EX 10.49 Severance Agreement 2x.doc
SEVERANCE AGREEMENT
AGREEMENT effective as of ___________, 1999, by and between Storage USA,
Inc., a Tennessee corporation (the "Company"), and _________________ (the
"Executive").
WITNESSETH:
WHEREAS, the Company considers it essential to the best interest of its
stockholders to xxxxxx the continuous employment of key management personnel;
WHEREAS, the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a Change of Control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of the Company's and its
affiliates' management personnel to the detriment of the Company and its
stockholders; and
WHEREAS, the Board has determined that it is in the best interest of the
Company and its stockholders to enter into this Agreement in order to reinforce
and encourage the continued attention and dedication of Executive to his
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change of Control.
NOW, THEREFORE, in consideration of the premises and mutual obligations
hereinafter set forth the parties agree as follows:
1) Definitions. For purposes of this Agreement, the following terms shall have
------------
the following definitions:
a) "1993 Omnibus Stock Plan" means the Company's 1993 Omnibus Stock Plan,
as amended.
b) "1995 Employee Stock Purchase and Loan Plan" means the Company's 1995
Employee Stock Purchase and Loan Plan, as amended.
c) "1996 Officers' Stock Option Loan Program" means the Company's 1996
Officers' Stock Option Loan Program, as amended.
d) "Additional Amount" means the amount the Company shall pay to the
Executive in order to indemnify the Executive against all claims,
losses, damages, penalties, expenses, interest, and Excise Taxes
(including additional taxes on such Additional Amount) incurred by
Executive as a result of Executive receiving Change of Control
Benefits as further described in Section 6 of this Agreement.
---------
e) "Arbitrators" means the arbitrators selected to conduct any
arbitration proceeding in connection with any disputes arising out of
or relating to this Agreement.
f) "Award Period" means any period in which the Company's performance is
measured in connection with its Shareholder Value Plan.
g) "Award Plans" mean each and every plan or program in which Executive
receives compensation in the form of a cash bonus, shares of stock in
the Company, Partnership Units, or Options, including, without
limitation, compensation received pursuant to the Company's 1993
Omnibus Stock Plan, 1995 Employee Stock Purchase and Loan Plan, 1996
Officers' Stock Option Loan Program, Shareholder Value Plan, and any
other stock option, incentive compensation, profit participation,
bonus or extra compensation plan that is adopted by the Company and in
which the Company's executive officers generally participate.
h) "Base Salary" means the annual salary paid to Executive by the
Company.
i) "Benefit Plans" mean each and every health, life, medical, dental,
disability, insurance and welfare plan maintained by the Company that
are maintained from time to time by the Company for the benefit of
Executive, the executives of the Company generally or for the
Company's employees generally, provided that Executive is eligible to
participate in such plan under the eligibility provisions thereof that
are generally applicable to the participants thereof.
j) "Board" means the Board of Directors of the Company.
k) "Change of Control" means any of the following events which occur
during the Term of this Agreement:
i) any "person", as that term is used in Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes, is discovered to be, or files a report on
Schedule 13D or 14D-1 (or any successor schedule, form or report)
disclosing that such person is a beneficial owner (as defined in Rule
13d-3 under the Exchange Act or any successor rule or regulation),
directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors,
without the approval of the Board of the acquisition of such
securities by the acquiring person;
ii) any "person", as that term is used in Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes, is discovered to be, or files a report on
Schedule 13D or 14D-1 (or any successor schedule, form or report)
disclosing that such person is a beneficial owner (as defined in Rule
13d-3 under the Exchange Act or any successor rule or regulation),
directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company's then outstanding
securities entitled to vote generally in the election of directors,
regardless of whether or not the Board shall have approved the
acquisition of
2
such securities by the acquiring person; if, at any time within three
(3) years after the acquisition of such securities, those individuals
who constituted the Board at the time of the acquisition of such
securities cease for any reason to constitute at least a majority of
the Board of Directors of the Company;
iii) any "person", as that term is used in Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes, is discovered to be, or files a report on
Schedule 13D or 14D-1 (or any successor schedule, form or report)
disclosing that such person is a beneficial owner (as defined in Rule
13d-3 under the Exchange Act or any successor rule or regulation),
directly or indirectly, of securities of the Company representing
49.9% or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of
directors, regardless of whether or not the Board shall have approved
the acquisition of such securities by the acquiring person;
iv) individuals who, as of the effective date of this Agreement,
constitute the Board of Directors of the Company cease for any reason
to constitute at least a majority of the Board of Directors of the
Company, unless any such change is approved by the vote of at least
80% of the members of the Board of Directors of the Company in office
immediately prior to such cessation;
v) the Company is merged, consolidated or reorganized into or with
another corporation or other legal person, or securities of the
Company are exchanged for securities of another corporation or other
legal person, and immediately after such merger, consolidation,
reorganization or exchange less than 75% of the combined voting power
of the then-outstanding securities of such corporation or person
immediately after such transaction are held, directly or indirectly,
in the aggregate by the holders of securities entitled to vote
generally in the election of directors of the Company immediately
prior to such transaction;
vi) the Company in any transaction or series of related transactions,
sells all or substantially all of its assets to any other corporation
or other legal person and less than 75% of the combined voting power
of the then-outstanding securities of such corporation or person
immediately after such sale or sales are held, directly or indirectly,
in the aggregate by the holders of securities entitled to vote
generally in the election of directors of the Company immediately
prior to such sale;
vii) the Company and its affiliates shall sell or transfer (in a
single transaction or series of related transactions) to a
non-affiliate business operations or assets that generated at least
two-thirds of the consolidated revenues (determined on the basis of
the Company's four most recently completed fiscal quarters for which
reports have been filed under the Exchange Act) of the Company and its
subsidiaries immediately prior thereto;
3
viii) the Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K (or any successor, form or report
or item therein) that a change in control of the Company has occurred;
ix) the shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company;
x) the Company ceases to be the general partner of the Partnership or
in any transaction or a series of transactions sells or transfers
Partnership Units owned by the Company to a third party constituting
at least 49.9% of the limited partnership interests in the
Partnership; or
xi) any other transaction or series of related transactions occur that
have substantially the effect of the transactions specified in any of
the preceding clauses in this sentence.
l) "Change of Control Benefits" means the Executive's receipt of the
Termination Payment or any other payment, benefit or compensation
(except for the Additional Amount) which the Executive receives or has
the right to receive from the Company or any of its affiliates as a
result of a Change of Control Termination.
m) "Change of Control Termination" means (i) a Termination Without Cause
of the Executive's employment by the Company, (a) within three (3)
months prior to a Change of Control and in anticipation of such Change
of Control; (b) on the date of the Change of Control; or (c) within
two (2) years after a Change of Control or (ii) the Executive's
resignation for Good Reason on or within two (2) years after a Change
of Control.
n) "Code" means the Internal Revenue Code of 1986, as amended.
o) "Company" means Storage USA, Inc., a Tennessee corporation, and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
p) "Company Shares" means the shares of common stock of the Company or
any securities of a successor company which shall have replaced such
common stock.
q) "Excess Parachute Payments" has the meaning set forth in section 280G
of the Code.
r) "Excise Tax" means a tax on Excess Parachute Payments imposed pursuant
to Code section 4999.
s) "Executive" means the person identified in the preamble paragraph of
this Agreement.
4
t) "Fair Market Value" means, on any give date, the closing sale price of
the common stock of the Company on the New York Stock Exchange on such
date, or, if the New York Stock Exchange shall be closed on such date,
the next preceding date on which the New York Stock Exchange shall
have been open.
u) "Good Reason" means any of the following:
i) a change in the Executive's status, position or responsibilities
(including reporting relationships and responsibilities) which, in the
Executive's reasonable judgment and without Executive's consent,
represents a reduction in or demotion of the Executive's status,
position or responsibilities as in effect immediately prior to a
Change of Control; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are
inconsistent with such status, position or responsibilities; or any
removal of the Executive from or failure to reappoint or reelect the
Executive to any of such positions;
ii) the relocation of the Company's principal executive offices to a
location outside a thirty-mile radius of Memphis, Tennessee or the
Company's requiring the Executive to be based at any place other than
a location within a thirty-mile radius of Memphis, Tennessee, except
for reasonably required travel on the Company's business;
iii) the failure by the Company to continue to provide the Executive
with compensation and benefits provided to Executive prior to the
Change of Control or benefits substantially similar to those provided
to the Executive under any of the employee benefit plans in which the
Executive is or becomes a participant, or the taking of any action by
the Company which would directly or indirectly materially reduce any
of such benefits or deprive the Executive of any material fringe
benefit enjoyed by the Executive at the time of the Change of Control;
iv) any material breach by the Company of any provision of this
Agreement; or
v) the failure of the Company to obtain an agreement reasonably
satisfactory to Executive from any successor or assign of the Company
to assume and agree to perform this Agreement.
v) "Option(s)" means any options issued pursuant to the Company's 1993
Omnibus Stock Plan, or any other stock option plan adopted by the
Company, any option granted with respect to Partnership Units, or any
option granted under the plan of any successor company that replaces
or assumes the Company's or the Partnership's options.
w) "Partnership" means SUSA Partnership, L.P.
x) "Partnership Unit(s)" means limited partnership interests of the
Partnership. The holder has the option of requiring the Company to
redeem such interests. The Company may
5
elect to effectuate such redemption by either paying cash or
exchanging Company Shares for such interests.
y) "Permanent Disability" means a complete physical or mental inability,
confirmed by a licensed physician, to perform the Executive's duties
that continues for a period of six (6) consecutive months.
z) "Plan Loan(s)" means any loan extended by the Company to Executive
pursuant to the 1995 Employee Stock Purchase and Loan Plan, the 1996
Officers' Stock Option Loan Program, or any other similar plan or
program adopted by the Company during the Term of this Agreement.
aa) "Restricted Stock" means any restricted stock issued pursuant to the
Company's 1993 Omnibus Stock Plan, or any other Award Plan adopted by
the Company, or any restricted stock issued under the plan of any
successor company that replaces or assumes the Company's grants of
restricted stock.
bb) "Self Storage Business" means the business of acquiring, developing,
constructing, franchising, owning or operating self-storage
facilities.
cc) "Self Storage Property" means any real estate upon which the
Self-Storage Business is being conducted.
dd) "Shareholder Value Plan" means the Company's Shareholder Value Plan,
as amended.
ee) "SVU Grant" means the total number of shareholder value units granted
to the Executive pursuant to the Company's Shareholder Value Plan.
ff) "SVU Value" means the value of each shareholder value unit based upon
certain performance measures as set forth in the Company's Shareholder
Value Plan.
gg) "Term" has the meaning assigned to it in Section 2 of this Agreement.
---------
hh) "Termination Date" means the date employment of Executive is
terminated, which date shall be the date specified as the Termination
Date in the Termination Notice, which date shall not be less than
thirty nor more than sixty days from the date the Termination Notice
is given.
ii) "Termination Notice" means a written notice of termination of
employment by Executive or the Company.
jj) "Termination Payment" has the meaning set forth in Section 3(b) of
------------
this Agreement.
6
kk) "Termination With Cause" means the termination of the Executive's
employment by the Company for any of the following reasons:
i) the Executive's conviction for a felony;
ii) the Executive's theft, embezzlement, misappropriation of or
intentional infliction of material damage to the Company's
property or business opportunity; or
iii) the Executive's ongoing willful neglect of or failure to perform
his duties hereunder or his ongoing willful failure or refusal to
follow any reasonable, unambiguous duly adopted written direction
of the Company that is not inconsistent with the Executive's
duties, if such willful neglect, failure or refusal is materially
damaging or materially detrimental to the business and operations
of the Company; provided that Executive shall have received
written notice of such failure and shall have continued to engage
in such failure after 30 days following receipt of such notice
from the Company, which notice specifically identifies the manner
in which the Company believes that Executive has engaged in such
failure.
For purposes of this subsection, no act, or failure to act, shall be deemed
"willful" unless done, or omitted to be done, by Executive not in good faith,
and without reasonable belief that such action or omission was in the best
interest of the Company.
ll) "Termination Without Cause" means the termination of the Executive's
employment by the Company for any reason other than Termination With
Cause, or termination by the Company due to Executive's death or
Permanent Disability.
mm) "Uniform Arbitration Act" means the Uniform Arbitration Act, Tennessee
Code Annotated (S) 29-5-391 et seq., as amended.
-- ---
2) Term; Termination.
------------------
a) The term of this Agreement hereunder shall commence on ________1, 1999
and shall be extended automatically, for so long as the Executive
remains employed by the Company hereunder, on January 1 of each year
beginning January 1, 2000 for an additional one year period (such
period, as it may be extended from time to time, being herein referred
to as the "Term"), unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not
wish to extend this Agreement; provided, further, if a Change of
Control of the Company shall have occurred during the original or
extended term of this Agreement, this Agreement shall automatically
continue in effect for a period of twenty-four months beyond the month
in which such Change of Control occurred. This Agreement shall
automatically terminate upon the termination of Executive's employment
other than by reason of a Change in Control Termination.
7
b) Any purported termination of employment by Executive or the Company
(i) within three (3) months prior to a Change of Control; , (ii) on
the date of the Change of Control; or (iii) within two (2) years after
a Change of Control shall be communicated by a Termination Notice. The
Termination Notice shall indicate the specific termination provision
in this Agreement relied upon and set forth the facts and
circumstances claimed to provide a basis for termination. If the party
receiving the Termination Notice notifies the other party prior to the
Termination Date that a dispute exists concerning the termination, the
Termination Date shall be extended until the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of
a court of competent jurisdiction. The Termination Date shall be
extended by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution of such
dispute with reasonable diligence. Notwithstanding the pendency of any
such dispute, the Company will continue to pay Executive his full
compensation in effect when the notice giving rise to the dispute was
given and Executive shall continue as a participant in all Award Plans
and Benefit Plans in which Executive participated when the Termination
Notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this subsection. Amounts paid
under this subsection are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
3) Severance Benefit in Connection with a Change of Control Termination.
---------------------------------------------------------------------
a) In the event of a Change of Control Termination, the Company shall, on
the Termination Date, pay the Executive in addition to any Base Salary
earned but not paid through the Termination Date and any amounts due
pursuant to Award Plans and Benefit Plans including, without
limitation, the pro rata amount of Executive's anticipated bonus for
the fiscal year in which Executive is terminated, the compensation and
benefits set forth in this Section 3.
---------
b) The Company shall pay Executive a Termination Payment which is equal
to the sum of two (2) times the Executive's annual Base Salary in
effect on the Termination Date plus two (2) times the amount of the
highest annual cash bonus paid to the Executive for the previous five
fiscal years (but not including compensation under the Company's
Shareholder Value Plan) ("Termination Payment"). The Termination
Payment shall be calculated and paid immediately prior to the closing
of the transactions constituting a Change of Control if the Executive
receives notice prior to the Change of Control that his employment
will be terminated on or after the Change of Control.
c) Executive shall be permitted to participate in, and have all rights
and benefits provided by, all Benefit Plans which Executive was
eligible to participate in immediately prior to the Termination Date
(to the extent such participation is possible under the laws then
pertaining to such Benefit Plans), for two years following the
Termination Date. If Executive is no longer eligible to participate in
one or more of the Benefit Plans because
8
of such termination, Executive shall be entitled to, and the Company
shall provide to Executive at the Company's sole expense, benefits
substantially equivalent to those Benefit Plans to which Executive was
entitled immediately prior to such termination for two (2) years after
the Termination Date.
d) All restrictions upon any Restricted Stock which may have been awarded
to Executive shall expire and be removed and such Restricted Stock
shall be fully vested at the Termination Date (unless otherwise
previously expired and removed and vested pursuant to the terms of any
Restricted Stock award pursuant to the 1993 Omnibus Stock Plan or any
other Award Plan), and such Stock shall be delivered to Executive. All
Options granted to Executive shall become fully vested at the
Termination Date (unless otherwise previously vested pursuant to the
1993 Omnibus Stock Plan or any other Award Plan). In lieu of Company
Shares issuable upon exercise of any outstanding and unexercised
Options granted to Executive, Executive may, at Executive's option,
receive an amount in cash equal to the product of (i) the excess of
the higher of the Fair Market Value of Company Shares on the
Termination Date, or the highest per share price for Company Shares
actually paid in connection with any Change of Control of the Company,
over the per share exercise price of each Option held by Executive,
times (ii) the number of Company Shares covered by each such Option.
In the event Executive does not elect to receive a cash payment for
any outstanding and unexercised Options granted to Executive,
Executive shall have the right to otherwise exercise such Options in
accordance with the terms and conditions of the 1993 Omnibus Stock
Plan or any other applicable Award Plan. This Agreement shall not
prevent Restricted Stock or Options from vesting pursuant to the terms
of the 1993.
e) Omnibus Stock Plan or any other Award Plan or otherwise, at a time
prior to that provided for herein.
f) If Executive has any Plan Loans outstanding to the Company immediately
prior to the effective date of a Change of Control Termination, the
Company shall, prior to the effective date of such Change of Control
Termination discharge and cancel the amount of principal and interest
due with respect to such Plan Loans which exceeds the Fair Market
Value of Company Shares securing the Plan Loans. The Executive shall
pay the Plan Loans in full (less the amount discharged) within ninety
(90) days following the Termination Date, and shall have the option of
repaying all amounts due with respect to the Plan Loans by the
transfer of the Company Shares securing the Plan Loans, or by the
payment, in cash, of the amounts due with respect to the Plan Loans.
Except as otherwise set forth herein, Executive shall remain subject
to all terms and conditions set forth in the Loan Agreements and
Promissory Notes until the Plan Loans are paid in full.
g) With respect to Executive's participation in the Company's Shareholder
Value Plan, the Award Periods in connection with all of Executive's
outstanding SVU Grants shall be accelerated such that each Award
Period is deemed to have ended upon the effective date of a Change of
Control Termination. At such time, the Company shall pay Executive an
9
amount equal to the SVU Value multiplied by the number of Executive's
outstanding SVU Grants. The SVU Value shall be reduced by 66% for all
SVU Grants which were granted less than twelve months prior to the
effective date of a Change of Control Termination and the SVU Value
shall be reduced by 33% for all SVU Grants which were granted less
than twenty-four months but more than twelve months prior to the
effective date of a Change of Control Termination. No adjustments
shall be made to the SVU Value for SVU Grants which were granted more
than twenty-four months prior to the effective date of the Change of
Control Termination. All payments made to Executive after a Change in
Control Termination in connection with outstanding SVU Grants shall be
made solely in cash.
h) The Company shall also pay to Executive all legal fees and expenses
incurred by Executive as a result of a Change of Control Termination
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit
provided hereunder).
4) Certain Transactions. Notwithstanding the provisions of Sections 1(k)(i),
--------------------- -----------------
(ii), (iii) or (viii), unless otherwise determined in a specific case by
---------------------
majority vote of the Board, a Change of Control shall not be deemed to have
occurred for purposes of this Agreement solely because (i) an entity in
which the Company directly or indirectly beneficially owns 50% or more of
the voting securities or (ii) any Company-sponsored employee stock
ownership plan, or any other employee benefit plan of the Company, either
files or becomes obligated to file a report or a proxy statement under or
in response to Schedule 13D, Schedule 14D-l, Form 8-K or Schedule 14A (or
any successor schedule, form or report or item thereon) under the Exchange
Act, disclosing beneficial ownership by it of shares of stock of the
Company, or because the Company reports that a Change of Control of the
Company has or may have occurred or will or may occur in the future by
reason of such beneficial ownership.
5) Escrow Arrangement. If within thirty (30) days after the effective date of
-------------------
a Change of Control, Executive's employment has not been terminated, the
Company shall, at the request of Executive, deposit with an escrow agent,
pursuant to an escrow agreement between the Company and such escrow agent,
a sum of money, or other property permitted by such escrow agreement, which
is substantially sufficient in the opinion of the Company's management to
fund the amounts due to Executive set forth in Section 3 of this Agreement.
---------
The escrow agreement shall provide that such agreement may not be
terminated until the earlier of (i) Executive's employment has terminated
and all amounts due to Executive as set forth in this Agreement have been
paid to Executive or (ii) two (2) years after the effective date of the
Change of Control.
6) Tax Matters. If the Excise Tax on Excess Parachute Payments will be imposed
------------
on the Executive under Code section 4999 as a result of the Executive's
receipt of the Change of Control Benefits, the Company shall indemnify the
Executive and hold him harmless against
10
all claims, losses, damages, penalties, expenses, interest, and Excise
Taxes. To effect this indemnification, the Company shall pay to the
Executive the Additional Amount which is sufficient to indemnify and hold
the Executive harmless from the application of Code sections 280G and 4999,
including the amount of (i) the Excise Tax that will be imposed on the
Executive under section 4999 of the Code with respect to the Change of
Control Benefits; (ii) the additional (A) Excise Tax under section 4999 of
the Code, (B) hospital insurance tax under section 3111(b) of the Code and
(C) federal, state and local income taxes for which the Executive is or
will be liable on account of the payment of the amount described in subitem
(i); and (iii) the further excise, hospital insurance and income taxes for
which the Executive is or will be liable on account of the payment of the
amount described in subitem (ii) and this subitem (iii) and any other
indemnification payment under this Section 6. The Additional Amount shall
---------
be calculated and paid to the Executive at the time that the Termination
Payment is paid to the Executive. In calculating the Additional Amount, the
highest marginal rates of federal and applicable state and local income
taxes applicable to individuals and in effect for the year in which the
Change of Control occurs shall be used. Nothing in this paragraph shall
give the Executive the right to receive indemnification from the Company
for federal, state or local income taxes or hospital insurance taxes
payable solely as a result of the Executive's receipt of (a) the Change in
Control Benefits, or (b) any additional payment, benefit or compensation
other than the Additional Amount. As specified in items (ii) and (iii),
above, all income, hospital insurance and additional Excise Taxes resulting
from additional compensation in the form of the Excise Tax payment
specified in item (i), above, shall be paid to the Executive.
The provisions of this Section 6 are illustrated by the following example:
---------
Assume that the Termination Payment and all other Change of Control
Benefits result in a total federal, state and local income tax and hospital
insurance tax liability of $180,000; and an Excise Tax liability under Code
section 4999 of $70,000. Under such circumstances, the Executive is solely
responsible for the $180,000 income and hospital insurance tax liability; and
the Company must pay to the Executive $70,000, plus an amount necessary to
indemnify the Executive for all federal, state and local income taxes, hospital
insurance taxes, and Excise Taxes that will result from the $70,000 payment to
the Executive and from all further indemnification to the Executive of taxes
attributable to the initial $70,000 payment.
7) Employment Status. The parties acknowledge and agree that Executive is an
------------------
employee of the Company or of one of its affiliates, not an independent
contractor. Any payments made to Executive by the Company pursuant to this
Agreement shall be treated for federal and state payroll tax purposes as
payments made to a Company employee, irrespective whether such payments are
made subsequent to the Termination Date.
8) Noncompetition; Nonsolicitation. For a period of two (2) years after
--------------------------------
Executive receives Change of Control Benefits pursuant to the terms of this
Agreement, Executive shall not solicit any employee of the Company to leave
the service of the Company or own any interest in any Self-Storage Property
(other than any permissible interest acquired while Executive was employed
by the Company) as partner, shareholder or otherwise; or directly or
11
indirectly, for his own account or for the account of others, either as an
officer, director, promoter, employee, consultant, advisor, agent, manager,
or in any other capacity, engage in the Self-Storage Business.
The nonsolicitation provision shall apply to any Company employee during
the period of such Company employee's employment with the Company and for a
period of 30 days after such employee's termination of employment with the
Company. The Executive agrees that damages at law for violation of the
restrictive covenant contained herein would not be an adequate or proper remedy
to the Company, and that should the Executive violate or threaten to violate any
of the provisions of such covenant, the Company, its successors or assigns,
shall be entitled to obtain a temporary or permanent injunction, as appropriate,
against the Executive in any court having jurisdiction over the person and the
subject matter, prohibiting any further violation of any such covenants. The
injunctive relief provided herein shall be in addition to any award of damages,
compensatory, exemplary or otherwise, payable by reason of such violation.
Furthermore, the Executive acknowledges that this Agreement has been
negotiated at arms' length by the parties, neither being under any compulsion to
enter into this Agreement, and that the foregoing restrictive covenant does not
in any respect inhibit his ability to earn a livelihood in his chosen profession
without violating the restrictive covenant contained herein. The Company by this
Agreement has attempted to limit the Executive's right to compete only to the
extent necessary to protect the Company from unfair competition. The Company
recognizes, however, that reasonable people may differ in making such a
determination. Consequently, the Company agrees that if the scope or
enforceability of the restricted covenant contained herein is in any way
disputed at any time, a court or other trier of fact may modify and enforce the
covenant to the extent that it believes to be reasonable under the circumstances
existing at the time.
9) Notices. All notices or deliveries authorized or required pursuant to this
--------
Agreement shall be deemed to have been given when in writing and personally
delivered or when deposited in the U.S. mail, certified, return receipt
requested, postage prepaid, addressed to the parties at the following
addresses or to such other addresses as either may designate in writing to
the other party:
To the Company: 000 Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
To the Executive:
-------------------------
-------------------------
-------------------------
10) Entire Agreement. This Agreement contains the entire understanding between
-----------------
the parties hereto with respect to the subject matter hereof and shall not
be modified in any manner except by instrument in writing signed, by or on
behalf of, the parties hereto. This Agreement
12
shall be binding upon and inure to the benefit of the heirs, successors and
assigns of the parties hereto.
11) Arbitration. Any controversy concerning or claim arising out of or relating
------------
to this Agreement shall be settled by final and binding arbitration in
Memphis, Shelby County, Tennessee at a location specified by the party
seeking such arbitration.
a) The Arbitrators. Any arbitration proceeding shall be conducted by
three (3) Arbitrators and the decision of the Arbitrators shall be
binding on all parties. Each Arbitrator shall have substantial
experience and expert competence in the matters being arbitrated. The
party desiring to submit any matter relating to this
Agreement to arbitration shall do so by written notice to the other
party, which notice shall set forth the items to be arbitrated, such
party's choice of Arbitrator, and such party's substantive position in
the arbitration. The party receiving such notice shall, within fifteen
(15) days after receipt of such notice, appoint an Arbitrator and
notify the other party of its appointment and of its substantive
position. The Arbitrators appointed by the parties to the Arbitration
shall select an additional Arbitrator meeting the aforedescribed
criteria. The Arbitrators shall be required to render a decision in
accordance with the procedures set forth in Subparagraph (b) below
within thirty (30) days after being notified of their selection. The
fees of the Arbitrators shall be equally divided amongst the parties
to the arbitration.
b) Arbitration Procedures. Arbitration shall be conducted in accordance
with the Uniform Arbitration Act, except to the extent the provisions
of such Act are modified by this Agreement or the subsequent mutual
agreement of the parties. Judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
Any party hereto may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which
this provision applies in any court having jurisdiction over such
action in Shelby County, Tennessee, and the parties agree that
jurisdiction and venue in Shelby County, Tennessee are appropriate and
approved by such parties.
12) Applicable Law. This Agreement shall be governed and construed in
---------------
accordance with the laws of the State of Tennessee.
13) Assignment. The Executive acknowledges that his services are unique and
-----------
personal. Accordingly, the Executive may not assign his rights or delegate
his duties or obligations under this Agreement.
14) Headings. Headings in this Agreement are for convenience only and shall not
---------
be used to interpret or construe its provisions.
15) Successors; Binding Agreement. The Company will require any successor to
------------------------------
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company
13
would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a beach of this Agreement and
shall entitle Executive to compensation from the Company in the same amount
and on the same terms as Executive would be entitled to hereunder if
Executive terminates his employment for Good Reason on or within three (3)
years after a Change of Control. The Company's rights and obligations under
this Agreement shall inure to the benefit of and shall be binding upon the
Company's successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
STORAGE USA, INC.
By:
-------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman of the Board
And Chief Executive Officer
EXECUTIVE:
----------------------------
Name:
-----------------------
14
