Exhibit 10.4
EMPLOYMENT AGREEMENT
PS Business Parks, Inc., a California Corporation (hereinafter referred to
as "Employer") and J. Xxxxxxx Xxxxx, a resident of the State of Maryland
(hereinafter referred to as "Employee"), in consideration of the mutual promises
hereinafter set forth, agree as follows:
ARTICLE 1.
EMPLOYMENT OF EMPLOYEE
1.1 SPECIFIED PERIOD: Employer hereby employs Employee and Employee hereby
accepts employment with Employer for a period of one (1) year beginning the date
last stated below, such period being referred to as the "Employment Term."
ARTICLE 2.
EMPLOYEE'S DUTIES AND OBLIGATIONS
2.1 GENERAL DUTIES: Employee shall serve as Vice President, Director of
Acquisitions/Development of Employer subject to the direction and control of the
Employer's Chief Executive Officer and Board of Directors. Employee shall be
based at the Employer's headquarters, currently 000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, XX 00000, as such may be changed from time to time.
2.2 DEVOTION TO EMPLOYER'S BUSINESS:
2.2.1 Employee shall devote, during the term of this Agreement, all or
substantially all of his professional time, ability and attention to the
business of Employer as is necessary to perform his duties and
responsibilities inherent in his position in a prudent, reasonable and
businesslike manner.
2.2.2 This Agreement, during its term, shall not be interpreted to
prohibit Employee from making passive personal investments, provided that
such investments do not materially interfere with the Employee's duties and
services required by this Agreement, including, but not limited to, the
competitive provisions of SECTION 2.3 hereof.
2.3 COMPETITIVE ACTIVITIES:
2.3.1 Without the consent in writing of employer, Employee shall not,
during the term of his employment engage in activities that compete with
Employer or its affiliate.
2.3.2 If a court or other authority having jurisdiction thereof
determines that the foregoing competitive restriction is too broad or
otherwise unreasonable under applicable law, including with respect to time
or space, the court is hereby requested, directed and authorized by the
parties hereto to revise the foregoing restriction to include the maximum
restriction allowed under the applicable law. The Employee expressly agrees
that his breach of the provisions of SECTION 2.3 would result in
irreparable injuries to Employer, that the remedy at law for any such
breach will be inadequate and that upon breach of this SECTION 2.3
Employer, in addition to all other available remedies, shall be entitled as
a matter of right to injunctive relief in any court of competent
jurisdiction.
2.3.3. Nothing herein shall prevent or prohibit the Employee, during
his Employment, from owning less than five percent (5%) of the outstanding
debt or equity securities of (i) any corporation whose securities are
listed on any national securities exchange or on the Nasdaq Stock Market or
(ii) any mutual fund or co-mingled investment entity registered under the
Investment Company Act.
ARTICLE 3.
OBLIGATIONS OF EMPLOYER
3.1 GENERAL PROVISION: Employer shall provide Employee with the salary.
Incentives and benefits specified in this Agreement and in Exhibit A.
3.2 OFFICE AND STAFF: Employer shall provide Employee with an office,
secretarial support, office equipment, supplies and other facilities and
services reasonably suitable to Employee's position and adequate for the
performance of his duties.
3.3 INDEMNIFICATION:
3.3.1 To the fullest extent permitted by law, Employee shall be
indemnified and held harmless by Employer from and against any and all
losses, claims, damages, liabilities (joint and several), expenses
(including reasonable legal fees and expenses), costs, charges, judgments,
fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings in which Employee may be involved,
or threatened to be involved, as a party or otherwise by reason of
Employee's status as an employee, officer or consultant of Employer if (a)
Employee acted in good faith and in a manner he in good faith believed to
be in, or not opposed to, the best interests of Employer, and, with respect
to any criminal proceedings, had no reasonable cause to believe his conduct
was unlawful, and (b) Employee's conduct did not constitute gross
negligence or willful or wanton misconduct. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that Employee acted in a manner contrary to that specified in
CLAUSE 3.3.1(a) or CLAUSE 3.3.1 (b) above.
3.3.2 To the fullest extent permitted by law, reasonable expenses
(including legal fees and expenses) incurred by Employee in defending any
claim, demand, action, suit or proceeding shall be advanced by Employer
prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by Employer of a written undertaking by or on
behalf of Employee to repay such amount if it shall be determined that
Employee is not entitled to be indemnified as authorized in this Section.
3.3.3 The indemnification provided by this Section shall be in
addition to any other rights which Employee may be entitled under any
agreement, as a matter of law or otherwise, both as to action in Employee's
capacity as an employee or consultant of Employer and to action in any
other capacity.
ARTICLE 4.
COMPENSATION TO EMPLOYEE
4.1 BASE SALARY: As base compensation for the services to be performed
hereunder, Employee shall receive a base annual salary of One hundred and
Forty-Five Thousand Dollars ($145,000) commencing as of the date Employee's
employment begins as specified in SECTION 1.1 of this Agreement. Such base
salary shall be paid pursuant to the general payroll practices of Employer and
shall be subject to increase from time to time, in the sole and absolute
discretion of Employer.
4.2 ANNUAL BONUS:
4.2.1 For each year, or part thereof, of his employment Employee will
be considered for receipt of an annual bonus. The payment and amount of the
bonus shall be determined solely by Employer, in its sole and absolute
discretion. At the discretion of the Chief Executive Officer of Employer,
Employee shall be paid an annual bonus of up to Fifty Thousand Dollars
($50,000) based on satisfaction of goals and objectives to be determined by
the Chief Executive Officer.
4.2.2 If this Agreement is terminated by Employer for cause, Employee
shall not be entitled to an annual bonus for the fiscal year in which that
termination occurs.
4.2.3 TAX WITHHOLDING: Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for federal, state, local and foreign income tax, Social Security
taxes, unemployment insurance taxes, state compensation fund charges, and
all other federal, state, local and foreign taxes, assessments and charges,
as the case may be, now applicable or that may be enacted and become
applicable in the future.
ARTICLE 5.
EMPLOYEE BENEFITS
5.1 VACATION, ILLNESS, LIFE INSURANCE AND OTHER BENEFITS: Employer shall
provide Employee with vacation and illness time off, life insurance, medical
insurance covering Employee and his immediate family, and such other fringe
benefits as are customarily made available to employees of like status and
tenure employed by Employer. Employee has been provided a copy of Employer's
"benefits package", which he has read and understands as the benefits that will
be available to him. Further, Employer reserves the right to change such
benefits package.
5.2 STOCK OPTIONS: Employee has read Employer's stock options and
understands its terms and conditions.
ARTICLE 6.
BUSINESS EXPENSES
6.1 BUSINESS EXPENSES:
6.1.1 Employer shall reimburse Employee for all expenses and
disbursements reasonably incurred by Employee in the performance of
Employee's duties for Employer during the Employment Term.
6.1.2 Each such expenditure shall be reimbursable only if Employee
furnishes to Employer reasonable and adequate written records and other
documentary evidence in accordance with Employer's policies established
from time to time and as requested by federal and state law, and
regulations issued by the appropriate taxing authorities, for the
substantiation of each such expenditure as an income tax deduction.
ARTICLE 7.
TERMINATION OF EMPLOYMENT
7.1 TERMINATION FOR CAUSE:
7.1.1 Employer reserves the right to terminate this Agreement if: (i)
Employee is convicted or pleads nolo contendere to a felony or a crime
involving moral turpitude; (ii) Employee fails to perform Employee's duties
as specified in the Agreement and fails to cure said failure within 15 days
after written notice from Employer; or (iii) Employee commits fraud or
theft against the Employer.
7.1.2 Subject to the notice and cure period set forth in SECTION 7.1.1
above, Employer may at its option terminate this Agreement for the reasons
stated in this Section by giving written notice of termination to Employee
without prejudice to any other remedy to which Employer may be entitled
either at law, in equity or under this Agreement.
7.1.3 Termination under this SECTION 7.1 shall be considered "for
cause" for the purposes of this Agreement.
7.1.4 In the event the Employee's employment is terminated for cause
pursuant to SECTION 7.1.1 the Employer shall pay to the Employee the
compensation, benefits and reimbursement of reasonable expenses otherwise
payable to him as otherwise would have been payable pursuant to this
Agreement through the last day of his actual employment by the Employer.
The Employer shall have no further obligations to the Employee, and the
Employee shall have no further rights, including, without limitation,
rights to any compensation, whatsoever under this Agreement.
7.2 EFFECT OF MERGER, TRANSFER OF ASSETS OR DISSOLUTION:
7.2.1 This Agreement shall terminate by any voluntary or involuntary
dissolution of Employer resulting from either a merger or consolidation in
which Employer is not the consolidated or surviving corporation, or
transfer of all or substantially all of the assets of Employer; provided,
however, that this Section shall not apply in the case of any such merger
or consolidation approved in writing by the Chief Executive Officer of
Employer and in which the surviving or consolidated entity assumes the
obligations of Employer under this Agreement. 7.2.2 Termination under this
Section shall not be considered "for cause" for the purposes of this
Agreement. In the event that the Employee is terminated pursuant to this
Section, Employee shall be entitled to the same severance as if terminated
without cause and, in addition, all options on stock of the Employer
granted to Employee in respect of his employment which have not vested and
become exercisable shall become exercisable at the time of closing of the
transaction which terminates this Agreement pursuant to section 7.2.1
above.
7.3 TERMINATION BY EMPLOYER WITHOUT CAUSE:
7.3.1 Notwithstanding any provision of this Agreement to the contrary,
if Employer terminates this Agreement without cause during its term (i)
Employer shall immediately pay Employee's annual salary and fringe benefits
and reimburse Employee for expenses in each case as set forth herein,
earned or reimbursable and unpaid through the effective date of
termination, and (ii), on the effective date of such termination, Employer
shall also pay Employee, in a lump sum, the present value of the Employee's
annual salary (based on the base salary being earned at the time of the
notice of termination) for the remainder of the Employment Term as would
otherwise be payable (based on a discount rate of 5%), but in no event will
the payment under this (ii) be less than $72,500.00.
7.4 TERMINATION BY EMPLOYEE WITH CAUSE: Employee may terminate his
obligations under this Agreement with cause after fifteen (15) days' written
notice to Employer fully and accurately describing the cause for termination and
Employer fails to cure the breach within such fifteen (15) day period. With
"cause" shall mean a material and continuing breach by Employer in failing to
pay to Employee amounts to which Employee is entitled under this Agreement. In
the event Employee terminates this Agreement pursuant to this Section 7.4 (i)
Employer shall immediately pay employee's annual salary and fringe benefits and
reimburse Employee for expenses in each case as set forth herein, earned or
reimbursable and unpaid through the effective date of termination, and (ii), on
the effective date of such termination, Employer shall also pay Employee, in a
lump sum of` the present value of the Employee's annual salary (based on the
base salary being at the time of the notice of termination) for the remainder of
the Employment Term as would otherwise be payable (based on a discount rate of
5%), but in no event less than $145,000.00.
ARTICLE 8.
GENERAL PROVISIONS
8.1 NOTICES: Any notices to be given hereunder by either party to the other
may be effected by personal delivery in writing or by registered or certified
mail, postage prepaid with return receipt requested, by nationally recognized
overnight courier or by confirmed facsimile at the following addresses or
facsimile numbers:
If to Employee: J. Xxxxxxx Xxxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
If to Employer: PS Business Parks, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Office of General Counsel
Notices delivered personally shall be deemed communicated upon actual
receipt; mailed notices shall be deemed communicated upon receipt of the
mailing; notices sent by overnight courier shall be deemed communicated and
received as of one (1) business day after delivery to the overnight courier; and
notices sent by facsimile shall be deemed communicated and received as of the
time the sender receives written confirmation of the sending of the facsimile.
8.2 ATTORNEYS' FEES AND COSTS: If any action in law or equity is necessary
to enforce or interpret the terms of this Agreement, the non-prevailing party
shall pay the reasonable attorneys' fees and costs of the prevailing party,
unless otherwise provided by law or this Agreement. A party shall not be
considered a prevailing party unless he or it prevails in substantially all of
his or its position under dispute.
8.3 PARTIAL INVALIDITY: If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated.
8.4 APPLICABLE LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of California as now enacted and as may
hereafter be modified and/or amended.
8.5 CONSTRUCTION OF TERMS: The terms and provisions of this Agreement,
which are freely negotiated as between the parties, shall not be construed
either in favor of or against either party in the event of any ambiguity or
uncertainty.
8.6 EMPLOYEE'S CONSULTATION WITH INDEPENDENT ATTORNEY: Employee expressly
acknowledges that Employee has been requested to consult with independent legal
counsel of Employee's choosing to review and have explained to Employee the
legal significance and legal effect of the terms and conditions of this
Agreement prior to Employee's execution of this Agreement. In this regard,
Employee expressly acknowledges that the terms of this Agreement were not forced
upon Employee by Employer, and that the terms of this Agreement were negotiable
and were not "cast in stone," and that Employer has not imposed any time
deadlines upon Employee with regard to the execution of this Agreement.
8.7 ENTIRE AGREEMENT: This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to that
employment in any manner whatsoever. Each party to this Agreement acknowledges
that no representations, inducements, promises or agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement or promise
not contained in this Agreement shall be valid or binding.
8.8 MODIFICATIONS: Any modification of this Agreement will be effective
only if it is in writing and signed by the party to be charged.
8.9 WAIVER: A waiver of any of the terms and conditions hereof shall not be
construed as a general waiver of the same or any other term or condition hereof
or any subsequent breach thereof.
8.10 DISPUTE RESOLUTION: Any controversy or claim arising out of, or
relating to, this Agreement or Employee's employment with Employer shall be
settled by arbitration in Los Angeles, California in accordance with the rules
of the American Arbitration Association then existing, and judgment on the
arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy. Employer and Employee agree to the personal
jurisdiction of any court of competent subject matter jurisdiction in the County
of Los Angeles for the enforcement of any order or judgment related hereto. The
decision of the arbitrator shall be final and binding upon both parties. The
prevailing party in any arbitration shall be entitled to its costs and expenses
(including reasonable attorney's fees) incurred in connection with the
arbitration from the other party. No punitive or exemplary damages may be
awarded by the arbitrator. The foregoing provisions of this Section shall not be
interpreted to restrict either party's right to pursue equitable relief from a
court of competent jurisdiction.
8.11 WAIVER OF JURY TRIAL: BY AGREEING TO ARBITRATE, ALL PARTIES, AS A
PRACTICAL MATTER, HAVE WAIVED THE RIGHT TO JURY TRIAL. The parties hereby waive
trial by jury in any action, proceeding or counterclaim brought by any of them
against any other party on any matters whatsoever arising out of or in any way
connected with this Agreement, provided that all actions brought under this
Agreement shall be brought in the State of California.
WHEREFORE, the parties hereby execute this Agreement this 20th day of May,
1998.
EMPLOYER:
PS BUSINESS PARKS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx.
President and CEO
EMPLOYEE:
/s/ J. Xxxxxxx Xxxxx
--------------------
J. XXXXXXX XXXXX
EXHIBIT A
EMPLOYMENT AGREEMENT FOR
J. XXXXXXX XXXXX
1. 40,000 shares of the Company common stock options with a "strike price" of
$23.50 each, vesting 1/3 for each of the first 3 years of employment.
2. A $30,000 signing bonus payable at the end of the first 30 days of
employment.
3. A moving allowance of up to $20,000 to pay for all costs, incurred after
the effective date of this agreement, related to relocating to Los Angeles,
including, but not limited to moving household effects, transporting an
automobile, house hunting trips and the final trip to transport family
members to Los Angeles.
4. Participation in the Company's profit sharing program.
5. An automobile estimated usage allowance intended to reimburse employee for
use of his business automobile usage.
