Exhibit 10.112
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXX
TABLE OF CONTENTS
Page
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1. Employment.................................................................2
2. Employment Period..........................................................2
3. Services / Place of Employment.............................................3
4. Compensation and Benefits..................................................4
5. Termination of Employment and Change in Control............................6
6. Compensation Upon Termination of Employment By the Company for
Cause or By Executive without Good Reason.................................9
7. Compensation Upon Termination of Employment Upon Death or
Disability...............................................................10
8. Compensation Upon Termination of Employment By the Company
Without Cause or By Executive for Good Reason............................12
9. Change in Control.........................................................13
10. Mitigation / Effect on Employee Benefit Plans and Programs...............17
11. Confidential Information.................................................17
12. Return of Documents......................................................18
13. Noncompete...............................................................19
14. Remedies.................................................................20
15. Indemnification/Legal Fees...............................................21
16. Successors and Assigns...................................................22
17. Timing of and No Duplication of Payments.................................23
18. Modification or Waiver...................................................24
19. Notices..................................................................24
20. Governing Law............................................................25
21. Severability.............................................................25
22. Legal Representation.....................................................25
23. Counterparts.............................................................25
24. Headings.................................................................26
25. Entire Agreement.........................................................26
26. Survival of Agreements...................................................26
ii
XXXXXX X. XXXX
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
December , 1997, by and between Xxxxxx X. Xxxx, an individual residing in
the State of New Jersey ("Executive"), and Xxxx-Xxxx Realty Corporation, a
Maryland corporation with offices at 00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx
00000 (the "Company").
RECITALS
Whereas, Executive held the positions of Chief Executive Officer and
President of the Company and served as a member of the Board of Directors of
the Company (the "Board") pursuant to his prior employment agreement dated as
of January 21, 1997 (the "Prior Agreement") and prior thereto and, through
such service, has acquired special and unique knowledge, abilities and
expertise;
Whereas, in connection with the combination of Cali Realty Corporation
with the Xxxx Companies (the "Xxxx Combination") the Prior Agreement is
canceled effective as of the closing of the Xxxx Combination; and
Whereas, the Company desires to continue to employ Executive as Chief
Executive Officer and to have Executive serve as a member of the Board, and
Executive desires to continue to be employed by the Company as Chief
Executive Officer and serve as a member of the Board pursuant to the terms of
the Agreement.
Now, Therefore, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. Employment.
The Company hereby agrees to employ Executive, and Executive hereby
agrees to accept such employment during the period and upon the terms and
conditions set forth in this Agreement.
2. Employment Period.
(a) Except as otherwise provided in this Agreement to the contrary,
the terms and conditions of this Agreement shall be and remain in effect
during the period of employment (the "Employment Period") established under
this Paragraph 2. The initial Employment Period shall be for a term
commencing on the date of this Agreement and ending on the fifth anniversary
of the date of this Agreement provided, however, that commencing on the day
after the date of this Agreement and on each day thereafter, the Employment
Period shall be extended for one additional day so that a constant five (5)
year Employment Period shall be in effect, unless (i) the Company or
Executive elects not to extend the term of this Agreement by giving written
notice to the other party in accordance with Paragraph 19, in which case,
subject to the provisions of sub-paragraph 5(a)(iv) below, the term of this
Agreement shall become fixed and shall end on the fifth anniversary of the
date of such written notice ("Notice of Non-Renewal"), or (ii) Executive's
employment terminates hereunder.
(b) Notwithstanding anything contained herein to the contrary: (i)
Executive's employment with the Company may be terminated by the Company or
Executive during the Employment Period, subject to the terms and conditions
of this Agreement; and (ii) nothing in this Agreement shall mandate or
prohibit a continuation
2
of Executive's employment following the expiration of the Employment Period
upon such terms and conditions as the Board and Executive may mutually agree.
(c) If Executive's employment with the Company is terminated, for
purposes of this Agreement the term "Unexpired Employment Period" shall mean
the period commencing on the date of such termination and ending on the last
day of the Employment Period.
3. Services / Place of Employment.
(a) Services. During the Employment Period, Executive shall hold
the position of Chief Executive Officer of the Company and shall serve as a
member of the Board. Executive shall devote his best efforts and
substantially all of his business time, skill and attention to the business
of the Company (other than absences due to vacation, illness, disability or
approved leave of absence), and shall perform such duties as are customarily
performed by similar executive officers and as may be more specifically
enumerated from time to time by the Board or Executive Committee of the
Board; provided, however, that the foregoing is not intended to (a) preclude
Executive from (i) owning and managing personal investments, including real
estate investments, subject to the restrictions set forth in Paragraph 13
hereof or (ii) engaging in charitable activities and community affairs, or
(b) restrict or otherwise limit Executive from conducting real estate
development, acquisition or management activities with respect to those
properties described in Schedule A, attached hereto, (the "Excluded
Properties"), provided that the performance of the activities referred to in
clauses (a)
3
and (b) does not prevent Executive from devoting substantially all of his
business time to the Company.
(b) Place of Employment. The principal place of employment of
Executive shall be at the Company's principal executive offices in Cranford,
New Jersey.
4. Compensation and Benefits.
(a) Salary. During the Employment Period, the Company shall pay
Executive a minimum annual base salary in the amount of $1,050,000 (the
"Annual Base Salary") payable in accordance with the Company's regular
payroll practices. Executive's Annual Base Salary shall be reviewed annually
in accordance with the policy of the Company from time to time and may be
subject to upward adjustment based upon, among other things, Executive's
performance, as determined in the sole discretion of the Option and Executive
Compensation Committee of the Board (the "Compensation Committee"). In no
event shall Executive's Annual Base Salary in effect at a particular time be
reduced without his prior written consent.
(b) Incentive Compensation/Bonuses. In addition, Executive shall
be eligible for incentive compensation payable each year in such amounts as
may be determined by the Compensation Committee based upon, among other
factors, growth in Funds from Operations per Common Share (as hereinafter
defined) for the year. Executive shall be entitled to receive such bonuses
and options to purchase shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock") as the Board or the Compensation Committee
as the case may be shall approve, in its
4
sole discretion, including, without limitation, options and bonuses
contingent upon Executive's performance and the achievement of specified
financial and operating objectives for Funds from Operations per Common
Share. For purposes of this Agreement, "Funds from Operations per Common
Share" for any period shall mean (i) net income (loss) before minority
interest of unit holders, computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains (or losses) from debt
restructuring and sale of property, plus real estate return, depreciation and
amortization as calculated in accordance with the National Association of
Real Estate Investment Trusts definition published in March 1995, as amended
from time to time, and as applied in accordance with the accounting practices
and policies of the Company in effect from time to time on a consistent basis
to the entire Employment Period, divided by (ii) the sum of (A) the primary
weighted average number of outstanding shares of Common Stock as it appears
in the Company's financial statement for the applicable period and (B) the
primary weighted average number of outstanding common limited partnership
units ("Common OP Units") of Xxxx-Xxxx Realty, L.P., a Delaware limited
partnership (the "Partnership") of which the Company is the sole general
partner, for the applicable period. All classes of preferred stock which are
convertible into Common Stock and all classes of preferred or other units
which are convertible into Common OP Units shall be treated as if they have
been converted into Common Stock or Common OP Units and shall be included in
the denominator, irrespective of any waiting period which must elapse prior
to conversion.
(c) Taxes and Withholding. The Company shall have the right to
deduct and withhold from all compensation all social security and other
federal, state
5
and local taxes and charges which currently are or which hereafter may be
required by law to be so deducted and withheld.
(d) Additional Benefits. In addition to the compensation specified
above and other benefits provided pursuant to this Paragraph 4, Executive
shall be entitled to the following benefits:
(i) participation in the Employee Stock Option Plan of Cali Realty
Corporation, the Cali Realty Corporation 401(k) Savings and
Retirement Plan (subject to statutory rules and maximum
contributions and non-discrimination requirements applicable to
401(k) plans) and such other benefit plans and programs ,
including but not limited to restricted stock, phantom stock
and/or unit awards, loan programs and any other incentive
compensation plans or programs (whether or not employee benefit
plans or programs), as maintained by the Company from time to time
and made generally available to executives of the Company with
such participation to be consistent with reasonable Company
guidelines;
(ii) participation in any health insurance, disability insurance, paid
vacation, group life insurance or other welfare benefit program
made generally available to executives of the Company; and
(iii) participation in the security plan and reimbursement for
reasonable business expenses incurred by Executive in furtherance
of the interests of the Company.
5. Termination of Employment and Change in Control.
(a) Executive's employment hereunder may be terminated during the
Employment Period under the following circumstances:
(i) Cause. The Company shall have the right to terminate Executive's
employment for Cause upon Executive's: (A) willful and continued
failure to use best efforts to substantially perform his duties
hereunder (other than any such failure resulting from Executive's
incapacity due to physical or mental illness) for a period of
thirty (30) days after written demand for substantial performance
is delivered by the Company specifically identifying the manner
in which the Company believes Executive has not substantially
6
performed his duties; (B) willful misconduct and/or willful
violation of Paragraph 11 hereof, which is materially
economically injurious to the Company and the Partnership taken
as a whole; (C) the willful violation of the provisions of
Paragraph 13 hereof; or (D) conviction of, or plea of guilty to a
felony. For purposes of this sub-paragraph 5(a), no act, or
failure to act, on Executive's part shall be considered "willful"
unless done, or omitted to be done, by him (I) not in good faith
and (II) without reasonable belief that his action or omission
was in furtherance of the interests of the Company.
(ii) Death. Executive's employment hereunder shall terminate upon his
death.
(iii) Disability. The Company shall have the right to terminate
Executive's employment due to "Disability" in the event that
there is a determination by the Company, upon the advice of an
independent qualified physician, reasonably acceptable to
Executive, that Executive has become physically or mentally
incapable of performing his duties under this Agreement and such
disability has disabled Executive for a cumulative period of one
hundred eighty (180) days within a twelve (12) month period.
(iv) Good Reason. Executive shall have the right to terminate his
employment for "Good Reason": (A) upon the occurrence of any
material breach of this Agreement by the Company which shall
include but not be limited to; an assignment to Executive of
duties materially and adversely inconsistent with Executive's
status as Chief Executive Officer or a member of the Board or a
material or adverse alteration in the nature of or diminution in
Executive's duties and/or responsibilities, reporting obligations,
titles or authority; (B) upon a reduction in Executive's Annual
Base Salary or a material reduction in other benefits (except for
bonuses or similar discretionary payments) as in effect at the
time in question, a failure to pay such amounts when due or any
other failure by the Company to comply with Paragraph 4 hereof;
(C) within six (6) months following the date a Notice of
Non-Renewal is issued by the Company pursuant to Paragraph 2
hereof; (D) on or within six (6) months following a Change in
Control (as hereinafter defined) in accordance with the provisions
set forth in sub-paragraph 5(a)(vii) hereof; (E) any purported
termination of Executive's employment for Cause which is not
effected pursuant to the procedures of sub-paragraph 5(a)(i)
(and for purpose of this Agreement, in the event of such failure
to comply, no such purported termination shall be effective); (F)
upon the relocation of the Company's principal executive offices
or Executive's own office location to a location
7
more than thirty (30) miles away from Cranford, New Jersey; or (G)
failure to be appointed or reappointed as a member of the Board.
(v) Without Cause. The Company shall have the right to terminate the
Executive's employment hereunder without Cause subject to the
terms and conditions of this Agreement.
(vi) Without Good Reason. The Executive shall have the right to
terminate his employment hereunder without Good Reason subject to
the terms and conditions of this Agreement.
(vii) Change in Control. Executive shall have the right to terminate
his employment hereunder on or within six (6) months following a
Change in Control. Such termination shall be deemed a
termination for Good Reason hereunder. For purposes of this
Agreement "Change in Control" shall mean that any of the
following events has occurred: (A) any "person" or "group" of
persons, as such terms are used in Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than any employee benefit plan sponsored by the Company,
becomes the "beneficial owner", as such term is used in Section
13 of the Exchange Act, (irrespective of any vesting or waiting
periods) of (I) Common Stock or any class of stock convertible
into Common Stock and/or (II) Common OP Units or preferred units
or any other class of units convertible into Common OP Units, in
an amount equal to twenty (20%) percent or more of the sum total
of the Common Stock and the Common OP Units (treating all classes
of outstanding stock, units or other securities convertible into
stock units as if they were converted into Common Stock or Common
OP Units as the case may be and then treating Common Stock and
Common OP Units as if they were a single class) issued and
outstanding immediately prior to such acquisition as if they were
a single class and disregarding any equity raise in connection
with the financing of such transaction; (B) any Common Stock is
purchased pursuant to a tender or exchange offer other than an
offer by the Company; (C) the dissolution or liquidation of the
Company or the consummation of any merger or consolidation of the
Company or any sale or other disposition of all or substantially
all of its assets, if the shareholders of the Company and
unitholders of the Partnership taken as a whole and considered as
one class immediately before such transaction own, immediately
after consummation of such transaction, equity securities and
partnership units possessing less than fifty (50%) percent of the
surviving or acquiring company and partnership taken as a whole;
or (D) a turnover, during any two (2) year period, of the
majority of
8
the members of the Board, without the consent of the
remaining members of the Board as to the appointment of the new
Board members.
(b) Notice of Termination. Any termination of Executive's
employment by the Company or any such termination by Executive (other than on
account of death) shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a 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 Executive's employment under the provision so indicated. In
the event of the termination of Executive's employment on account of death,
written Notice of Termination shall be deemed to have been provided on the
date of death.
6. Compensation Upon Termination of Employment By the Company for
Cause or By Executive without Good Reason.
In the event the Company terminates Executive's employment for Cause or
Executive terminates his employment without Good Reason, the Company shall
pay Executive any unpaid Annual Base Salary at the rate then in effect
accrued through and including the date of termination. In addition, in such
event, Executive shall be entitled (i) to receive any earned but unpaid
incentive compensation or bonuses and (ii) to exercise any options which have
vested and are exercisable in accordance with the terms of the applicable
option grant agreement or plan.
Except for any rights which Executive may have to unpaid salary amounts
through and including the date of termination, earned but unpaid incentive
9
compensation or bonuses and vested options, the Company shall have no further
obligations hereunder following such termination. The aforesaid amounts
shall be payable in full immediately upon such termination.
7. Compensation Upon Termination of Employment Upon Death or
Disability.
In the event of termination of Executive's employment as a result of
either Executive's death or Disability, the Company shall pay to Executive,
his estate or his personal representative (i) the unpaid Annual Base Salary
at the rate then in effect through the end of the Unexpired Employment Period
(the "Annual Base Salary Payment"); (ii) a pro-rata portion, based upon the
number of days in the period beginning with the date of the termination of
Executive's employment due to death or Disability and ending with the last
day of the Unexpired Employment Period, of the cash equivalent of the average
annual amount of all other compensation based on the average of the last two
(2) calendar years immediately preceding the year in which Executive's
termination of employment occurs including, without limitation, incentive
compensation payments, bonuses and stock based compensation (e.g., stock
options, restricted stock awards, etc.) paid, granted or accreted to
Executive during such years (the "Pro-Rata Portion of Other Compensation")
and (iii) reimbursement of expenses incurred prior to date of termination
("Expense Reimbursement"). The aforesaid amounts shall be payable in cash
without discount for early payment, at the option of Executive, his estate or
his personal representative, either in full immediately upon such termination
or monthly over the Unexpired Employment Period (the "Payment
10
Election"). In the event of termination of employment due to Disability,
Executive shall also receive continuation of health coverage through the end
of the Unexpired Employment Period on the same basis as health coverage is
provided by the Company for active employees and as may be amended from time
to time ("Medical Continuation").
In addition, all (A) incentive compensations payments or programs of any
nature whether stock based or otherwise that are subject to a vesting
schedule including without limitation restricted stock, phantom stock, units
and any loan forgiveness arrangements granted to Executive ("Incentive
Compensation") shall immediately vest as of the date of such termination
("Vested Incentive Compensation") and (B) options granted to Executive shall
immediately vest as of the date of such termination (the "Vested Options")
and Executive shall be entitled at the option of Executive, his estate or his
personal representative, within one (1) year of the date of such termination,
to exercise any options which have vested (including, without limitation, by
acceleration in accordance with the terms of this Agreement, the applicable
option grant agreement or plan) and are exercisable in accordance with the
terms of the applicable option grant agreement or plan and/or any other
methods or procedures for exercise applicable to optionees or to require the
Company (upon written notice delivered within one hundred eighty (180) days
following the date of Executive's termination) to repurchase all or any
portion of Executive's vested options to purchase shares of Common Stock at a
price equal to the difference between the Repurchase Fair Market Value (as
hereinafter defined) of the shares of Common Stock for which the options to
be repurchased are exercisable and the exercise price of such options as of
the date of Executive's termination of employment (the "Vested Option
Exercise
11
Election"). In the event of a conflict between any option grant agreement or
plan and this Agreement, the terms of this Agreement shall control.
Except for any rights which Executive may have to all of the above
including the Annual Base Salary Payment, the Pro-Rata Portion of Other
Compensation, Vested Incentive Compensation, Vested Options, Expense
Reimbursement and in the event of a termination of employment due to
Disability, Medical Continuation, the Company shall have no further
obligations hereunder following such termination.
For purposes of this Agreement, "Repurchase Fair Market Value" shall mean
the average of the closing price on the New York Stock Exchange (or such
other exchange on which the Common Stock is primarily traded) of the Common
Stock on each of the trading days within the thirty (30) days immediately
preceding the date of termination of Executive's employment.
8. Compensation Upon Termination of Employment By the Company Without
Cause or By Executive for Good Reason.
In the event the Company terminates Executive's employment for any reason
other than Cause or Executive terminates his employment for Good Reason, the
Company shall pay to Executive and Executive shall be entitled to receive the
greater of (i) ten million dollars ($10,000,000) with such amount subject
only to upwards adjustment from time to time by the Compensation Committee
(the "Fixed Amount") or (ii) the sum total of (A) the Annual Base Salary
Payment and (B) the Pro-Rata Portion of Other Compensation. The aforesaid
amount shall be payable in cash without discount
12
for early payment, at the option of Executive, either in full immediately
upon such termination or monthly over the Unexpired Employment Period.
In addition, the Executive shall be entitled to receive Vested Incentive
Compensation, Vested Options exercisable pursuant to the Vested Option
Exercise Election, Medical Continuation, and Expense Reimbursement.
Executive understands that any options exercised more than ninety (90) days
following the date of his termination of employment which were granted as
incentive stock options shall automatically be converted into non-qualified
options.
Except for any rights which Executive may have to Vested Incentive
Compensation, Vested Options, Medical Continuation and Expense Reimbursement
and either the Fixed Amount or in lieu thereof to the Annual Base Salary
Payment, and the Pro-Rata Portion of Other Compensation (as defined in
Paragraph 7), the Company shall have no further obligations hereunder
following such termination. The parties both agree that the agreement to make
these payments was consideration and an inducement to obtain Executive's
consent to enter into this Agreement. The payments are not a penalty and
neither party will claim them to be a penalty. Rather, the payments
represent a fair approximation of reasonable amounts due to Executive for the
Employment Period.
9. Change in Control.
(a) Options. Any Incentive Compensation and options granted to
Executive that have not vested as of the date of a Change in Control shall
immediately vest upon the date of the Change in Control. Neither the
occurrence of a Change in Control, nor
13
the vesting in any options as a result thereof shall require Executive to
exercise any options. In the event of a conflict between any Incentive
Compensation grant agreement or program or any option grant agreement or plan
and this Agreement, the terms of this Agreement shall control.
(b) Upon Termination. In the event Executive terminates his
employment on or following a Change in Control as set forth in sub-paragraph
5(a)(vii), the Company shall pay to Executive and Executive shall be entitled
to all the payments and rights Executive would have had if Executive had
terminated his employment with Good Reason as set forth in Paragraph 8.
The aforesaid amount shall be payable in accordance with Executive's
Payment Election.
Except for any rights which Executive may have to Vested Incentive
Compensation, Vested Options (including, without limitation, by acceleration
in accordance with sub-paragraph 9(a)), Medical Continuation, Expense
Reimbursement and the Excise Tax Gross Up set forth in subparagraph 9(d), and
either the Fixed Amount or in lieu thereof to the Annual Base Salary Payment,
and the Pro-Rata Portion of Other Compensation (as defined in Paragraph 7),
the Company shall have no further obligations hereunder following such
termination.
(c) Retention Payment. Prior to the date of a Change in Control
and subject to the approval of the Board, Executive may make an election to
receive, as a retention payment, the payments and rights set forth
sub-paragraph 9(b) above (the "Retention Payment") and remain in the employ
of the successor after the Change in Control. In the event that Executive
makes such election and the Board approves the
14
same, this Agreement shall remain in full force and effect except that (i)
simultaneously with the receipt of the Retention Payment, Executive shall
waive any right to receive any additional payment as a direct result of such
Change in Control, and (ii) other than with respect to the consummation of a
subsequent transaction which constitutes a Change in Control and is unrelated
to the Change in Control with respect to which the Retention Payment was
paid, termination payments otherwise due subsequently under this Agreement
for any event requiring payment of termination payments under this Agreement
which occurs within the six (6) month period immediately following the date
of the Change In Control as to which the Retention Payment was paid shall be
reduced by the Retention Payment paid to Executive on the date of the Change
in Control.
Any cash payments owed to Executive pursuant to this sub-paragraph
9(c) shall be paid to Executive in a single sum without discount for early
payment at the time of the Change in Control but prior to the consummation of
the transaction with any successor.
(d) Excise Tax Gross Up. In addition, if it is determined by an
independent accountant mutually acceptable to the Company and Executive that
as a result of any payment in the nature of compensation made by the Company
to (or for the benefit of) Executive pursuant to this Agreement or otherwise,
an excise tax may be imposed on Executive pursuant to Section 4999 of the
Code (or any successor provisions), the Company shall pay Executive in cash
an amount equal to X determined under the following formula: (the "Excise Tax
Gross Up"):
15
E x P
X =
-------------------------------------
1-[(FI x (1-SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under Section 4999
of the Code (or any successor provisions);
P = the amount with respect to which such excise tax is assessed,
determined without regard to the Excise Tax Gross Up;
FI = the highest effective marginal rate of income tax applicable to
Executive under the Code for the taxable year in question (taking
into account any phase-out or loss of deductions, personal
exemptions or other similar adjustments);
SLI = the sum of the highest effective marginal rates of income tax
applicable to Executive under all applicable state and local laws
for the taxable year in question (taking into account any phase-
out or loss of deductions, personal exemptions and other similar
adjustments); and
M = the highest marginal rate of Medicare tax applicable to Executive
under the Code for the taxable year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise
and on which an excise tax under Section 4999 of the Code (or any successor
provisions) may be assessed, the payment determined under this sub-paragraph
9(d) shall be paid to Executive at the time of the Change in Control but
prior to the consummation of the transaction with any successor. It is the
intention of the parties that the Company provide Executive with a full tax
gross-up under the provisions of this Paragraph, so that on a net after-tax
basis, the result to Executive shall be the same as if the excise tax under
Section 4999 of the Code (or any successor provisions) had not been
16
imposed. The Excise Tax Gross Up may be adjusted if alternative minimum tax
rules are applicable to Executive.
10. Mitigation / Effect on Employee Benefit Plans and Programs.
(a) Mitigation. Executive shall not be required to mitigate
amounts payable under this Agreement by seeking other employment or
otherwise, and there shall be no offset against amounts due Executive under
this Agreement on account of subsequent employment. Amounts owed to
Executive under this Agreement shall not be offset by any claims the Company
may have against Executive and such payment shall not be affected by any
other circumstances, including, without limitation, any counterclaim,
recoupment, defense, or other right which the Company may have against
Executive or others.
(b) Effect on Employee Benefit Programs. The termination of
Executive's employment hereunder, whether by the Company or Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Company's (i) welfare benefit plans including, without limitation, Medical
Continuation as provided for herein and, health coverage thereafter but only
to the extent required by law, and on the same basis applicable to other
employees and (ii) 401(k) Plan but only to the extent required by law and
pursuant to the terms of the 401(k) Plan.
11. Confidential Information.
(a) Executive understands and acknowledges that during his
employment with the Company, he will be exposed to Confidential Information
(as
17
defined below), all of which is proprietary and which will rightfully belong
to the Company. Executive shall hold in a fiduciary capacity for the benefit
of the Company such Confidential Information obtained by Executive during his
employment with the Company and shall not, directly or indirectly, at any
time, either during or after his employment with the Company, without the
Company's prior written consent, use any of such Confidential Information or
disclose any of such Confidential Information to any individual or entity
other than the Company or its employees, attorneys, accountants, financial
advisors, consultants, or investment bankers except as required in the
performance of his duties for the Company or as otherwise required by law.
Executive shall take all reasonable steps to safeguard such Confidential
Information and to protect such Confidential Information against disclosure,
misuse, loss or theft.
(b) The term "Confidential Information" shall mean any information
not generally known in the relevant trade or industry or otherwise not
generally available to the public, which was obtained from the Company or its
predecessors or which was learned, discovered, developed, conceived,
originated or prepared during or as a result of the performance of any
services by Executive on behalf of the Company or its predecessors. For
purposes of this Paragraph 11, the Company shall be deemed to include any
entity which is controlled, directly or indirectly, by the Company and any
entity of which a majority of the economic interest is owned, directly or
indirectly, by the Company.
12. Return of Documents.
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Except for such items which are of a personal nature to Executive (e.g.,
daily business planner), all writings, records, and other documents and
things containing any Confidential Information shall be the exclusive
property of the Company, shall not be copied, summarized, extracted from, or
removed from the premises of the Company, except in pursuit of the business
of the Company and at the direction of the Company, and shall be delivered to
the Company, without retaining any copies, upon the termination of
Executive's employment or at any time as requested by the Company.
13. Noncompete.
Executive agrees that:
(a) During the Employment Period and, in the event (i) the Company
terminates Executive's employment for Cause, or (ii) Executive terminates his
employment without Good Reason, for a one (1) year period thereafter,
Executive shall not, directly or indirectly, within the continental United
States, engage in, or own, invest in, manage or control any venture or
enterprise primarily engaged in any office-service, flex, or office property
development, acquisition or management activities without regard to whether
or not such activities compete with the Company. Nothing herein shall
prohibit Executive from being a passive owner of not more than five percent
(5%) of the outstanding stock of any class of securities of a corporation or
other entity engaged in such business which is publicly traded, so long as he
has no active participation in the business of such corporation or other
entity. Moreover, the foregoing limitations shall not be deemed to restrict
or otherwise limit Executive from conducting real estate development,
acquisition or management activities with respect
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to the Excluded Properties, if any, provided that during the Employment
Period the performance of such activities does not prevent Executive from
devoting substantially all of his business time to the Company.
(b) If, at the time of enforcement of this Paragraph 13, a court
shall hold that the duration, scope, area or other restrictions stated herein
are unreasonable, the parties agree that reasonable maximum duration, scope,
area or other restrictions may be substituted by such court for the stated
duration, scope, area or other restrictions and upon substitution by such
court, this Agreement shall be automatically modified without further action
by the parties hereto.
(c) For purposes of this Paragraph 13, the Company shall be deemed
to include any entity which is controlled, directly or indirectly, by the
Company and any entity of which a majority of the economic interest is owned,
directly or indirectly, by the Company.
14. Remedies.
The parties hereto agree that the Company would suffer irreparable harm
from a breach by Executive of any of the covenants or agreements contained in
Paragraphs 11, 12 or 13 of this Agreement. Therefore, in the event of the
actual or threatened breach by Executive of any of the provisions of
Paragraphs 11, 12 or 13 of this Agreement, the Company may, in addition and
supplementary to other rights and remedies existing in its favor, apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any
violation of the provisions thereof.
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15. Indemnification/Legal Fees.
(a) Indemnification. In the event the Executive is made party or
threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason
of Executive's employment with or serving as an officer or director of the
Company, whether or not the basis of such Proceeding is alleged action in an
official capacity, the Company shall indemnify, hold harmless and defend
Executive to the fullest extent authorized by Maryland law, as the same
exists and may hereafter be amended, against any and all claims, demands,
suits, judgments, assessments and settlements including all expenses incurred
or suffered by Executive in connection therewith (including, without
limitation, all legal fees incurred using counsel reasonably acceptable to
Executive) and such indemnification shall continue as to Executive even after
Executive is no longer employed by the Company and shall inure to the benefit
of his heirs, executors, and administrators. Expenses incurred by Executive
in connection with any Proceeding shall be paid by the Company in advance
upon request of Executive that the Company pay such expenses; but, only in
the event that Executive shall have delivered in writing to the Company an
undertaking to reimburse the Company for expenses with respect to which
Executive is not entitled to indemnification. The provisions of this
Paragraph shall remain in effect after this Agreement is terminated
irrespective of the reasons for termination. The indemnification provisions
of this Paragraph shall not supersede or reduce any indemnification provided
to Executive under any separate agreement, or the by-laws of the Company
since it is intended that this Agreement shall expand and extend the
Executive's rights to receive indemnity.
(b) Legal Fees. If any contest or dispute shall arise between the
Company and Executive regarding or as a result of any provision of this
Agreement, the Company shall reimburse Executive for all legal fees and
expenses reasonably incurred
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by Executive in connection with such contest or dispute, but only if
Executive is successful in respect of substantially all of Executive's claims
pursued or defended in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution
of such contest or dispute (whether or not appealed).
16. Successors and Assigns.
(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 and/or assets of the Company, by agreement
in form and substance satisfactory to Executive, to expressly 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 an such succession shall be a breach of this Agreement and
shall entitle Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if Executive
terminated his employment hereunder within six (6) months of a Change in
Control as set forth in Paragraph 9, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective shall
be deemed the date of termination. In the event of such a breach of this
Agreement, the Notice of Termination shall specify such date as the date of
termination. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to all or substantially all of its
business and/or its assets as aforesaid which executes and delivers the
agreement provided for in this Paragraph 16 or which otherwise becomes
22
bound by all the terms and provisions of this Agreement by operation of law.
Any cash payments owed to Executive pursuant to this Paragraph 16 shall be
paid to Executive in a single sum without discount for early payment
immediately prior to the consummation of the transaction with such successor.
(b) This Agreement and all rights of Executive hereunder may be
transferred only by will or the laws of descent and distribution. Upon
Executive's death, this Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent
any such person succeeds to Executive's interests under this Agreement.
Executive shall be entitled to select and change a beneficiary or
beneficiaries to receive any benefit or compensation payable hereunder
following Executive's death by giving Company written notice thereof. If
Executive should die following the date of termination while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to such person or persons so appointed in writing
by Executive, including, without limitation, under any applicable plan, or
otherwise to his legal representatives or estate.
17. Timing of and No Duplication of Payments.
All payments payable to Executive pursuant to this Agreement shall be
paid as soon as practicable after such amounts have become fully vested and
determinable. In addition, Executive shall not be entitled to receive
duplicate payments under any of the provisions of this Agreement.
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18. Modification or Waiver.
No amendment, modification, waiver, termination or cancellation of this
Agreement shall be binding or effective for any purpose unless it is made in
a writing signed by the party against whom enforcement of such amendment,
modification, waiver, termination or cancellation is sought. No course of
dealing between or among the parties to this Agreement shall be deemed to
affect or to modify, amend or discharge any provision or term of this
Agreement. No delay on the part of the Company or Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by the Company or Executive of any
such right or remedy shall preclude other or further exercise thereof. A
waiver of right or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right or remedy on any other occasion.
The respective rights and obligations of the parties hereunder shall
survive the Executive's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such
rights and obligations.
19. Notices.
All notices or other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered
by hand or delivered by a recognized delivery service or mailed, postage
prepaid, by express, certified or registered mail, return receipt requested,
and addressed to the Company at the address set forth above or Executive at
his address as set forth in the Company
24
records (or to such other address as shall have been previously provided in
accordance with this Paragraph 19).
20. Governing Law.
This agreement will be governed by and construed in accordance with the
laws of the State of New Jersey except as to Paragraph 15(a), without regard
to principles of conflicts of laws thereunder.
21. Severability.
Whenever possible, each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement shall be held to be prohibited
by or invalid under such applicable law, then, subject to the provisions of
sub-paragraph 13(b) above, such provision or term shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating or
affecting in any manner whatsoever the remainder of such provisions or term
or the remaining provisions or terms of this Agreement.
22. Legal Representation.
Each of the Company and Executive have been represented by counsel with
respect to this Agreement.
23. Counterparts.
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This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and both of which taken together shall constitute
one and the same agreement.
24. Headings.
The headings of the Paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof and
shall not affect the construction or interpretation of this Agreement.
25. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other prior
agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof. The parties recognize that the Prior
Agreement dated as of January 21, 1997 has been canceled.
26. Survival of Agreements.
The covenants made in Paragraphs 5 through 15 and 21 each shall survive
the termination of this Agreement.
In Witness Whereof, the undersigned have executed this Agreement as of
the date first above written.
XXXX-XXXX REALTY CORPORATION
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By:
----------------------------------
Name:
Title:
---------------------------------
Xxxxxx X. Xxxx
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SCHEDULE A
Those properties described in the Prospectus of Cali Realty Corporation
for the sale of 10,500,000 Shares dated August 24, 1994, in the section
entitled "Business and Properties -- Excluded Properties".
28
