Exhibit 10.45
EMPLOYMENT AGREEMENT
BETWEEN
XXX X. XXXXXXXX
AND
FIRST STATES GROUP, L.P.
This Employment Agreement (the "Agreement"), dated as of July 21,
2003, between First States Group, L.P., a Delaware limited partnership (the
"Company"), and Xxx X. Xxxxxxxx (the "Executive"):
WHEREAS, American Financial Realty Trust, a Maryland real estate
investment trust (the "REIT"), is a limited partner and the sole owner of the
general partner of the Company;
WHEREAS, the Company wishes to employ the Executive in the
capacities and on the terms and conditions set out below, and the Executive has
agreed to accept such employment, in the capacities and on the terms and
conditions set forth below.
NOW, THEREFORE, the Company and the Executive, in consideration of
the respective covenants set out below, hereby agree as follows:
1. EMPLOYMENT.
(a) POSITIONS. Beginning on such date as the Executive and
the Chief Executive Officer shall mutually agree (the "Effective Date"), the
Executive shall be employed by the Company as Senior Vice President and Chief
Investment Officer. The Executive shall also be an officer of the REIT as its
Senior Vice President and Chief Investment Officer.
(b) DUTIES. The Executive shall report to the Chief Executive
Officer of the Company (the "Chief Executive Officer") and his principal
employment duties and responsibilities shall be those duties and
responsibilities consistent with this position as are assigned by the Chief
Executive Officer or the Board of Trustees of the REIT (the "Board").
(c) EXTENT OF SERVICES. Except for illnesses and vacation
periods, the Executive shall devote all of his working time and attention and
his best efforts to the performance of his duties and responsibilities under
this Agreement. Notwithstanding the foregoing, the Executive may (i) make any
passive investment where he is not obligated or required to, and shall not in
fact, devote any managerial efforts, (ii) participate in charitable, academic or
community activities, and in trade or professional organizations, or (iii) hold
directorships in other companies consistent with the Company's conflict of
interest policies and corporate governance guidelines as in effect from time to
time.
2. TERM. This Agreement shall be effective as of the Effective Date and
shall continue in full force and effect thereafter for a term of three (3) years
following the Effective Date (the "Initial Term"), and shall be automatically
extended for an additional one (1) year term at the end of the Initial Term, and
an additional one (1) year term on each one-year anniversary of the one (1) year
term (the last day of each such term is referred to herein as a "Term Date"),
unless
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either party terminates this Agreement not later than sixty (60) days prior to a
Term Date by providing written notice to the other party of such party's intent
not to renew, or it is sooner terminated pursuant to Section 7. For purposes of
this Agreement, "Term" shall mean the actual duration of the Executive's
employment hereunder, taking into account any extensions pursuant to this
Section 2 or early termination of employment pursuant to Section 7.
3. BASE SALARY. The Company shall pay the Executive a base salary
annually (the "Base Salary"), which shall be payable in periodic installments
according to the Company's normal payroll practices. The initial Base Salary
shall be $200,000. The Board or the Compensation and Human Resources Committee
of the REIT (the "Compensation Committee") shall review the Base Salary at least
once a year to determine whether the Base Salary should be increased effective
January 1 of each year during the Term; provided, however, that on each January
1 during the Term, the Base Salary shall be increased by a minimum positive
amount equal to the Base Salary in effect on January 1 of the prior year
multiplied by the percentage increase in the Consumer Price Index for such year,
except that on January 1, 2004, the amount shall be the percentage increase from
the first day of the month in which the Effective Date occurs to January 1,
2004. The amount of the increase shall be determined before March 31 of each
year and shall be retroactive to January 1. The Base Salary, including any
increases, shall not be decreased during the Term. For purposes of this
Agreement, the term "Base Salary" shall mean the amount established and adjusted
from time to time pursuant to this Section 3.
4. INCENTIVE AWARDS.
(a) ANNUAL INCENTIVE BONUS. The Executive shall be entitled to
receive an annual cash incentive bonus for each fiscal year during the Term of
this Agreement consistent with a bonus policy adopted by the Compensation
Committee (the "Bonus Policy"). For the period beginning on the Effective Date
and ending on December 31, 2003, if the Executive or the Company, as the case
may be, satisfies the performance criteria contained in such Bonus Policy for
the 2003 fiscal year, the Executive shall receive an annual incentive bonus in
an amount equal to two (2) times his Base Salary, with his Base Salary for this
purpose being pro rated and adjusted to reflect the portion of the fiscal year
that the Executive was employed by the Company. Beginning January 1, 2004, and
for each year thereafter, if Executive or the Company, as the case may be,
satisfies the performance criteria contained in such Bonus Policy for a fiscal
year, he shall receive an annual incentive bonus of up to two (2) times his Base
Salary, as in effect for such fiscal year, as recommended by the Chief Executive
Officer and subject to approval by the Compensation Committee. If Executive or
the Company, as the case may be, fails to satisfy the performance criteria
contained in such Bonus Policy for a fiscal year, he may be eligible to receive
an incentive bonus for such fiscal year, in such amount as is recommended by the
Chief Executive Officer and subject to approval by the Compensation Committee.
Beginning January 1, 2004, the Bonus Policy shall contain both individual and
group goals established by the Compensation Committee. Notwithstanding the
foregoing, in no event shall the annual incentive bonus payable to Executive be
less than a guaranteed bonus amount, irrespective of whether the Executive
satisfies the performance criteria contained in the Bonus Policy as in effect
for such fiscal year (the "Guaranteed Bonus"), or exceed two (2) times his Base
Salary as in effect for such fiscal year. The Guaranteed Bonus shall be
$22,916.67 per month. The Board or the Compensation Committee shall review the
Guaranteed Bonus at least once a year to determine whether the Guaranteed Bonus
should be increased effective January 1
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of each year during the Term. The Guaranteed Bonus portion of the annual
incentive bonus shall be paid during the fiscal year pursuant to the Company's
normal payroll practices. The balance of the annual incentive bonus (the
incremental portion of the annual incentive bonus in excess of the Guaranteed
Bonus amount, if any) shall be paid to the Executive no later than thirty (30)
days after the date the Compensation Committee approves the annual incentive
bonus payable to the Executive for such fiscal year. For purposes of this
Agreement, the term "Incentive Bonus" shall mean the amount established pursuant
to this Section 4(a).
(b) OUTPERFORMANCE PLAN BONUS. The REIT has established the 2003
Outperformance Plan (the "OPP") as an incentive compensation plan for key
employees with awards determined based on the annual and the three-year total
return to shareholders of the REIT. The Executive shall be eligible to
participate in the OPP as of the Effective Date in an amount as determined by
the Compensation Committee.
5. STOCK BASED AWARDS.
(a) OPTION GRANTS. The REIT has established the 2002 Equity
Incentive Plan ("Equity Incentive Plan"). The Company agrees that on the
Effective Date, Executive will receive an initial grant of options (the "Initial
Grant Options") to purchase 75,000 common shares of beneficial ownership of the
REIT ("Common Shares") under the Equity Incentive Plan. The grant of the Initial
Grant Options will be made pursuant to an Award Agreement (the "Award
Agreement") that will contain the terms and conditions of the grant, subject to
the terms of the Equity Incentive Plan. The Award Agreement will contain
provisions stating that the Initial Grant Options will have a term of ten (10)
years and will vest and become exercisable with respect to 25% of the underlying
Common Shares on the one-year anniversary of the date of grant and 6.25% of the
underlying Common Shares on the last day of each fiscal quarter thereafter until
fully vested; provided, however, that, upon any of the following events the
Executive will be 100% vested in the Initial Grant Options: (i) a Change in
Control (as defined herein), (ii) a termination by the Company without Cause (as
defined herein), (iii) his death, or (iv) his becoming Permanently Disabled (as
defined herein). Executive will forfeit all unvested Initial Grant Options if he
is terminated at any time for Cause, or if he voluntarily terminates his
employment with the Company for any reason. The exercise price of the Initial
Grant Options shall be the market value of the REIT's shares on the Effective
Date, except to the extent otherwise required for the Initial Grant Options to
be treated as ISOs (as defined below). The Executive shall be eligible to
receive future option grants as recommended by the Chief Executive Officer and
approved by the Compensation Committee.
The Initial Grant Options are intended to meet the qualifications
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code" and
"ISO" respectively) to the fullest extent possible and in excess of that amount,
they will be treated as stock options that do not meet the terms of Code Section
422 ("NQSO").
(b) RESTRICTED SHARE AWARDS. The Executive shall be eligible to
receive restricted Common Shares of the REIT ("Restricted Share Grants") as
recommended by the Chief Executive Officer and approved by the Compensation
Committee, but only to the extent that restricted shares become available for
issuance under the Equity Incentive Plan. If the REIT obtains shareholder
approval of an increase in the number of restricted shares authorized
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for issuance to employees under the Equity Incentive Plan, then the Company will
submit a recommendation to the Compensation Committee to award to the Executive,
subject to review and approval by the Compensation Committee, a Restricted Share
Grant for 25,000 Common Shares (the "Initial Restricted Share Grant"). Awards of
Restricted Share Grants shall be on the following terms: vesting at the rate of
33.33% of the underlying Common Shares on the one-year anniversary of the
effective date of the grant of Common Shares as Restricted Share Grants and
8.33% of the underlying Common Shares on the last day of each fiscal quarter
thereafter until fully vested; provided, however, that, upon any of the
following events the Executive will be 100% vested in the Restricted Share
Grants: (i) a Change in Control (as defined herein), (ii) a termination by the
Company without Cause (as defined herein), (iii) his death, or (iv) his becoming
Permanently Disabled (as defined herein). Executive will forfeit all unvested
Restricted Share Grants if he is terminated for Cause or if he voluntarily
terminates his employment with the Company for any reason. Any Common Shares
issued as Restricted Share Grants will have voting and dividend rights, and,
following the restriction period, shall be registered and transferable by the
Executive. If the Initial Restricted Share Grant has not been issued to the
Executive by the record date for the dividend for the third quarter of 2003,
then the Company will pay the Executive a dividend equivalent payment on the
payment date for the dividend for the third quarter of 2003, and on each
dividend payment date thereafter, until such time as either the Initial
Restricted Share Grant is awarded or the Executive's employment is terminated
for any reason.
6. BENEFITS.
(a) VACATION. The Executive shall be entitled to four (4)
weeks paid vacation per full calendar year, which shall accrue during the
Executive's employment with the Company.
(b) SICK AND PERSONAL DAYS. The Executive shall be entitled
to sick and personal days pursuant to Company policy.
(c) EMPLOYEE BENEFIT PLANS. The Executive and his spouse and
eligible dependents, if any, and their respective designated beneficiaries where
applicable, will be eligible for and entitled to participate in any Company
sponsored employee benefit plans, including but not limited to benefits such as
group health, dental, accident, disability insurance, group life insurance, and
a 401(k) plan, as such benefits may be offered from time to time, on a basis no
less favorable than that applicable to other executives of the Company.
(d) OTHER BENEFITS.
(i) ANNUAL PHYSICAL. The Company shall provide, at
its cost, a medical examination for the Executive on an annual basis by a
licensed physician in the Philadelphia, Pennsylvania or the New York, New York
area selected by the Executive.
(ii) CAR ALLOWANCE. The Company shall pay Executive a
monthly car allowance that is not less than $750.00 per month.
(iii) DIRECTORS AND OFFICERS INSURANCE. During the Term
and the Severance Period, the Executive shall be entitled to directors and
officers insurance
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coverage for his acts and omissions while an officer of the Company and the REIT
on a basis no less favorable to him than the coverage provided to current
officers and trustees.
(iv) EXPENSES, OFFICE AND SECRETARIAL SUPPORT. The Executive
shall be entitled to reimbursement of all reasonable expenses, in accordance
with the Company's policy as in effect from time to time and on a basis no less
favorable than that applicable to other executives of the Company, including,
without limitation, telephone, reasonable travel and reasonable entertainment
expenses incurred by the Executive in connection with the business of the
Company, promptly upon the presentation by the Executive of appropriate
documentation. The Executive shall also be entitled to appropriate office space,
administrative support, and such other facilities and services as are suitable
to the Executive's positions and adequate for the performance of the Executive's
duties.
(v) PROFESSIONAL LICENSES; CONTINUING EDUCATION. The
Company shall pay for the Executive's New York real estate license and the
professional licenses of the Executive in all states in which he is licensed to
practice law, and shall reimburse the Executive for all reasonable costs
incurred in his complying with any continuing legal education or other
requirements required to maintain his licenses.
(vi) REAL ESTATE ORGANIZATIONS. The Company shall pay for
the Executive to be a member of real estate organizations that have been
approved by the Chief Executive Officer.
(vii) HOUSING ALLOWANCE. The Company shall pay for or provide
long-term extended stay housing for the Executive during the Term. On a
year-to-year basis during the Term, the Chief Executive Officer and the
Executive shall review the housing allowance and determine the form it shall
take for the following year.
7. TERMINATION. The employment of the Executive by the Company pursuant
to this Agreement shall terminate upon the occurrence of any of the following:
(a) DEATH OR PERMANENT DISABILITY. Immediately upon death or
Permanent Disability of the Executive. As used in this Agreement, "Permanent
Disability" shall mean an inability due to a physical or mental impairment to
perform the material services contemplated under this Agreement for a period of
six (6) months, whether or not consecutive, during any 365-day period. A
determination of Permanent Disability shall be made by a physician satisfactory
to both the Executive and the Company, provided that if the Executive and the
Company do not agree on a physician, the Executive and the Company shall each
select a physician and these two together shall select a third physician, whose
determination as to Permanent Disability shall be binding on all parties. The
appointment of one or more individuals to carry out the offices or duties of the
Executive during a period of the Executive's inability to perform such duties
and pending a determination of Permanent Disability shall not be considered a
breach of this Agreement by the Company.
(b) FOR CAUSE. At the election of the Company and subject to the
provisions of this Section 7(b), immediately upon written notice by the Company
to the Executive of his termination for Cause. For purposes of this Agreement,
"Cause" for termination shall be deemed
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to exist solely in the event of (i) the conviction of the Executive of, or the
entry of a plea of guilty or nolo contendere by the Executive to, a felony
(exclusive of any felony relating to negligent operation of a motor vehicle and
not including a conviction, plea of guilty or nolo contendere arising solely
under a statutory provision imposing criminal liability upon the Executive on a
per se basis due to the Company offices held by the Executive, so long as any
act or omission of the Executive with respect to such matter was not taken or
omitted in contravention of any applicable policy or directive of the Board or
the Chief Executive Officer), (ii) a willful breach of his duty of loyalty which
is materially detrimental to the Company, (iii) a willful failure to perform or
adhere to explicitly stated duties that are consistent with the terms of this
Agreement, or the Company's reasonable and customary guidelines of employment or
reasonable and customary corporate governance guidelines or policies, including
without limitation any business code of ethics adopted by the Board, or to
follow the lawful directives of the Board (provided such directives are
consistent with the terms of this Agreement) which, in any such case, continues
for thirty (30) days after written notice from the Chief Executive Officer to
the Executive, or (iv) gross negligence or willful misconduct in the performance
of the Executive's duties. For purposes of this Section 7(b), no act, or failure
to act, on the Executive's part will be deemed "gross negligence" or "willful
misconduct" unless done, or omitted to be done, by the Executive not in good
faith and without a reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company. The parties agree that in order to
terminate the Executive pursuant to Subsections (ii) and (iv) hereof, the
Company shall first be required to prove to the reasonable satisfaction of the
Executive that he engaged in improper conduct under these Subsections, and if
the Executive shall not agree with the Company's assessment of his conduct, then
the Executive shall not be terminated until an arbitrator, as provided for in
Section 13(b), has determined that the Executive's conduct constituted improper
conduct under the applicable Subsection.
(c) WITHOUT CAUSE; VOLUNTARY RESIGNATION. At the election of
the Company without Cause, and at the election of the Executive for any reason,
in either case upon thirty (30) days prior written notice to the Executive or
the Company, as the case may be.
8. EFFECTS OF TERMINATION.
(a) TERMINATION ON PERMANENT DISABILITY OR BY THE COMPANY
WITHOUT CAUSE. If, at any time after the date of this Agreement, the employment
of the Executive should terminate by reason of his becoming Permanently Disabled
or should terminate at the election of the Company without Cause, then the
Company shall pay all compensation and benefits for the Executive as follows:
(i) any Base Salary, Guaranteed Bonus, Incentive
Bonus, expense reimbursements and all other compensation related payments that
are payable as of his termination of employment date that are related to his
period of employment preceding his termination date, and
(ii) the prorated amount of the maximum Incentive Bonus
for the year in which the termination of employment occurs, prorated for the
portion of such year during which the Executive was employed prior to the
effective date of the termination, and subtracting out all Guaranteed Bonus
payments received by the Executive during such year, and
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(iii) the amount equal to his (A) Base Salary, plus (B) his
Guaranteed Bonus, at the rates in effect on the effective date of his
termination of employment, that would have been paid or payable for the duration
of the Term of this Agreement, or if greater, for 12 months (the "Severance
Period").
The sum of the amount payable under subsections (ii) and (iii)
hereof is referred to herein as his "Severance Payment".
(iv) The Severance Payment shall be made in a single, lump
sum cash payment before the later of (x) thirty (30) days after the effective
date of the Executive's termination of employment, and (y) the delivery of the
signed Release (as defined below) to the Company and the expiration of the
Executive's statutory period to revoke the Release. With respect to any
Severance Payment attributable to a period after the expiration of 24 calendar
months after the termination of the Executive's employment, such payment shall
be reduced for compensation earned from other employment or self-employment
after that date, and the Executive shall refund to the Company any amount due as
a result of such reduction.
(v) The Company shall allow the Executive to continue to
participate during the Severance Period in any healthcare, dental, vision and
prescription drug plans in which the Executive was entitled to participate
immediately prior to his termination, to the same extent and upon the same terms
as the Executive participated in such plans prior to his termination, provided
that the Executive's continued participation is permissible or otherwise
practicable under the general terms and provisions of such benefit plans and
programs. During the Severance Period, the Company shall pay for the Executive's
continued participation in said healthcare, dental, vision and prescription drug
plans, including but not limited to premiums for such programs. To the extent
that continued participation is neither permissible nor practicable, the Company
shall take such actions as may be necessary to provide the Executive with
substantially comparable benefits (without additional cost to the Executive)
outside the scope of such plans, including, without limitation, reimbursing the
Executive for his costs in obtaining such coverage, such as COBRA premiums paid
by the Executive and/or his eligible dependents. If the Executive engages in
regular employment after his termination of employment (whether as an executive
or as a self-employed person), any employee benefit and welfare benefits
received by the Executive in consideration of such employment which are similar
in nature to the healthcare, dental, vision and prescription drug plans provided
by the Company will relieve the Company of its obligation under this Section
8(a)(v) to provide comparable benefits to the extent of the benefits so
received.
(vi) The Executive's Initial Grant Options awarded under the
Equity Incentive Plan shall immediately become 100% vested, and he shall have a
two-year period following the effective date of his termination of employment in
which to exercise his vested stock options, including those stock options that
vested upon his termination of employment.
(vii) The Executive's restricted Common Shares awarded under
the Equity Incentive Plan shall immediately become 100% vested, and all
restrictions shall lapse on the vested portion of the Restricted Stock Grants.
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(viii) The Executive shall vest in and receive a percentage
of his total OPP allocation for the 3-year term of the OPP (the "OPP
Allocation") equal to (x) the number of complete months the Executive had
participated in the OPP from the Effective Date through the effective date of
his termination of employment, divided by (y) 36 (representing the total number
of months in the OPP term), in lieu of the scheduled vesting of his OPP
Allocation under the OPP. This percentage of his OPP Allocation would be paid to
the Executive (less any cash OPP payments previously received by the Executive)
after the OPP reward is determined at the end of the OPP plan term.
(ix) If the Severance Period is less than 24 months, then
the Noncompete Period in Section 11 shall be reduced to be equal to the
Severance Period.
(x) All Severance Payments are contingent on Executive
signing a release of claims, substantially in the form attached hereto as
Exhibit A (the "Release").
(b) TERMINATION ON DEATH. Upon a termination of employment due to
the Executive's death, the Executive shall become 100% vested in the Initial
Grant Options and Restricted Share Grants awarded to the Executive under the
Equity Incentive Plan. The Executive's personal representative shall have a
one-year period following the Executive's death in which to exercise his vested
stock options, including those stock options that vested on death. The Company
shall pay to the Executive's personal representative any Base Salary, Guaranteed
Bonus, expense reimbursements and all other compensation related payments that
are payable as of his date of death and that are related to his period of
employment preceding his date of death, and within 60 days after the Executive's
death, shall pay to the Executive's personal representative a prorated amount of
maximum Incentive Bonus for the year in which the Executive's death occurs,
prorated for the portion of the year during which the Executive was employed
prior to his death, and subtracting out all Guaranteed Bonus payments received
by the Executive during such year.
(c) BY THE COMPANY FOR CAUSE OR VOLUNTARILY BY THE EXECUTIVE. In
the event that the Executive's employment is terminated by the Company for Cause
or voluntarily by the Executive, the Company shall pay the Executive his Base
Salary, Guaranteed Bonus, expense reimbursements and all other compensation
related payments that are payable as of his termination of employment date and
that are related to his period of employment preceding his termination date. The
Executive shall forfeit all unvested options and restricted Common Shares if he
is terminated by the Company for Cause, and, subject to Section 9(b) below, he
shall forfeit all unvested options and restricted Common Shares if he
voluntarily terminates his employment with the Company.
(d) TERMINATION OF AUTHORITY. Immediately upon the Executive
terminating or being terminated from his employment with the Company for any
reason, notwithstanding anything else appearing in this Agreement or otherwise,
the Executive will stop serving the functions of his terminated or expired
position(s) and shall be without any of the authority or responsibility for such
position(s).
9. CHANGE OF CONTROL.
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(a) CHANGE OF CONTROL. For purposes of this Agreement, a "Change of
Control" will be deemed to have taken place upon the occurrence of any of the
following events:
(i) any person, entity or affiliated group, excluding the
REIT or any employee benefit plan of the REIT, acquiring more than 50% of the
then outstanding voting shares of the REIT,
(ii) the consummation of any merger or consolidation of the
REIT into another company, such that the holders of the voting shares of the
REIT immediately prior to such merger or consolidation is less than 50% of the
voting power of the securities of the surviving company or the parent of such
surviving company,
(iii) the complete liquidation of the REIT or the sale or
disposition of all or substantially all of the REIT's assets, such that after
the transaction, the holders of the voting shares of the REIT immediately prior
to the transaction is less than 50% of the voting securities of the acquiror or
the parent of the acquiror, or
(iv) a majority of the Board of the REIT votes in favor of a
decision that a Change of Control has occurred.
(b) CERTAIN BENEFITS UPON A CHANGE OF CONTROL. In the event of a
Change of Control, the Executive shall become 100% vested in the Initial Grant
Options and Restricted Share Grants awarded to the Executive under the Equity
Incentive Plan and if the Executive voluntarily terminates his employment for
any reason after the Change of Control, then the Executive shall have a one-year
period following the Change of Control in which to exercise his vested stock
options, including those stock options that vested upon the Change of Control.
(c) EXCISE TAX.
(i) In the event that any payment or benefit received or to
be received by the Executive in connection with a change in control or a
termination of the Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a change in control or any person affiliated with
the Company or such person) (all such payments and benefits being hereinafter
called "Total Payments"), such that the Executive will be subject (in whole or
in part) to the excise tax imposed under Code Section 4999 ("Excise Tax") on
such payments and benefits, then the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax and any federal, state and
local tax on the Gross-Up Payment, will be equal to the Total Payment. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on such date, net of the maximum
deduction in federal income taxes which could be obtained from deduction of such
state and local taxes.
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(ii) The Executive or the Company may request, prior
to the time any payments under this Agreement are made, a determination of
whether any or all of the Total Payments will be subject to the Excise Tax and,
if so, the amount of such Excise Tax and the federal, state and local tax
imposed on the Gross-Up Payment. If such a determination is requested, it shall
be made promptly, at the Company's expense, by tax counsel selected by the
Executive and approved by the Company (with such approval not being unreasonably
withheld), and such determination shall be conclusive and binding on both
parties. The Company agrees to provide any information reasonably requested by
such tax counsel. Tax counsel may engage accountants or other experts, at the
Company's expense, to the extent deemed necessary or advisable for them to reach
a determination. For these purposes, the term "tax counsel" shall mean a law
firm with expertise in federal income tax matters.
(iii) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder, the
Executive will repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income tax imposed
on the Gross-Up Payment, without any interest thereon. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder, the
Company will make an additional Gross-Up Payment in respect of such excess and
in respect of any portion of the Excise Tax with respect to which the Company
had not previously made a Gross-Up Payment (plus any interest, penalties or
additions payable by the Executive with respect to such excess and such portion)
at the time that the amount of such excess is finally determined, without any
interest thereon.
(iv) Each party agrees to notify the other party, in
writing, of any claim that, if successful, would require the payment by the
Company of a Gross-Up Payment or might entitle the Company to a refund of all or
part of any previous Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten (10) business days after the Executive or
Company is informed in writing of such claim or otherwise becomes aware of such
claim. If notice of the claim arose as a result of a claim made against the
Executive by a taxing authority, Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which he gives
notice to the Company. 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: (A) give the Company any information reasonably requested by
the Company relating to such claim, (B) 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 selected by the Executive and approved by
the Company (with such approval not being unreasonably withheld), (C) cooperate
with the Company in good faith in order to effectively contest such claim, and
(D) permit the Company to reasonably participate in any proceedings relating to
such claim. The Company shall bear and pay directly all costs and expenses
(including legal fees and additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
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(v) Notwithstanding the foregoing, the Company shall control all
audits and proceedings taken in connection with any claim, audit or proceeding
involving Excise Taxes or Gross-Up Payments 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 any such claim, audit or
proceeding and may, at its sole option, either direct the Executive to pay the
tax claimed and xxx for a refund or contest the tax in any permissible manner,
and the Executive agrees 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 Company shall determine; provided, however, that if the
Company directs the Executive to pay such tax and xxx for a refund, the Company
shall advance the amount of such payment to the Executive, (including interest
or penalties with respect thereto) and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance. The Company
shall be required to consult with and keep the Executive fully apprised of
developments and actions being considered or taken with respect to such claim,
audit or proceeding. The Company's control of the contest shall be limited to
issues with respect to which such a Gross-Up Payment would be payable or
refundable hereunder and the Executive shall be entitled to settle or contest,
as the case may be, any other issue. Each party agrees to keep the other party
fully apprised of developments concerning such claim, audit or proceeding and to
cooperate with the other in good faith in order to effectively resolve such
claim, audit or proceeding.
(vi) For purposes of this Subsection (c), a determination of
whether a payment is subject to Excise Taxes, including but not limited to, a
determination of change in control, shall be made pursuant to Code Section 280G.
10. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges
that certain assets of the Company constitute Confidential Information. The term
"Confidential Information" as used in this Agreement shall mean all information
which is known only to the Executive or the Company, other employees of the
Company, or others in a confidential relationship with the Company, and relating
to the Company's business including, without limitation, information regarding
clients, customers, pricing policies, methods of operation, proprietary Company
programs, sales products, profits, costs, markets, key personnel, formulae,
product applications, technical processes, and trade secrets, as such
information may exist from time to time, which the Executive acquired or
obtained by virtue of work performed for the Company, or which the Executive may
acquire or may have acquired knowledge of during the performance of said work.
The Executive shall not, during or after the Term, disclose all or any part of
the Confidential Information to any person, firm, corporation, association, or
any other entity for any reason or purpose whatsoever, directly or indirectly,
except as may be required pursuant to his employment hereunder, unless and until
such Confidential Information becomes publicly available other than as a
consequence of the breach by the Executive of his confidentiality obligations
hereunder by law or in any judicial administrative proceeding (in which case,
the Executive shall provide the Company with notice). In the event of the
termination of his employment, whether voluntary or involuntary and whether by
the Company or the Executive, the Executive shall deliver to the Company all
documents and data pertaining to the Confidential Information and shall not take
with him any documents or data of any kind or any reproductions (in whole or in
part) or extracts of any items relating to the Confidential
-11-
Information. The Company acknowledges that prior to his employment with the
Company, the Executive has lawfully acquired extensive knowledge of the
industries and businesses in which the Company engages in business, and that the
provisions of this Section 10 are not intended to restrict the Executive's use
of such previously acquired knowledge.
In the event that the Executive receives a request or is required (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose all or any part of the Confidential
Information, the Executive agrees to (a) promptly notify the Company in writing
of the existence, terms and circumstances surrounding such request or
requirement, (b) consult with the Company on the advisability of taking legally
available steps to resist or narrow such request or requirement, and (c) assist
the Company in seeking a protective order or other appropriate remedy. In the
event that such protective order or other remedy is not obtained or that the
Company waives compliance with the provisions hereof, the Executive shall not be
liable for such disclosure unless disclosure to any such tribunal was caused by
or resulted from a previous disclosure by the Executive not permitted by this
Agreement.
11. NON-COMPETITION AND NONSOLICITATION. During the Term and, except as
otherwise provided in Section 8(a)(ix), for a period of 24 calendar months after
the termination of the Executive's employment (the "Noncompete Period"), the
Executive shall not, directly or indirectly, either as a principal, agent,
employee, employer, stockholder, partner or in any other capacity whatsoever:
(a) engage or assist others engaged, in whole or in part, in any business which
is engaged in a business or enterprise that is substantially similar to the
business that the Company was engaged in during the period of the Executive's
employment with the Company, or (b) without the prior consent of the Board,
employ or solicit the employment of, or assist others in employing or soliciting
the employment of, any individual employed by the Company at any time while the
Executive was also so employed; provided, however, that the provisions of this
Section 11 shall not apply in the event the Company materially breaches this
Agreement or the Release.
Nothing in this Section 11 shall prohibit Executive from making any
passive investment in a public company, or where he is the owner of five percent
(5%) or less of the issued and outstanding voting securities of any entity,
provided such ownership does not result in his being obligated or required to
devote any managerial efforts.
The Executive agrees that the restraints imposed upon him pursuant to
this Section 11 are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates, and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and
geographic area. The parties further agree that, in the event that any provision
of this Section 11 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of its being extended over too great a time, too
large a geographic area or too great a range of activities, such provision shall
be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.
12. INTELLECTUAL PROPERTY. During the Term, the Executive shall promptly
disclose to the Company or any successor or assign, and grant to the Company and
its successors and assigns without any separate remuneration or compensation
other than that received by him
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in the course of his employment, his entire right, title and interest in and to
any and all inventions, developments, discoveries, models, or any other
intellectual property of any type or nature whatsoever ("Intellectual
Property"), whether developed by him during or after business hours, or alone or
in connection with others, that is in any way related to the business of the
Company, its successors or assigns. This provision shall not apply to books or
articles authored by the Executive during non-work hours, consistent with his
obligations under this Agreement, so long as such books or articles (a) are not
funded in whole or in part by the Company, and (b) do not contain any
Confidential Information or Intellectual Property of the Company. The Executive
agrees, at the Company's expense, to take all steps necessary or proper to vest
title to all such Intellectual Property in the Company, and cooperate fully and
assist the Company in any litigation or other proceedings involving any such
Intellectual Property.
13. DISPUTES.
(a) EQUITABLE RELIEF. The Executive acknowledges and agrees that upon
any breach by the Executive of his obligations under Sections 10, 11, or 12
hereof, the Company will have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate injunctive and equitable
relief.
(b) ARBITRATION. Excluding only requests for equitable relief by the
Company under Section 13(a), in the event that there is any claim or dispute
arising out of or relating to this Agreement or the breach hereof, and the
parties hereto shall not have resolved such claim or dispute within 60 days
after written notice from one party to the other setting forth the nature of
such claim or dispute, then such claim or dispute shall be settled exclusively
by binding arbitration in Xxxxxxxxxx county, Pennsylvania, in accordance with
the Employment Dispute Resolution Rules of the American Arbitration Association
("Rules"), by an arbitrator mutually agreed upon by the parties hereto or, in
the absence of such agreement, by an arbitrator selected according to such
Rules. Notwithstanding the foregoing, if either the Company or the Executive
shall request, such arbitration shall be conducted by a panel of three (3)
arbitrators, one selected by the Company, one selected by the Executive and the
third selected by agreement of the first two arbitrators, or, in the absence of
such agreement, in accordance with such Rules. Judgment upon the award rendered
by such arbitrator(s) shall be entered in any Court having jurisdiction thereof
upon the application of either party. The parties agree to use their reasonable
best efforts to have such arbitration completed as soon as is reasonably
practicable. Notwithstanding anything herein to the contrary, except as provided
in 13(c) below, the losing party shall pay the reasonable costs and expenses
(including reasonable attorney fees and expenses) of the prevailing party with
respect to such arbitration, except the Executive, if he is the losing party,
shall not be required to pay such expenses and costs if the claim relates to
statutory discrimination claims that he would not otherwise be required to pay
if such claim had been brought in a court of competent jurisdiction.
(c) LEGAL FEES. The Company shall pay or promptly reimburse the
Executive for the reasonable legal fees and expenses incurred by the Executive
in successfully enforcing or defending any right of the Executive pursuant to
this Agreement, even if the Executive does not prevail on each issue.
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14. INDEMNIFICATION. The Company shall indemnify the Executive, to the
maximum extent permitted by applicable law, against all costs, charges and
expenses incurred or sustained by the Executive, including the cost of legal
counsel selected and retained by the Executive in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of the
Executive being or having been an officer, director, or employee of the Company
or the REIT.
15. COOPERATION IN FUTURE MATTERS. The Executive hereby agrees that for a
period of 18 months following his termination of employment he shall cooperate
with the Company's reasonable requests relating to matters that pertain to the
Executive's employment by the Company, including, without limitation, providing
information or limited consultation as to such matters, participating in legal
proceedings, investigations or audits on behalf of the Company, or otherwise
making himself reasonably available to the Company for other related purposes.
Any such cooperation shall be performed at scheduled times taking into
consideration the Executive's other commitments, and the Executive shall be
compensated at a reasonable hourly or per diem rate to be agreed upon by the
parties to the extent such cooperation is required on more than an occasional
and limited basis. The Executive shall not be required to perform such
cooperation to the extent it conflicts with any requirements of exclusivity of
services for another employer or otherwise, nor in any manner that in the good
faith belief of the Executive would conflict with his rights under or ability to
enforce this Agreement.
16. GENERAL.
(a) NOTICES. All notices and other communications hereunder shall be
in writing or by written telecommunication, and shall be deemed to have been
duly given if delivered personally or if sent by overnight courier or by
certified mail, return receipt requested, postage prepaid or sent by written
telecommunication or telecopy, to the relevant address set forth below, or to
such other address as the recipient of such notice or communication shall have
specified in writing to the other party hereto, in accordance with this Section
16(a).
If to the Company, to: First States Group, L.P.
0000 Xxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx, President and
Chief Executive Officer
Facsimile: 000-000-0000
If to Executive, at his last residence shown on the records of the Company.
Any such notice shall be effective (i) if delivered personally, when received,
(ii) if sent by overnight courier, when receipted for, (iii) if mailed, five (5)
days after being mailed, and (iv) on confirmed receipt if sent by written
telecommunication or telecopy, provided a copy of such communication is sent by
regular mail, as described above.
(b) SEVERABILITY. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.
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(c) WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege.
(d) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
(e) ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the Company's successors and the Executive's personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. This Agreement shall not be assignable by the Executive, it being
understood and agreed that this is a contract for the Executive's personal
services. This Agreement shall not be assignable by the Company except that the
Company shall assign it in connection with a transaction involving the
succession by a third party to all or substantially all of the Company's
business and/or assets (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise). When assigned to a successor,
the assignee shall assume this Agreement and expressly agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of such an assignment. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets that executes and delivers the assumption
agreement described in the immediately preceding sentence or that becomes bound
by this Agreement by operation of law.
(f) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties, supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter hereof and may not be amended
except by a written instrument hereafter signed by the Executive and the Chief
Executive Officer or a duly authorized representative of the Board (other than
the Executive).
(g) GOVERNING LAW. This Agreement and the performance hereof shall be
construed and governed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to principles of conflicts of law.
(h) CONSTRUCTION. The language used in this Agreement shall be deemed
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against any party. The headings of
sections of this Agreement are for convenience of reference only and shall not
affect its meaning or construction. Whenever any word is used herein in one
gender, it shall be construed to include the other gender, and any word used in
the singular shall be construed to include the plural in any case in which it
would apply and vice versa.
(i) PAYMENTS AND EXERCISE OF RIGHTS AFTER DEATH. Any amounts payable
hereunder after the Executive's death shall be paid to the Executive's
designated beneficiary or beneficiaries, whether received as a designated
beneficiary or by will or the laws of descent and distribution. The Executive
may designate a beneficiary or beneficiaries for all
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purposes of this Agreement, and may change at any time such designation, by
notice to the Company making specific reference to this Agreement. If no
designated beneficiary survives the Executive or the Executive fails to
designate a beneficiary for purposes of this Agreement prior to his death, all
amounts thereafter due hereunder shall be paid, as and when payable, to his
spouse, if she survives the Executive, and otherwise to his estate.
(j) CONSULTATION WITH COUNSEL. The Executive acknowledges that he has
had a full and complete opportunity to consult with counsel or other advisers of
his own choosing concerning the terms, enforceability and implications of this
Agreement, and that the Company has not made any representations or warranties
to the Executive concerning the terms, enforceability and implications of this
Agreement other than as are reflected in this Agreement.
(k) WITHHOLDING. Any payments provided for in this Agreement shall be
paid net of any applicable income tax withholding required under federal, state
or local law.
(l) CONSUMER PRICE INDEX. For purposes of this Agreement, the term
"CPI" refers to the Consumer Price Index as published by the Bureau of Labor
Statistics of the United States Department of Labor, U.S. City Average, All
Items for Urban Wage Earners and Clerical Workers (1982-1984=100). If the CPI is
hereafter converted to a different standard reference base or otherwise revised,
the determination of the CPI adjustment shall be made with the use of such
conversion factor, formula or table for converting the CPI, as may be published
by the Bureau of Labor Statistics, or, if the bureau shall no longer publish the
same, then with the use of such conversion factor, formula or table as may be
published by an agency of the United States, or failing such publication, by a
nationally recognized publisher of similar statistical information.
(m) SURVIVAL. The provisions of Sections 8, 9, 10, 11, 12, 13, 14 and
15 shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed as of the date first above
written.
FIRST STATES GROUP, X.X. XXX X. XXXXXXXX
By: First States Group, LLC
Its general partner
By: _______________________________ ______________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
Dated: July __, 2003 Dated: July __, 2003
GUARANTEE:
For good and valuable consideration, including the Executive's agreement to
serve as an officer of American Financial Realty Trust, the obligations of First
States Group, L.P. under this Employment Agreement, dated July __, 2003, with
Xxx X. Xxxxxxxx, shall be guaranteed by American Financial Realty Trust.
AMERICAN FINANCIAL REALTY TRUST
By: _______________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
Dated: July __, 2003
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EXHIBIT A
RELEASE AND WAIVER
This release and waiver (the "Termination Release") is made as of the
___ day of __________, 200__ by ______________________ (the "Executive").
WHEREAS, the Executive and First States Group, L.P. (the "Company")
have entered into an Employment Agreement (the "Agreement") dated as of
____________, 2003 that provides for certain compensation and severance amounts
upon his termination of employment; and
WHEREAS, the Executive has agreed, pursuant to the terms of the
Agreement, to execute a release and waiver in the form set forth in this Release
and Waiver ("Termination Release") in consideration of the Company's agreement
to provide the compensation and severance amounts upon his termination of
employment set out in the Agreement; and
WHEREAS, the Executive has incurred a termination of employment
effective as of _________, 20__; and
WHEREAS, the Company and the Executive desire to settle all rights,
duties and obligations between them, including without limitation all such
rights, duties, and obligations arising under the Agreement or otherwise out of
the Executive's employment by the Company.
NOW THEREFORE, intending to be legally bound and for good and valid
consideration the sufficiency of which is hereby acknowledged, the Executive
agrees as follows:
1. RELEASE. In consideration for the payments to be made pursuant to
the Agreement:
(a) Executive knowingly and voluntarily releases, acquits and forever
discharges the Company, and its respective owners, parents, stockholders,
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, divisions and subsidiaries (collectively, the "Releasees") from
any and all charges, complaints, claims, liabilities, obligations, promises,
agreements, damages, causes of action, suits, rights, costs, losses, debts and
expenses of any nature whatsoever, known or unknown, suspected or unsuspected,
foreseen or unforeseen, matured or unmatured, against them which the Executive
or any of his heirs, executors, administrators, successors and assigns
("Executive Persons") ever had, now has or at any time hereafter may have, own
or hold by reason of any matter, fact, or cause whatsoever from the beginning of
time up to and including the date of this Termination Release, including without
limitation all claims for salary, bonuses, severance pay, vacation pay or any
benefits arising under the Employee Retirement Income Security Act of 1974, as
amended; any claims of sexual harassment, or discrimination based upon race,
color, national origin, ancestry, religion, marital status, sexual orientation,
citizenship status, medical condition or disability under Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the American with Disabilities
Act, Section 1981 of the Civil Rights Acts of 1866 and 1871, the Equal Pay Act,
The Rehabilitation Act, The Consolidated Omnibus Budget Reconciliation Act, as
amended, The Fair Labor Standards Act, as amended, and any other federal, state
or local law prohibiting discrimination in
A-1
employment; any claims of age discrimination under the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit Protection Act, or under
any other federal, state or local law prohibiting age discrimination; claims of
breach of implied or express contract, breach of promise, misrepresentation,
negligence, fraud, estoppel, defamation, infliction of emotional distress,
violation of public policy, wrongful or constructive discharge, or any other
employment-related tort; any claim for costs, fees, or other expenses, including
attorneys fees; and all claims under any other federal, state or local laws
relating to employment, except in any case to the extent such release is
prohibited by applicable federal, state and/or local law.
(b) Executive represents that he has not filed or permitted to be
filed against the Releasees, any complaints, charges or lawsuits and covenants
and agrees that he will not seek or be entitled to any personal recovery in any
court or before any governmental agency, arbitrator or self-regulatory body
against any of the Releasees arising out of any matters set forth in Section
1(a) hereof. If Executive has filed a complaint, charge, grievance, lawsuit or
similar action, he agrees to remove, dismiss or take similar action to eliminate
such complaint, charge, grievance, lawsuit or similar action within five (5)
days of signing this Termination Release.
(c) Notwithstanding the foregoing, this Termination Release is not
intended to interfere with Executive's right to file a charge with the Equal
Employment Opportunity Commission (hereinafter referred to as the "EEOC") in
connection with any claim he believes he may have against the Company. However,
Executive hereby agrees to waive the right to recover money damages in any
proceeding he may bring before the EEOC or any other similar body or in any
proceeding brought by the EEOC or any other similar body on his behalf. This
Termination Release does not release, waive or give up any claim for workers'
compensation benefits, vested retirement or welfare benefits he is entitled to
under the terms of the Company's retirement and welfare benefit plans, as in
effect from time to time, any right to unemployment compensation that Executive
may have, or his right to enforce his rights under the Agreement.
2. CONFIRMATION OF OBLIGATIONS. Executive hereby confirms and agrees
to his continuing obligation under the Agreement after termination of employment
not to directly or indirectly disclose to third parties or use any Confidential
Information (as defined in the Agreement) that he may have acquired, learned,
developed, or created by reason of his employment with the Company.
3. CONFIDENTIALITY; NO COMPETITION; NONSOLICITATION. Executive hereby
confirms and agrees to his confidentiality, nonsolicitation and non-competition
obligations under the Agreement.
4. NO DISPARAGEMENT. Each of the Executive and the Company agree not
to disparage the other, including making any statement or comments or engaging
in any conduct that is disparaging or derogatory toward the Executive or the
Company, as the case may be, whether directly or indirectly, by name or
innuendo; provided, however, that nothing in this Termination Release shall
restrict communications protected as privileged under federal or state law to
testimony or communications ordered and required by a court or an administrative
agency of competent jurisdiction.
A-2
5. CONFIDENTIALITY. Each of the Executive and the Company agree to
keep the terms of this Termination Release confidential and shall not disclose
the fact or terms to third parties, except as required by applicable law or
regulation or by court order; provided, however, that Executive may disclose the
terms of this Termination Release to members of his immediate family, his
attorney or counselor, and persons assisting him in financial planning or tax
preparation, provided these people agree to keep such information confidential;
provided, further, however, that the Company may disclose the terms of this
Termination Release to its certified public accounts, outside counsel or others
on a need to know basis, provided these people agree to keep such information
confidential.
6. ACKNOWLEDGMENT. The Company has advised the Executive to consult
with an attorney of his choosing prior to signing this Termination Release and
the Executive hereby represents to the Company that he has been offered an
opportunity to consult with an attorney prior to signing this Termination
Release. The Executive shall have forty-five (45) days to consider the waiver of
his rights in this Termination Release, although he may sign this Termination
Release sooner if he chooses. Once he has signed this Termination Release, the
Executive shall have seven (7) additional days from the date of execution to
revoke his consent to the waiver of his rights. If no such revocation occurs,
the Executive's waiver of rights in this Termination Release shall become
effective seven (7) days from the date of execution by the Executive. In the
event that the Executive revokes his waiver of rights in this Termination
Release, this Termination Release will have no force and effect and no Severance
Payments (as defined in the Agreement) shall be due or payable.
7. GOVERNING LAW. This Termination Release shall be governed and
construed in accordance with the laws of Commonwealth of Pennsylvania, without
giving effect to principles of conflicts law.
IN WITNESS WHEREOF, the Executive has executed this Termination
Release as of the day and year first above written.
_______________________________
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