1
Exhibit 10(af)
CHANGE IN CONTROL AGREEMENT
---------------------------
First Union Real Estate Equity
and Mortgage Investments
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
February 17, 1998
[Employee]
[Address]
Dear :
First Union Real Estate Equity and Mortgage Investments (the
"Trust") recognizes that the possibility of a change in control of the Trust may
exist and that such possibility, and the uncertainty and distraction such
situations raise among key employees, may work to the detriment of the Trust and
its beneficiaries. Accordingly, the Board of Trustees (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of key employees, including yourself, to
their assigned duties without distraction in the face of the potentially
disturbing circumstances arising from the possibility of a change in control of
the Trust.
In order to induce you to remain in the employ of the Trust until
the termination of your employment in conjunction with a "change in control" of
the Trust (as defined in Section 2 hereof) and to induce you to remain in the
Trust's employ for at least ninety (90) days after a change in control in order
to provide continuity during a transition period, this letter agreement
("Agreement") sets forth the severance benefits which this Trust agrees will be
provided to you in the event your employment with the Trust is terminated within
the two-year period immediately following any change in control of the Trust
either by you for "Good Reason" or by the Trust "Without Cause" (both as defined
in Section 3 hereof). In the event that a change in control of the Trust does
not occur, your severance benefits, if any, shall be determined without regard
to this Agreement.
Nothing herein shall be construed so as to prevent either you or
the Trust from terminating your employment at any time, for cause or otherwise,
subject only to the specific payment and other provisions hereinafter provided
for under certain circumstances in the event a change in control of the Trust
shall have occurred prior to the date your termination becomes effective. In
addition, this Agreement shall be deemed terminated, and of no further force and
effect, in the event that you cease to be a Board-elected officer or an
appointed officer or a key employee of the Trust prior to a change in control of
the Trust. You hereby specifically acknowledge that as of the date of
effectiveness of this Agreement your employment by the Trust is
employment-at-will, subject to termination by you, or by the Trust, at any time
with or without cause. You also acknowledge that such employment-at-will status
cannot be modified except in a specific writing which has been authorized or
ratified by the Board.
1. CONTINUED EMPLOYMENT. Subject to the terms, provisions and
conditions of this Agreement, this confirms that you have advised the Trust
that, in consideration of, among other things, the Trust's entering into this
Agreement with you, it is your present intention to remain in the employ of the
Trust, in the position and with substantially the same duties and
responsibilities that you currently have, or in a position and with such duties
as the Trust and you may hereafter mutually agree in writing, unless and until
there occurs a change in control of the Trust.
2
2. CHANGE IN CONTROL. A "change in control" of the Trust will be
deemed to occur if at any time after the date of the adoption of this Agreement:
(a) Any Person (other than the Trust, any Subsidiary of the
Trust, any employee benefit plan or employee share ownership
plan of the Trust or any Subsidiary of the Trust, or any
Person organized, appointed, or established by the Trust or
any Subsidiary of the Trust for or pursuant to the terms of
any such plan), alone or together with any of its Affiliates
or Associates, becomes the Beneficial Owner of 25% or more
of the shares of beneficial interest, par value $1 per
share, of the Trust ("Shares") then outstanding. For
purposes of this Section 2(a), the terms "Beneficial Owner,"
"Person," "Subsidiary", "Affiliates" and "Associates" have
the meanings given to them in the Rights Agreement, dated as
of March 7, 1990, between the Trust and National City Bank,
as Rights Agent, as amended from time to time.
(b) At any time during a period of 24 consecutive months,
individuals who were trustees at the beginning of the period
no longer constitute a majority of the members of the Board
of Trustees unless the election, or the nomination for
election by the Trust's beneficiaries, of each trustee who
was not a trustee at the beginning of the period is approved
by at least a majority of the trustees who are in office at
the time of the election or nomination and were trustees at
the beginning of the period.
(c) A record date is established for determining beneficiaries
of the Trust entitled to vote upon (A) a merger or
consolidation of the Trust with another business trust, real
estate investment trust, partnership, corporation, or other
entity in which the Trust is not the surviving or continuing
entity or in which all or part of the outstanding Shares are
to be converted into or exchanged for cash, securities, or
other property, (B) a sale or other disposition of all or
substantially all of the assets of the Trust, or (C) the
dissolution of the Trust.
Notwithstanding events set forth above, unless otherwise
determined by a majority vote of the Board, a change in control of
the Trust shall not be deemed to have occurred solely because (i)
the Trust, (ii) an entity of which the Trust directly or
indirectly beneficially owns 50% or more of the entity's voting
stock, or (iii) any employee stock ownership plan or any other
employee benefit plan sponsored by the Trust, either files or
becomes obligated to file a report or proxy statement in response
to Schedules 13D, 14D-1 or 14A, or Form 8-K (or any successor
form), disclosing beneficial ownership by it of Trust Shares,
whether in excess of 20% or otherwise, or because the Trust
reports that a change of control of the Trust has or may have
occurred, or will or may occur in the future, by reason of such
beneficial ownership; and provided further that a change in
control of the Trust shall not have occurred if at least 75% of
the assets of the Trust have been transferred to another entity
which assumes this Agreement and at least a majority of the
Trust's then trustees become trustees or directors of such other
entity.
The first date upon which a change in control of the Trust as
defined above takes place shall be known as the "Effective Date." Anything in
this Agreement to the contrary notwithstanding, if a change in control of the
Trust occurs and if your employment with the Trust is terminated prior to the
date on which the change in control of the Trust occurs, and if it is reasonably
demonstrated by you that such termination (i) was at the request of a third
party who had taken steps reasonably calculated to effect a change in control of
the Trust or (ii) was by the Trust and arose with or in anticipation of a change
in control of the Trust, then for all purposes of this Agreement your employment
shall be deemed to have been terminated by the Trust Without
2
3
Cause under Section 3(f) of this Agreement and the "Effective Date" shall mean
the date immediately prior to the Date of Termination (as defined in Section 3
hereof).
3. TERMINATION OF EMPLOYMENT. Your employment with the Trust shall
or may be terminated, as the case may be, for any of the following reasons:
(a) DEATH. Termination of your employment with the Trust due to
your death;
(b) RETIREMENT. Termination of your employment with the Trust
at or after the attainment of age sixty-five (65);
(c) DISABILITY. Termination of your employment with the Trust
either by you or the Trust, if you become disabled as determined by a physician
acceptable to you and the Trust by reason of physical or mental impairment for
an aggregate of one hundred eighty (180) days (whether business or non-business
days and whether or not consecutive) during any period of twelve consecutive
months to such an extent that you are unable to substantially perform your
duties of employment with the Trust on a full-time basis;
(d) CAUSE. Termination of your employment with the Trust at any
time for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) The willful and continued failure by you to perform
substantially your duties with the Trust or one of
its affiliates (other than for Disability or Good
Reason), after a written demand for substantial
performance is delivered to you by the Board or the
Chief Executive Officer of the Trust which
specifically identifies the manner in which the
Board or Chief Executive Officer believes that you
have not substantially performed your duties;
(ii) Willful, wanton and voluntary action taken by you
without approval of the Board that you know to be
materially adverse to the interest of the Trust and
its beneficiaries, collectively; or
(iii) Your conviction of a felony involving moral
turpitude.
For purposes of this Section 3(d), no act or failure to act shall
be considered "willful" unless it is done, or omitted to be done,
in bad faith or without your reasonable belief that such act or
omission was in the best interests of the Trust. Any act, or
failure to act, based upon authority given you pursuant to a
resolution duly adopted by the Board or based upon the advice of
counsel for the Trust shall be conclusively presumed to be done,
or omitted to be done, in good faith and in the best interests of
the Trust. Termination of your employment with the Trust shall not
be deemed to be for Cause unless and until, in the case of any
failure on your part in respect of clause (i) or (ii) of this
Section 3(d), (x) the Board first gives you written notice
specifying the nature of the failure and the steps that you must
take to cure any such failure, and you fail to take those steps
within 30 days after such notice is given and (y) in the event the
Board deems such failure not to have been cured, there shall have
been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after 30 days' written notice of termination of
employment is provided to you and you are given an opportunity,
together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, you are guilty of
the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
3
4
(e) GOOD REASON. You may terminate your employment with the
Trust for Good Reason; provided that this Agreement shall not apply to, and no
benefits will be paid to you hereunder for, any termination by you within ninety
(90) days after a change in control of the Trust. For purposes of this
Agreement, "Good Reason" shall mean:
(i) The assignment of any duties inconsistent in any
respect with your position (including status,
offices, titles and reporting requirements),
authority, duties or responsibilities, or any other
action by the Trust which results in a diminution in
such position, authority, duties or
responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the
Trust promptly after receipt of notice thereof given
by you;
(ii) Any failure by the Trust following a change in
control of the Trust to continue to provide you with
Base Compensation (as defined below) or employee
benefits which you were entitled to immediately
prior to the Effective Date, other than an isolated,
insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by the Trust
promptly after receipt of notice thereof given by
you;
(iii) The Trust's requiring you to be based at or
generally work from any location other than the
location that you were based at or generally worked
from prior to the Effective Date or the Trust's
requiring you to travel on Trust business to a
substantially greater extent than required
immediately prior to the Effective Date; or
(iv) Any failure by the Trust to comply with and satisfy
Section 10 of this Agreement.
For purposes of this Section 3(e), your good faith determination
of "Good Reason" shall be conclusive.
(f) WITHOUT CAUSE. The Trust may terminate your employment
with the Trust Without Cause. For purposes of this Agreement the term "Without
Cause" shall mean termination of your employment for reasons other than for
Death, Retirement, Disability or Cause.
Except in the case of Retirement or Death, termination of your
employment shall be effective only as of the earliest date (hereinafter referred
to as the "Date of Termination") specified by either you or the Trust in a
written notice of termination ("Notice of Termination") to the other party
hereto. Notwithstanding any provision herein to the contrary, if at any time
prior to a change in control of the Trust you receive notice from the Trust that
you shall be placed in an income continuation status (i.e., where the Trust
agrees to (i) continue to pay your then existing salary or a modified level of
salary continuation and/or all or some of your then existing employee benefits
and (ii) relieve you of your obligation to render services to the Trust), your
employment for the purpose of this Agreement only shall be deemed terminated as
of the date of such notice and no benefits shall be payable to you hereunder.
4. SEVERANCE PAY. If a change in control of the Trust occurs and
within two years thereafter your employment with the Trust is terminated either
by you for Good Reason or by the Trust Without Cause, then in addition to all
other benefits which you have earned prior to such termination or to which you
are otherwise entitled, the Trust shall pay to you as severance pay, in a lump
sum on or before the fifth day following the Date of Termination, the following
amounts:
4
5
(a) your full base salary and other benefits earned or accrued
(e.g., accrued vacation) through the Date of Termination at the rate in effect
ten days prior to the date the Notice of Termination is given, to the extent not
theretofore paid;
(b) an amount equal to the product of (1) the sum of (i) the
higher of (a) your highest annual base salary prior to the Effective Date and
(b) your annual base salary at the highest rate in effect at any time since any
change in control of the Trust and (ii) the higher of (c) your Additional
Compensation (as defined hereafter) for the most recently completed fiscal year
of the Trust, and (d) the arithmetic average of your Additional Compensation for
the most recently completed three fiscal years of the Trust (the sum of such
annual base salary and Additional Compensation shall be referred to as your
"Base Compensation") and (2) the lesser of (i) the [number two] [number one]
[fraction one-half] and (ii) a fraction the numerator of which is the number of
months from and including the month in which the Date of Termination occurs to
and including the month in which you would attain the age sixty-five and the
denominator of which is twelve. The term "Additional Compensation" shall mean
your annual (measured by a calendar year) total incentive compensation,
including the dollar value of awards granted under the Trust's 1994 Long Term
Incentive Performance Plan (as the same may be amended or continued from time to
time, the "Incentive Plan"), commissions, bonuses, amounts deferred under any
non-qualified deferred compensation program of the Trust, including under the
Incentive Plan, and any elective contributions that are made by or on behalf of
you under any plan maintained by the Trust that are not includible in gross
income under Section 125 or 402(e)(3) of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"), but excluding moving or educational
reimbursement expenses, amounts realized from the exercise of any stock options,
and imputed income attributable to any fringe benefit;
(c) in lieu of Trust Shares issuable upon exercise of options
("Options"), if any, granted to you under any Trust share option plan, including
under the Incentive Plan (which Options shall be deemed canceled upon the making
of the payment herein referred to), you shall receive an amount in cash equal to
the aggregate spread between the exercise prices of all such Options that are
outstanding and held by you (whether or not then fully vested or exercisable)
and the higher of (i) the last reported sales price of Trust Shares on the New
York Stock Exchange on the Date of Termination or, if no sales are reported for
that date, for the last day for which sales of Trust Shares were reported, and
(ii) the highest price per Trust Share actually paid in connection with any
change in control of the Trust; and
(d) an amount of cash equal to any unvested portion of your
interest in any of the Trust's tax-qualified pension plans as of the Date of
Termination.
5. WELFARE BENEFIT PLANS. If a change in control of the Trust
occurs and within two years thereafter your employment with the Trust is
terminated either by you for Good Reason or by the Trust Without Cause, then the
Trust shall maintain in full force and effect, for the continued benefit of you
and your dependents for two years after the Date of Termination, all health and
welfare benefits historically provided to you before the Date of Termination,
including health, accident, disability and life insurance at the levels in
effect before the Date of Termination, and such other employee benefit plans,
programs and arrangements (excluding, however, any tax-qualified and
nonqualified retirement plan or program of the Trust), in which you were
entitled to participate immediately prior to the Date of Termination, provided
that your continued participation is possible under the general terms and
provisions of such welfare plans, programs and arrangements, and provided
further with respect to any life insurance benefit which is provided through a
split dollar program, the Trust shall cause the ownership of any such life
insurance policy to be transferred (with any cash value related thereto) to you.
In the event that your participation in any such welfare plan, program or
arrangement is barred, or any such plan, program or arrangement is discontinued
or the benefits thereunder materially reduced, the Trust shall arrange to
provide you with benefits substantially similar to those which you were entitled
to receive under such plans, programs and arrangements immediately prior to the
Date of
5
6
Termination. At the end of the period of coverage hereinabove provided for, you
shall have the option to have assigned to you at no cost and with no
apportionment of prepaid premiums, any assignable insurance owned by the Trust
and relating specifically to you.
6. OUTPLACEMENT SERVICES. If a change in control of the Trust
occurs and within two years thereafter your employment with the Trust is
terminated either by you for Good Reason or by the Trust Without Cause, then the
Trust shall provide you reasonable outplacement services for a period of up to
one year of a nature customarily provided at your executive officer or other
employment level.
7. NO MITIGATION REQUIRED. You shall not be required to mitigate
the amount of any payment or benefit provided for in Section 4 or 5 by seeking
other employment or otherwise. Notwithstanding the foregoing, benefits otherwise
receivable under Section 5 of this Agreement shall be reduced to the extent
that, and for any period during which, you receive substantially similar
benefits from another employer.
8. ADDITIONAL PAYMENTS.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it is determined (as hereafter provided) that any payment or
distribution to or for your benefit, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement or
similar right (any such payment or distribution, a "Payment"), would be subject
to the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto), or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then you shall be entitled to
receive an additional payment or payments (a "Gross-Up Payment") in an amount
such that, after payment by you of all taxes (including federal, state, and
local taxes and any interest or penalties imposed with respect to such taxes and
including any Excise Tax) imposed upon the Gross-Up Payment, you retain (or have
withheld and credited on your behalf for tax purposes) an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(e) hereof, all
determinations required to be made under this Section 8 (including whether an
Excise Tax is payable by you, the amount of such Excise Tax, whether a Gross-Up
Payment is required, and the amount of such Gross-Up Payment), shall be made by
a nationally recognized legal or accounting firm (the "Firm") selected by you in
your sole discretion. You agree to direct the Firm to submit its determination
and detailed supporting calculations to both you and the Trust within 15
calendar days after the Date of Termination, if applicable, or such earlier time
or times as may be requested by you or the Trust. If the Firm determines that
any Excise Tax is payable by you and that a Gross-Up Payment is required, the
Trust shall pay you the required Gross-Up Payment within five business days
after receipt of such determination and calculations. If the Firm determines
that no Excise Tax is payable by you, it shall, at the same time as it makes
such determination, furnish you with an opinion that you have substantial
authority not to report any Excise Tax on your federal income tax return. Any
determination by the Firm as to the amount of the Gross-Up Payment shall be
binding upon you and the Trust. As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision thereto) at
the time of the initial determination by the Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Trust should have been
made (an "Underpayment"). In the event that the Trust exhausts its remedies
pursuant to Section 8(e) hereof and you thereafter are required to make a
payment of any Excise Tax, you may direct the Firm to determine the amount of
the Underpayment (if any) that has occurred and to submit its determination and
detailed supporting calculations to both you and the Trust as promptly as
possible. Any such Underpayment shall be promptly paid by the Trust to you, or
for your benefit, within five business days after receipt of such determination
and calculations.
6
7
(c) You and the Trust shall each provide the Firm access to and
copies of any books, records and documents in the possession of the Trust or
you, as the case may be, reasonably requested by the Firm, and otherwise
cooperate with the Firm in connection with the preparation and issuance of the
determination contemplated by Section 8(b) hereof.
(d) The fees and expenses of the Firm for its services in
connection with the determinations and calculations contemplated by Section 8(b)
hereof shall be borne by the Trust. If such fees and expenses are initially paid
by you, the Trust shall reimburse you the full amount of such fees and expenses
within five business days after receipt from you of a statement therefor and
reasonable evidence of your payment thereof.
(e) You agree to notify the Trust in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Trust of a Gross-Up Payment. Such notification shall be given as promptly as
practicable but no later than ten business days after you actually receive
notice of such claim. You agree to further apprise the Trust of the nature of
such claim and the date on which such claim is requested to be paid (in each
case, to the extent known by you). You agree not to pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period following the date
on which you give such notice to the Trust and (ii) the date that any payment or
amount with respect to such claim is due. If the Trust notifies you in writing
at least five business days prior to the expiration of such period that it
desires to contest such claim, you agree to:
(i) provide the Trust with any written records or
documents in your possession relating to such claim
reasonably requested by the Trust;
(ii) take such action in connection with contesting such
claim as the Trust shall reasonably request in
writing from time to time, including without
limitation accepting legal representation with
respect to such claim by an attorney competent in
respect of the subject matter and reasonably
selected by the Trust;
(iii) cooperate with the Trust in good faith in order
effectively to contest such claim; and
(iv) permit the Trust to participate in any proceedings
relating to such claim;
provided, however, that the Trust shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold you harmless, on an after-tax basis, for
and against any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions of this Section 8(e),
the Trust shall control all proceedings taken in connection with the contest of
any claim contemplated by this Section 8(e) and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim (provided,
however, that you may participate therein at your own cost and expense) and may,
at its option, either direct you to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and you agree to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Trust shall
determine; provided, however, that if the Trust directs you to pay the tax
claimed and xxx for a refund, the Trust shall advance the amount of such payment
to you on an interest-free basis and shall indemnify and hold you harmless, on
an after-tax basis, from any Excise Tax or income tax including interest or
penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for your taxable year with respect to which the
contested amount is claimed
7
8
to be due is limited solely to such contested amount. Furthermore, the Trust's
control of any such contested claim shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and you shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(f) If, after the receipt by you of an amount advanced by
the Trust pursuant to Section 8(e) hereof, you receive any refund with respect
to such claim, you agree (subject to the Trust's complying with the requirements
of Section 8(e) hereof) to promptly pay to the Trust the amount of such refund
(together with any interest paid or credited thereon after any taxes applicable
thereto). If, after your receipt of an amount advanced by the Trust pursuant to
Section 8(e) hereof, a determination is made that you are not entitled to any
refund with respect to such claim and the Trust does not notify you in writing
of its intent to contest such denial of refund prior to the expiration of 30
calendar days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid
pursuant to this Section 8.
9. SECURITY. To secure payment of the benefits herein provided
for, the Trust agrees to maintain an irrevocable escrow account (the "Escrow
Account") at a bank (the "Bank") designated by the Trust and, concurrent with a
change in control of the Trust or immediately after a change in control of the
Trust has occurred, the Trust shall promptly deposit in the Escrow Account cash
or marketable securities having a value of at least 100% of the amounts to be
paid to you by the Trust pursuant to this Agreement. Amounts deposited in the
Escrow Account shall be paid out by the Bank only to you, in such amounts as you
shall certify to the Bank as amounts that the Trust is in default in paying to
you under this Agreement, or to the Trust, to the extent that you and the Trust
have agreed in writing, or in the event the Trust has fully performed its
obligations under this Agreement.
10. SUCCESSORS, BINDING AGREEMENT. The Trust shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Trust, by agreement in form and substance satisfactory to you, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Trust would be required to perform it if no such succession had
taken place. Failure of the Trust to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle you to compensation from the Trust in the same amount and on the
same terms as you would be entitled to hereunder if the Trust had terminated
your employment after a change in control of the Trust occurring at the time of
succession, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Trust" shall mean the Trust as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
10 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law. This Agreement shall inure to the benefit of and
be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisees, legatees,
or other designee or, if there be no such devisee, legatee or other designee, to
your estate.
11. CONTINUED STATUS AS KEY EMPLOYEE. Notwithstanding anything to
the contrary elsewhere contained in this Agreement, if you are now and later
cease to be a Board-elected officer or an appointed officer or key employee of
the Trust, or your position is otherwise reduced by title, compensation or
otherwise prior to a change in control of the Trust, this Agreement shall be
deemed terminated and of no further force and effect.
12. NOTICE. Notices and all other communications provided for in
this Agreement
8
9
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Trust shall be directed to the
attention of the Secretary of the Trust, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
13. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing signed by you and such officer as may be specifically
designated by the Board, provided, that the Trust shall have the right to
terminate its obligations to you under this Agreement by written notice given to
you at any time prior to a change in control of the Trust, so long as such
termination is not done in anticipation of or in connection with a change in
control of the Trust. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement constitutes the entire agreement between the
Trust and you with respect to the subject matter hereof and, except to the
extent a specific compensation program provides for benefits upon a change in
control of the Trust relative to that program, which provisions shall remain in
effect, no agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. To the extent the provisions of
another compensation program that provides for severance benefits upon a change
in control of the Trust are inconsistent with the provisions of this Agreement,
the provisions of this Agreement shall govern unless and to the extent that such
provisions of such other compensation program provide severance benefits more
favorable to you than the severance benefits provided for herein. Without
limiting the generality of the foregoing, this Agreement supersedes and replaces
in its entirety any prior agreement relating to the subject matter hereof. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Ohio.
14. VALIDITY. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. JURISDICTION. In the event of any dispute or controversy
arising under or in connection with this Agreement you and the Trust hereby
irrevocably consent to the jurisdiction of the Common Pleas Court of the State
of Ohio (Cuyahoga County) or the United States District Court for the Northern
District of Ohio.
17. LEGAL FEES AND EXPENSES. It is the intent of the Trust that
you shall not be required to incur the expenses associated with the enforcement
of your rights under this Agreement by arbitration, litigation, other legal
action or negotiation to resolve any disputes because the cost and expenses
thereof would substantially detract from the benefits intended to be extended to
you hereunder. Accordingly, if it should appear to you that the Trust has failed
to comply with any of its obligations under this Agreement or in the event the
Trust or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any arbitration or litigation designed to deny, or
to recover from, you the benefits intended to be provided to you hereunder, the
Trust irrevocably authorizes you from time to time to retain counsel of your
choice, at the expense of the Trust, to represent you in connection with the
initiation or defense of any arbitration, litigation, other legal action or
negotiation to resolve any disputes whether by or against the Trust or any
director, officer, shareholder or other person
9
10
affiliated with the Trust, in any jurisdiction. Notwithstanding any existing or
prior attorney-client relationship between the Trust and such counsel, the Trust
irrevocably consents to your entering into an attorney-client relationship with
such counsel, and in that connection the Trust and you agree that a confidential
relationship shall exist between you and such counsel. The Trust shall also pay
or cause to be paid and shall be solely responsible for any and all attorneys'
and related fees and expenses incurred by you as a result of the Trust's failure
to perform this Agreement or any provision hereof (including this Section 17) or
as a result of the Trust or any person contesting the validly or enforceability
of this Agreement or any provision hereof.
10
11
If this letter correctly sets forth our agreement on the
subject matter hereof, kindly sign and return to the Trust the enclosed copy of
the letter which will then constitute our agreement on this subject.
Sincerely,
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By:
-----------------------------------------
Accepted and agreed to
this ____ day of February, 1998
---------------------------------------
Employee
