CHANGE OF CONTROL AGREEMENT
This
Agreement dated as of February 2, 2007 between Urstadt Xxxxxx Properties Inc.
(the "Company") and Xxxxxx 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:
| 1. |
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) |
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) |
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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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.
| 2. |
Definitions.
The definitions in Appendix A are hereby incorporated in this
Agreement.
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| 3. |
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. |
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. |
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
base rate
as from time to time in effect at The Bank of New York, until paid
in
full.
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| 6. |
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. |
Notices.
All notices shall be in writing and shall be deemed given five days
after
mailing in the continental United States by registered or 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.
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000
Xxxxxxxx Xxxxxx
|
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Xxxxxxxxx,
Xxxxxxxxxxx 00000
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To
the Employee: At
his home address,
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as
last shown on the
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records
of the Company
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| 8. |
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. |
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. |
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. |
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. |
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. |
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. |
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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This
Space Intentionally
Left
Blank
IN
WITNESS WHEREOF the parties have duly executed the Agreement as of the above
date.
EMPLOYEE:
______________________________
Xxxxxx
X.
Xxxxx
COMPANY:
Urstadt
Xxxxxx Properties Inc.
By:
___________________________
Willing
X. Xxxxxx
President
APPENDIX
A TO CHANGE OF CONTROL AGREEMENT
"Change
of Control" shall mean the occurrence of any one of the following
events:
| (a) |
any
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) |
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) |
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.
|
| (d) |
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 Directors or 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.
“Person”
shall have the meaning used in Section 13(d) of the Exchange Act, as in effect
on January 31, 2007. A Person shall be deemed to be the "owner" of any Common
Shares:
| (a) |
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 January 31, 2007; or
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| (b) |
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 January 31, 2007;
or
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| (c) |
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 January 31, 2007), 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 90 days after the occurrence of any one of the following
events without the Employee's express written consent:
| (a) |
the
assignment to him of any duties inconsistent with his positions,
duties,
responsibilities, reporting requirements, and status with the Company
immediately prior to a Change of Control, or a substantive change
in the
Employee's titles or offices as in effect immediately prior to a
Change of
Control, or any removal of the Employee from or any failure to re-elect
him to such positions, except in connection with the termination
of the
Employee's employment by the Company for Cause or by the Employee
other
than for Good Reason; or any other action by the Company which results
in
a diminishment in such position, authority, duties or responsibilities,
other than an insubstantial and inadvertent action which is remedied
by
the Company promptly after receipt of notice thereof given by the
Employee; or
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| (b) |
if
the Employee's base salary for any fiscal year is less than 100 percent
of
the base salary paid to the Employee in the completed fiscal year
immediately preceding the Change of Control, or if the Employee's
total
cash compensation opportunities, including salary and incentives,
for any
fiscal year are less than 100 percent of the total cash compensation
opportunities made available to the Employee in the completed fiscal
year
immediately preceding the Change of Control;
or
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| (c) |
the
failure of the Company to continue in effect any benefits or perquisites,
or any pension, life insurance, medical insurance or disability plan
in
which the Employee was participating immediately prior to a Change
of
Control unless the Company provides the Employee with a plan or plans
that
provide substantially similar benefits, or the taking of any action
by the
Company that would adversely affect the Employee's participation
in or
materially reduce the Employee's benefits under any of such plans
or
deprive the Employee of any material fringe benefit enjoyed by the
Employee immediately prior to a Change of Control;
or
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| (d) |
any
relocation of the Employee outside Fairfield County, Connecticut
or
Westchester County, New York; or
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| (e) |
the
Company sells or otherwise disposes of, in one transaction or a series
of
related transactions, assets or earning power aggregating more than
50% of
the assets (taken at asset value as stated on the books of the Company
determined in accordance with generally accepted accounting principles
consistently applied) or earning power of the Company to any other
Person
or Persons; or
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| (f) |
any
other breach by the Company of any provision of this Agreement, provided
that the same shall have continued unremedied for a period of 30
days
after the Employee gives notice to the Company requesting that the
Company
remedy the
same.
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