Exhibit 10.9
FORM OF
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this
____ day of ____________, 1997 by and between Prime Group Realty, L.P., a
Delaware limited partnership ("Employer"), and Xxxxxx X. Xxxxxxxxx, an
individual domiciled in the State of Illinois ("Executive").
W I T N E S S E T H
-------------------
A. Employer is engaged primarily in the ownership, management, leasing,
marketing, acquisition, development and construction of office and industrial
real estate facilities throughout the United States.
B. Employer believes that it would benefit from the application of
Executive's particular and unique skill, experience, and background to the
development of office properties and the management thereof.
C. Executive wishes to commit himself to serve Employer in the position
set forth herein on the terms herein provided.
D. The parties wish by this Agreement to set forth the terms and
conditions of the employment relationship between Employer and Executive.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein set forth, and for other good and valuable consideration, Employer and
Executive hereby agree as follows:
1. Employment and Duties. During the Employment Term (as defined in
Section 2 hereof), Employer agrees to employ Executive, and Executive agrees to
be employed by Employer, as the President of Employer's Office Division on the
terms and conditions provided in this Agreement. Executive shall conduct,
operate, manage and promote the business and business concept of Employer. The
Chief Executive Officer or the President of Employer may from time to time
further define and clarify Executive's duties and services hereunder as
President of Employer's Office Division, which principal duties will include the
development, management, leasing, marketing and acquisition of office
properties. Executive agrees to devote Executive's best efforts and
substantially all of Executive's business time, attention, energy and skill to
perform Executive's duties as President of Employer's Office Division.
2. Term. The term of this Agreement shall commence on the date The
Registration Statement on Form S-11, as amended (No. 333-33547; the
"Registration Statement") of Prime Group
Realty Trust ("PGRT"), the general partner of Employer, is declared effective
(the "Effective Date") and expire on ___________, 2000 [three year term] (the
"Employment Term").
3. Compensation and Related Matters. (a) Base Salary. As compensation
for performing the services required by this Agreement during the Employment
Term, Employer shall pay to Executive an annual salary of no less than Two
Hundred Thousand Dollars ($200,000) ("Base Compensation"), payable in accordance
with the general policies and procedures for payment of salaries to its
executive personnel maintained, from time to time, by Employer (but no less
frequently than monthly), subject to withholding for applicable federal, state,
and local taxes. Increases in Base Compensation, if any, shall be determined by
the Compensation Committee (the "Committee") of the Board of Trustees of PGRT
(the "Board") based on periodic reviews of Executive's performance conducted on
at least an annual basis.
(b) Bonus. In addition to Base Compensation, Executive shall have the
right to receive, and Employer agrees to distribute to Executive, a performance
bonus distribution for each calendar year during the Employment Term, commencing
on January 1, 1998, in such amounts as determined by the two point formula
delineated hereinbelow (collectively, a yearly "Performance Bonus
Distribution"); provided, however, that the aggregate Performance Bonus
Distribution for any calendar year distributable in accordance with the
provisions of this Section 3(b) shall in no event exceed 100% of the Base
Compensation for such calendar year. The amount of the Performance Bonus
Distribution for each calendar year distributable to Executive hereunder shall
be determined by the Committee based upon the achievement of Employer's annual
business plan approved by the Board for such calendar year, as reflected in the
audited financial statements of Employer prepared in accordance with generally
accepted accounting principles and auditing standards and practices,
consistently applied ("GAAP"). Prior to issuance of the final audited financial
statements for each calendar year, Executive shall have the right to review and
approve or challenge any calculation or determination of the amount of the
Performance Bonus Distribution distributable for such calendar year. Any amount
of Performance Bonus Distribution required to be distributed to Executive for
any calendar year during the Employment Term shall be distributed by Employer to
Executive during the pay period of Employer following finalization of the audit
for such calendar year and final review and approval of the bonus calculation by
the Committee and, in all events, on or before April 15 of the year immediately
following the end of the calendar year for which such Performance Bonus
Distribution is attributable.
The two point formula to determine a Performance Bonus Distribution
for any calendar year during the Employment Term shall be as follows:
(i) Funds From Operations. Executive's Performance Bonus
Distribution in an amount of up to seventy-five percent (75%) of Executive's
Base Compensation for any given calendar year shall be based on Employer's Funds
From Operations publicly announced by Employer ("FFO") such calendar year in
relation to projected budget for FFO disclosed to shareholders of PGRT set forth
in Employer's Board approved annual business plan for such calendar year
("Public FFO") as follows:
2
(A) If FFO is less than Public FFO, Executive shall not be
entitled to any Performance Bonus Distribution under this Section 3(b)(i).
(B) If FFO is one hundred and three percent (103%) or more of
Public FFO, Executive shall be entitled to a Performance Bonus Distribution
under this Section 3(b)(i) equal to seventy-five percent (75%) of Executive's
Base Compensation for such calendar year.
(C) If FFO is equal to Public FFO but less than one hundred and
three percent (103%) of Public FFO, Executive shall be entitled to a Performance
Bonus Distribution under this Section 3(b)(i) equal to thirty seven and one-half
percent (37.5%) of Executive's Base Compensation for such calendar year.
(D) If FFO is greater than Public FFO but less than one hundred
and three percent (103%) of Public FFO, then a pro rata adjustment shall be made
to the Performance Bonus Distribution to which Executive is entitled under this
Section 3(b)(i) for such calendar year.
(ii) Discretionary. Executive's Performance Bonus Distribution in
an amount of up to twenty-five percent (25%) of Executive's Base Compensation
for any given calendar year shall be determined at the sole discretion of the
Board or the Committee based upon achievement of such corporate or individual
performance goals and objectives as may be established or determined by the
Board or the Committee from time to time.
Within ninety (90) days after the Effective Date, Employer and Executive shall
negotiate in good faith a revised Performance Bonus Distribution formula which
more accurately measures the performance by Executive of Executive's duties and
responsibilities related to Employer's Office Division for which Executive has
direct authority and oversight.
(c) Benefits. During the Employment Term and subject to the
limitations and alternative rights set forth in this Section 3(c), Executive and
Executive's eligible dependents shall have the right to participate in the
medical and dental benefit plan to be established by Employer (which may include
contributions by Executive) and in any other retirement, pension, insurance,
health or other benefit plan or program that has been or is hereafter adopted by
Employer (or in which Employer participates), as such plans and programs may be
amended or modified from time to time by Employer, according to the terms of
such plan or program with all the benefits, rights and privileges as are enjoyed
by any other executive officers of Employer. Employer expects to have in place a
life insurance program in which Executive will be entitled to participate. If
the participation of Executive would adversely affect the qualification of a
plan intended to be qualified under Section 401(a) of the Internal Revenue Code
as the same may be amended from time to time (the "Code"), Employer shall have
the right to exclude Executive from that plan in return for Executive's
participation in (i) a nonqualified deferred compensation plan or (ii) an
arrangement providing substantially comparable benefits under a plan that is
either a qualified or nonqualified under the Code at Employer's option.
3
(d) Expenses. Executive shall be reimbursed, subject to Employer's
receipt of invoices or similar records as Employer may reasonably request in
accordance with its policies and procedures, as such policies and procedures may
be amended or modified from time to time by Employer, for all reasonable and
necessary expenses incurred by Executive in the performance of Executive's
duties hereunder, including expenses for business entertainment and meals
(whether in or out of town) and gas for business travel, but excluding
automobile insurance. Subject to the policies and procedures referred to in the
previous sentence, Employer agrees to reimburse Executive for membership dues
for the following organizations (i) NACORE, (ii) ULI and (iii) U.S. Green
Building - Council and for travel and related expenses incurred by Executive to
attend the annual conventions and board and council meetings of such
organizations.
(e) Vacations. During the Employment Term, Executive shall be entitled
to vacation in accordance with Employer's practices, as such practices may be
amended or modified from time to time by Employer, provided that Executive shall
be entitled to at least four (4) weeks paid vacation in each full calendar year.
Executive may accrue unused vacation time if not used in any calendar year or
years, however, the maximum cumulative amount of vacation time that Executive
may accrue and carry over to the next year is two (2) weeks. Executive shall be
entitled to a payment for any vacation time which has accrued but has not been
used as of the date of the termination of Executive's employment with Employer,
unless Executive's employment is terminated pursuant to Section 5(a)(ii) hereof.
4. Stock Options. The general partner of Employer, PGRT has established a
stock incentive plan (the "Stock Incentive Plan") that will become effective
prior to the completion of the initial public offering of shares of common stock
of PGRT (the "Common Stock") contemplated by the Registration Statement. The
Stock Incentive Plan initially provides, among other things, for the issuance
from time to time to certain officers, directors and other employees of PGRT and
Employer, including Executive, of stock options. On the Effective Date,
pursuant to the Stock Incentive Plan, PGRT shall grant to Executive 70,000 stock
options ("Options") that will have such terms and conditions as are set forth in
the Stock Incentive Plan and the Stock Option Agreement to be entered into
between PGRT and Executive. Such Options granted to Executive shall vest
immediately upon the death or disability of Executive or upon termination of
this Agreement and Executive's employment for any reason other than a
termination for cause by Employer. In the case of a termination for cause, all
unvested Options shall be forfeited by Executive, but Executive shall have the
right to exercise within the time period provided for in the Stock Incentive
Plan all Options vested prior to such termination for cause.
5. Termination and Termination Benefits. (a) Termination by Employer.
(i) Without Cause. Employer may terminate this Agreement and Executive's
employment at any time for any reason or for no reason at all upon thirty (30)
days' prior written notice to Executive following notice of termination. In
connection with the termination of Executive's employment pursuant to this
Section 5(a)(i), Executive shall (A) be paid Executive's Base Compensation in
accordance with Section 3(a) hereof up to the effective date of such
termination, (B) be paid a pro rata portion of any bonus otherwise payable to
Executive for or with respect to the calendar year in which such termination
occurs in accordance with Section 3(b) hereof up to the effective date of such
4
termination and, to the extent not previously paid, Executive shall be entitled
to all bonuses payable to Executive in accordance with Section 3(b) hereof for
or with respect to any calendar years prior to the calendar year in which such
termination occurs, (C) be entitled to the benefits set forth in Sections 3(c),
3(d), 3(e) and 3(f) hereof up to the effective date of such termination and (D)
receive the Termination Compensation specified in Section 5(d) hereof. For
purposes of calculating Executive's pro rata portion of any bonus pursuant to
clause (B) in the previous sentence, if the termination takes place prior to
receipt by Executive of any Performance Bonus Distribution, the Performance
Bonus Distribution, a pro rata (based on the number of days in the year) portion
of which Executive shall be entitled to receive, shall be deemed to be 50% of
Executive's then current annual Base Compensation. For purposes of this
Agreement, the "effective date of termination" shall mean the last day on which
Executive is employed with Employer which may be later than the date of the
delivery of any applicable notice of termination.
(ii) With Cause. Employer may terminate this Agreement with cause
immediately upon written notice to Executive. Employer may elect to require
Executive to continue to perform Executive's duties under this Agreement for an
additional thirty (30) days following notice of termination. In connection with
the termination of Executive's employment pursuant to this Section 5(a)(ii),
Executive shall (A) be paid Executive's Base Compensation in accordance with
Section 3(a) hereof up to the effective date of such termination, and, to the
extent not previously paid, Executive shall be entitled to any bonuses payable
to Executive in accordance with Section 3(b) hereof for or with respect to any
calendar years prior to the calendar year in which such termination occurs and
(B) be entitled to the benefits set forth in Sections 3(c), 3(d), 3(e) and 3(f)
hereof up to the effective date of such termination. For purposes of this
Section 5(a)(ii), "cause" shall mean (1) a finding by the Board that Executive
has materially harmed Employer, its business, assets or employees through an act
of dishonesty, material conflict of interest, gross misconduct or willful
malfeasance, (2) Executive's conviction of (or pleading nolo contendere to) a
felony, (3) Executive's failure to perform (which shall not include inability to
perform due to disability) in any material respects Executive's material duties
under this Agreement after written notice specifying the failure and a
reasonable opportunity to cure (it being understood that if Executive's failure
to perform is not of a type requiring a single action to fully cure, then
Executive may commence the cure promptly after such written notice and
thereafter diligently prosecute such cure to completion), (4) the breach by
Executive of any of Executive's material obligations hereunder (other than those
covered by clause (3) above) and the failure of Executive to cure such breach
within thirty (30) days after receipt by Executive of a written notice of
Employer specifying in reasonable detail the nature of the breach, or (5)
Executive's sanction (including restrictions, prohibitions and limitations
agreed to under a consent decree or agreed order) under, or conviction for
violation of, any federal or state securities law, rule or regulation (provided
that in the case of a sanction, such sanction materially impedes or impairs the
ability of Executive to perform Executive's duties and exercise Executive's
responsibilities hereunder in a satisfactory manner).
(iii) Disability. If due to illness, physical or mental
disability, or other incapacity, Executive shall fail during any four (4)
consecutive months to perform the duties required by this Agreement, Employer
may, upon thirty (30) days' written notice to Executive, either terminate this
Agreement or suspend Executive's right to any Base Compensation or Performance
5
Bonus Distributions without terminating this Agreement. In any such event,
Executive shall (A) be paid Executive's Base Compensation in accordance with
Section 3(a) hereof up to the effective date of such termination, (B) be paid a
pro rata portion of any bonus otherwise payable to Executive for or with respect
to the calendar year in which such termination occurs in accordance with Section
3(b) hereof up to the first day of such four (4) month period and, to the extent
not previously paid, Executive shall be entitled to all bonuses payable to
Executive in accordance with Section 3(b) hereof for or with respect to any
calendar years prior to the calendar year in which such termination occurs and
(C) be entitled to the benefits set forth in Sections 3(c) hereof (or the after-
tax cash equivalent) up to the effective date of such termination, and be
entitled to the benefits set forth in Sections 3(d), 3(e), and 3(f) hereof up to
the date of such termination. For purposes of calculating Executive's pro rata
portion of any bonus pursuant to clause (B) in the previous sentence, if the
termination takes place prior to receipt by Executive of any Performance Bonus
Distribution, the Performance Bonus Distribution, a pro rata portion of which
Executive shall be entitled to receive, shall be deemed to be 50% of Executive's
then current annual Base Compensation. In the event Employer elects to suspend
Executive's right to Base Compensation and Performance Bonus Distributions, at
such time as Executive is able to resume the duties required under this
Agreement, Executive shall be entitled to receive Base Compensation and
Performance Bonus Distributions from the date Executive commences the
performance of such duties following the disability in accordance with the terms
and provisions of this Agreement. This Section 5(a)(iii) shall not limit the
entitlement of Executive, Executive's estate or beneficiaries to any disability
or other benefits available to Executive under any disability insurance or other
benefits plan or policy which is maintained by Employer for Executive's benefit.
For purposes of this Agreement, the "date of disability" shall mean the first
day of the consecutive period during which Executive fails to perform the duties
required by this Agreement due to illness, physical or mental disability or
other incapacity.
(b) Termination by Executive. (i) After Change of Control. Executive
may terminate this Agreement upon thirty (30) days' written notice to Employer
following any "change of control" of PGRT and a resulting "diminution event",
each as defined below, but in no event later than two years after the change of
control event. Executive shall continue to perform, at the election of Employer,
Executive's duties under this Agreement for an additional thirty (30) days
following notice of termination. In such event, Executive shall (A) be paid
Executive's Base Compensation up to the effective date of such termination, (B)
be paid a pro rata portion of any bonus otherwise payable to Executive for or
with respect to the calendar year in which such termination occurs in accordance
with Section 3(b) hereof up to the effective date of such termination and, to
the extent not previously paid, Executive shall be entitled to all bonuses
payable to Executive in accordance with Section 3(b) hereof for or with respect
to any calendar years prior to the calendar year in which such termination
occurs, (C) be entitled to the benefits set forth in Sections 3(c), 3(d), 3(e)
and 3(f) hereof up to the effective date of such termination and (D) receive the
Termination Compensation specified in Section 5(d) hereof. For purposes of
calculating Executive's pro rata portion of any bonus pursuant to clause (B) in
the previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata portion of which Executive shall be entitled to
receive, shall be deemed to be 50% of Executive's then current annual Base
Compensation. For purposes of this Agreement, in the event
6
Employer defaults in its obligation under Section 9 hereof and, as a consequence
thereof, Executive's employment with Employer (or Employer's successor or
assign) terminates, such termination shall be deemed to be a termination under
this Section 5(b)(i).
For purposes of this Section 5(b)(i), (A) a "change of control" of PGRT
shall be deemed to have occurred if: (1) any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), including a "group" as defined in Section 13(d)(3) of the
Exchange Act (but excluding The Prime Group, Inc. or any of its affiliates or
any group in which The Prime Group, Inc. or any of its affiliates has a
significant interest and excluding a trustee or other fiduciary holding
securities under an employee benefit plan of PGRT), becomes the beneficial owner
of shares of beneficial interests of PGRT having at least fifty percent (50%) of
the total number of votes that may be cast for the election of trustees of PGRT;
(2) the merger or other business combination of PGRT or Employer, sale of all or
substantially all of PGRT's or Employer's assets or combination of the foregoing
transactions (a "Transaction"), other than a Transaction immediately following
which the shareholders of PGRT immediately prior to the Transaction continue to
have a majority of the voting power in the resulting entity (excluding for this
purpose any shareholder, other than The Prime Group, Inc. and its affiliates,
owning directly or indirectly more than ten percent (10%) of the shares of the
other company involved in the Transaction); or (3) within any twenty-four (24)
month period beginning on or after the date hereof, the persons who were
trustees of PGRT immediately before the beginning of such period (the "Incumbent
Trustees") shall cease to constitute at least a majority of the Board or a
majority of the board of trustees of any successor to PGRT, provided that, any
trustee who was not a trustee as of the date hereof shall be deemed to be an
Incumbent Trustee if such trustee was elected to the Board by, or on the
recommendation of or with the approval of, at least two-thirds of the trustees
who then qualified as Incumbent Trustees either actually or by prior operation
of this provision, unless such election, recommendation or approval was the
result of an actual or threatened election contest of the type contemplated by
Regulation 14a-11 promulgated under the Exchange Act or any successor provision;
and (B) a "diminution event" shall mean any material diminution in (1) the
duties and responsibilities of Executive (other than a mere title change, unless
the new title is not President) or (2) the compensation package for Executive.
(ii) Without Good Reason. Executive may terminate this Agreement
and Executive's employment at any time for any reason or for no reason at all
upon thirty (30) days' written notice to Employer, during which period Executive
shall continue to perform Executive's duties under this Agreement if Employer so
elects. In connection with the termination of Executive's employment pursuant to
this Section 5(b)(ii), Executive shall (A) be paid Executive's Base Compensation
in accordance with Section 3(a) hereof up to the effective date of such
termination, and, to the extent not previously paid, Executive shall be entitled
to all bonuses payable to Executive in accordance with Section 3(b) hereof for
or with respect to any calendar years prior to the calendar year in which such
termination occurs and (B) be entitled to the benefits set forth in Sections
3(c), 3(d), 3(e) and 3(f) hereof up to the effective date of such termination.
(c) Death. Notwithstanding any other provision of this Agreement, this
Agreement shall terminate on the date of Executive's death. In such event,
Executive shall (A) be
7
paid Executive's Base Compensation in accordance with Section 3(a) hereof up to
the date of such death, (B) be paid a pro rata portion of any bonus otherwise
payable to Executive for or with respect to the calendar year in which such
death occurs in accordance with Section 3(b) hereof up to the effective date of
such death and, to the extent not previously paid, Executive shall be entitled
to all bonuses payable to Executive in accordance with Section 3(b) hereof for
or with respect to any calendar years prior to the calendar year in which such
death occurs and (C) be entitled to the benefits set forth in Sections 3(c) (or
the after-tax cash equivalent), 3(d), 3(e) and 3(f) hereof up to the date of
such death. This Section 5(c) shall not limit the entitlement of Executive,
Executive's estate or beneficiaries under any insurance or other benefits plan
or policy which is maintained by Employer for Executive's benefit. For purposes
of calculating Executive's pro rata portion of any bonus pursuant to clause (B)
in the previous sentence, if the termination takes place prior to receipt by
Executive of any Performance Bonus Distribution, the Performance Bonus
Distribution, a pro rata portion of which Executive shall be entitled to
receive, shall be deemed to be 50% of Executive's then current annual Base
Compensation.
(d) Termination Compensation. In the event of a termination of this
Agreement pursuant to Section 5(a)(i) or 5(b)(i) hereof, Employer shall pay to
Executive, within thirty (30) days of termination, an amount in one lump sum
("Termination Compensation") equal to (i) in the case of a termination pursuant
to Section 5(a)(i) hereof, the product of (A) the sum of (1) Executive's then
current annual Base Compensation and (2) Executive's last annualized Performance
Bonus Distribution times (B) a fraction, the numerator of which is the number of
days between such date of termination and expiration of the Employment Term (but
in no event less than 365) and the denominator of which is 365 or (ii) in the
case of a termination pursuant to Section 5(b)(i) hereof, two times the sum of
(A) Executive's then current annual Base Compensation and (B) Executive's last
annualized Performance Bonus Distribution. For purposes of calculating
Executive's Termination Compensation, if the termination takes place prior to
receipt by Executive of any Performance Bonus Distribution, the Performance
Bonus Distribution component of the Termination Compensation calculation shall
be deemed to be 50% of Executive's then current annual Base Compensation.
6. Covenants of Executive.
(a) No Conflicts. Executive represents and warrants that Executive is
not personally subject to any agreement, order or decree which restricts
Executive's acceptance of this Agreement and the performance of Executive's
duties with Employer hereunder.
(b) Non-Competition. In return for the performance of the management
duties described in Section 1 hereof, during the Employment Term, and for a
period of two years after any applicable Section 5 termination event, Executive
shall not, directly or indirectly, attempt to hire or hire any employee or
client of Employer or solicit or attempt to lease space to or lease space to any
tenant of Employer. Notwithstanding the foregoing, nothing herein shall
prohibit Executive from owning 5% or less of any securities of a competitor
engaged in the same Business if such securities are listed on a nationally
recognized securities exchange or traded over-the-counter on the National
Association of Securities Dealers Automated Quotation System or otherwise.
8
(c) Non-Disclosure. During the Employment Term and for a period of two
years after the expiration or termination of this Agreement for any reason,
Executive shall not disclose or use, except in the pursuit of the Business for
or on behalf of Employer, any Trade Secret (as hereinafter defined) of Employer,
whether such Trade Secret is in Executive's memory or embodied in writing or
other physical form. For purposes of this Section 6(c), "Trade Secret" means any
information which derives independent economic value, actual or potential, with
respect to Employer from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use and is the subject of efforts to maintain its secrecy
that are reasonable under the circumstances, including, but not limited to,
trade secrets, customer lists, sales records and other proprietary commercial
information. Said term, however, shall not include general "know-how"
information acquired by Executive prior to or during the course of Executive's
service which could have been obtained by him from public sources without the
expenditure of significant time, effort and expense which does not relate to
Employer.
(d) Business Opportunities. During the Employment Term, Executive
agrees to bring to Employer any and all business opportunities which come to
Executive's attention for the acquisition, development, management, leasing or
marketing of real estate for industrial or office use. In the event that
Employer elects not to participate or take advantage of any such business
opportunity, upon termination of Executive's employment with Employer for any
reason, Executive shall be free to pursue such business opportunity, provided
that such business opportunity does not cause any tenant to relocate from a
facility owned and/or operated by Employer, PGRT or any of their respective
subsidiaries.
(e) Return of Documents. Upon termination of Executive's services with
Employer, Executive shall return all originals and copies of books, records,
documents, customer lists, sales materials, tapes, keys, credit cards and other
tangible property of Employer within Executive's possession or under Executive's
control.
(f) Equitable Relief. In the event of any breach by Executive of any
of the covenants contained in this Section 6, it is specifically understood and
agreed that Employer shall be entitled, in addition to any other remedy which it
may have, to equitable relief by way of injunction, an accounting or otherwise
and to notify any employer or prospective employer of Executive as to the terms
and conditions hereof.
(g) Acknowledgment. Executive acknowledges that Executive will be
directly and materially involved as a senior executive in all important policy
and operational decisions of Employer. Executive further acknowledges that the
scope of the foregoing restrictions has been specifically bargained between
Employer and Executive, each being fully informed of all relevant facts.
Accordingly, Executive acknowledges that the foregoing restrictions of Section 6
are fair and reasonable, are minimally necessary to protect Employer, its other
partners and the public from the unfair competition of Executive who, as a
result of Executive's performance of services on behalf of Employer, will have
had unlimited access to the most confidential and important information of
Employer, its business and future plans. Executive furthermore acknowledges that
no unreasonable
9
harm or injury will be suffered by him from enforcement of the covenants
contained herein and that Executive will be able to earn a reasonable livelihood
following termination of Executive's services notwithstanding enforcement of the
covenants contained herein.
7. Prior Agreements. This Agreement, together with the Stock Incentive
Plan, supersedes and is in lieu of any and all other employment arrangements
between Executive and Employer or its predecessor or any subsidiary and any and
all such employment agreements and arrangements are hereby terminated and deemed
of no further force or effect.
8. Assignment. Neither this Agreement nor any rights or duties of
Executive hereunder shall be assignable by Executive and any such purported
assignment by him shall be void. Employer may assign all or any of its rights
hereunder provided that substantially all of the assets of Employer are also
transferred to the same party.
9. Successor to Employer. Employer will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all the business and/or assets of Employer, as the case may
be, by agreement in form and substance reasonably satisfactory to Executive,
expressly, absolutely and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that Employer would be
required to perform it if no such succession or assignment had taken place. Any
failure of Employer to obtain such agreement prior to the effectiveness of any
such succession or assignment shall be a material breach of this Agreement
giving Executive the right to terminate this Agreement, in which case Executive
shall be entitled to receive the compensation specified in Section 5(b)(i)
hereof. This Agreement shall inure to the benefit of and be enforceable by
Executive's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die
while any amounts are still payable to Executive hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Executive's devisee, legatee or other designee or, if there be
no such designee, to Executive's estate.
10. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if personally delivered, sent by
courier or by certified mail, postage or delivery charges prepaid, to the
following addresses:
(a) if to Executive, to:
Xxxxxx X. Xxxxxxxxx
_________________________
_________________________
10
With a copy to:
--------------
________________________
________________________
________________________
Attn: ____________________
(b) if to Employer, to:
Prime Group Realty Trust
Suite 3900
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to:
--------------
Prime Group Realty Trust
Suite 3900
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
and to:
------
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Any notice, claim, demand, request or other communication given as provided in
this Section 10, if delivered personally, shall be effective upon delivery; and
if given by courier, shall be effective one (1) business day after deposit with
the courier if next day delivery is guaranteed; and if given by certified mail,
shall be effective three (3) business days after deposit in the mail. Either
party may change the address at which it is to be given notice by giving written
notice to the other party as provided in this Section 10.
11. Amendment. This Agreement may not be changed, modified or amended
except in writing signed by both parties hereto.
12. Waiver of Breach. The waiver by either party of the breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
11
13. Severability. Employer and Executive each expressly agree and
contract that it is not the intention of either party to violate any public
policy, statutory or common law, and that if any covenant, sentence, paragraph,
clause or combination of the same of this Agreement (a "Contractual Provision")
is in violation of the law of any state where applicable, such Contractual
Provision shall be void in the jurisdictions where it is unlawful, and the
remainder of such Contractual Provision, if any, and the remainder of this
Agreement shall remain binding on the parties such that such Contractual
Provision shall be binding only to the extent that such Contractual Provision is
lawful or may be lawfully performed under then applicable laws. In the event
that any part of any Contractual Provision of this Agreement is determined by a
court of competent jurisdiction to be overly broad thereby making the
Contractual Provision unenforceable, the parties hereto agree, and it is their
desire, that such court shall substitute a judicially enforceable limitation in
its place, and that the Contractual Provision, as so modified, shall be binding
upon the parties as if originally set forth herein.
14. Indemnification by Executive. Executive shall indemnify Employer for
any and all damages, costs and expenses resulting from any material harm to
Employer, its business, assets or employees through an act of dishonesty,
material conflict of interest, gross misconduct or willful malfeasance by
Executive. Executive also shall indemnify Employer for any and all damages,
costs and expenses resulting from Executive's acts of omission constituting
reckless disregard of Executive's duties to Employer following notice thereof by
Employer after it becomes aware of such conduct and Executive's failure to so
cure within thirty (30) days.
15. Governing Law. This Agreement shall be governed by, and construed,
interpreted and enforced in accordance with the laws of the State of Illinois,
exclusive of the conflict of laws provisions of the State of Illinois.
[signature page follows]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
EMPLOYER:
PRIME GROUP REALTY L.P.
By: Prime Group Realty Trust,
its General Partner
By:____________________________
Title:___________________________
EXECUTIVE:
_______________________________________
Xxxxxx X. Xxxxxxxxx
Document Number: EXHBT10.9
October 30, 1997
13
