CONTINUITY AGREEMENT
This Agreement (the "Agreement") is dated as of May 12, 1999 by and between
FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Company's Board of Directors (the "Board") considers the
continued services of key executives of the Company to be in the best interests
of the Company and its stockholders; and
WHEREAS, the Board desires to assure, and has determined that it is
appropriate and in the best interests of the Company and its stockholders to
reinforce and encourage the continued attention and dedication of key executives
of the Company to their duties of employment without personal distraction or
conflict of interest in circumstances which could arise from the occurrence of a
change in control of the Company; and
WHEREAS, the Board has authorized the Company to enter into continuity
agreements with those key executives of the Company and any of its respective
subsidiaries (all of such entities, with the Company hereinafter referred to as
an "Employer"), such agreements to set forth the severance compensation which
the Company agrees under certain circumstances to pay such executives; and
WHEREAS, the Executive is a key executive of an Employer and has been
designated by the Board as an executive to be offered such a compensation
continuity agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Executive agree as follows:
1. TERM. This Agreement shall become effective on the date hereof and
remain in effect until the second anniversary thereof; PROVIDED, HOWEVER, that,
thereafter, this Agreement shall automatically renew on each successive
anniversary, unless an Employer provides to the Executive, in writing, at least
120 days prior to the renewal date, notice that this Agreement shall not be
renewed. This Agreement shall terminate upon any termination of employment of
the Executive which occurs prior to a Change in Control (as hereinafter defined)
(other than as provided in Section 3(a)(ii) hereof). Notwithstanding the
foregoing, in the event that a Change in Control (as hereinafter defined) occurs
at any time prior to the termination or expiration of this Agreement in
accordance with the preceding sentences, this Agreement shall not terminate
until the second anniversary of the Change in Control. The termination of the
Executive's employment with any Employer shall not be deemed to be a termination
of employment for purposes of this Agreement if the Executive continues
thereafter to be employed by any other Employer. For purposes of this Agreement,
the foregoing provision shall constitute the "Term" of this Agreement.
2. CHANGE IN CONTROL. No compensation or other benefit pursuant to Section
4 hereof shall be payable under this Agreement unless and until either (i) a
Change in Control shall have occurred while the Executive is an employee of any
Employer and the Executive's employment by such Employer thereafter shall have
terminated in accordance with Section 3(a)(i) hereof or (ii) the Executive's
employment by an Employer shall have terminated in accordance with Section
3(a)(ii) hereof in anticipation of the occurrence of a Change in Control. For
purposes of this Agreement, a "Change in Control" shall be deemed to have
occurred when:
(a) any "Person" as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as used in
Section 13(d) and 14(d) thereof, including a "group" as defined in Section
13(d) of the Exchange Act but excluding the Company and any subsidiary and
any employee benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of such plan acting as trustee), directly
or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), of securities of the Company representing 35% or
more of the combined voting power of the Company's then outstanding
securities (other than indirectly as a result of the Company's redemption
of its securities); PROVIDED, HOWEVER, that, in the event that any such
person becomes the beneficial owner of 35% or more, but not exceeding 50%,
of the combined voting power of the Company's then outstanding securities,
no Change of Control shall be deemed to occur so long as the Incumbent
Directors (as defined below) continue to constitute a majority of the Board
in accordance with the terms of paragraph (c) below; or
(b) the consummation of any merger or other business combination of
the Company, sale of all or substantially all of the Company's assets
(other than with respect to sales of assets in the ordinary course of
business, securitization and whole loan sales provided by the Company's
interim and permanent financing arrangements), liquidation or dissolution
of the Company or combination of the foregoing transactions (the
"Transactions") other than a Transaction immediately following which the
shareholders of the Company and any trustee or fiduciary of any Company
employee benefit plan immediately prior to the Transaction own at least 51%
of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the
purchaser of or successor to the Company's assets (other than with respect
to sales of assets in the ordinary course of business, securitization and
whole loan sales provided by the Company's interim and permanent financing
arrangements); (C) both the surviving corporation and the purchaser in the
event of any combination of Transactions; or (D) the parent company owning
100% of such surviving corporation, purchaser or both the surviving
corporation and the purchaser, as the case may be; or
(c) within any twenty-four-month period, the persons who were
directors immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who commenced or threatened to commence an election
contest or proxy solicitation by or on behalf of a Person (other than the
Board) or who has entered into an agreement to effect a Change in Control
or expressed an intention to cause such a Change in Control).
3. TERMINATION OF EMPLOYMENT; DEFINITIONS.
(a) TERMINATION WITHOUT CAUSE BY THE COMPANY OR FOR GOOD REASON BY THE
EXECUTIVE. (i) The Executive shall be entitled to the compensation provided
for in Section 4 hereof, if within two years after a Change in Control, the
Executive's employment by an Employer shall be terminated (A) by an
Employer for any reason other than (I) the Executive's Disability or
Retirement, (II) the Executive's death or (III) for Cause, or (B) by the
Executive with Good Reason (all of the foregoing terms are hereinafter
defined).
(ii) In addition, the Executive shall be entitled to the
compensation provided for in Section 4 hereof, if the following events
occur: (A) an agreement is signed which, if consummated, would result in a
Change of Control, (B) the Executive is terminated without Cause by an
Employer or terminates employment with Good Reason prior to the anticipated
Change in Control, and (C) such termination (or the action leading to such
termination, in the case of Good Reason) is at the request or suggestion of
the acquiror or merger partner or otherwise in connection with the
anticipated Change in Control, except that any termination of employment as
set forth in clause (B), above, that occurs after the event set forth in
clause (A), above, shall, for purposes of clause (C), above, be presumed,
in the absence of clear and convincing evidence to the contrary, to have
occurred in connection with a Change in Control, whether or not a Change in
Control actually occurs.
(b) DISABILITY. For purposes of this Agreement, "Disability" shall
mean the Executive's absence from the full-time performance of the
Executive's duties (as such duties existed immediately prior to such
absence) for 180 out of 190 consecutive business days, when the Executive
is disabled as a result of incapacity due to physical or mental illness.
(c) RETIREMENT. For purposes of this Agreement, "Retirement" shall
mean the Executive's voluntary termination of employment pursuant to late,
normal or early retirement under a pension plan (which may include a
defined benefit plan or a defined contribution plan) sponsored by an
Employer, as defined in such plan, but only if such retirement occurs prior
to a termination by an Employer without Cause or by the Executive for Good
Reason.
(d) CAUSE. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
a substantial portion of his or her duties with an Employer (other
than any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to such Executive by the Board, which specifically
identifies the manner in which the Board believes that the Executive
has not substantially performed his or her duties;
(ii) the willful engaging by the Executive in gross misconduct
(including, without limitation, fraud or embezzlement); or
(iii) the conviction of, or plea of guilty or NOLO CONTENDERE to,
a felony.
Termination of the Executive for Cause shall be made by delivery to the
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the non-employee members of the Board or of the board of
directors of the ultimate parent of the entity which caused the Change in
Control (if the Company has become a subsidiary) (the "Directors") at a regular
or special meeting of such Directors called and held for such purpose, after 30
days prior written notice to the Executive specifying the basis for such
termination and the particulars thereof and a reasonable opportunity for the
Executive to be heard prior to or at such meeting, finding that in the
reasonable judgment of such Directors, the conduct or event set forth in any of
clauses (i) through (iii) above has occurred and that such occurrence warrants
the Executive's termination.
(e) GOOD REASON. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, within the Term of this Agreement, of any of the
following without the Executive's express written consent:
(i) any material diminution or adverse change in the Executive's
duties, titles or responsibilities with the Company (or any affiliate
thereof) from those in effect immediately prior to any such diminution
or adverse change; PROVIDED, HOWEVER, that no such diminution or
adverse change shall be deemed to exist solely as a consequence of the
Company ceasing to be a company with publicly-traded securities or
becoming a wholly-owned subsidiary of another company;
(ii) any reduction in the Executive's aggregate annual cash
compensation (which shall include annual base salary and annual bonus)
from the Executive's aggregate annual cash compensation in effect
immediately prior to such reduction (which shall include annual base
salary and the Executive's Actual Bonus (as hereinafter defined)
(calculated in respect of the calendar year in which the reduction
occurs);
(iii) any requirement that the Executive be based at a location
more than 35 miles from the Company's headquarters, located in
Scottsdale, Arizona (or a substantial increase in the amount of travel
that the Executive is required to do because of a relocation of the
Company's headquarters from Scottsdale, Arizona);
(iv) any failure by the Company to obtain from any successor to
the Company an agreement reasonably satisfactory to the Executive to
assume and perform this Agreement, as contemplated by Section 10(a)
hereof; or
(v) during the thirty-day period immediately following the first
anniversary of the Change in Control, the Executive voluntarily
terminates his employment for any reason or no reason at all (the
"Thirteenth-Month Termination").
Notwithstanding the foregoing, in the event that the Executive provides the
Company with a Notice of Termination (as defined below) referencing this Section
3(e), except in the event of a Thirteenth-Month Termination, the Company shall
have 30 days thereafter in which to cure or resolve the behavior otherwise
constituting Good Reason. Any good faith determination by the Executive that
Good Reason exists shall be presumed correct and shall be binding upon the
Company.
(f) ACTUAL BONUS; TERMINATION YEAR. "Actual Bonus" shall mean the
highest annual cash bonus payable to the Executive in respect of any of the
three years immediately preceding the Termination Year (except as otherwise
calculated as provided in subsection (ii) of the definition of Good Reason,
as set forth above). "Termination Year" shall mean the year in which the
Executive's termination of employment occurs.
(g) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment (other than on account of Executive's death) with an
Employer shall be communicated by a Notice of Termination to the Executive,
if such termination is by an Employer, or to an Employer, if such
termination is by the Executive. For purposes of this Agreement, "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provisions so
indicated; PROVIDED, HOWEVER, that in connection with a Thirteenth-Month
Termination, no details shall be necessary other than reference to such
provision. For purposes of this Agreement, no purported termination of
Executive's employment with an Employer shall be effective without such a
Notice of Termination having been given.
4. COMPENSATION UPON TERMINATION IN RESPECT OF A CHANGE IN CONTROL.
If during the Term of this Agreement, the Executive's employment by an
Employer shall be terminated in accordance with Section 3(a) (the
"Termination"), the Executive shall be entitled to the following payments and
benefits:
(a) SEVERANCE. The Company shall pay or cause to be paid to the
Executive a cash severance amount equal to three times the sum of (i) the
Executive's annual base salary on the date of the Change in Control (or, if
higher, the annual base salary in effect immediately prior to the giving of
the Notice of Termination), and (ii) the Actual Bonus. This cash severance
amount shall be payable in a lump sum calculated without any discount.
(b) ADDITIONAL PAYMENTS AND BENEFITS. The Executive shall also be
entitled to:
(i) a lump sum cash payment equal to the sum of (A) the
Executive's accrued but unpaid annual base salary through the date of
Termination, (B) the unpaid portion, if any, of the Actual Bonus, PLUS
an amount equal to the Executive's Actual Bonus, pro rated from
January 1 of the Termination Year through the date of the Termination,
and (C) an amount, if any, equal to compensation previously deferred
(excluding any qualified plan deferral) and any accrued vacation pay,
in each case, in full satisfaction of Executive's rights thereto.
(ii) continued medical, dental, vision, and life insurance
coverage (excluding accident, death, and disability insurance) and any
fringe benefit or perquisites in effect immediately prior to the
occurrence of the Change in Control ("Welfare Benefit Coverage") for
the Executive and the Executive's eligible dependents or, to the
extent Welfare Benefit Coverage is not commercially available, such
other arrangements reasonably acceptable to the Executive, on the same
basis as in effect prior to the Change in Control or the Executive's
Termination, whichever is deemed to provide for more substantial
benefits, for a period ending on the earlier of (A) the end of the
three-year period following the date of Termination or (B) the
commencement of comparable coverage by the Executive with a subsequent
employer;
(iii) unless it would adversely affect the Company's ability to
use pooling of interest accounting in a Change in Control transaction
in which such accounting is intended to be used, immediate 100%
vesting of all outstanding stock options, stock appreciation rights
and restricted stock granted or issued by any Employer to the extent
not previously vested on or following the Change of Control; and
(iv) all other accrued or vested benefits in accordance with the
terms of the applicable plan, which vested benefits shall include the
Executive's otherwise unvested account balances in the Company's
401(k) plan, which shall be vested as of the date of Termination (with
an offset for any amounts paid under Section 4(b)(i)(C), above).
All lump sum payments under this Section 4 shall be paid within 10 business
days after Executive's date of Termination.
(c) OUTPLACEMENT. If so requested by the Executive, outplacement
services shall be provided by a professional outplacement provider selected
by Executive; PROVIDED, HOWEVER, that such outplacement services shall be
provided to the Executive at a cost to the Company of not more than fifteen
(15) percent of such Executive's annual base salary.
(d) WITHHOLDING. Payments and benefits provided pursuant to this
Section 4 shall be subject to any applicable payroll and other taxes
required to be withheld.
5. COMPENSATION UPON TERMINATION FOR DEATH, DISABILITY OR RETIREMENT.
If an Executive's employment is terminated by reason of Death, Disability
or Retirement prior to any Termination, Executive will receive:
(a) the sum of (i) Executive's accrued but unpaid salary through the
date of termination of employment, (ii) the pro rata portion of the
Executive's Actual Bonus (calculated from January 1 of the Termination Year
through the date of the termination of the Executive's employment), and
(iii) an amount equal to any compensation previously deferred and any
accrued vacation pay; and
(b) other accrued or vested benefits in accordance with the terms of
the applicable plan (with an offset for any amounts paid under subsection
(a)(iii), above).
6. EXCESS PARACHUTE EXCISE TAX.
(a) (i) If it is determined (as hereafter provided) that any payment
or distribution by the Company or any Employer to or for the benefit of the
Executive, 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, including without
limitation any stock option, stock appreciation right or similar right, or
the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a "Payment"), would be subject to
the excise tax imposed by Section 4999 of the Code (or any successor
provision thereto) by reason of being "contingent on a change in ownership
or control" of the Company, within the meaning of Section 280G of the Code
(or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such excise tax
(such tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment or payments (a "Gross-Up
Payment") in an amount such that, after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(ii) Subject to the provisions of Section 6(a)(i) hereof, all
determinations required to be made under this Section 6, including whether
an Excise Tax is payable by the Executive and the amount of such Excise Tax
and whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the Company prior to the
Change in Control (or, if such Accounting Firm shall be a nationally
recognized firm of certified public accountants, as selected by the
Executive). The Accounting Firm shall be directed by the Company or the
Executive to submit its preliminary determination and detailed supporting
calculations to both the Company and the Executive within 15 calendar days
after the date of termination of employment, if applicable, and any other
such time or times as may be requested by the Company or the Executive. If
the Accounting Firm determines that any Excise Tax is payable by the
Executive, the Company shall pay the required Gross-Up Payment to, or for
the benefit of, the Executive within five business days after receipt of
such determination and calculations. If the Accounting Firm determines that
no Excise Tax is payable by the Executive, it shall, at the same time as it
makes such determination, furnish the Executive with an opinion that he has
substantial authority not to report any Excise Tax on his/her federal,
state, local income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment shall be binding
upon the Company and the Executive absent a contrary determination by the
Internal Revenue Service or a court of competent jurisdiction; PROVIDED,
HOWEVER, that no such determination shall eliminate or reduce the Company's
obligation to provide any Gross-Up Payment that shall be due as a result of
such contrary determination. As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty regarding state or
local tax law at the time of any determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments that will not have been
made by the Company should have been made (an "Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts or fails to pursue its remedies pursuant to Section 6(a)
hereof and the Executive thereafter is required to make a payment of any
Excise Tax, the Executive shall direct the Accounting Firm to determine the
amount of the Underpayment that has occurred and to submit its
determination and detailed supporting calculations to both the Company and
the Executive as promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the Executive
within five business days after receipt of such determination and
calculations.
(iii) The federal, state and local income or other tax returns
filed by the Executive (or any filing made by a consolidated tax group
which includes the Company) shall be prepared and filed on a consistent
basis with the determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall make proper
payment of the amount of any Excise Tax, and at the request of the Company,
provide to the Company true and correct copies (with any amendments) of
his/her federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents
reasonably requested by the Company, evidencing such payment. If prior to
the filing of the Executive's federal income tax return, or corresponding
state or local tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the Executive shall
within five business days pay to the Company the amount of such reduction.
(b) (i) In the event that the Internal Revenue Service claims that any
payment or benefit received under this Agreement constitutes as "excess
parachute payment", within the meaning of Section 280G(b)(1) of the Code,
the Executive shall notify the Company in writing of such claim. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30 day period following the date on which
the Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the
Executive shall (i) give the Company any information reasonably requested
by the Company relating to such claim; (ii) take such action in connection
with contesting such claim as the Company shall reasonably request in
writing from time to time, including without limitation, accepting legal
representation with respect to such claim by an attorney reasonably
selected by the Company and reasonably satisfactory to the Executive; (iii)
cooperate with the Company in good faith in order to effectively contest
such claim; and (iv) permit the Company to participate in any proceedings
relating to such claim; PROVIDED, HOWEVER, that the Company shall bear and
pay directly all costs and expenses (including, but not limited to,
additional interest and penalties and related legal, consulting or other
similar fees) incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for and against any
Excise Tax or other tax (including interest and penalties with respect
thereto) imposed as a result of such representation and any payment of
costs and expenses.
(ii) The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences
with the tax authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed and xxx for a
refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; PROVIDED, HOWEVER, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall advance
the amount of such payment to the Executive on an interest-free basis, and
shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and PROVIDED, FURTHER,
that if the Executive is required to extend the statute of limitations to
enable the Company to contest such claim, the Executive may limit this
extension solely to such contested amount. The Company' s control of the
contest shall be limited to issues with respect to which a corporate
deduction would be disallowed pursuant to Section 280G of the Code and the
Executive 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. In addition, no position may be taken nor any final resolution
be agreed to by the Company without the Executive's consent if such
position or resolution could reasonably be expected to adversely affect the
Executive (including adversely affecting any other tax position of the
Executive unrelated to matters covered hereby).
(iii) If, after the receipt by the Executive of any amount
advanced by the Company in connection with the contest of the Excise Tax
claim, the Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after
taxes applicable thereto); PROVIDED, HOWEVER, if the amount of that refund
exceeds the amount advanced by the Company or it is otherwise determined
for any reason that additional amounts could be paid by the Company to the
Executive without incurring any Excise Tax, any such amount will be
promptly paid by the Company to the Executive. If, after the receipt by the
Executive of an amount advanced by the Company in connection with an Excise
Tax claim, a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify
the Executive in writing of its intent to contest the denial of such refund
prior to the expiration of 30 days after such determination, such advance
shall be forgiven and shall not be required to be repaid and shall be
deemed to be in consideration for services rendered after the date of the
Termination.
(c) The Company and the Executive shall each provide the Accounting
Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(a) hereof.
(d) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Section
6(b) hereof shall be borne by the Company. If such fees and expenses are
initially advanced by the Executive, the Company shall reimburse the
Executive the full amount of such fees and expenses within five business
days after receipt from the Executive of a statement therefor and
reasonable evidence of his/her payment thereof.
7. EXPENSES. In addition to all other amounts payable to the Executive
under this Agreement, the Company shall pay or reimburse the Executive for
reasonable legal fees (including without limitation, any and all court costs and
reasonable attorneys' fees and expenses) as they are incurred by the Executive
in connection with or as a result of any claim, action or proceeding brought by
the Company or the Executive or any other person with respect to or arising out
of this Agreement or any provision hereof; PROVIDED, HOWEVER, that in the case
of an action brought by the Executive, the Company shall have no obligation for
any such legal fees, if the Company is successful in establishing with the court
that the Executive's action was taken in bad faith or was frivolous.
8. OBLIGATIONS ABSOLUTE; NON-EXCLUSIVITY OF RIGHTS; JOINT SEVERAL
LIABILITY.
(a) The obligations of the Company to make the payment to the
Executive, and to make the arrangements, provided for herein shall be
absolute and unconditional and shall not be reduced by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense
or other right which the Company may have against the Executive or any
third party at any time.
(b) Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or
other plan or program provided by the Company or any other Employer and for
which the Executive may qualify, nor shall anything herein limit or reduce
such rights as the Executive may have under any agreements with the Company
or any other Employer.
(c) Each entity included in the definition of "Employer" and any
successors or assigns shall be joint and severally liable with the Company
under this Agreement.
9. NOT AN EMPLOYMENT AGREEMENT; EFFECT ON OTHER RIGHTS.
(a) This Agreement is not, and nothing herein shall be deemed to
create, a contract of employment between the Executive and the Company. The
Company may terminate the employment of the Executive by the Company at any
time, subject to the terms of this Agreement and/or any employment
agreement or arrangement between the Company and the Executive that may
then be in effect.
(b) Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or
any other Employer shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.
10. SUCCESSORS; BINDING AGREEMENT, ASSIGNMENT.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to
expressly, absolutely and unconditionally assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of
the Company to obtain such agreement prior to the effectiveness of any such
succession shall be a material breach of this Agreement and shall entitle
the Executive to terminate the Executive's employment with the Company or
such successor for Good Reason immediately prior to or at any time after
such succession. As used in this Agreement, "Company" shall mean (i) the
Company as hereinbefore defined, and (ii) any successor to all the stock of
the Company or to all or substantially all of the Company's business or
assets (other than with respect to sales of assets in the ordinary course,
securitization and whole loan sales provided by the Company's interim and
permanent financing arrangements) which executes and delivers an agreement
provided for in this Section 10(a) or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law, including
any parent or subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive should die while any amount would be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's estate or designated beneficiary. Neither
this Agreement nor any right arising hereunder may be assigned or pledged
by the Executive.
11. NOTICE. For purpose of this Agreement, notices and all other
communications provided for in this Agreement or contemplated hereby shall be in
writing and shall be deemed to have been duly given when personally delivered,
delivered by a nationally recognized overnight delivery service or when mailed
United States certified or registered mail, return receipt requested, postage
prepaid, and addressed, in the case of the Company, to the Company at:
Franchise Finance Corporation of America
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
and in the case of the Executive, to the Executive at the address set forth on
the execution page at the end hereof.
Either party may designate a different address by giving notice of change
of address in the manner provided above, except that notices of change of
address shall be effective only upon receipt.
12. CONFIDENTIALITY. The Executive shall retain in confidence any and all
confidential information concerning the Company and its respective business
which is now known or hereafter becomes known to the Executive, except as
otherwise required by law and except information (i) ascertainable or obtained
from public information, (ii) received by the Executive at any time after the
Executive's employment by the Company shall have terminated, from a third party
not employed by or otherwise affiliated with the Company or (iii) which is or
becomes known to the public by any means other than a breach of this Section 12.
Upon any termination of employment, the Executive will not take or keep any
proprietary or confidential information or documentation belonging to the
Company.
13. MISCELLANEOUS. No provision of this Agreement may be amended, altered,
modified, waived or discharged unless such amendment, alteration, modification,
waiver or discharge is agreed to in writing signed by the Executive and such
officer of the Company as shall be specifically designated by the Board. No
waiver by either party, at any time, of any breach by the other party of, or of
compliance by the other party with, any condition or provision of this Agreement
to be performed or complied with by such other party shall be deemed a waiver of
any similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. 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 expressly set forth in this Agreement.
14. SEVERABILITY. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each party hereto
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
15. GOVERNING LAW; VENUE. The validity, interpretation, construction and
performance of this Agreement shall be governed on a non-exclusive basis by the
laws of the State of Arizona without giving effect to its conflict of laws
rules. For purposes of jurisdiction and venue, the Company and each Employer
hereby consents to jurisdiction and venue in any suit, action or proceeding with
respect to this Agreement in any court of competent jurisdiction in the state in
which Executive resides at the commencement of such suit, action or proceeding
and waives any objection, challenge or dispute as to such jurisdiction or venue
being proper.
16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
FRANCHISE FINANCE CORPORATION OF AMERICA:
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Title: EVP and General Counsel
----------------------------------
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
Address:
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
