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Exhibit 10.3
[XXXXXX LETTERHEAD]
[DATE]
Mr. Xxxxxxx Xxxxxx
[ADDRESS]
Re: Severance Agreement
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Dear Xx. Xxxxxx:
As you know, the board of directors of Xxxxxx Properties Corporation
(the "Company") (and to the extent applicable, Xxxxxxx Real Estate, Inc.
("Xxxxxxx")) has approved a termination package for you. With the exception of
the payment described in paragraph 1 below, the benefits provided in this
Agreement will be provided only if your employment with the Company and its
affiliates is terminated during the Transition Period. For purposes of this
Agreement, the "Transition Period" is the period commencing as of the date of
this Agreement and ending on the later of (i) the date which is six months
after the merger of the Company with and into Xxxxxxx (the "Merger"), or (ii)
December 31, 1996. If the Merger does not occur prior to July 1, 1996, the
Transition Period will expire on December 31, 1996. The purpose of this letter
is to set forth our agreement regarding these benefits:
1. SEVERANCE. If your employment terminates in a Covered
Termination prior to the Merger, you will be entitled to a
"Severance Benefit" in an amount equal $225,000. If your
employment is not terminated in a Covered Termination prior to
the Merger and you are still employed on the date of the
Merger, you will be paid a lump sum cash payment of $225,000
upon the Merger, provided the Merger occurs prior to July 1,
1996 (or such later date as may be mutually agreed by the
Company and Xxxxxxx).
2. COVERED TERMINATION. You will be entitled to the benefits
described below if your employment is terminated in a Covered
Termination. A "Covered Termination" means your termination
of employment, during the Transition Period, for reasons other
than your voluntary resignation, death or termination for
Cause or Disability (each as defined below). In addition,
your resignation for Good Reason (as described below) will be
considered a Covered Termination.
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For purposes of this Agreement, the term "Cause" means your
violation of any policy, rule or procedure of the Company (or,
after the Merger, Xxxxxxx), misconduct which represents a
serious deviation from generally accepted norms of behavior,
or unsatisfactory performance of duties; provided, however,
that the determination of unsatisfactory performance shall be
made based only upon events occurring after the date of this
Agreement. The term "Disability" means your inability to
continue to perform your duties for the Company (or, after the
Merger, Xxxxxxx) on a full-time basis as a result of mental or
physical illness, sickness or injury for a period of 6 months
within any 12-month period. Any determination of "Cause" or
"Disability" under this Agreement will be determined by the
Board of Directors of the Company (or, after the Merger,
Xxxxxxx); provided, however, that such determination shall not
be made in an arbitrary or capricious manner.
Your termination of employment will be considered to be on
account of "Good Reason" if you resign within 60 days
following any of the following events which occur without your
consent:
(A) you incur a substantial adverse change in your
position, authorities, responsibilities or status as
in effect immediately prior to your termination of
employment;
(B) a reduction in your annual base salary as in effect
immediately prior to your termination of employment
(except for uniform salary reductions affecting all
similarly situated employees);
(C) your relocation to an office or job location that is
more than fifty miles from your office or job
location immediately prior to your termination of
employment, except for required travel on business to
an extent substantially consistent with your business
travel obligations as in effect immediately prior to
your termination of employment; or
(D) the failure by the Company (or, after the Merger,
Xxxxxxx) to pay any portion of your current
compensation or any portion of an installment of
deferred compensation under any deferred compensation
program within ten days of the date such compensation
is due.
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For purposes of the foregoing, any comparison of your
position, authorities, responsibilities, status, annual base
salary or office or job location before and after your
termination of employment shall be determined without regard
to any change made in anticipation of your termination of
employment.
3. HEALTH COVERAGE CONTINUATION. For the first 12 months
following your Covered Termination, the Company (or, after the
Merger, Xxxxxxx) will provide medical coverage to you and your
dependents at its expense; provided, however, that the Company
(or, after the Merger, Xxxxxxx) will only be required to
provide such coverage to the extent that the cost to the
Company (or, after the Merger, Xxxxxxx) is not more than 200%
of the premium incurred by the Company (or, after the Merger,
Xxxxxxx) for medical coverage for you and your dependents
immediately prior to your termination of employment (the
"Maximum Coverage Cost"). The coverage to be provided to you
pursuant to the foregoing provisions of this Section 3 shall
be the coverage that is provided from time to time to
similarly situated active employees of the Company or, if no
such coverage is provided, such coverage as can be purchased
from an insurance company that is comparable to the medical
coverage last provided to similarly situated active employees
of the Company. If, in any event, the cost of the
post-termination coverage exceeds the Maximum Coverage Cost,
the Company (or, after the Merger, Xxxxxxx) shall be required
to contribute to the cost of such coverage an amount equal to
the Maximum Coverage Cost.
The medical coverage provided pursuant to this Section 3 will
terminate, subject to any rights you and your dependents have
to continue the coverage under applicable law, if, during the
12-month continuation period, you become covered under another
employer's group medical plan without application of any
pre-existing condition limitations or other limitations on
coverage. This coverage is in addition to any coverage to
which you may be entitled under applicable laws relating to
continuation of medical coverage.
4. AUTOMOBILE LEASE. Following your Covered Termination, the
Company (or, after the Merger, Xxxxxxx) will pay your car
rental through the end of its term as in effect on the date
hereof and, upon the expiration of such rental, you will have
the right to exercise any purchase options provided in the
current rental
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agreement. A copy of the current rental agreement is attached
hereto.
5. OFFICE FURNITURE. Upon your Covered Termination, you will
have the option to purchase your existing office furniture at
the fair market value.
If you die after becoming entitled to any benefits in accordance with
the foregoing and prior to full payment thereof, any remaining payments will be
made to your estate.
In consideration of the foregoing, you agree to waive all of your
rights under the Lease of Art dated as of October 12, 1993 (the "Lease")
between you and the Company and acknowledge that it is null and void. Further,
you represent that you have full and clear title to the art which is subject to
the Lease and that you will transfer such title to the Company as soon as
practicable after the date of this Agreement; provided, however, that if such
transfer does not occur until after the Merger, you agree to transfer the title
to Xxxxxxx.
In consideration for the severance and other benefits described above,
you voluntarily agree to release the Company and Xxxxxxx (and their respective
affiliates and subsidiaries, successors and assigns, and the current and former
officers, directors, shareholders, employees and agents of the foregoing)
generally from all claims, demands and liabilities of every name and nature in
connection with your employment and resignation or termination from the Company
or Xxxxxxx, as applicable, whether arising in contract, tort, equity or
otherwise (including any express or implied contract or obligation of good
faith or fair dealing or any theory of wrongful termination) or under any
discrimination statute including without limitation, the Age Discrimination in
Employment Act. This Agreement also covers any claims that you may have for
attorneys' fees. Notwithstanding the foregoing, you shall continue to be
entitled to indemnification for your actions as an employee or officer of the
Company (or, after the Merger, Xxxxxxx) for periods prior to your termination
of employment in accordance with the Company's (or, after the Merger,
Xxxxxxx'x) corporate charter and by-laws and shall continue to be covered for
periods prior to your termination of employment under the Company's (or
Xxxxxxx'x) corporate indemnification policies.
This Agreement is a legally binding document and your signature will
commit you to its terms. The Company encourages you to obtain legal advice
before you sign it. You acknowledge that you have been advised to discuss all
aspects of this Agreement with your attorney, that you have carefully read and
fully understand all of the provisions of this Agreement and that you
voluntarily enter into this Agreement.
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You acknowledge that you have been given the opportunity to consider
this Agreement for twenty-one (21) days before signing it. If you sign this
Agreement within less than twenty-one (21) days of the date of its delivery to
you, you acknowledge that such decision was entirely voluntary and that you had
the opportunity to consider this Agreement for the entire twenty-one (21) day
period. The Company acknowledges that for a period of seven (7) days from the
date you sign this Agreement, you have the right to revoke this Agreement by
written notice to the Company. This Agreement shall not become effective until
the expiration of the enforcement period.
Please indicate your agreement with the foregoing by signing and
dating a copy of this letter and returning it to me by ________________, 1995.
Sincerely yours,
_____________________
Agreed to by:
________________________
Xxxxxxx Xxxxxx
Date:___________________
Consented to by:
Xxxxxxx Real Estate, Inc.
By________________________
Its_______________________
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