EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN EDUCATION REALTY TRUST, INC. AND THOMAS J. HICKEY JANUARY 1, 2008
Exhibit 10.4
BETWEEN
AND
XXXXXX X. XXXXXX
JANUARY 1, 2008
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and between EDUCATION REALTY TRUST,
INC. (the “Company”), and XXXXXX X. XXXXXX (the “Executive” and, together with the
Company, the “Parties”) is effective as of January 1, 2008 (the “Effective Date”).
“Agreement” shall have the meaning set forth in the introductory paragraph above.
“Application” shall have the meaning set forth in Section 9.
“Base Salary” shall have the meaning set forth in Section 4(a).
“Board” shall have the meaning set forth in Section 2(a).
“Bonus” shall have the meaning set forth in Section 4(b).
“Business” shall mean the business of owning and managing off-campus student housing
communities, providing third-party management services for student housing communities, and
providing third-party development consulting services for student housing communities.
“Cause”, shall mean any one of the following events: (a) Executive’s insubordination;
(b) Executive’s breach of this Agreement; (c) any act or omission by Executive which injures, or is
likely to injure, the Company or the business reputation of the Company; (d) Executive’s
dishonesty, fraud, malfeasance, negligence or misconduct; (e) Executive’s failure to (i)
satisfactorily perform Executive’s duties under this Agreement, (ii) follow the direction of any
individual to whom Executive reports, (iii) abide by the policies, procedures, and rules of the
Company, or (iv) abide by laws applicable to Executive in Executive’s capacity as an employee,
executive, or officer of the Company; (f) Executive’s arrest, indictment for, conviction of, or
entry of a plea of guilty or no contest to, a felony or crime involving moral turpitude; (g)
Executive’s resignation unless such resignation is based upon Good Reason; or (h) Executive’s
refusal to perform duties unless such refusal is based upon Good Reason.
“Change of Control” means (a) the sale, transfer, or other disposition of eighty
percent (80%) or more of the aggregate value of the Company’s assets, as reasonably determined by
the Board, or (b) a sale of fifty percent (50%) or more of the then outstanding voting stock of the
Company in a single transaction or a series of related transactions.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” shall have the meaning set forth in Section 4(a).
“Company” shall have the meaning set forth in the introductory paragraph above.
“Confidential Information” means (a) information of the Company, to the extent not
considered a Trade Secret under applicable law, that (i) relates to the business of the Company,
(ii) possesses an element of value to the Company, (iii) is not generally known to the Company’s
competitors, and (iv) would damage the Company if disclosed, and (b) information of any third party
provided to the Company which the Company is obligated to treat as confidential. Confidential
Information includes, but is not limited to, future business plans, the composition, description,
schematic or design of products, future products or equipment of the Company, communication
systems, audio systems, system designs and related documentation, advertising or marketing plans,
information regarding independent contractors, employees, clients and customers of the Company, and
information concerning the Company’s financial structure and methods and procedures of operation.
Confidential Information shall not include any information that is or becomes generally available
to the public other than as a result of an unauthorized disclosure, has been independently
developed and disclosed by others without violating this Agreement or the legal rights of any
party, or otherwise enters the public domain through lawful means.
“Contact” means any interaction between Executive and a Customer which: (a) takes
place in an effort to establish, maintain, and/or further a business relationship on behalf of the
Company, and (b) occurs during the last year of Executive’s employment with the Company (or during
Executive’s employment if employed less than a year).
“Cure Period” shall have the meaning set forth within the definition of “Good Reason”.
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“Customer” means any person or entity to whom the Company has sold its products or
services, or solicited to sell its products or services.
“Defense Costs” has the meaning set forth in Section 13.
“Duties” means administer all key operating functions of the Management Services Group
consistent with on-site operations and customer’s financial objectives. Seek new fee management
business and maintain continuous dialogue with those property owners.
“Effective Date” shall have the meaning set forth in the introductory paragraph above.
“Employee” means any person who (a) is employed by the Company at the time Executive’s
employment with the Company ends, (b) was employed by the Company during the last year of
Executive’s employment with the Company (or during Executive’s employment if employed less than a
year), or (iii) is employed by the Company during the Restricted Period.
“Employment Period” shall have the meaning set forth in Section 3(a).
“Executive” shall have the meaning set forth in the introductory paragraph above.
“Good Reason” shall exist if (a) the Company, without either cause or Executive’s
written consent, materially reduces Executive’s then current title, duties or responsibilities,
provided, however, that the occurrence of the Change of Control and the corresponding change in
Executive’s duties and responsibilities one (l) or more year(s) after the Change of Control shall
not, by itself, be sufficient to qualify as Good Reason under this clause, (b) Executive provides
written notice to the Company of such action and provides the Company with thirty (30) days to
remedy such action (the “Cure Period”), (c) the Company fails to remedy such action within
the Cure Period, and (d) Executive resigns within ten (10) days of the expiration of the Cure
Period. Good Reason shall not include any isolated, insubstantial or inadvertent action that is not
taken in bad faith, and is remedied by the Company within the Cure Period.
“Incentive Plan” means the Company’s 2004 Incentive Plan.
“Licensed Materials” means any materials that Executive utilizes for the benefit of
the Company, or deliver to the Company or the Company’s customers, which (i) do not constitute Work
Product, (ii) are created by Executive or of which Executive is otherwise in lawful possession, and
(iii) Executive may lawfully utilize for the benefit of, or distribute to, the Company or the
Company’s customers.
“Parties” shall have the meaning set forth in the introductory paragraph above.
“Renewal Period” shall have the meaning set forth in Section 3(b).
“Restricted Period” means the time period during Executive’s employment with the
Company, and for one year after Executive’s employment with the Company ends.
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“Restricted Stock Award” means the Restricted Stock Award Agreement, dated January 31,
2005, between the Company and the Executive, which granted restricted stock to the Executive
pursuant to the Incentive Plan.
“Section 409A Taxes” shall have the meaning set forth in Section 25.
“Separation Conditions” shall have the meaning set forth in Section 6(c).
“Territory” means the Continental United States.
“Trade Secrets” means information of the Company, and its licensors, suppliers,
clients and customers, without regard to form, including, but not limited to, technical or
non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers which is not commonly known by or available to the
public and which information (a) derives economic value, actual or potential, 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 (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
“Unvested Award Shares” shall have the meaning set forth in the Restricted Stock
Award.
“Vested Award Shares” shall have the meaning set forth in the Restricted Stock Award.
“Work Product” means (a) any data, databases, materials, documentation, computer
programs, inventions (whether or not patentable), designs, and/or works of authorship, including
but not limited to, discoveries, ideas, concepts, properties, formulas, compositions, methods,
programs, procedures, systems, techniques, products, improvements, innovations, writings, pictures,
audio, video, images of Executive, and artistic works, and (b) any subject matter protected under
patent, copyright, proprietary database, trademark, trade secret, rights of publicity, confidential
information, or other property rights,- including all worldwide rights therein, that is or was
conceived, created or developed in whole or in part by Executive while employed by the Company and
that either (i) is created within the scope of Executive’s employment, (ii) is based on, results
from, or is suggested by any work performed within the scope of Executive’s employment and is
directly or indirectly related to the Business of the Company or a line of business that the
Company may reasonably be interested in pursuing, (iii) has been or will be paid for by the
Company, or (iv) was created or improved in whole or in part by using the Company’s time,
resources, data, facilities, or equipment.
(a) The Company shall employ Executive as Senior Vice-President — Management Services.
Executive shall perform all duties that are consistent with Executive’s position and that may
otherwise be assigned to Executive by the Company from time to time. Executive shall report
directly to the Board of Directors (the “Board”) of the Company or any other executive
designated by the Board from time to time.
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(b) Executive agrees to (i) devote all necessary working time required of Executive’s
position, (ii) devote Executive’s best efforts, skill, and energies to promote and advance the
business and/or interests of the Company, and (iii) fully perform Executive’s obligations under
this Agreement.
(c) During Executive’s employment, Executive shall not render services to any other entity,
regardless of whether Executive receives compensation, without the prior written consent of the
Company. Executive may, however, (i) engage in community, charitable, and educational activities,
(ii) manage Executive’s personal investments, (iii) continue working with Xxxxx & X’Xxxx, Inc.,
provided, however, that such work does not compete with the Company and does not involve student
housing whatsoever, and (iv) with the prior written consent of the Company, serve on corporate
boards or committees, provided that such activities do not conflict or interfere with the
performance of Executive’s obligations under this Agreement or conflict with the interests of the
company.
(d) Executive agrees to comply with the policies and procedures of the Company as may be
adopted and changed from time to time, including those described in the Company’s employee handbook
and other policies set forth by the Company from time to time. If this Agreement conflicts with
such policies or procedures, this Agreement will control.
(e) As an officer of the Company, Executive owes a duty of care and loyalty to the Company, as
well as a duty to perform such duties in a manner that is in the best interests of the Company.
(a) The term of this Agreement shall be for a period of three (3) years, beginning on the
Effective Date and ending on the third anniversary of the Effective Date (the “Employment
Period”).
(b) Upon expiration of the Employment Period, this Agreement will automatically renew for a
one-year period (each a “Renewal Period’), unless either Party notifies the other Party, in
writing, at least sixty (60) days prior to the end of the Employment Period or the Renewal Period
that the Agreement will not be renewed. If this Agreement is renewed in accordance with this
Section 3, each Renewal Period shall be included in the definition of “Employment Period”
for purposes of this Agreement.
(c) If this Agreement is not renewed in accordance with this Section 3, Executive’s
employment will either (i) terminate, or (ii) convert to an at-will relationship, meaning that
Executive may terminate Executive’s employment with the Company at any time and for any reason
whatsoever simply by notifying the Company, and the Company may terminate Executive’s employment at
any time with or without cause or advance notice.
(d) If this Agreement is not renewed and Executive’s employment converts to an at-will
relationship, then (i) the period in which Executive continues to be employed with the Company
shall not be included in the definition of “Employment Period” for purposes of this Agreement, and
(ii) this Agreement will no longer be in effect; provided, however, that the
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restrictive covenants and all post-termination obligations contained in this Agreement shall
survive termination of this Agreement.
(a) During the Employment Period, the Company will pay to Executive an annual base salary
(“Base Salary”) as determined from time to time by the Compensation Committee of the Board
(the “Committee”), minus applicable withholdings, in accordance with the Company’s normal
payroll practices. Executive’s Base Salary will be adjusted annually at the discretion of the
Committee based upon Executive’s performance and the Company’s performance.
(b) During the Employment Period, Executive will be eligible to receive an annual bonus of up
to 50% of Base Salary only if, as determined by the Committee in its sole discretion, Executive
meets certain criteria established from year to year by the Committee (the “Bonus”).
Executive will not receive any Bonus if Executive does not meet such criteria. The Bonus will be
subject to all applicable withholdings and will be paid between January 1 and March 15 of the year
following the end of the year in which the Bonus was earned.
(c) During the Employment Period, Executive shall be eligible to participate in all benefit
plans in effect for executives and employees of the Company, subject to the terms and conditions of
such plans.
(d) During the Employment Period, Executive shall be entitled to 4 weeks of paid vacation per
calendar year.
(e) During the Employment Period, Executive shall be entitled to receive all other fringe
benefits available to executives of the Company.
(f) During the Employment Period, the Company will reimburse Executive for all approved
business expenses incurred by Executive in the performance of Executive’s duties under this
Agreement in accordance with the policies and procedures of the Company.
(a) Expiration of the Employment Period unless renewed or extended as set forth above;
(b) Mutual written agreement between Executive and the Company at any time;
(c) Executive’s death;
(d) Executive’s disability which renders Executive unable to perform the essential functions
of Executive’s job even with reasonable accommodation;
(e) by the Company for Cause;
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(f) by Executive for Good Reason;
(g) Resignation by Executive without Good Reason; and
(h) Without Cause, which shall mean any termination of employment by the Company which is not
defined in Section 5(a) through Section 5(g) above.
(a) If this Agreement terminates for the reasons set forth in Section 5(a),
Section 5(b), Section 5(e) or Section 5(g) above, then the Company will pay
Executive (i) all accrued but unpaid wages, based on Executive’s then current Base Salary, through
the termination date; and (ii) a payment for all approved, but unreimbursed, business expenses,
provided that a request for reimbursement of business expenses is submitted in accordance with the
Company’s policies and submitted within five (5) business days of Executive’s termination date.
The Company shall have no other obligations to Executive, including under any provision of this
Agreement, Company policy, or otherwise; however, Executive shall continue to be bound by
Section 8 and all other post-termination obligations to which Executive is subject,
including, but not limited to, the obligations contained in this Agreement.
(b) If this Agreement terminates for any of the reasons set forth in Section 5(c),
Section 5(d), Section 5(f) or Section 5(h) above, then the Company will pay
Executive (i) all accrued but unpaid wages through the termination date, based on Executive’s then
current Base Salary; (ii) a separation payment equal to 12 months of Executive’s then current Base
Salary, to be paid over a period of 12 months in accordance with the Company’s regular payroll
practices; (iii) a payment for all accrued but unpaid vacation through Executive’s termination
date, based on Executive’s then current Base Salary; (iv) a payment for all approved, but
unreimbursed, business expenses, provided that a request for reimbursement of business expenses is
submitted in accordance with the Company’s policies and submitted within five (5) business days of
Executive’s termination date; (v) a payment for all earned and accrued but unpaid bonuses; and (vi)
payment of any COBRA continuation coverage premiums required for the coverage of Executive and
Executive’s eligible dependents under the Company’s major medical group health plan for a period of
up to 12 months (or, if less, the period that Executive and Executive’s eligible dependents are
entitled to such COBRA continuation coverage; provided, however that Executive and Executive’s
eligible dependents shall be solely responsible for any requirements which must be satisfied or
actions that must be taken in order to obtain such COBRA continuation coverage other than the
payment of COBRA premiums. Except as set forth in this Section 6(b), the Company shall have
no other obligations to Executive.
(c) The Company’s obligation to provide the payments set forth in Section 6(b) above
shall be conditioned upon the following (the “Separation Conditions”):
(i) Executive’s execution and non-revocation of a separation agreement in a form
prepared by the Company, which will include a general release from liability so that
Executive will release the Company from any and all liability and claims of any kind as
permitted by law; and
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(ii) Executive’s compliance with the restrictive covenants ( Section 8 ) and all
post-termination obligations, including, but not limited to, the obligations contained in
this Agreement.
(d) If Executive does not execute an effective separation agreement as set forth in
Section 6(c) above, the Company will not provide any payments or benefits to Executive
under Section 6(b). The Company’s obligation to make the separation payments set forth in
Section 6(b) shall terminate immediately upon any breach by Executive of any
post-termination obligations to which Executive is subject.
(a) Notwithstanding anything to the contrary in the Incentive Plan or the Restricted Stock
Award, upon a Change of Control, all Unvested Award Shares granted to the Executive pursuant to the
Restricted Stock Award shall immediately, and without any action by the Board or any committee
thereof, vest and become Vested Award Shares.
(b) Notwithstanding the provisions of Section 6 if, within one (1) year following a
Change of Control, the Company terminates Executive’s employment Without Cause pursuant to
Section 5(h), then the Company will pay Executive the following amounts:
(i) all accrued but unpaid wages through the termination date, based on Executive’s
then current Base Salary;
(ii) a separation payment equal to twelve (12) months of Executive’s then current Base
Salary, to be paid within thirty (30) days of Executive’s termination date;
(iii) a payment for all earned and accrued but unpaid bonuses;
(iv) a payment for all approved, but unreimbursed, business expenses, provided that a
request for reimbursement of business expenses is submitted in accordance with the Company’s
policies and submitted within five (5) business days of Executive’s termination date; and
(v) payment of any COBRA continuation coverage premiums required for the coverage of
Executive and Executive’s eligible dependents under the Company’s major medical group health
plan for a period of up to 12 months (or, if less, the period that Executive and Executive’s
eligible dependents are entitled to such COBRA continuation coverage); provided, however
that Executive and Executive’s eligible dependents shall be solely responsible for any
requirements which must be satisfied or actions that must be taken in order to obtain such
COBRA continuation coverage other than the payment of COBRA premiums. The payments and
benefits set forth in this Section 7 shall be provided to Executive in lieu of any
benefits to which Executive may be entitled to receive under Section 6(b) above;
provided, however, that Executive’s right to receive the separation payments and benefits
set forth in this Section 7 shall be subject to the Separation Conditions set forth
in Section 6(c) above. The separation payments and
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benefits set forth in this Section 7 shall constitute full satisfaction of the
Company’s obligations under this Agreement, any Company policy, or otherwise.
(i) Executive represents and warrants that: (A) Executive is not subject to any legal or
contractual duty or agreement that would prevent or prohibit Executive from performing the duties
contemplated by this Agreement or otherwise complying with this Agreement, and (B) Executive is not
in breach of any legal or contractual duty or agreement, including any agreement concerning trade
secrets or confidential information owned by any other party.
(ii) Executive agrees that Executive will not: (A) use, disclose, or reverse engineer the
Trade Secrets or the Confidential Information for any purpose other than the Company’s Business,
except as authorized in writing by the Company; (B) during Executive’s employment with the Company,
use, disclose, or reverse engineer (1) any confidential information or trade secrets of any former
employer or third party, or (2) any works of authorship developed in whole or in part by Executive
during any former employment or for any other party, unless authorized in writing by the former
employer or third party; or (C) upon Executive’s resignation or termination (1) retain Trade
Secrets or Confidential Information, including any copies existing in any form (including
electronic form), which are in Executive’s possession or control, or (2) destroy, delete, or alter
the Trade Secrets or Confidential Information without the Company’s written consent.
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(iii) The obligations under this Section 8 shall remain in effect as long as the
information constitutes a trade secret or Confidential Information under applicable law. The
confidentiality, property, and proprietary rights protections available in this Agreement are in
addition to, and not exclusive of, any and all other rights to which the Company is entitled under
federal and state law, including, but not limited to, rights provided under copyright laws, trade
secret and confidential information laws, and laws concerning fiduciary duties.
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other protection available in the Work Product. At the Company’s request, Executive agrees to
perform, during or after Executive’s employment with the Company, any acts to transfer, perfect and
defend the Company’s ownership of the Work Product, including, but not limited to: (a) executing
all documents (including a formal assignment to the Company) necessary for filing an application or
registration for protection of the Work Product (an “Application”), (b) explaining the
nature of the Work Product to persons designated by the Company, (c) reviewing Applications and
other related papers, or (d) providing any other assistance reasonably required for the orderly
prosecution of Applications. Executive agrees to provide the Company with a written description of
any Work Product in which Executive is involved (solely or jointly with others) and the
circumstances attendant to the creation sufficient of such Work Product.
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cannot be
modified to be enforceable, the provision shall be severed from this Agreement to the extent unenforceable. The remaining provisions and any partially enforceable provisions shall
remain in full force and effect.
20. Governing Law. The laws of the State of Tennessee shall govern this Agreement. If
Tennessee’s conflict of law rules would apply another state’s laws, the Parties agree that
Tennessee law shall still govern.
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To Company:
|
Attention: Chief Executive Officer | |
Education Realty Trust, Inc. | ||
000 Xxx Xxxxx Xxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxxxxxx 00000 | ||
To Executive:
|
Xxxxxx X. Xxxxxx | |
0000 Xxxxxxxx Xxxx | ||
Xxxxxxx, Xxxxxxxxx 00000 |
Notice shall be deemed given and effective when deposited in the U.S. mail , sent to the
receiving party by electronic means or when actually received. Either Party may change the address
to which notices shall be delivered or mailed by notifying the other party of such change in
accordance with this Section.
23. Consent to Jurisdiction and Venue. Executive agree that any claim arising out of
or relating to this Agreement shall be brought in a state or federal court of competent
jurisdiction in Tennessee. Executive consents to the personal jurisdiction of the state and/or
federal courts located in Tennessee. Executive waives (a) any objection to jurisdiction or venue,
or (b) any defense claiming lack of jurisdiction or improper venue, in any action brought in such
courts.
[SIGNATURES ON FOLLOWING PAGE]
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EDUCATION REALTY TRUST, INC. |
||||
By: | /s/ Xxxx X. Xxxxx | |||
Name: | Xxxx X. Xxxxx | |||
Title: | President and Chief Executive Officer | |||
Date: 12/17/07
/s/ Xxxxxx X. Xxxxxx | ||||
Xxxxxx X. Xxxxxx | ||||
Date: 12/17/07
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