EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of March 14,
1997, by and between Grove Real Estate Asset Trust, a real estate investment
trust organized under the laws of the State of Maryland ("GREAT"), and Xxxxx
Xxxxxxx, an individual residing at 00 Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxx
00000 ("Executive").
WHEREAS, on the date hereof, GREAT is entering into a series of related
transactions pursuant to which it will acquire, among other things,
substantially all of the interests of Executive and certain other individuals
and entities in a portfolio of multi-family residential properties (and one
retail mixed-use property) located in the Northeastern United States;
WHEREAS, it is a condition to the consummation of the above-referenced
transactions, that Executive enter into this Agreement with GREAT; and
WHEREAS, Executive desires to be employed by and serve GREAT and GREAT
desires to employ Executive, all on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Certain Definitions. The following capitalized terms, as used in this
Agreement shall have the meanings ascribed to such terms below:
"Cause" means (a) failure of the Executive to perform his
duties under Section 3 of this Agreement or otherwise to perform or observe any
of the material terms or provisions of this Agreement or the Noncompetition
Agreement, in either case after receipt of notice from GREAT specifying such
failure and giving Executive fifteen (15) days to cure such failure; (b) willful
misconduct or other similar action on the part of Executive that is materially
damaging or detrimental to GREAT; (c) conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or a plea of no contest
by Executive with respect to, a crime involving a felony, fraud, embezzlement or
the like; or (d) misappropriation (or attempted misappropriation) of GREAT's
funds or misuse of GREAT's assets by Executive.
"Change of Control" a "Change of Control" of GREAT shall be
deemed to have occurred upon the happening of any of the following events:
(a) the acquisition or holding, other than in or as a result of a
transaction approved by the Continuing Trust Managers (as defined in paragraph
(b) below) of GREAT, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of the combined voting power of the then outstanding Common Shares and
other shares of GREAT entitled to vote generally in the election of trust
managers, but excluding for this purpose:
(i) any such acquisition (or holding) by any Employer (as such
term is defined in GREAT's 1996 Share Incentive Plan), or any employee benefit
plan (or related trust) of such Employer; or
(ii) any such acquisition (or holding) by any corporation with
respect to which, following such acquisition, more than 50% of, respectively,
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Common Shares
and other voting securities of GREAT immediately prior to such acquisition in
substantially the same proportion as their ownership immediately prior to such
acquisition, of the then outstanding Common Shares of GREAT and of the combined
voting power of the then outstanding voting securities of GREAT entitled to vote
generally in the election of trust managers;
(b) individuals who, as of the date hereof, constitute the Board of
Trust Managers of GREAT (the "Continuing Trust Managers") cease for any reason
to constitute at least a majority of the Board of Trust Managers of GREAT,
provided that any individual becoming a trust manager subsequent to the date
hereof whose election, or nomination for election by the shareholders of the
Company, was approved by a vote of at least a majority of the persons then
comprising the Continuing Trust Managers shall be considered a Continuing Trust
Manager, but excluding, for this purpose, any such individual whose initial
election as a member of the Board of Trust Managers of GREAT is in connection
with an actual or threatened "election contest" relating to the election of the
trust managers of GREAT (as such term is used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(c) approval by the shareholders of GREAT of
(i) a reorganization, merger or consolidation of GREAT, with
respect to which in each case all or substantially all of the individuals and
entities who were the respective beneficial owners of the Common Shares or
voting securities of GREAT immediately prior to such reorganization, merger or
consolidation will not, immediately following such reorganization, merger or
consolidation, beneficially own, directly and indirectly, more than 50% of,
respectively, the then outstanding Common Shares and the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors of the entity resulting from such reorganization, merger
or consolidation, or
(ii) a complete liquidation or dissolution of GREAT, or
(iii) the sale or other disposition of all or substantially all of the
assets of GREAT.
"Common Shares" means the common shares of beneficial interest, par value
$0.01 per share of GREAT.
"Company" means, collectively, GREAT and its subsidiaries, including,
without limitation, Grove Operating, L.P.
"Confidential Information" means any and all proprietary
information of the Company of whatever kind or nature pertaining to any aspect
of the Company's business as disclosed as a consequence of or through employment
with GREAT or otherwise. Such proprietary information includes but is not
limited to information relating to the Company's inventions, processes, plans,
products, sources or supply of material, operating and other cost data, property
purchase prices, list of present, past, and prospective customers or tenants,
customer or seller proposals, price or rent lists and data relating to
determination of rental rates or pricing of the Company's products or services,
any of which information is not generally known to the public or to actual or
potential competitors of the Company.
"Disability" means that Executive shall have been unable to
perform in any material respect Executive's duties under this Agreement by
reason of illness, or physical or mental disability or other similar incapacity,
which inability shall continue for more than 120 consecutive days, or 180 days
during any twelve-month period, but only to the extent that such definition does
not violate the Americans With Disabilities Act, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Good Reason" means (a) the assignment of Executive without
his consent to a position, responsibilities or duties of a materially lesser
status or degree of responsibility than his position, responsibilities, or
duties as set forth in Section 3 hereof or (b) failure of GREAT to perform or
observe any of the material terms or provisions of this Agreement, and the
continued failure of GREAT to cure such default within thirty (30) days after
written notice of such default and demand for performance has been given to
GREAT by Executive, which notice and demand shall describe specifically the
nature of such alleged failure to perform or observe such material terms or
provisions; provided, however, that if cure is impossible within such thirty
(30) days, it shall be sufficient for GREAT to commence such cure within said
thirty (30) day period, and pursue such cure diligently to completion within the
shortest possible reasonable time.
"Noncompetition Agreement" means that certain Noncompetition
Agreement between Executive and GREAT, of even date herewith.
2. Term of Employment. GREAT will employ the Executive, and the
Executive hereby accepts employment by GREAT, on the terms and conditions
contained in this Agreement for the period commencing upon the date of this
Agreement and ending on the date that is three (3) years from the date hereof
(together with any extensions thereof, the "Term"). This Agreement will
automatically extend for successive one-year terms without any further action by
the parties hereto, unless GREAT or Executive gives written notice to the other,
at least 120 days prior to the end of the then current term, of such party's
desire to terminate this Agreement.
3. Position and Duties.
(a) Executive shall serve as Chief Executive Officer and
President of GREAT, with such duties and responsibilities as are assigned or
delegated to Executive by GREAT's Board of Trust Managers from time to time.
(b) Executive shall devote substantially all of his business
time, attention, skill and energy to the performance of Executive's duties and
the advancement of the business and affairs of GREAT. If Executive is elected as
a director or officer of GREAT or any of its affiliates, Executive will fulfill
his duties as such director or officer without additional compensation.
(c) Subject to the covenants of Executive set forth in the
Noncompetition Agreement, Executive may engage in other activities for
Executive's own account while employed by GREAT hereunder, including, without
limitation, charitable, community and other business activities, provided that
such other activities do not materially interfere with the performance of
Executive's duties hereunder and are not otherwise detrimental to the business
and operations of GREAT and its subsidiaries.
4. Current Compensation.
(a) Base Compensation. During the Term, GREAT shall pay the Executive
an initial annual base salary equal to $50,000, payable in equal installments in
accordance with GREAT's normal practices for payment of executives in existence
from time to time. Executive's salary shall be reviewed by GREAT's Board of
Trust Managers on the employment anniversary date each year, and nothing in this
Agreement shall be deemed to prohibit an increase at any time in the annual rate
of salary of Executive at the sole discretion of GREAT's Board of Trust Managers
.
(b) Bonus Compensation. Executive will be entitled to bonus compensation if
and as determined, and in the form and upon the terms determined, by GREAT's
Board of Trust Managers; including, without limitation pursuant to GREAT's 1996
Share Incentive Plan.
(c) Reimbursement for Expenses. During the Term, GREAT will reimburse
Executive for all documented expenses properly incurred by Executive in the
performance of Executive's duties under this Agreement. Reimbursement for such
expenses shall be made in accordance with the expense reimbursement policies of
GREAT in effect from time to time.
(d) Other Benefits. In addition to the benefits specified in Sections
4(a) through 4(c), during the Term, Executive will be entitled to participate in
any present and future life, disability or health insurance, pension,
retirement, profit sharing or employee stock ownership plan or other
compensation or incentive plan adopted by GREAT for the general and overall
benefit of all principal executives of GREAT.
5. Confidentiality; Nondisclosure. Executive hereby agrees to hold in
confidence and not directly or indirectly to use or disclose, either during or
after the Term, Confidential Information obtained or created by Executive during
the Term, whether or not during working hours, except to the extent authorized
by GREAT. Upon termination of this Agreement (for any reason), or upon an
earlier request by GREAT, Executive shall deliver to GREAT all tangible forms of
Confidential Information in Executive's possession or control, including, but
not limited to, drawings, specifications, records, devices, models,
correspondence, blueprints, manuals, letters, notes, notebooks, reports,
flow-charts, computer programs, proposals, or any other documents, whether in
hard copy or on magnetic or optical media, and any copies or reproductions
thereof.
6. Termination of Employment.
(a) Executive's employment with GREAT hereunder shall terminate upon
Executive's death.
(b) Upon notice to Executive, GREAT may terminate Executive's
employment with GREAT hereunder (i) upon the Disability of Executive, (ii) for
Cause, or (iii) for any other reason in its sole and absolute discretion.
(c) Upon not less than thirty (30) days prior written notice to GREAT,
Executive may terminate Executive's employment with GREAT hereunder (i) for Good
Reason, or (ii) at any time within one (1) year after a Change of Control of
GREAT.
7. Compensation Upon Termination of Employment.
(a) If Executive's employment with GREAT is terminated by Executive's
death, GREAT shall continue to pay to Executive's estate, or as may be directed
by the legal representatives of such estate, Executive's full base salary at the
rate in effect at the time of Executive's death through the end of the calendar
month during which his death occurs.
(b) If Executive's employment with GREAT is terminated by reason of
Executive's Disability, GREAT will continue to pay Executive's full base salary
at the rate in effect at the time notice of Executive's termination as a result
of Executive's Disability is given, through the end of the calendar month during
which such termination is effective and for the lesser of (i) three consecutive
months thereafter, and (ii) the period until disability insurance benefits
commence under the disability insurance coverage furnished by GREAT to
Executive.
(c) If (i) Executive shall terminate Executive's employment with GREAT
in breach of this Agreement or (ii) GREAT terminates Executive's employment with
GREAT for Cause; GREAT shall pay Executive's full salary, at the rate in effect
at the time notice of such termination is given through the date such
termination is effective, and GREAT shall have no further obligations to
Executive under this Agreement.
(d) If (i) GREAT terminates Executive's employment with GREAT pursuant
to clause (iii) of Section 6(b) or (ii) Executive terminates his employment with
GREAT for Good Reason or in the event of a Change of Control of GREAT, (x) GREAT
shall continue to pay the Executive's full base salary at the rate in effect at
the time that notice of such termination is given through the end of the
calendar month during which such termination is effective and (y) GREAT shall
pay to Executive a lump sum amount equal to 200% of (A) Executive's then current
base salary plus (B) an amount equal to the aggregate of all bonuses (whether
cash, stock, options, or otherwise (but specifically excluding Deferred Stock
Grants, if any, granted to Executive under GREAT's 1996 Share Incentive Plan)
granted to Executive for the previous year, and GREAT shall have no further
obligations to Executive under this Agreement.
(e) Notwithstanding anything to the contrary set forth in this Section
7, no termination of Executive's employment with GREAT shall affect the right of
Executive or his estate of beneficiaries to receive any salary or bonus accrued
and due and payable but unpaid at the time of such termination, or any vested
rights which Executive may have at the time of his death pursuant to any
insurance or other death benefit plans or any other plans, policies or
arrangements of GREAT, subject to the terms of such insurance or other plans,
policies or arrangements.
8. Injunctive Relief; Breach of Certain Provisions.
(a) Executive acknowledges that the injury that would be suffered by
GREAT as a result of a breach of the provisions of this Agreement (including,
without limitation, any provision of Section 5 (Confidentiality; Nondisclosure))
would be irreparable, and that an award of monetary damages to GREAT for such a
breach would be an inadequate remedy. Consequently, GREAT will have the right,
in addition to any other rights it may have, to obtain injunctive relief to
restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement, and GREAT will not be obligated to post bond or
other security in seeking such relief.
(b) Without limiting GREAT's rights under this Section 8 or any other
remedies available to GREAT, if Executive (i) breaches any of the provisions of
Section 5 (Confidentiality; Nondisclosure) of this Agreement or (ii) breaches
any of the provisions of Section 2 or Section 3 of the Noncompetition Agreement,
GREAT shall have the right to cease making payments of any amounts otherwise due
to Executive under this Agreement.
9. Termination of Existing Employment Agreement. The existing Employment
Agreement between Executive and GREAT is hereby terminated and shall be of no
further legal effect.
10. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11. Binding Effect. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective successors, heirs,
assigns and legal representatives. The duties of Executive under this Agreement
are personal and therefore, may not be delegated.
12. Survival. It is the express intention and agreement of the parties
hereto that the provisions of Section 5 (Confidentiality; Nondisclosure) of this
Agreement shall survive the termination of this Agreement and termination of the
employment of Executive with GREAT hereunder or otherwise.
13. Notices. All notices and other communications to any party
hereunder shall be in writing and shall be personally delivered or sent by
certified mail, postage prepaid, return receipt requested, or by a reputable
courier delivery service or by prepaid telex or telecopy and shall be given to
the address or telex or telecopier number for such party set forth below such
party's signature to this Agreement, or to such other address or telex or
telecopier number as such party may hereafter specify by notice to the other
party. Each such notice or other communication shall be effective (a) if given
by telex or telecopier, when such telex or telecopy is transmitted to the telex
or telecopier number specified by this Section and the appropriate answerback or
confirmation is received or (b) if given by any other means (including, without
limitation, by courier), when delivered at the address specified by this
Section.
14. Headings. The Section headings contained in this Agreement are inserted
for convenience of reference only and shall not in any way define or affect the
meaning, construction or scope of the provisions hereof.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without reference to
principles conflict of laws.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original, but all of which
together shall constitute the same instrument.
17. Entire Agreement; Amendment. This Agreement supersedes all prior
agreements (whether written or oral) among the parties with respect to the
subject matter, is intended as a complete and exclusive statement of the terms
of the agreement among the parties with respect thereto and cannot be amended or
terminated except by a written instrument by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GROVE REAL ESTATE ASSET TRUST
/s/ Xxxxx Xxxxxxx By:/s/ Xxxxxx X. XxXxxxxx
Xxxxx Xxxxxxx Name: Xxxxxx X. XxXxxxxx
Title: Chief Financial Officer
Address: Address:
Business
x/x Xxxxx Xxxx Xxxxxx Xxxxx Xxxxx Xxxxx Xxxx Xxxxxx Asset Trust
000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Residence
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
