1
EXHIBIT 10.9
CHANGE IN CONTROL EMPLOYMENT AGREEMENT
THIS AGREEMENT is by and between IRT Property Company, a Georgia
corporation (herein, together with any successor or assigns to its business
and/or assets, and any person or entity that assumes and agrees to perform this
Agreement by operation of law or otherwise, the "Company") and W. Xxxxxxxx
Xxxxx, III (the "Executive"), dated as of the 11th day of November, 1997.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations and entities. Therefore, in order to accomplish these objectives,
the Board has authorized and caused the Company to enter into this Agreement.
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each
party hereto, the parties, intending to be legally bound, agree as follows:
1. Certain Definitions.
(a) "Affiliated Companies" shall mean any corporation,
partnership, limited liability company, trust and/or other entity controlled by,
controlling or under common control with, the Company. Unless the context
clearly requires otherwise, as used herein, the Company shall include all its
Affiliated Companies.
(b) "Change of Control Period" shall mean the period of
three years ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall hereinafter be referred to as the "Renewal Date"), unless previously
terminated, the Change of Control Period shall be automatically extended so as
to terminate three years from such Renewal Date.
(c) "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive days as a result of incapacity due to mental or physical illness
which is determined to be total and
2
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative.
(d) "Effective Date" shall mean the first date during the
Change of Control Period (as defined in Section l(c)) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with any discussion or negotiation contemplating
or in anticipation of a potential Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination of employment.
(e) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended and the rules and regulations of the Securities and Exchange
Commission ("SEC") thereunder.
(f) "Person" shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
2. Change of Control. For the purposes of this Agreement, a
"Change of Control" shall mean:
(a) The acquisition by any Person of beneficial ownership
(within the meaning of SEC Rule 13d-3 under the Exchange Act) of 25% or more of
the combined voting power of (x) all then outstanding shares of Company common
stock ("Outstanding Company Common Stock") and (y) all then outstanding
securities of the Company entitled to vote generally in the election of
directors and all outstanding securities and/or rights to acquire (whether by
conversion, exchange or otherwise) voting securities of the Company entitled to
vote generally in the election of directors (collectively with the Outstanding
Company Common Stock, the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following acquisitions
shall not constitute a Change of Control: (i) any acquisition by a Person who
was on November 1, 1997 the beneficial owner of 25% or more of the Outstanding
Company Voting Securities, (ii) any acquisition by the Company, provided no
Change in Control has previously occurred or would result therefrom under
subsections 2(b) and 2(c) of this Agreement, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliated Company, or (iv) any acquisition by any Person pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of
this Section 2; or
(b) Individuals who, as of November 1, 1997, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board;
-2-
3
provided, however, that any individual becoming a director subsequent to
November 1, 1997 whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation, a sale, liquidation or partial liquidation, or other disposition
of all or substantially all (e.g., 50% or more) of the assets of the Company in
one or a series of transactions, and/or any combination of the foregoing (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the Persons who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such transaction
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange Act)
the Company or all or substantially all (e.g., 50% or more) of the Company's
assets either directly or through one or more subsidiaries, partnerships,
limited liability companies, trusts and/or other entities or Persons) in
substantially the same proportions as their beneficial ownership, immediately
prior to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation or other entity resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation or entity resulting from such Business Combination)
beneficially owns (within the meaning of SEC Rule 13d-3 under the Exchange Act),
directly or indirectly, 25% or more of the combined voting power of the then
outstanding voting securities of such corporation or entity except to the extent
that such ownership existed prior to the Business Combination, and (iii) at
least a majority of the members of the board of directors or other governing
body (including trustees and/or general partners) of the corporation or entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ as provided in Section 4 hereof, and the Executive
hereby agrees to remain in the employ of the Company subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on the first anniversary of such date (the "Employment Period").
-3-
4
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the
Executive's position (including status, offices, titles and reporting
relationships), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date, and (B) the Executive's services shall be
performed at the location where the Executive was employed immediately preceding
the Effective Date or any office or location not more than 35 miles from such
location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) engage in other business activities that do not
represent a conflict of interest with his duties to the Company, and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period,
the Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to 12 times the highest monthly
base salary paid or payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its Affiliated Companies in
respect of the 12-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed not later than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter shall be
reviewed at least annually. Any increase in Annual Base Salary shall not serve
to limit or reduce any other obligation to the Executive under this Agreement.
The Annual Base Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
-4-
5
(ii) Annual Bonus. In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus, excluding any payments of cash in lieu of
pension (the "Annual Bonus"), in cash at least equal to the Executive's highest
annual bonus for the last two full fiscal years prior to the Effective Date
(annualized in the event that the Executive was not employed by the Company for
the whole of such fiscal year). Each such Annual Bonus shall be paid no later
than the end of the third month of the fiscal year next following the fiscal
year for which the Annual Bonus is awarded, unless the Executive shall elect to
defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its Affiliated
Companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its Affiliated Companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the one-year period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its Affiliated
Companies.
(iv) Welfare Benefit Plans. During the Employment
Period (and after termination of employment, except where prohibited by law or
the applicable plan, or the generally applicable practices, policies and
programs of the Company and its Affiliated Companies and their respective
successors and assigns), the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under such welfare benefit plans, practices, policies and programs
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of the
Company, its Affiliated Companies and their respective successors and assigns,
but in no event shall such plans, practices, policies and programs provide the
Executive and his or her family, as applicable, with benefits which are less
favorable, in the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive and his or her family, as
applicable, at any time during the one year period immediately preceding the
Effective Date or, if more favorable to the Executive and his or her family, as
applicable, those provided generally at any time after the Effective Date to
other peer executives (and their families) of the Company and its Affiliated
Companies or their successors. In the event that the Executive's and his or her
family's participation in any such plan, program or other benefit provided under
the generally applicable practices, policies and programs of the Company and its
Affiliated Companies and their respective successors and assigns are prohibited,
the Company and its Affiliated Companies and
-5-
6
their respective successors and assigns shall provide the Executive and his or
her family, without further cost or expense to the Executive and his or her
family members, benefits similar to those which the Executive and his or her
family would otherwise have been entitled to receive under such plans, programs,
practices and policies as if the Executive's employment had not ceased.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its Affiliated Companies
in effect for the Executive at any time during the one-year period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company, the Affiliated Companies, and their respective successors and
assigns.
(vi) Fringe Benefits. During the Employment
Period (but not after termination of employment, except as required by this
Agreement, law and/or the applicable plan, practices, policies and programs of
the Company and its Affiliated Companies and their respective successors and
assigns), the Executive shall be entitled to fringe benefits in accordance with
the most favorable of such plans, practices, programs and policies in effect for
the Executive at any time during the one year period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
Affiliated Companies.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Board determines in good faith that the Disability of the Executive has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the
Executive to perform substantially the Executive's duties with the Company
and/or its Affiliated Companies (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the
-6-
7
Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company.
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment or proposed assignment to the
Executive of any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting relationships),
authority, duties or responsibilities as contemplated by Section 4(a) of this
Agreement, or any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company or any Affiliated Company promptly after
receipt of notice thereof given by the Executive;
(ii) any failure by the Company and its
Affiliated Companies to comply with any of the provisions of Section 4(b) of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company and such
Affiliated Companies promptly after receipt of notice thereof given by the
Executive;
(iii) the Company or any Affiliated Company
requiring the Executive to be based at any office or location other than as
provided in Section
-7-
8
4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company
or any Affiliated Company's business to a substantially greater extent than
required immediately prior to the Effective Date;
(iv) any purported termination by the Company or
any Affiliated Company of the Executive's employment otherwise than as expressly
permitted by this Agreement; or
(v) any failure by the Company or any Affiliated
Company to comply with and satisfy Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of Good
Reason made by the Executive shall be conclusive. Anything in this Agreement to
the contrary notwithstanding, a termination by the Executive for any reason
during the period beginning on the Effective Date and ending 30 days following
the first anniversary of the Effective Date shall be deemed to be a termination
for Good Reason for all purposes hereunder.
(d) Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 12(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company and/or any Affiliated
Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company and/or any Affiliated Company notifies the Executive of such
termination, and (iii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
-8-
9
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company and/or any Affiliated Company shall
terminate the Executive's employment other than for Cause or Disability, or the
Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Date of Termination the aggregate of
the following amounts, or if elected by the Executive, the following aggregate
amounts shall be paid in cash to the Executive in equal monthly installments
over the one year following termination of employment:
A. the sum of (1) the Executive's
Annual Base Salary through the Date of Termination to the extent not theretofore
paid, (2) the product of (x) the average of the Annual Bonus paid or payable,
including any bonus or portion thereof which has been earned but deferred, for
the two most recently completed fiscal years during the Employment Period, if
any (such amount being referred to as the "Most Recent Annual Bonus") and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365, and
(3) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2), and (3) shall be hereinafter referred to as the "Accrued
Obligations");
B. the amount equal to the sum of (x)
one (1) times the Executive's Annual Base Salary, and (y) one (1) times the Most
Recent Annual Bonus; and
(ii) for one year after the Executive's Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company and its Affiliated
Companies, shall continue to provide benefits to the Executive and/or the
Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 4(b)(iv) of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes re-employed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
-9-
10
remained employed until two years after the Date of Termination and to have
retired on the last day of such period;
(iii) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Company and its Affiliated Companies (such other amounts and
benefits shall be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable provided by the Company and Affiliated
Companies to the estates and beneficiaries of peer executives of the Company.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period,
this Agreement shall terminate without further obligations to the Executive,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable such benefits provided by the Company and its
Affiliated Companies to other peer executives and their families, provided the
provision of such benefits are permissible under law, and the plans and programs
of the Company and its Affiliated Companies.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously deferred
by the Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.
-10-
11
7. Non-exclusivity of Rights; Disputes; etc. Nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its Affiliated Companies and entities and for which the Executive may
qualify, nor, subject to Section 12(f), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its Affiliated Companies and entities. Amounts or
benefits which are vested or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of, or any contract or
agreement with, the Company or any of its Affiliated Companies at or subsequent
to the Date of Termination, shall be payable in accordance with such plan,
policy, practice, program, contract or agreement, except as explicitly modified
by this Agreement. In the event that the Company terminates or seeks to
terminate this Agreement or the employment of the Executive hereunder and/or
disputes its obligation to pay or fails or refuses to pay or provide timely to
the Executive any portion of the amounts or benefits due to the Executive
pursuant to this Agreement and the Executive prevails without regard to amount,
the Company shall pay or reimburse to the Executive all costs incurred by him in
such dispute or collection effort, including reasonable attorneys' fees and
expenses (whether or not suit is filed) and costs of litigation.
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. The Executive shall not be required to mitigate the amount
of any payment or benefit provided herein by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided herein be
reduced by any compensation earned by the Executive an a result of employment by
another employer or by retirement or disability benefits after the date of
termination of employment or otherwise. The Company agrees to pay as incurred,
to the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
9. Limitation of Benefits.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any benefit, payment
or distribution by the Company to or for the benefit of the Executive (whether
payable or distributable pursuant to the terms of this Agreement or otherwise)
(a "Payment") would, if paid, be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), then the Payment shall be
-11-
12
reduced to the extent necessary to avoid the imposition of the Excise Tax. The
Executive may select the Payments to be limited or reduced.
(b) All determinations required to be made under this
Section 9, including whether an Excise Tax would otherwise be imposed and the
assumptions to be utilized in arriving at such determination, shall be made by
Xxxxxx Xxxxxxxx L.L.P. or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that a Payment is due to be
made, or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Payments hereunder will
have been unnecessarily limited by this Section 9 ("Underpayment"), consistent
with the calculations required to be made hereunder. The Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
10. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its Affiliated
Companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
Affiliated Companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement. Executive
agrees that, for a period of one (1) year after termination, he will not solicit
or hire any Company employees for any business that is in direct competition
with any Company property.
11. Successors.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit
-12-
13
of and be enforceable by the Executive's heirs, legatees, and personal and legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company, the Affiliated Companies and their respective
successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, as a result of a Business Combination, or otherwise) to all
or substantially all (e.g. 50% or more) of the business and/or assets of the
Company to assume expressly 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.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, without reference to conflicts
of laws principles. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives. As used
herein, the plural shall include the singular and vice versa, any reference to
gender shall include the other genders, and the term "include" and any
derivation thereof shall be without limitation by virtue of enumeration thereof
or otherwise.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, or by
reliable overnight courier service addressed as follows:
If to the Executive:
W. Xxxxxxxx Xxxxx, III
000 Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to the Company:
IRT Property Company
000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
-13-
14
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between
the Executive and the Company, the employment of the Executive by the Company is
"at will" and, subject however to subsections 1.(b) and 1.(c) hereof, prior to
the commencement of any discussion or negotiation that contemplate or are in
anticipation of a potential Change in Control, the Executive's employment and
this Agreement may be terminated by either the Executive or the Company at any
time prior to the Effective Date, in which case the Executive shall have no
further rights under this Agreement. From and after the Effective Date, this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.
-14-
15
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.
EXECUTIVE:
/S/ W. Xxxxxxxx Xxxxx, III
-----------------------------
W. Xxxxxxxx Xxxxx, III
COMPANY:
IRT PROPERTY COMPANY
By: /S/ Xxxxxx X. XxXxxxx
-------------------------
Xxxxxx X. XxXxxxx
President
-15-
