Acadia Realty Trust, a Maryland
real estate investment trust with offices at 00 Xxxxxxxxx Xxxxxxxxxxx, Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Trust").
RECITALS
WHEREAS, The Trust desires to continue the employment of Senior Officer
as Senior Vice President of Finance, and Senior Officer desires to be employed
by the Trust as Senior Vice President of Finance; and
WHEREAS, Senior Officer has requested the Trust to enter into a
severance agreement and the Trust is willing to do so.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreement set forth herein, the parties hereby agree as follows:
1. Termination of Employment and Change in Control.
(a) Senior Officer's employment hereunder may be terminated at any
time under the following circumstances:
(i) Cause. The Trust shall have the right to terminate
Senior Officer's employment for Cause upon Senior
Officer's: (A) willful and continued failure
substantially to perform his duties hereunder (other
than any such failure resulting from Senior Officer's
incapacity due to physical or mental illness) which
failure continues for a period of ten (10) days after
demand for substantial performance is delivered by the
Trust specifically identifying the manner in which the
Trust believes the Senior Officer has not substantially
performed his duties; (B) willful misconduct or (C)
conviction of, or plea of guilty to a felony.
(ii) Death. Senior Officer's employment hereunder shall
terminate upon his death.
(iii) Disability. The Trust shall have the right to terminate
Senior Officer's employment due to "Disability" in the
event that there is a determination by the Trust that
the Senior Officer has become physically or mentally
incapable of performing his duties under this Agreement
and such disability has disabled the Senior Officer for
a cumulative period of one hundred eighty (180) days
within a twelve (12) month period.
(iv) Good Reason. The Senior Officer shall have the right to
terminate his employment for "Good Reason": (A) upon
the occurrence of any material breach of this Agreement
by the Trust which shall include but not be limited to:
a material, adverse alteration in the nature of Senior
Officer's duties, responsibilities, or authority; (B)
upon a reduction in Senior Officer'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 which is not cured by the Trust within ten
(10) days written notice of such default by the Senior
Officer, and (C) on or within three (3) months
following a Change in Control (as hereinafter defined)
in accordance with the provisions set forth in
subparagraph 1(a)(vi) hereof.
(v) Without Cause. The Trust shall have the right to
terminate the Senior Officer's employment hereunder
Without Cause subject to the terms and conditions of
this Agreement.
(vi) Change in Control. (a) The Senior Officer shall have
the right to terminate his employment hereunder on or
within three (3) 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 Trust, becomes the
"beneficial owner", as such term is used in Section 13
of the Exchange Act (respective of any vesting or
waiting periods) of (i) Common Shares or any class of
stock convertible into Common Shares 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
thirty (30%) percent or more of the sum total of the
Common Shares and the Common OP Units (treating all
classes of outstanding Common Shares, units or other
securities convertible into Common Shares as if they
were converted into Common Shares or Common OP Units,
as the case may be, and then treating Common Shares 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) the dissolution or liquidation of the
Trust or the consummation of any merger or
consolidation of the Trust or any sale or other
disposition of all or substantially all of its assets,
if the shareholders of the Trust and unit holders 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
Trust and partnership taken as a whole; or (C) a
turnover, during any two (2) year period, of the
majority of the members of the Board, without the
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consent of the remaining members of the Board as to the
appointment of the new Board members. Notwithstanding
anything to the contrary set forth above, a "Change of
Control" shall not be deemed to exist if 1(iv)A and B
have not occurred and Xxxxxxx X. Xxxxxxxxx or Xxxx
Xxxxxxx remain as senior executive officer(s) of the
Trust or of a newly re-formed ownership entity whether
public or private, including but not be limited to a
leveraged buy-out or other recapitalization of the
Trust with supervisory authority over the Senior
Officer.
(b) If the Trust relocates Senior Officer's office
requiring the Senior Officer to increase his
commuting time by more than one hour, then the Senior
Officer shall have the right to terminate his
employment, which termination shall be deemed for
Good Reason.
(b) Notice of Termination Any termination of Senior Officer's
employment by the Trust or any such termination by the Senior Officer (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 Senior
Officer's employment under the provision so indicated. In the event of the
termination of Senior Officer's employment on account of death, written Notice
of Termination shall be deemed to have been provided on the date of death.
2. Compensation Upon Termination of Employment By the Trust for Cause
or Voluntarily By The Senior Officer.
In the event the Trust terminates Senior Officer's employment for Cause,
or the Senior Officer voluntarily terminates his employment, the Trust shall pay
the Senior Officer any unpaid Annual Base Salary at the rate then in effect
accrued through and including the date of termination ("Unpaid Accrued Salary").
In addition, in such event, the Senior Officer shall be entitled to exercise any
options which, as of the date of termination, have vested and are exercisable in
accordance with the terms of the applicable option grant agreement or plan. All
options and all restricted stock granted to the Senior Officer which have not
vested on the date of termination shall automatically terminate.
Except for any rights which the Senior Officer may have to Unpaid
Accrued Salary through and including the date of termination, and vested options
and stock, the Trust shall have no further obligations hereunder following such
termination. The aforesaid amounts shall be payable in full immediately upon
such termination.
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3. Compensation Upon Termination of Employment Upon Disability, Without
Cause or By Senior Officer for Good Reason.
In the event of termination of Senior Officer's employment as a result
of Senior Officer's Disability, Without Cause or by Senior Officer for Good
Reason, the Trust shall pay to the Senior Officer, the following:
(i) any Unpaid Accrued Salary through and including the
date of termination; plus
(ii) an amount equal to one year's salary at the then
current annual base salary (the "Severance Salary");
plus
(iii) reimbursement of expenses incurred prior to date of
termination ("Expense Reimbursement"); plus
(iv) the Senior Officer's car allowance, if any, for one
year (the "Car Allowance"); plus
In the event of termination of Senior Officer due to a Change in
Control, in addition to the above amounts:
(v) an amount equal to six month's base salary (the "Change
of Control Retention Payment").
The aforesaid amounts shall be payable immediately.
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 the Senior Officer ("Incentive
Compensation") shall immediately vest as of the date of such termination
("Vested Incentive Compensation") and (B) options granted to the Senior Officer
shall immediately vest as of the date of such termination (the "Vested Options")
and the Senior Officer shall be entitled at the option of the Senior Officer,
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 the 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
Trust (upon written notice delivered within one hundred (180) days following the
date of Senior Officer's termination, to repurchase all or any portion of Senior
Officer's vested options to purchase shares of Common Shares at a price equal to
the difference between the Repurchase Fair Market Value (as hereinafter defined)
of the Common Shares for which the options to be repurchased are exercisable and
the exercise price of such options as of the date of Senior Officer'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. 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 Shares
are primarily traded) of the Common Shares on each of the trading days within
the twenty (20) days immediately preceding the date of termination of Senior
Officer's employment.
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Except for any rights which the Senior Officer may have to all of the
above including unpaid Accrued Salary, Severance Salary, Vested Incentive
Compensation, Vested Options, Expense Reimbursement, the Car Allowance and the
Bonus, the Trust 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 Senior Officer'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 the Senior Officer.
4. Change in Control.
(a) Options. Any options granted to the Senior Officer 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 the Senior
Officer to exercise any options. In the event of a conflict between any option
grant agreement or plan and this Agreement, the terms of this Agreement shall
control.
(b) Restricted Stock. Any restricted stock granted to the Senior
Officer that have not vested as of the date of a Change in Control shall
immediately vest upon the date of the Change in Control. In the event of a
conflict between any restricted stock agreement or plan and this Agreement, the
terms of this Agreement shall control.
(c) Upon Termination. In the event the Senior Officer terminates his
employment in accordance with the terms set forth in sub-paragraph 1(a)(iv)(d),
or if the surviving entity terminates his employment Without Cause, the Trust
shall pay to the Senior Officer, and the Senior Officer shall be entitled to,
all the payments and rights the Senior Officer would have had if the Senior
Officer had terminated his employment with Good Reason as set forth in
Paragraph 3.
5. Indemnification/Legal Fees.
(a) Indemnification. In the event the Senior Officer 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
Senior Officer's employment with or serving as an officer of the Trust, whether
or not the basis of such Proceeding is alleged action in an official capacity,
the Trust shall indemnify, hold harmless and defend Senior Officer 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 Senior Officer in
connection therewith (including, without limitation, all legal fees incurred
using counsel reasonably acceptable to Senior Officer) and such indemnification
shall continue as to Senior Officer even after Senior Officer is no longer
employed by the Trust and shall inure to the benefit of his heirs, executors,
and administrators. Expenses incurred by Senior Officer in connection with any
Proceeding shall be paid by the Trust in advance upon request of Senior Officer
that the Trust pay such expenses; but only in the event that Senior Officer
shall have delivered in writing to the Trust an undertaking to reimburse the
Trust for expenses with respect to which Senior Officer is not entitled to
indemnification. The provisions of this Paragraph 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 Senior Officer under any separate agreement, or the
by-laws of the Trust since it is intended that this Agreement shall expand and
extend the Senior Officer's rights to receive indemnity.
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(b) Legal Fees. If any contest or dispute shall arise between the
Trust and Senior Officer regarding or as a result of any provision of this
Agreement, the Trust shall reimburse Senior Officer for all legal fees and
expenses reasonably incurred by Senior Officer in connection with such contest
or dispute, but only if Senior Officer is successful in respect of substantially
all of Senior Officer'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).
6. Successors and Assigns.
The Trust 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 Trust, by agreement in form and substance
satisfactory to Senior Officer, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Trust would be
required to perform it if no such succession had taken place. Failure of the
Trust to obtain any such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Senior Officer
to compensation from the Trust in the same amount and on the same terms as he
would be entitled to hereunder if Senior Officer terminated his employment for
Good Reason hereunder in accordance with the terms as set forth in Paragraph
1.(a)(iv), 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, "Trust" shall mean the Trust 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 6 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. Any cash payments owed to Senior Officer
pursuant to this Paragraph 6 shall be paid to Senior Officer in a single sum
without discount for early payment immediately prior to the consummation of the
transaction with such successor. Nothing in this Paragraph 6(a) shall be
construed to interfere with the Trust's right to implement or pursue such
succession.
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7. Timing of and No Duplication of Payments.
All payments payable to Senior Officer pursuant to this Agreement shall
be paid as soon as practicable after such amounts have become fully vested and
determinable. In addition, Senior Officer shall not be entitled to receive
duplicate payments under any of the provisions of this Agreement.
8. 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 Trust or Senior Officer 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 Trust or Senior Officer of any such right or remedy
shall preclude other or further exercise thereof. A waiver of right to 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 Senior Officer's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations.
9. 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 Trust at the address set forth above or Senior
Officer at his address as set forth in the Trust records (or to such other
address as shall have been previously provided in accordance with this Paragraph
10).
10. Governing Law.
This Agreement will be governed by and construed in accordance with the
laws of the State of New York.
11. Severability.
Whenever possible, each provision and term of this Agreement shall be
interpreted n 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, 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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12. Legal Representation.
Each of the Trust and Senior Officer has had an opportunity to discuss
this Agreement with counsel.
13. 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.
14. 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.
15. 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.
16. Survival of Agreements.
The covenants made in Paragraphs 1 through 5 each shall survive the
termination of this Agreement.
17. Binding Effect.
This Agreement shall be binding on the Trust, its successors and
assigns, including any surviving entity resulting from a merger, consolidation
or other corporate reorganization.
18. Senior Officer's Covenants.
Senior Officer covenants and agrees that in the event he receives any
compensation pursuant to this Agreement, he shall not solicit for employment any
personnel employed by the Trust at the time of his termination for a period of
two years from his Date of Termination as long as such personnel is still
employed by the Trust. Nothing contained herein to the contrary, however, shall
prevent Senior Officer from providing a reference for any such personnel.
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19. Confidentiality.
Senior Officer and the Trust agree to keep this Agreement confidential
to the extent permitted by law. Senior Officer agrees to keep confidential all
information in his possession regarding the Company, its properties and its
plans, which is not generally known to the public.
20. Prior Understandings.
This Agreement embodies the entire contract between the parties hereto
with respect to employment and severance and supersedes any and all prior
agreements and understandings, written or oral, formal or informal by and
between the Trust and the Senior Officer.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ACADIA REALTY TRUST
By:_________________________
Xxxxxxx X. Xxxxxxxxx
President
____________________________
Xxxxxxx X. Xxxxx
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