EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated March 1, 1996, is
made by and among BRI OP Limited Partnership ("BRI OP"), its General Partner,
Berkshire Realty Company, Inc., a Delaware corporation (the "General Partner"),
and XXXXX X. XXXXXXXX, an individual ("Employee").
WITNESSETH THAT:
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WHEREAS, BRI OP has acquired the advisory services business of Berkshire
Companies Limited Partnership;
WHEREAS, the General Partner manages BRI OP;
WHEREAS, the General Partner is managed by its Board of Directors;
WHEREAS, the Compensation Committee of the Board of Directors is
responsible for negotiating employment contracts with senior management and
staff of the General Partner subject to approval by the Board;
WHEREAS, the General Partner and BRI OP should for management, business
and accountability reasons have the same senior executives;
WHEREAS, BRI OP and the General Partner shall be referred to herein
collectively as the "Company";
WHEREAS, all payments and health and welfare benefits payable hereunder
to Employee will be paid for or provided by BRI OP;
WHEREAS, the Company's principal business is the ownership and operation
of high quality multi-family properties and community and regional shopping
centers;
WHEREAS, BRI OP and the General Partner desire to employ the Employee as
President and Chief Operating Officer of BRI OP and the General Partner,
respectively, on the terms hereinafter set forth; and
WHEREAS, the Employee wishes to be employed by BRI OP and the General
Partner as their President and Chief Operating Officer on the terms hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, BRI OP, the General Partner and the Employee hereby agree as
follows:
1. Employment. The Company will employ Employee, and Employee will
accept such employment, upon the terms and subject to the conditions set forth
in this Agreement.
2. Capacity and Duties. Employee shall serve the Company as its
President and Chief Operating Officer, and his duties and responsibilities shall
be those consistent with these positions, subject to the direction and control
of the Board of Directors of the Company (the "Board of Directors"). Employee
shall report directly to the Chief Executive Officer or such other individual as
may be designated from time to time by the Board of Directors.
3. Obligations of Employee. During the term of his employment under this
Agreement:
(a) Employee shall devote all of his business time and efforts to the
business of the Company and use faithful and diligent efforts to promote the
business interests of the Company and its subsidiaries and affiliates over which
Employee has management responsibility.
(b) Employee shall not, without the prior written consent of the Board of
Directors in each instance, whether as an employee, consultant, independent
contractor or otherwise, be engaged in any other business activities on behalf
of any other person, firm, corporation, partnership, proprietorship or other
entity.
4. Term of Employment; Termination. The term of Employee's employment
hereunder shall commence as of March 1, 1996 ("Commencement Date"), and shall
continue until December 31, 1998 unless terminated prior thereto by the first to
occur of the following (the "Employment Termination Date"):
(a) the delivery by the Company to Employee of written notice of
termination without "cause" (as defined in subsection (b) below). Any
termination of this Agreement within two years of a Change in Control of the
Company (as herein defined) also shall be deemed a termination by the Company.
For purposes of this Agreement, a "Change in Control" of the Company shall mean
(i) the acquisition by any person (other than the Employee), corporation,
partnership or other person or entity of 10% or more beneficial ownership (as
defined in Rule 13d in effect as of such date under the Securities Exchange Act
of 1934) of the outstanding voting stock of the Company; (ii) the merger or
consolidation of the Company and any other corporation or entity; or (iii) the
sale of all or substantially all of the assets of the Company.
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(b) delivery by the Company to Employee of written notice of termination
for "cause". The term "cause" means any termination by the Company by reason of
(i) persistent and willful neglect of material duties by Employee after written
notice and an opportunity to immediately cure such neglect to the satisfaction
of the Board of Directors; (ii) the entry against Employee of a guilty plea, or
a conviction, judgment or order in any proceeding of which Employee had notice
and the opportunity to defend himself before any court relating to (y) a willful
violation of any material law, rule or regulation applicable to the business of
the Company or its subsidiaries or affiliates, unless such breach arises out of
and is consistent with the express written direction of the Board of Directors
or is undertaken with the express prior written consent of the Board of
Directors, or (z) a violation of any law involving fraud, deceit or criminal
misrepresentation; (iii) the entry against Employee of a guilty plea, or a
conviction or judgment in any proceeding of which Employee had notice and the
opportunity to defend himself before any court relating to any charge which
would constitute a felony (other than negligent vehicular homicide) if
convicted; (iv) Employee engaging in any act involving moral turpitude, which
act is, or could reasonably be expected to be, injurious to the financial
interests or reputation of the Company or any of its subsidiaries or affiliates
in any material respect; (v) Employee willfully misappropriating substantial
assets of the Company or any of its subsidiaries or affiliates; (vi) Employee
engaging in gross misconduct which is, or which could reasonably be expected to
be, injurious to the Company or any of its subsidiaries or affiliates in any
material respect; or (vii) Employee breaching any provisions of this Agreement
and such breach has a material adverse effect on the Company after written
notice and an opportunity to immediately cure such breach to the satisfaction of
the Board of Directors, unless such breach arises out of and is consistent with
the express written direction of the Board of Directors or is undertaken with
the express prior written consent of the Board of Directors.
(c) the date one month after the date of the delivery by Employee to the
Company of written notice of termination; provided, however, that if the Company
receives such notice from Employee, the Company shall have the right,
exercisable by written notice to Employee, to accelerate the Employment
Termination Date to such date on or after the date of the Employee's notice to
Company as the Company shall determine in its discretion.
(d) the death of Employee;
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(e) the delivery to Employee of written notice of termination by the
Company if Employee shall suffer a physical or mental disability which renders
Employee, (i) in the reasonable judgment of the carrier if a long-term
disability policy covering the Employee provided by the Company is in force or,
(ii) if no such policy is in force, in the reasonable judgment of the Board of
Directors, unable to perform his duties and obligations under this Agreement for
90 consecutive days or 120 days in any period of 180 consecutive days;
provided, however, that no termination of Employee's employment under this
Agreement shall diminish or affect in any way Employee's rights to payments
provided for hereunder which have accrued to and including the Employment
Termination Date, and provided further, that no termination of Employee's
employment under this Agreement for cause or otherwise (whether such termination
is voluntary or involuntary) shall diminish or affect the Company's obligations
to Employee, or Employee's obligations to the Company, under Section 10 hereof
with respect to Non-Disclosure, Section 11 hereof with respect to the return of
Company property, or Section 12 hereof with respect to Noncompetition.
5. Base Salary; Bonus; Severance Compensation. From the Commencement
Date through the Employment Termination Date, the Company shall pay Employee a
base salary (the "Base Salary") at an annual rate of not less than $325,000
payable in equal bi-weekly payments. During the term hereof the Base Salary may
be increased by the Board of Directors in its sole discretion based upon its
review of the performance of both Employee and the Company.
During the term of this Agreement Employee shall participate in a bonus
plan comparable to the Annual Threshold Target Maximum Bonus Plan under his
prior employment with comparable targets established. The terms and conditions
of the Bonus Plan and payments thereunder, if any, are at the sole discretion of
the Board of Directors. In the event of the termination of Employee's employment
pursuant to subsection 4(a), 4(d) or 4(e) hereof, the Board of Directors will
consider whether in their sole discretion to make a bonus award to Employee on a
pro rata basis for the period of the calendar year prior to the Employment
Termination Date. For calendar year 1996 the Employee's bonus earned will be
prorated with his prior employer and the Company will be responsible for the
payment of Employee's bonus, if any, prorated from March 1, 1996 to year end.
If Employee's employment hereunder is terminated pursuant to subsection
4(a) hereof, the Company shall pay Employee severance compensation in eighteen
(18) monthly payments at the same rate as the Base Salary in effect at the
Employment Termination Date.
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The Company shall deduct from payments of the Base Salary and bonus
amounts sufficient to cover applicable federal, state and local income tax
withholdings, social security and any other amounts which the Company is
required to withhold by applicable law.
6. Stock Options. The Company, as an inducement to Employee to enter
into this Agreement at the Commencement Date shall grant Employee options to
purchase 200,000 shares of the Company's common stock exercisable no later than
ten years following the Commencement Date all as set forth in the Berkshire
Realty Company, Inc. Stock Option Agreement and Non-Qualified Stock Option
Agreement both dated March 1, 1996 (collectively, the "Option Agreement").
Should Employee's employment be terminated for "cause" or for "misconduct" as
those terms are used in the Option Agreement, said Option Agreement provides
that the option must be exercised within thirty days of the Employment
Termination Date. Should Employee's termination occur for other reasons, under
the terms of the Option Agreement, said Option may be exercisable on Employee's
behalf for a period of three (3) years from the Employment Termination Date.
7. Promotion to Chief Executive Officer. If at the sole discretion of the
Board of Directors, the Employee's Capacity and Duties are not changed to that
of Chief Executive Officer of the Company within two years of the Commencement
Date, Employee shall have the right to terminate this Agreement with thirty days
notice as prescribed by Section 20 hereof. If Employee gives said notice,
Employee will have the right to elect (i) to leave the Company's employ and
receive severance compensation in six (6) monthly payments at the same rate as
the Base Salary in effect at the Employment Termination Date, or (ii) to
continue in the capacity of Chief Operating Officer until the shareholder vote
on the Plan of Liquidation required to be presented to the shareholders by
December 31, 1998 pursuant to the General Partner's Restated Certificate of
Incorporation, as amended, and receive his Base Salary and benefits as then in
effect and, in addition, severance compensation in eighteen (18) monthly
payments at the same rate as the Base Salary then in effect.
8. Employee Benefits. From the Commencement Date through the Employment
Termination Date, the Company shall provide health and welfare benefits
including group life insurance, group health and accident insurance, group
long-term disability insurance and a Section 401(k) retirement plan
substantially similar to those received by Employee pursuant to his employment
prior to the Commencement Date. In addition, Employee shall be entitled to a
continuation of health insurance benefits under the Company's group health
insurance program or COBRA, as the case may be, until any severance payments due
Employee hereunder have been paid or the Employee is eligible to participate in
a group health insurance plan with another employer, whichever comes first.
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9. Expense Reimbursement. Employee shall be entitled to reimbursement
from the Company for the reasonable business costs and expenses which he incurs
in connection with the performance of his duties and obligations under this
Agreement provided that the nature and amount of such expenses are incurred and
approved in accordance with the Company's business expense reimbursement policy
in effect from time to time as approved by the Board of Directors.
10. Non-Disclosure. Employee acknowledges that as a result of Employee's
employment by the Company, Employee has and will become informed of, and have
access to, valuable and confidential information of the Company or information
which is not generally known to those outside of the Company (the "Confidential
Information"), including but not limited to trade secrets, ways of business,
technical information, know-how, plans, projections, business opportunities,
proposed acquisitions, proposed dispositions, specifications, and the identity
of partners and stockholders and that this Confidential Information, even though
it may be contributed, developed or acquired by Employee, is the exclusive
property of the Company to be held by Employee in trust and solely for the
Company's benefit. Accordingly, Employee shall not at any time during or
subsequent to his employment by the Company reveal, report, publish, transfer or
otherwise disclose to any person, corporation or other entity, any of the
Confidential Information without the prior written consent of the Board of
Directors, except to responsible officers and employees of the Company and other
responsible persons whom the Board of Directors agrees in writing are in a
contractual or fiduciary relationship with the Company or who have a need for
this information for purposes that are in the best interests of the Company.
These provisions shall not prohibit Employee from disclosing information which
legally is or becomes of general public knowledge from authorized sources other
than Employee.
11. Return of Company Property. Upon the termination of this Agreement,
Employee shall promptly deliver to the Company all property of the Company
including, without limitation, lists, drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials, including those
of a secret or confidential nature, relating to the Company's business that are
in Employee's possession or control. Employee agrees that, upon the request of
the Company, he will represent to the Company that he has complied with the
provisions of this Section at the time he ceases to be an employee of the
Company.
12. Noncompetition.
(a) Employee agrees that during the term of this Agreement and for
one year after the Employment Termination Date, Employee shall not (i) directly
or indirectly solicit any person
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(natural or otherwise) to purchase or sell any multifamily or retail real estate
or a mortgage loan financing such type of real estate if the person being
solicited is or had been a purchaser from or seller to the Company of such type
of property during the twelve (12) months prior to the Employment Termination
Date or (ii) recruit or otherwise solicit or induce any person who is at the
time an employee or consultant of the Company to terminate his employment with,
or otherwise cease his relationship with, the Company, or hire any such employee
or consultant who has left the employ of the Company within one year after
termination of such employee's employment or consultant's relationship with the
Company, provided, however, that Employee may recruit any former employee of the
Company whose employment has been terminated by the Company and, provided
further, that if Employee has terminated his employment of his own volition,
other than pursuant to Section 7 above, this restriction upon recruiting
employees or consultants shall run for two (2) years after the Employment
Termination Date.
(b) During any period that Employee is entitled to receive and is
paid severance compensation in accordance with Section 5 or 7 hereof, if
Employee shall become an employee, officer, director, shareholder, principal,
agent, partner or consultant or otherwise be engaged in or have a financial or
other interest in any business which competes with the Company, or their
respective subsidiaries or affiliates or providers under contract of property
management or administrative services, equipment or facilities (which activity
by the Employee is not prohibited by this Agreement), any base salary received
from such activities shall be set off against any severance pay which he is
entitled to receive from the Company. Notwithstanding the foregoing, Employee
may make personal investments in the equity securities of any publicly traded
company provided that any such investment does not exceed one percent (1%) of
the market capitalization of the class of securities of the company in which his
investment is made.
(c) The restrictions against activities set forth in Section 12(a)
and (b) above are considered by the parties to be reasonable for the purposes of
protecting the business of the Company. If any restriction is found by a court
of competent jurisdiction to be unenforceable because it extends for too long a
period of time, over too broad a range of activities or in too large a
geographic area, that restriction shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.
13. Remedies. Employee acknowledges that the Company would not have an
adequate remedy at law for money damages if the covenants contained in Sections
10, 11 or 12 were not complied with in accordance with their terms, and that any
breach or threatened breach thereof would result in immediate and irrepar-
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able injury to the Company. Therefore, Employee agrees that in the event of a
threatened or anticipated breach or actual breach by Employee of any of the
provisions of Section 10, 11 or 12, the Company shall be entitled (a) to inform
in writing all potential or new employers, partners, shareholders, officers,
directors or borrowers of Employee of the terms of this Agreement and (b) to an
injunction restraining Employee from violating Sections 10, 11 or 12. Employee
covenants and agrees that if he violates any of the covenants and agreements in
Section 10, 11 or 12, the Company shall be entitled to an accounting and
repayment of all profits, compensation, commissions, remuneration or benefits
which Employee directly or indirectly realizes or may realize as a result of or
in connection with any such violation. In addition to any remedies set forth in
this Section, the Company may pursue all other legal or equitable remedies that
may be available to it for a breach or threatened breach, including the recovery
of damages.
14. Successors and Assigns. The Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, that Employee's duties and obligations hereunder may not be
delegated or assigned by him in any manner.
15. Counterparts. This Agreement may be executed in two or more
counterparts, all of which, when taken together, shall constitute one and the
same Agreement.
16. Governing Law. This Agreement, and the validity and interpretation
hereof and the performance by the parties hereto of their respective duties and
obligations hereunder, shall be governed by the laws of The Commonwealth of
Massachusetts without regard to principles of conflicts of laws. Jurisdiction
and venue over any legal action by either party under this Agreement shall be
Boston, Massachusetts.
17. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to make the provision valid and
enforceable under the applicable law, but if any provision of this Agreement
shall be or become invalid or prohibited under any applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
only, without thereby invalidating the remainder of such provisions or the
remaining provisions of this Agreement.
18. Amendments and Modifications. No modification, extension, or waiver
of any provisions hereof or any release of any right hereunder shall be valid,
unless the same is in writing and is consented to by all parties hereto.
19. Entire Agreement. This Agreement and the Exhibit hereto embody the
entire understanding and agreement of the parties hereto relating to the subject
matter hereof.
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20. Notice. All notices, demands or other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered in
person, by United States mail, certified or registered, with return receipt
requested, or by telefax, telegram or telex:
(a) If to the Employee, to:
Xxxxx X. Xxxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telefax number: (000) 000-0000
(b) If to the Company, to:
BRI OP Limited Partnership
Berkshire Realty Company, Inc.
Harbor Plaza
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Telefax number: (000) 000-0000
With a copy to:
Peabody & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Telefax number: (000) 000-0000
or to such other addresses or telefax numbers as the parties may have furnished
to each other by notice pursuant to the provisions of this Section. Any such
notice, demand or other communication shall be deemed to have been given on the
date actually delivered to the address to which it is directed.
21. Captions. Captions and paragraph headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing or interpreting any provision contained herein.
22. Gender. Whenever the singular is used herein and where required by
the context, the same shall include the plural, and the neuter gender shall
include the masculine and feminine genders.
23. Survival. The provisions of Sections 5, 6 and 7, 8 and 9 insofar as
they provide for payments to be made to Employee after termination of this
Agreement and Sections 10 through 13 hereof shall survive the termination of
this Agreement by Employee or
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the Company, whether voluntary of involuntary, or with or without cause.
24. Renewal. This Agreement will renew for a period of one year if
Notice of intent to modify or terminate is not given by either party to the
other no later than thirty (30) days prior to December 31, 1998 or any
subsequent December 31 thereafter. Such notice shall be in the form and to the
address as prescribed by Section 20 of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal effective on the date first above set forth.
BRI OP LIMITED PARTNERSHIP BERKSHIRE REALTY COMPANY, INC.
By: Berkshire Realty Company, Inc.
Its General Partner
By: /s/ J. Xxxx Xxxxxxxx
_____________________________
Its: Chairman of the
Compensation Committee
By: /s/ J. Xxxx Xxxxxxxx
_______________________________
Its: Chairman of the
Compensation Committee
Employee:
/s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
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