CHANGE OF CONTROL AGREEMENT
This
Agreement is dated as of December 16, 2008 between Urstadt Xxxxxx Properties
Inc. (“Company”) and Xxxx X.
Xxxxx ("Employee").
The
Employee is currently employed by the Company and the Employee's services are
valued by the Company.
The
Company recognizes that the possibility of a change of control of the Company
may result in the departure or distraction of the Employee, to the detriment of
the Company and its shareholders.
The
Company wishes to assure the Employee of fair severance should his employment
terminate in certain specified circumstances following a change of
control.
In
consideration of the Employee's continued employment by the Company, and for
other good and valuable consideration, the parties hereto hereby agree as
follows:
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1.
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Termination
Benefits. If
the employment of the Employee is terminated by the Employee for Good
Reason or by the Company for any reason other than for Cause, within 18
months following a Change of Control,
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(a)
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the
Company shall pay Employee an amount equal to 12 months of Employee's rate
of base salary (exclusive of any bonus or other benefit) in effect at the
date of the Change of Control. Such amount shall be payable in
cash in a lump sum within 45 days after such termination; and
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(b)
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the
Company shall continue in force and effect for 12 months after termination
(the "Continuation of Benefits Period") and at the same level and for the
benefit of the Employee's family, where applicable, all life insurance,
disability, medical and other benefit programs or arrangements in which
the Employee is participating or to which the Employee is entitled at the
date of the Change of Control, provided that the Employee's continued
participation is possible under such programs and arrangements. In the
event that such continued participation is not possible, the Company shall
arrange to provide the Employee with benefits similar to those which
Employee would be entitled to receive under such programs and
arrangements. Without limiting the foregoing, the benefits continuation
shall include a lump sum cash payment to the Employee within 45 days of
such termination in lieu of Company contributions on behalf of the
Employee under the Urstadt Xxxxxx Properties Inc. Profit Sharing and
Savings Plan. The amount of such payment shall be the product of (i) the
number of months in the Continuation of Benefits Period and (ii) 1/12 of
5% (or such other percentage reflected in the Company’s most recent annual
contribution determined prior to the Change of Control) times the
Employee's annual salary rate in effect immediately prior to the
termination date or, if greater, the Employee's annual salary rate in
effect immediately prior to the Change of
Control.
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1
Payments
under this Section 1 shall be reduced to the extent, but only to the extent,
necessary to provide that no "payment in the nature of compensation" to (or for
the benefit of) the Employee which is "contingent" on the Change of Control
would fail to be deductible for federal income tax purposes by reason of section
280G of the Internal Revenue Code of 1986, as amended (the
"Code"). As used in this Section, the words "payment in the nature of
compensation" and "contingent" shall be construed and applied in a manner
consistent with the meaning of those words under section 280G of the Code and
regulations thereunder. The determination as to whether and to what extent a
reduction in payments under this Section 1 is necessary to avoid the
non-deductibility of any payment under section 280G of the Code shall be made at
the Company’s expense by PKF, Certified Public Accountants, A Professional
Corporation (“PKF”), or by such other certified public accounting firm as the
Compensation Committee of the Directors may designate prior to a Change of
Control. In the event of any underpayment or overpayment under this
Section 1, as determined by PKF (or such other firm as may have been designated
in accordance with the preceding sentence), the amount of such underpayment or
overpayment shall forthwith be paid to the Employee or refunded to the Company,
as the case may be, with interest at the applicable federal rate provided for in
section 7872(f)(2) of the Code.
Notwithstanding anything to the contrary hereunder, if
any payment, compensation or other benefit provided to the Employee in
connection with his employment termination (other than termination on account of
Employee’s death) is determined, in whole or in part, to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the
Code and the Employee is a “specified employee” as defined in Section
409A(2)(B)(i) thereof, no part of such payments shall be paid before the day
that is six (6) months plus one (1) day after the date of termination (the “New
Payment Date”). The aggregate of any payments that otherwise would
have been paid to the Employee during the period between the date of termination
and the New Payment Date shall be paid to the Employee in a lump sum on such New
Payment Date. Thereafter, any payments that remain outstanding as of
the day immediately following the New Payment Date shall be paid without delay
over the time period originally scheduled, in accordance with the terms of this
Agreement.
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2.
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Definitions.
The definitions in Appendix A are hereby incorporated in this
Agreement.
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3.
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No Duty to Mitigate
Damages. The Employee's benefits under this Agreement shall
be considered severance pay in consideration of his past service and his
continued service from the date of this Agreement, and his entitlement
thereto shall neither be governed by any duty to mitigate his damages by
seeking further employment nor offset by any compensation which he may
receive from future employment.
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4.
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Withholding.
Anything herein to the contrary notwithstanding, all payments required to
be made by the Company hereunder to the Employee shall be subject to the
withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.
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5.
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Legal Fees and
Expenses; Interest. The Company shall pay all reasonable
legal fees and expenses incurred by the Employee in successfully obtaining
any right or benefit to which the Employee is entitled under this
Agreement. Any amount payable under this Agreement that is not
paid when due shall accrue interest at the prime rate as from time to time
in effect at The Bank of New York Mellon, until paid in full.
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2
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6.
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Arbitration.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in New York City in
accordance with the rules of the American Arbitration Association then in
effect. The parties shall attempt to select a mutually agreeable
arbitrator who shall promptly convene a hearing to resolve submitted
disputes. If the parties are unable to agree upon such an
arbitrator within 20 days from initial contact, the American Arbitration
Association shall be requested by either party to submit a list of at
least seven arbitrators from which the parties shall attempt to select one
by agreement. In the event they do not so agree, they shall
alternately strike names from this list beginning with the Employee, until
a single name remains. The remaining person shall be appointed to hear and
decide the parties' disputes, drawing his authority and the bases for
decision from this Agreement. The arbitrator will resolve all
submitted matters in a written decision with
expedition. Judgment may be entered on the arbitrator's award
in any court having jurisdiction.
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7.
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Notices.
All notices shall be in writing and shall be deemed given five days after
mailing in the continental United States by certified mail, or upon
personal receipt after delivery, facsimile or telegram, to the party
entitled thereto at the address stated below or to such changed address as
the addressee may have given by a similar notice:
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To the Company:
Urstadt Xxxxxx Properties
Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
To the Employee:
At his
home address,
as last shown on the
records of the Company
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8.
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Severability.
In the event that any provision of this Agreement shall be determined to
be invalid or unenforceable, such provision shall be enforceable in any
other jurisdiction in which valid and enforceable and in any event the
remaining provisions hereof shall remain in full force and effect to the
fullest extent permitted by law.
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9.
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Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties and be enforceable by the Employee's personal
or legal representatives or successors. If the Employee dies
while any amounts would still be payable to him hereunder, such amounts
shall be paid to the Employee's estate. This Agreement shall not otherwise
be assignable by the Employee.
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10.
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Successors.
This Agreement shall inure to and be binding upon the Company’s
successors. The Company will require any successor to all or substantially
all of the businesses and/or assets of the Company by sale, merger (where
the Company is not the surviving entity), lease or otherwise, to assume
expressly this Agreement. If the Company shall not obtain such
agreement prior to the effectiveness of any such succession, the Employee
shall have all rights resulting from termination of the Employee's
employment under this Agreement. This Agreement shall not
otherwise be assignable by the Company.
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11.
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Amendment or
Modification; Waiver. This Agreement may not be amended
unless agreed to in writing by the Employee and the Company. No
waiver by either party of any breach of this Agreement shall be deemed a
waiver of a subsequent breach.
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12.
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Continued
Employment. This Agreement shall not confer upon the
Employee any right of continued or future employment by the Company or any
right to compensation or benefits from the Company except the right
specifically stated herein to certain severance benefits, and shall not
limit the right of the Company to terminate the Employee's employment at
any time, except as may be otherwise provided in a written employment
agreement between the Company and the Employee.
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13.
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Governing
Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State
of New York.
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14.
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Liability of
Shareholders. This Agreement is executed by or on behalf of
the Directors of the Company solely in their capacity as such Directors,
and shall not constitute their personal obligation either jointly or
severally in their individual capacities. The shareholders,
Directors, officers or agents of the Company shall not be personally
liable for any obligations of the Company under this Agreement and all
parties hereto shall look solely to the property of the Company for the
payment of any claim hereunder.
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15.
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Entire
Agreement. This Agreement, including the
attached Appendix, represents the entire agreement between the parties
concerning the subject matter of payment of severance upon the Employee’s
termination of employment following a change of control of the Company and
supersedes and incorporates any and all prior agreements, both written or
oral.
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IN
WITNESS WHEREOF the parties have duly executed the Agreement as of the above
date.
EMPLOYEE:
/s/
Xxxx X. Xxxxx
Xxxx X.
Xxxxx
COMPANY:
Urstadt
Xxxxxx Properties Inc.
By: /s/ Willing X. Xxxxxx
Willing X. Xxxxxx
President
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APPENDIX
A TO CHANGE OF CONTROL AGREEMENT
"Change
of Control" shall mean the occurrence of any one of the following
events:
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(a)
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any
Person other than an “Exempted Person” becomes the owner of Common Shares
which represent more than 20% of the combined voting power of the Common
Shares outstanding and thereafter individuals who were not Directors of
the Company prior to the date such Person became a 20% owner are elected
as Directors pursuant to an arrangement or understanding with, or upon the
request of or nomination by, such Person and constitute at least two of
the Directors; or
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(b)
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there
occurs a change of control of the Company of a nature that would be
required to be reported in response to Item 5.01 of Form 8-K pursuant to
Section 13 or 15 under the Securities Exchange Act of 1934 ("Exchange
Act"), or in any other filing by the Company with the Securities and
Exchange Commission (the "Commission"); or
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(c)
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there
occurs any solicitation of proxies by or on behalf of any Person other
than the Directors of the Company and thereafter individuals who were not
Directors prior to the commencement of such solicitation are elected as
Directors pursuant to an arrangement or understanding with, or upon the
request of or nomination by, such Person and constitute at least two of
the Directors.
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(d)
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the
Company executes an agreement of acquisition, merger or consolidation
which contemplates that (i) after the effective date provided for in the
agreement, all or substantially all of the business and/or assets of the
Company shall be owned, leased or otherwise controlled by another
corporation or other entity and (ii) individuals who are Directors of the
Company when such agreement is executed shall not constitute a majority of
the board of directors of the survivor or successor entity immediately
after the effective date provided for in such agreement; provided,
however, for purposes of this paragraph (d) that if such agreement
requires as a condition precedent approval by the Company’s shareholders
of the agreement or transaction, a Change of Control shall not be deemed
to have taken place unless and until such approval is
secured.
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"Common
Shares" shall mean all shares of the then outstanding Common stock and Class A
Common stock of the Company plus, for purposes of determining the ownership of
any Person, the number of unissued Common Shares which such Person has the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) upon the exercise of conversion rights, exchange rights,
warrants or options or otherwise.
“Exempted
Person” shall mean: (i) Xxxxxxx X. Xxxxxxx; (ii) any Urstadt Family Member (as
hereinafter defined); (iii) any executor, administrator, trustee or personal
representative who succeeds to the estate of Xxxxxxx X. Xxxxxxx or an Xxxxxxx
Family Member as a result of the death of such individual, acting in their
capacity as an executor, administrator, trustee or personal representative with
respect to any such estate; (iv) a trustee, guardian or custodian holding
property for the primary benefit of Xxxxxxx X. Xxxxxxx or an Urstadt Family
Member; (v) any corporation, partnership, limited liability company or other
business organization that is directly or indirectly controlled by one or more
persons or entities described in clauses (i) through (iv) hereof and is not
controlled by any other person or entity; and (vi) any charitable foundation,
trust or other not-for-profit organization for which one or more persons or
entities described in clauses (i) through (v) hereof controls the investment and
voting decisions in respect of any interest in the Company held by such
organization. For sake of clarity with respect to clause (v)
above, “control” includes the power to control the investment and voting
decisions of any such corporation, partnership, limited liability company or
other business organization.
A-1
For
purposes of this definition, the term “Urstadt Family Member” shall mean and
include the spouse of Xxxxxxx X. Xxxxxxx, the descendants of the parents of
Xxxxxxx X. Xxxxxxx, the descendants of the parents of the spouse of Xxxxxxx X.
Xxxxxxx, the spouses of any such descendant and the descendants of the parents
of any spouse of a child of Xxxxxxx X. Xxxxxxx. For this purpose, an
individual’s “spouse” includes the widow or widower of such individual, and an
individual’s “descendants” includes biological descendants and persons deriving
their status as descendants by adoption.
“Person”
shall have the meaning used in Section 13(d) of the Exchange Act, as in effect
on October 31, 2008. A Person shall be deemed to be the "owner" of
any Common Shares:
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(a)
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of
which such Person would be the "beneficial owner", as such term is defined
in Rule 13d-3 promulgated by the Commission under the Exchange Act, as in
effect on October 31, 2008; or
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(b)
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of
which such Person would be the "beneficial owner", as such term is defined
under Section 16 of the Exchange Act and the rules of the Commission
promulgated thereunder, as in effect on October 31, 2008; or
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(c)
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which
such Person or any of its Affiliates or Associates (as such terms are
defined in Rule 12b-2 promulgated by the Commission under the Exchange
Act, as in effect on October 31, 2008), has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options or
otherwise.
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Termination
for "Cause" shall mean termination of the Employee's employment by the Company
because of dishonesty, conviction of a felony, gross neglect of duties (other
than as a result of disability or death), or conflict of interest (other than
any conflict of interest which has been fully disclosed to the Directors and has
been determined by them not to be material), which, in the case of gross neglect
or conflict, shall continue for 30 days after the Company gives written notice
to the Employee requesting the cessation of such gross neglect or conflict, as
the case may be.
Termination
for "Good Reason" shall have the following meanings:
Termination
for "Good Reason" shall mean the voluntary termination by the Employee of his
employment within 180 days following the occurrence of any of the
events listed below by written notice (setting
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination for Good Reason) given within ninety (90) days after the
occurrence, without the Employee’s express consent, of any one of such events unless they are fully
corrected within 30 days after receipt of notice thereof:
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(a)
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a change in the Employee’s authority, duties or
responsibilities which represent a material diminution in his
authority, duties or
responsibilities immediately prior to
a Change of Control; or a change in
the authority, duties or
responsibilities of the person to
whom the Employee reports (including, if applicable, requiring the
Employee to report to an officer or employee instead of the Board of
Directors) which represents a material diminution of such person’s
authority, duties or responsibilities
immediately prior to a Change of Control;
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A-2
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(b)
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a material reduction in the Employee's base
salary for any fiscal year below the
level of Employee’s base salary in the completed fiscal year
immediately preceding the Change of Control;
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(c)
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any
relocation of the Employee outside a 50 mile
radius of the Employee’s work site on the date hereof; or
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(d)
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any
other material breach by the Company of any provision of this
Agreement.
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A-3
