Exhibit 10(iv)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), entered into this 14 day of December,
1996, between UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the
"Company") and XXXX X. XXXXXXXXX (the "Executive"), recites and provides as
follows:
R E C I T A L S:
A. On October 1, 1996, the Company and South West Property Trust Inc., a
Maryland corporation ("South West"), and others entered into an Agreement and
Plan of Merger (the "Merger Agreement") pursuant to which South West would merge
with and into a wholly owned subsidiary of the Company.
B. The Executive and South West are parties to an Employment Agreement dated as
of January 1, 1995, and amended January l, 1996 (the "South West Employment
Agreement").
C. The South West Employment Agreement automatically terminates as the last day
of the month in which South West merges with another entity and South West is
not the survivor, and the Company and the Executive wish to replace the South
West Employment Agreement with this Agreement.
D. This Agreement is delivered pursuant to Section 3.2 of the Merger Agreement
and shall automatically terminate in the event the transactions contemplated by
the Merger Agreement are not consummated within the time set forth therein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
undertakings hereinafter set forth, and the payments to be made to the Executive
hereunder and as a result of the execution of the Merger Agreement, the parties
hereto agree as follows:
1. Position and duties.
a. The Company shall employ the Executive as Executive Vice President of the
Company, subject to the supervision of the President or the Board of Directors
of the Company (the "Board"). In this capacity, the Executive shall initially
also serve on the Executive and Investment Committees of the Company.
b. The Executive agrees to serve the Company as a full time executive officer
with duties and authority as set forth in the Company's by-laws or as otherwise
prescribed by the Board, the President, or such other senior officer prescribed
by the Board. The Executive shall devote such time, attention, skill, and
efforts to the performance of his duties as a Company executive as shall be
required therefore, all under the supervision and direction of the Board, the
President, or such other senior officer prescribed by the Board. The Executive
agrees that during the period of his employment he will not, without the consent
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of the Board, have any other (i) real estate investment trust affiliations, or
(ii) corporate affiliations that interfere with the ability of the Executive to
perform his duties for the Company or comply with the covenants under this
Agreement.
2. Term of Agreement.
This Agreement will take effect as of the closing of the transaction
contemplated by the Merger Agreement and will continue for a period of one (1)
year unless sooner terminated in accordance with Section 4. This Agreement shall
automatically renew for successive one (1) year periods unless otherwise
terminated in accordance with Section 4.
3. Compensation and Benefits.
a. Base Salary. The Executive's pay will not be less than $25O,000 per year,
payable in accordance with the Company's regular payroll practices.
b. Incentive Compensation. The Executive will participate in the management
incentive plan adopted by the Compensation Committee of the Board (the
"Compensation Committee"), as may be modified from time to time, which plan is
currently tied to the annual performance of the Company as measured by the
increase in funds from operations per share from the prior year. The Executive
shall also be entitled to participate in any other bonus plan approved by the
Board, which may initially include a bonus that is based upon the Executive
meeting certain performance goals and objectives. The Executive acknowledges
that the Board may elect to terminate incentive compensation for all executives
at any time.
c. Benefit Plans. The Executive will be eligible to participate in any and all
the employee benefit plans, medical insurance plans, retirement plans, and other
benefit plans in effect for employees in similar positions at the Company (the
"Company Plans"). Such participation shall be subject to the terms of the
applicable plan documents and the Company's generally applied policies. In
addition, the Executive acknowledges that the Company may elect to terminate the
Company Plans. With respect to the 401(k) Plan and Profit Sharing Plan of the
Company, the Executive shall be credited with his time of employment with South
West or its predecessors.
d. Automobile. The Executive will receive an automobile allowance payable in
accordance with the Company's regular practices, which for 1997 for an Executive
Vice President of the Company is $8,300. The Executive's automobile allowance
shall be reviewed annually in accordance with the Company's policies. The
Executive acknowledges that the Company may elect to terminate the automobile
allowance for all executive officers at any time.
e. Option Plan. The Executive will be entitled to participate in the Company's
1982 Stock Option Plan on the same basis as similarly situated executive
officers of the Company. During 1997, the Executive will be granted options to
purchase 30,000 shares of common stock of the Company (the "Options"), which
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will vest as of December 31, 1997, provided the Executive has been employed
continuously through the initial term of this Agreement. The exercise price of
the Options shall be the closing sale price of shares of common stock of the
Company on the New York Stock Exchange on January 2, 1997.
f. Stock Loan Plan. The Executive will be entitled to participate in the
Company's 1991 Officers Stock Purchase and Loan Plan on the same basis as
similarly situated executive officers of the Company. During 1997, the Executive
will be offered the opportunity, to purchase up to 10,000 shares of common stock
of the Company, pursuant to the referenced Stock Purchase and Loan Plan. The
shares shall be granted at the closing sale price of common stock of the Company
on the New York Stock Exchange on January 2, 1997. The Executive acknowledges
that the purchase of shares pursuant to the referenced Stock Purchase and Loan
Plan is subject to shareholder approval, which shall be submitted for approval
at the 1997 annual meeting of shareholders of the Company.
g. Travel. It is contemplated that the Executive will be required to incur
travel and entertainment expense in the interests and on behalf of the Company
and in furtherance of its business. The Executive agrees to comply with the
travel and entertainment guidelines of the Company, which may be modified from
time to time. The Company at the end of each month during the period of this
Agreement will, upon submission of appropriate bills or vouchers, pay all such
expense incurred by the Executive during such month, such payment to be made
either directly to the payee named in such bills or vouchers, or to the extent
paid by the Executive, by reimbursement of the Executive: The Executive agrees
to maintain adequate records, in such detail as the Company may reasonably
request, of all expenses to be reimbursed by the Company hereunder and to make
such records available for inspection as and when reasonably requested by the
Company.
4 Termination of Agreement.
a. Change of Control. This Agreement may be terminated by either party, by
written notice to the other, in the event of (i) the merger or consolidation of
the Company with any other real estate investment trust, corporation or other
business entity, in which the Company is not the survivor, (ii) the transfer or
sale of all or substantially all of the assets of the Company other than to an
affiliate or subsidiary of the Company, (iii) the liquidation of the Company, or
(iv) the acquisition by any person or by a group of persons acting in concert,
of more than 25% of the outstanding voting securities of the Company, which
results in the resignation or addition of three (3) or more members of the
Board.
b. Incapacity; Death. This Agreement may be terminated by the Company, by notice
to the Executive or his personal representative given at least thirty (30) days
prior to the effective date specified therein, in the event that the Executive
shall be unable to perform his duties hereunder for a period of more than three
consecutive months as a result of illness or incapacity. This Agreement shall
terminate on the death of the Executive.
c. Without Cause. This Agreement may be terminated by the Company, without
cause, by notice given to the Executive on or before October 1, of each year,
with the effective date of such termination being December 31 of the same year.
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x. Xxxxxxxxx Compensation. Upon termination of this Agreement pursuant to
Section 4 (a), 4(b) or 4(c), the Company shall pay to the Executive or his legal
representative, certain compensation (the "Severance Compensation") as follows:
(1) First Three Years. If the termination is prior to January 1, 2000, the
Executive shall be paid thirteen (13) weeks of base salary and automobile
allowance, and the Company shall continue in effect for a period of thirteen
(13) weeks after the effective date of the Executive's termination, all
health/life/disability insurance coverage provided to the Executive and his
immediate family on the day immediately prior to the date of notice of
termination or, if the Executive shall so elect, the Company shall pay to the
Executive an amount equal to the premium, or portion thereof allocable to the
Executive for providing such coverage, provided, however, if such coverage
cannot be continued by the Company, the Company shall pay to the Executive an
amount sufficient for the Executive to obtain substantially similar coverage for
a period of thirteen (13) weeks after the effective date of termination.
(2) Three to Ten Years. If the termination is after January 1, 2000 and prior to
January 1, 2007, the Executive shall be paid twenty-six (26) weeks of base
salary and automobile allowance, and the Company shall continue in effect for a
period of twenty-six (26) weeks after the effective date of the Executive's
termination, all health/life/disability insurance coverage provided to the
Executive and his immediate family on the day immediately prior to the date of
notice of termination or, if the Executive shall so elect, the Company shall pay
to the Executive an amount equal to the premium, or portion thereof allocable to
the Executive for providing such coverage, provided, however, if such coverage
cannot be continued by the Company, the Company shall pay to the Executive an
amount sufficient for the Executive to obtain substantially similar coverage for
a period of twenty-six (26) weeks after the effective date of termination.
(3) Ten or More Years. If the Termination is after January 1, 2007, the
Executive shall be paid fifty-two (52) weeks of base salary and automobile
allowance, and the Company shall continue in effect for a period of fifty-two
(52) weeks after the effective date of the Executive's termination, all
health/life/disability insurance coverage provided to the Executive and his
immediate family on the day immediately prior to the date of notice of
termination or, if the Executive shall so elect, the Company shall pay to the
Executive an amount equal to the premium, or portion thereof allocable to the
Executive for providing such coverage, provided, however, if such coverage
cannot be continued by the Company, the Company shall pay to the Executive an
amount sufficient for the Executive to obtain substantially similar coverage
for a period of fifty-two (52) weeks after the effective date of termination.
(4) Incentive Compensation. If the termination is on or after January 1, 1998,
the Executive shall also be entitled to a pro-rata portion of incentive
compensation, if any, earned by the Executive pursuant to the second sentence of
Section 3(b) of this Agreement, which compensation shall be paid no later than
forty-five (45) days after the end of the Company's fiscal year.
(5) Severance Compensation Reduction. In the event termination is pursuant to
Section 4 (b) of this Agreement, Severance Compensation shall be reduced by the
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amount of any life insurance proceeds or disability insurance payments, as
appropriate, payable to the Executive or his personal representative or other
beneficiary as provided by this Agreement.
(6) Timing. The Company shall pay to the Executive or his legal representative
the sums payable to such Executive or his legal representative on account of the
portion of Severance Compensation consisting of base salary and automobile
allowance within fifteen (15) days after the earlier to occur of (i) the
effective date of termination or (ii) the date the Executive is no longer
expected to perform full time duties for the Company.
e. By the Executive. This Agreement may be terminated by the Executive, upon
notice given at least ninety (90) days before the effective date of termination.
In such event, the Executive shall not be entitled to any compensation under
this Agreement for any period not worked after the termination date.
f. For Cause. The Company may terminate this Agreement with cause by providing a
written notice to the Executive. In such event, the Executive shall not be
entitled to any compensation under this Agreement for the period after the
termination date, and any compensation paid to the Executive shall be net of any
sums owed by the Executive to the Company as a result of the act for which the
employment of the Executive was terminated. The circumstances under which the
Company will be deemed to have cause to terminate this Agreement include the
following:
(1) The Executive is convicted of or pleads nolo contendere to any crime, other
than a traffic offense or misdemeanor not involving moral turpitude;
(2) The Executive shall commit, with respect to the Company, an act of fraud or
embezzlement or shall have been grossly negligent in the performance of his
duties hereunder;
(3) The Executive engages in gross dereliction of duties, refusal to perform
assigned duties consistent with his position, or repeated violation of the
Company's policies after written warning or
(4) The Executive engages in drug abuse.
g. Consulting Services. Upon termination of this Agreement, the Executive shall,
for a period of up to one year following the effective date of termination,
render such advisory or consulting services to the Company as it may reasonably
request, taking into account the Executive's health, business commitments,
geographical location and other relevant circumstances. The intent of this
paragraph is not to obligate the Executive to perform any day-to-day duties for
the Company following termination of his employment but only to assist
management in effecting a smooth transition of the functions or projects for
which the Executive was responsible while an employee of the Company. Should the
Executive fail to render such advisory or consulting services, after 30 days'
prior written notice to the Executive and the Executive's failure to commence
the rendering of such service, the Company's sole remedy shall be to terminate
any insurance coverages the Company is maintaining.
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h. Survival. Notwithstanding the termination of this Agreement, the Executive
acknowledges that he shall continue to be bound by the covenants in Sections 5
and 6 of this Agreement. The Executive shall not be entitled to any Severance
Compensation or benefits for any period he is in violation of the covenants in
Sections 5 or 6.
5. Covenant to Maintain Confidentiality.
a. The Executive acknowledges that because of his proposed employment with the
Company, he will be exposed to and learn a substantial amount of information
which is proprietary and confidential to the Company, whether or not he develops
or creates such information. The Executive further acknowledges that because of
his employment with South West, he was exposed to and learned a substantial
amount of information which is proprietary and confidential to South West,
whether or not he developed or created such information. The Executive
acknowledges that such proprietary and confidential information may include, but
is not limited to, acquisition or merger information; development projects;
business or investment opportunities; client lists; or any other information of
a similar nature made available to the Executive and not known in the trade in
which the Company is engaged, which, if misused or disclosed, could adversely
affect the business or standing of the Company. Confidential information shall
not include information that is generally known or generally available to the
public through no fault of the Executive.
b. The Executive agrees that except as required by law, he will not at any time
divulge to any person, agency, institution, company or other entity any
information which he knows or has reason to believe is proprietary or
confidential to the Company, including but not limited to the types of
information described in Section 5(a), or use such information to the
competitive disadvantage of the Company. The Executive agrees that his duties
and obligations under this Section 5 will continue for 12 months from the
termination of his employment or as long as such information remains proprietary
or confidential to the Company.
6. Non-Competition and Non-Solicitation Covenants
a. The Executive acknowledges that i) he will be employed as a high-level
employee in an executive and managerial capacity; ii) his employment with the
Company gives him access to confidential and proprietary information concerning
the Company; iii) his prior employment with South West gave him access to
confidential and proprietary information concerning South West; iv) the
agreements and covenants contained in this Section 6 (the "Covenants") are
essential to protect the business of the Company and to protect the Company's
investment in South West; and v) the Executive is to receive consideration
pursuant to this Agreement and the Merger Agreement.
b. During the period of the Executive's employment, the Executive agrees that he
will not, on behalf of anyone other than the Company, engage in any managerial,
executive, sales, or marketing activities related to any business in which the
Company is or becomes engaged during the Executive's employment. The Executive
acknowledges the competitive nature of the business and the extensive geographic
markets served by the Company. The Executive acknowledges that because of his
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position with the Company his duties will require him to perform, supervise, or
assist in performing work throughout the markets served by the Company. The
Executive further acknowledges that because of his position with the Company and
the broad scope of his duties, he will be in a position to cause substantial
harm to the Company were he to compete in the business of the Company or any
other business in which the Company is or becomes engaged during Executive's
employment in the Company's markets. Given the broad scope of Executive's
duties, he acknowledges that the geographic scope of the covenants in this
paragraph shall be limited to the continental United States.
c. Should the Executive (i) be terminated with or without cause following the
first 90 days of this Agreement, or (ii) resign from his employment or otherwise
terminate this Agreement at any time, he agrees that for a twelve (12) month
period following the termination of his employment with the Company, the
Executive shall not hire or solicit any employee of the Company employed at the
time of his termination, or encourage any such employee to leave such
employment.
d. If the Executive commits a material breach of, the Covenants, the Company
shall have the rights and remedy (in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity) to seek
injunctive relief, including permanent injunctions; (ii) to have the Covenants
specifically enforced by any court of competent jurisdiction (it being agreed
that any breach or threatened breach of the Covenants would cause irreparable
injury to the Company and that money damages would not provide an adequate
remedy to the Company; and (iii) to cease any severance payments or benefits
which the Executive or his eligible dependents may otherwise be due.
e. The Executive agrees that the Covenants are necessary for the reasonable and
proper protection of the Company and that the Covenants are reasonable in
respect of subject matter, length of time, and geographic scope. The Executive
further acknowledges that the Covenants will not unreasonably restrict him from
earning a livelihood following the termination of his employment with the
Company.
f. If any court of competent jurisdiction determines that the Covenants, or any
part thereof, are invalid or unenforceable, the remainder of the Covenants shall
not thereby be affected and shall be given full effect, without regard to the
invalid portions. In such event, the court shall have the power (and the parties
hereto request the court) to reduce or modify the duration or scope, or any
other unenforceable aspect of such provision, as the case may be, and, in its
reduced or modified form, enforce such provision to the maximum extent
permissible.
g. The provisions of this Section 6 so far as they relate to the period after
the end of the term of this Agreement shall continue to have effect and shall
operate as a separate agreement between the Company and the Executive, provided,
however, that the provisions of Section 6 (b) shall terminate.
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7. Successors and Assigns.
a. The Executive acknowledges and agrees that this Agreement is a contract for
his personal services, he is not entitled to assign, subcontract, or transfer
any of the obligations imposed or benefits provided under this Agreement.
b. This Agreement shall be binding on and will inure to the benefit of any
successors or assigns of the Company.
8. Construction of Agreement
a. This Agreement contains the complete agreement between the Executive and the
Company with respect to its subject matter. This Agreement supersedes all
previous and contemporaneous agreements, negotiations, commitments, writings,
and undertakings, and, effective as of the closing of the transactions
contemplated by the Merger Agreement, the South West Employment Agreement shall
terminate.
b. This Agreement shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Virginia. Any dispute arising between the parties
related to or involving this Agreement will be litigated in a court having
jurisdiction in the Commonwealth of Virginia.
c. This Agreement may be modified or waived only by a writing signed by both
parties.
d. Any waiver of a breach of this Agreement will not constitute a waiver of any
future breach, whether of a similar or dissimilar nature.
e. The provisions of this Agreement shall be severable. If any court or agency
with authority to do so should determine that any part of this Agreement is
legally invalid, the remainder of this Agreement shall remain in effect. The
parties intend for this Agreement to be enforceable to the fullest extent
permitted by law.
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WE AGREE TO THIS:
UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation
By: /s/ Xxxx X. XxXxxx
Its: President
EXECUTIVE
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
