EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of May 14, 1998, by and between Excel Realty Trust,
Inc., a Maryland corporation (the "Company") and Xxxx X. Xxxxx ("Executive").
RECITALS
A. Executive is currently the Chief Executive Officer of the Company.
B. The Company, a wholly owned subsidiary of the Company ("Sub"), and New
Plan Realty Trust, a Massachusetts business trust ("New Plan"), have entered
into an Agreement and Plan of Merger ("Merger Agreement"), pursuant to which Sub
shall merge with and into New Plan (the "Merger").
C. The Company desires to employ Employee, effective as of the time the
Merger is consummated (the "Effective Time"), on the terms and conditions set
forth in this Agreement, and Executive desires to be so employed.
AGREEMENT
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as the
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President of the Company, and Executive hereby accepts such employment, on the
terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company hereunder
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(the "Employment Period") shall commence at the Effective Time of the Merger
(the "Commencement Date") and shall continue through December 31, 2002;
provided, that, commencing on January 1, 2003, and on each January 1 thereafter,
the Employment Period shall automatically be extended for one (1) additional
year unless either party gives written notice not to extend this Agreement prior
to six (6) months before such extension would be effectuated. The Employment
Period may be sooner terminated by either party in accordance with Section 6 of
this Agreement.
3. Position and Duties.
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(a) Position. Subject to Section 3(b) of this Agreement, during the
Employment Period, Executive shall serve as President of the Company, and shall
report
solely and directly to the Chief Executive Officer. Executive shall have those
powers and duties normally associated with the position of President and, in
particular, shall be responsible for the acquisitions and dispositions by the
Company and such other powers and duties as may be properly prescribed by the
Chief Executive Officer or the Board of Directors of the Company (the "Board"),
provided that such other powers and duties are consistent with Executive's
position as President. Executive shall devote such time, attention and energies
to Company affairs as are necessary to fully perform his duties (other than
absences due to illness or vacation) for the Company. Notwithstanding the above,
Executive shall be permitted, to the extent such activities do not materially
and adversely affect the ability of Executive to fully perform his duties and
responsibilities hereunder, to (i) subject to Section 6(d)(i), serve as an
officer and director of Excel Legacy Corporation, a Delaware corporation
("Legacy"), (ii) manage Executive's personal, financial and legal affairs, and
(iii) serve on civic or charitable boards or committees and/or donate a
reasonable portion of his time to various charitable endeavors and
organizations.
(b) Appointment as Chief Executive Officer. Upon Xxxxxx Xxxxxxx'x
resignation or cessation of service as Chief Executive Officer of the Company,
the Company intends and expects to appoint Executive as the Chief Executive
Officer of the Company.
(c) No Senior Employee. During the Employment Period, the Company
shall not hire or retain any person (other than Xxxxxx Xxxxxxx) as Chief
Executive Officer of the Company or as Chairman of the Board of the Company, or
in any other position of the Company that is senior to the position of President
held by Executive; provided, that nothing herein is intended to limit the role
of Xxxxxxx Xxxxxx as Chairman of the Board of the Company.
(d) Investment Committee. At the Effective Time, Executive shall be
appointed by the Board as Chairman of the Board's Investment Committee (the
"Investment Committee") and shall be given authority to direct the activities of
the Investment Committee in accordance with the applicable provisions of the
Merger Agreement and its ancillary documents, exhibits and schedules. During
the Employment Period, the Investment Committee shall consist of four persons,
as follows: (i) Executive, who shall act as Chairman of the Investment
Committee, (ii) an additional director of the Company designated by Executive,
and (iii) Xxxxxx Xxxxxxx and an additional director appointed by Laubich or if
Laubich is not then a director two additional persons appointed by
the Board. During the Employment Period, neither the Company nor the Board shall
(w) appoint or create any other committee to act as the Investment Committee or
as an Executive Committee of the Board without Executive's prior written
consent, (x) delegate any of the duties of the Investment Committee to the Board
(subject only to matters required by law to be voted upon by the Board) or any
other committee of the Board, (y) limit the scope or authority of the Investment
Committee, except as provided in the Merger Agreement and its ancillary
documents, exhibits and schedules, or (z) change the size or composition of the
Investment Committee (except as provided in clause (iii) above). A similar
arrangement shall prevail with respect to the Investment Committee of the
Company's principal subsidiary, New Plan Realty Trust, and the term "Investment
Committee" shall apply to each or both of such Committees.
(e) During the term of this Agreement, Executive shall be nominated by
the Board to serve as a director of the Company.
4. Place of Performance. The principal place of employment of Executive
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shall be at the Company's operating offices in San Diego, California.
5. Compensation and Related Matters.
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(a) Salary. During the Employment Period, the Company shall pay
Executive an annual base salary at the rate of not less than the annual salary
paid to the Chief Executive Officer of the Company, but in no event less than
$525,000 per year ("Base Salary"). With respect to the services to be performed
by Executive for Legacy from time to time, agreements between the Company and
Legacy provide for reimbursement to Company by Legacy of a portion of the
salary, bonus, and other compensation benefits payable hereunder, none of which
reimbursement shall accrue to Executive. Executive's Base Salary shall be paid
in approximately equal installments in accordance with the Company's customary
payroll practices. If Executive's Base Salary is increased by the Company, such
increased Base Salary shall then constitute the Base Salary for all purposes of
this Agreement.
(b) Bonus. The Board's compensation committee (the "Compensation
Committee") shall review Executive's performance at least annually during each
year of the Employment Period and cause the Company to award Executive a cash
bonus in an amount equal to up to 50% of the Base Salary, as provided in Section
5(a) above, which the Compensation Committee shall reasonably determine as
fairly compensating and rewarding Executive for services
rendered to the Company and/or as an incentive for continued service to the
Company; provided, however, that the cash bonus paid to Executive under this
Section 5(b) during the first year of the Employment Period shall not be less
than $262,500. Subject to the proviso set forth in the preceding sentence, the
amount of Executive's cash bonus shall be determined in the reasonable
discretion of the Compensation Committee and shall be dependent upon, among
other things, the achievement of certain performance levels by the Company,
including, without limitation, growth in funds from operations, and Executive's
performance and contribution to increasing the funds from operations.
(c) Stock Options. Effective as of the Effective Time, Executive shall
be awarded (i) an incentive stock option to purchase an amount of shares of
Common Stock of the Company, par value $.01 per share (the "Common Stock"),
equal to the difference between the number of stock options currently held by
Xxxxxx Xxxxxxx and those held by Executive on May 12, 1998, which options shall
vest pro-rata over the remaining time period for the options issued to Laubich
but in no event shall such options vest less favorably to Executive than on the
first, second, third and fourth anniversaries of the date of grant in equal
installments (collectively, the "Stock Options"); and (ii) incentive stock
options to be awarded in the future at the times and in the amounts awarded to
Xxxxxx Xxxxxxx. Each share of the Common Stock subject to the Stock Options
shall have an exercise price equal to the closing price of a share of Common
Stock on the date the Effective Time occurs. The Stock Options shall be subject
to the terms and conditions of the Company's 1993 Stock Option Plan (the
"Company Option Plan"). The Company hereby represents and warrants to Executive
that, at the time of grant: (a) the Company Option Plan will have sufficient
shares available to effect the grant and exercise of the Stock Options and the
Company Option Plan has been approved by its shareholders, (b) the Stock Options
shall be granted by the Board or by a compensation committee of the Board
satisfying the conditions for "non-employee directors" under Rule 16b-3,
promulgated under the Securities Exchange Act of 1934, as amended ("Rule 16b-
3"), (c) the Stock Options will be properly authorized and approved by the Board
and/or its compensation committee, (d) the Common Stock underlying the Stock
Options will be registered on Form S-8 and (e) the Common Stock underlying the
Stock Options will be listed on the New York Stock Exchange.
(d) Automobile. During the Employment Period, the Company shall
provide Executive with an automobile allowance of at least $12,000 per year.
(e) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(f) Vacation. Executive shall be entitled to the number of weeks of
vacation per year provided to the Company's Chief Executive Officer, but in no
event less than four (4) weeks annually.
(g) Services Furnished. During the Employment Period, the Company
shall furnish Executive with office space, stenographic and secretarial
assistance and such other facilities and services comparable to those provided
to the Company's Chief Executive Officer.
(h) Welfare, Pension and Incentive Benefit Plans. During the
Employment Period, Executive (and his spouse and dependents to the extent
provided therein) shall be entitled to participate in and be covered under all
the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives including, without limitation, all
medical, hospitalization, dental, disability, accidental death and dismemberment
and travel accident insurance plans and programs. The Company shall at all times
provide to Executive (and his spouse and dependents to the extent provided under
the applicable plans or programs) (subject to modifications affecting all senior
executive officers) the same type and levels of participation and benefits as
are being provided to the Company's Chief Executive Officer (and his spouse and
dependents to the extent provided under the applicable plans or programs) during
the Employment Period. In addition, during the Employment Period, Executive
shall be eligible to participate in all pension, retirement, savings and other
employee benefit plans and programs maintained from time to time by the Company
for the benefit of its senior executives, or any annual incentive or long-term
performance plans.
6. Termination. Executive's employment hereunder may be terminated
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during the Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his
death.
(b) Disability. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been substantially unable to
perform his duties hereunder for an entire period of six (6) consecutive months,
and within thirty (30) days after written Notice of Termination (as defined in
Section 7(a)) is given after such six (6) month period, Executive shall not have
returned to the substantial performance of his duties on a full-time basis, the
Company shall have the right to terminate Executive's employment hereunder for
"Disability", and such termination in and of itself shall not be, nor shall it
be deemed to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executive's
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have "Cause" to terminate Executive's employment
upon Executive's:
(i) conviction of, or plea of guilty or nolo contendere to, a
felony; or
(ii) willful and continued failure to use reasonable best efforts
to substantially perform his duties hereunder (other than such failure
resulting from Executive's incapacity due to physical or mental illness or
subsequent to the issuance of a Notice of Termination by Executive for Good
Reason (as defined in Section 6(d)) after demand for substantial performance
is delivered by the Company in writing that specifically identifies the
manner in which the Company believes Executive has not used reasonable best
efforts to substantially perform his duties; or
(iii) willful misconduct (including, but not limited to, a willful
breach of the provisions of Section 10) that is materially economically
injurious to the Company or to any entity in control of, controlled by or
under common control with the Company ("Affiliate").
For purposes of this Section 6(c), no act, or failure to act, by Executive
shall be considered "willful" unless committed in bad faith and without a
reasonable belief that the act or omission was in the best interests of the
Company or any Affiliates thereof.; provided, however, that the willful
requirement outlined
in paragraphs (ii) or (iii) above shall be deemed to have occurred if the
Executive's action or non-action continues for more than ten (10) days after
Executive has received written notice of the inappropriate action or non-action.
Cause shall not exist under paragraph (ii) or (iii) above unless and until the
Company has delivered to Executive a copy of a resolution duly adopted by a
majority of the Board (excluding Executive for purposes of determining such
majority) at a meeting of the Board called and held for such purpose (after
reasonable (but in no event less than thirty (30) days) notice to Executive and
an opportunity for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of the conduct set forth in paragraph (ii) or (iii) and specifying the
particulars thereof in detail. This Section 6(c) shall not prevent Executive
from challenging in any court of competent jurisdiction the Board's
determination that Cause exists or that Executive has failed to cure any act (or
failure to act) that purportedly formed the basis for the Board's determination.
(d) Good Reason. Executive may terminate his employment for "Good
Reason" within thirty (30) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of the following
events that has not been cured within thirty (30) days after written notice
thereof has been given by Executive to the Company; provided, however, that with
respect to Section 6(d), the Company shall have the right to challenge in any
court of competent jurisdiction the Executive's determination that he has the
right to terminate his employment for "Good Reason."
(i) the failure of Executive to be appointed as Chief Executive
Officer of the Company within thirty (30) days after Xxxxxx Xxxxxxx ceases to
serve as Chief Executive Officer of the Company; provided, however, if at
such time Executive is an executive officer of Legacy, he shall have six
months to resign such position and his appointment shall not be effective
until such resignation, but will become effective only upon such resignation,
but in no event will Executive be required to resign as a director or
Chairman of the Board of Legacy. If such resignation is not effected within
six (6) months, then the Company's failure to so appoint shall not constitute
"Good Reason." Discontinuing Executive's employment as Chief Executive
Officer shall not be deemed to be "Good Reason" if he, during such
employment, resumes being an executive officer of Legacy;
(ii) the assignment to Executive of duties materially and adversely
inconsistent with Executive's status as President of the Company or a
material and adverse alteration in the nature of Executive's duties and/or
responsibilities, reporting obligations, titles or authority;
(iii) the assignment to Executive of duties materially and adversely
inconsistent with Executive's status as Chairman of the Investment Committee
or a material and adverse alteration in the nature of Executive's duties
and/or responsibilities, titles or authority in such capacity as Chairman of
the Investment Committee;
(iv) a breach of the Company's obligations under the last two
sentences of Section 3(d);
(v) a reduction by the Company in Executive's Base Salary or a
failure by the Company to pay any such amounts when due;
(vi) Except as provided in Section 6(d)(i) hereof the hiring of any
person (other than Xxxxxx Xxxxxxx in his capacity as Chief Executive Officer
or Chairman of the Board of the Company) during the Employment Period whose
position or authority would be senior to that of Executive;
(vii) the relocation of the Company's operating offices or
Executive's own office location to a location more than thirty (30) miles
from San Diego, California;
(viii) any purported termination of Executive's employment for Cause
which is not effected pursuant to the procedures of Section 6(c) (and for
purposes of this Agreement, no such purported termination shall be
effective);
(ix) the Company's failure to provide the Stock Options or the
Company's material breach of one or more of the stock option agreements
pursuant to which the Stock Options were issued to Executive;
(x) the Company's failure to substantially provide any material
employee benefits due to be provided to Executive;
(xi) the Company's failure to provide in all material respects the
indemnification set forth in Section 11 of this Agreement; or
(xii) a Change in Control (as defined below) of the Company.
Executive's right to terminate his employment hereunder for Good Reason
shall not be affected by his incapacity due to physical or mental illness.
Executive's continued employment during the thirty (30) day period referred to
above in this paragraph (d) shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason
hereunder.
(e) Without Good Reason. Executive shall have the right to terminate
his employment hereunder without Good Reason by providing the Company with a
Notice of Termination, and such termination shall not in and of itself be, nor
shall it be deemed to be, a breach of this Agreement.
For purposes of this Agreement, a "Change in Control" of the Company means
the occurrence of one of the following events:
(1) individuals who, on the Commencement Date, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the Commencement Date whose election or nomination for election
was approved by a vote of a majority of the Incumbent Directors then on the
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of
the Company as a result of an actual or threatened election contest with
respect to directors or as a result of any other actual or threatened
solicitation of proxies by or on behalf of any person other than the Board
shall be an Incumbent Director;
(2) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the
Commencement Date, a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities eligible to vote for the election of the
Board (the "Company Voting Securities"); provided, however, that an event
described in this paragraph (2) shall not be deemed to be a Change in Control
if any of following becomes such a beneficial owner: (A) the Company or any
majority-owned subsidiary (provided, that this exclusion applies solely to
the ownership levels of the Company or the majority-owned subsidiary), (B)
any tax-qualified, broad-based employee benefit plan sponsored or maintained
by the Company or any majority-owned subsidiary, (C) any underwriter
temporarily holding securities pursuant to an offering of such securities,
(D) any person pursuant to a Non-Qualifying Transaction (as defined in
paragraph (3)), or (E) Executive or any group of persons including Executive
(or any entity controlled by Executive or any group of persons including
Executive);
(3) the consummation of a merger, consolidation, share exchange or
similar form of transaction involving the Company or any of its subsidiaries,
or the sale of all or substantially all of the Company's assets (a "Business
Transaction"), unless immediately following such Business Transaction (i)
more than 50% of the total voting power of the entity resulting from such
Business Transaction or the entity acquiring the Company's assets in such
Business Transaction (the "Surviving Corporation") is beneficially owned,
directly or indirectly, by the Company's shareholders immediately prior to
any such Business Transaction, and (ii) no person (other than the persons set
forth in clauses (A), (B), or (C) of paragraph (2) above or any tax-
qualified, broad-based employee benefit plan of the Surviving Corporation or
its Affiliates beneficially owns, directly or indirectly, 30% or more of the
total voting power of the Surviving Corporation (a "Non-Qualifying
Transaction")); or
(4) Board approval of a liquidation or dissolution of the Company,
unless the voting common equity interests of an ongoing entity (other than a
liquidating trust) are beneficially owned, directly or indirectly, by the
Company's shareholders in substantially the same proportions as such
shareholders owned the Company's outstanding voting common equity interests
immediately prior to such liquidation and such ongoing entity assumes all
existing obligations of the Company to Executive under this Agreement and the
Stock Option Agreements pursuant to which the Stock Options were granted.
7. Termination Procedure.
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(a) Notice of Termination. Any termination of Executive's employment
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 14. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
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Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Termination By Company Without Cause or By Executive for Good
Reason. If Executive's employment is terminated by the Company without Cause or
by Executive for Good Reason:
(i) the Company shall pay to Executive (A) his Base Salary and
accrued vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and to Executive (B) a lump sum cash
payment of Two Million Five Hundred Thousand Dollars ($2,500,000), as soon as
practicable following the Date of Termination; provided, however, to the
extent that the Company would not be able to deduct any portion of such
payment pursuant to Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), such portion of the payment,
together with accrued interest as provided below, shall be made at the
earliest time that such portion first would be deductible by the Company
under Code Section 162(m); and provided, further that to the extent that any
portion of such payment is deferred as provided in this Section 8(a)(i), such
portion shall accrue interest at the rate of 8% per annum from the Date of
Termination until the payment is made;
(ii) the Company shall maintain in full force and effect, for the
continued benefit of Executive, his spouse and his dependents for a period of
three (3) years following the Date of Termination the medical,
hospitalization, dental, and life insurance programs in which Executive, his
spouse and his dependents were participating immediately prior to the Date of
Termination at the level in effect and upon substantially the same terms and
conditions (including without limitation contributions required by Executive
for such benefits) as existed immediately prior to the Date of Termination;
provided, that if Executive, his spouse or his dependents cannot continue to
participate in the Company programs providing such benefits, the Company
shall arrange to provide Executive, his spouse and his dependents with the
economic equivalent of such benefits which they otherwise would have been
entitled to receive under such plans and programs ("Continued Benefits"),
provided, that such Continued Benefits shall terminate on the date or dates
Executive receives substantially equivalent coverage and benefits, without
waiting period or pre-existing condition limitations, under the plans and
programs of a subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage, or benefit-by-benefit, basis); and
(iii) the Company shall reimburse Executive pursuant to Section 5(e)
for reasonable expenses incurred, but not paid prior to such termination of
employment;
(iv) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company;
(v) all stock options and other pension or employment benefits
granted to Executive during the Employment Period and more than one year
prior
to the Date of Termination shall fully vest as of the Date of Termination and
all stock options granted before the Employment Period shall also fully vest;
(vi) the Company shall forgive and cancel all loans made by the
Company or any Affiliate to Executive during the Employment Period, if any,
and shall take all actions and execute all documents necessary to evidence
the forgiveness and cancellation of such loans; and
(vii) the Company shall eliminate any and all restrictions on
Executive's ability either to engage in any activities, directly or
indirectly, in competition with the Company (including, without limitation,
the restrictions set forth in Section 10(c) of this Agreement but not the
restrictions set forth in Sections 10(a) and (b), or to make any investment
in competition with the Company, and shall execute all documents necessary or
reasonably requested by Executive to reflect such elimination of
restrictions.
The foregoing notwithstanding, the total of the severance payments
payable under this Section 8(a) shall be reduced to the extent the payment of
such amounts would cause Executive's total termination benefits (as determined
by Executive's tax advisor) to constitute an "excess" parachute payment under
Section 280G of the Code and by reason of such excess parachute payment
Executive would be subject to an excise tax under Section 4999(a) of the Code,
but only if Executive determines that the after-tax value of the termination
benefits calculated with the foregoing restriction exceed those calculated
without the foregoing restriction.
(b) Cause or By Executive Without Good Reason. If Executive's
employment is terminated by the Company for Cause or by Executive (other than
for Good Reason):
(i) the Company shall pay Executive his Base Salary and, to the
extent required by law or the Company's vacation policy, his accrued vacation
pay through the Date of Termination, as soon as practicable following the
Date of Termination; and
(ii) the Company shall reimburse Executive pursuant to Section
5(e) for reasonable expenses incurred, but not paid prior to such termination
of employment, unless such termination resulted from a misappropriation of
Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the Company.
(c) Disability. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b). In the event Executive's employment is terminated for Disability pursuant
to Section 6(b):
(i) the Company shall pay to Executive (A) his Base Salary and
accrued vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and (B) continued Base Salary (as provided
for in Section 5(a)) and Continued Benefits for the longer of (i) six (6)
months or (ii) the date on which Executive becomes entitled to long-term
disability benefits under the applicable plan or program of the Company
paying the benefits described in Section 5(h), up to a maximum of three (3)
years of Base Salary continuation; and
(ii) the Company shall reimburse Executive pursuant to Section
5(e) for reasonable expenses incurred, but not paid prior to such termination
of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance with
the terms and provisions of any agreements, plans or programs of the Company.
(d) Death. If Executive's employment is terminated by his death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be, Executive's
Base Salary through the Date of Termination and one (1) times Executive's
annual rate of Base Salary, and shall provide Executive's spouse and
dependents with Continued Benefits for one (1) year;
(ii) the Company shall reimburse Executive's beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 5(e)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary, legal representatives or estate,
as the case may be, shall be entitled to any other rights, compensation and
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company.
(e) Failure to Extend. A failure to extend the Agreement pursuant to
Section 2 by either party shall not be treated as a termination of Executive's
employment for purposes of this Agreement.
9. Mitigation. Executive shall not be required to mitigate amounts
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payable under this Agreement by seeking other employment or otherwise, and there
shall be no offset against amounts due Executive under this Agreement on account
of subsequent employment except as specifically provided herein. Additionally,
amounts owed to Executive under this Agreement shall not be offset by any claims
the Company may have against Executive, and 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 other circumstances, including, without
limitation, any counterclaim, recoupment, defense or other right which the
Company may have against Executive or others.
10. Confidential Information, Ownership of Documents; Non-Competition.
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(a) Confidential Information. Executive shall hold in a fiduciary
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses and
investments, which shall have been obtained by Executive during Executive's
employment by the Company and which is not generally available public knowledge
(other than by acts by Executive in violation of this Agreement). Except as may
be required or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against the Company (in
which case Executive shall use his reasonable best efforts in cooperating with
the Company in obtaining a protective order against disclosure by a court of
competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the
Company and those designated by the Company or on behalf of the Company in the
furtherance of its business or to perform duties hereunder.
(b) Removal of Documents; Rights to Products. All records, files,
drawings, documents, models, equipment, and the like relating to the Company's
business, which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such removal is in the
furtherance of the Company's business or is in connection with Executive's
carrying out his duties under this Agreement and, if so removed, shall be
returned to the Company promptly after termination of Executive's employment
hereunder, or otherwise promptly after removal if such removal occurs following
termination of employment. Executive shall assign to the Company all rights to
trade secrets and other products relating to the Company's business developed by
him alone or in conjunction with others at any time while employed by the
Company.
(c) Protection of Business. During the Employment Period and until the
first anniversary of Executive's Date of Termination (but only in the event
Executive is terminated by the Company for Cause, Executive terminates
employment without Good Reason or Executive is terminated by the Company for
Disability), the Executive will not (i) engage, anywhere within the geographical
areas in which the Company or any of its Affiliates (the "Designated Entities")
are conducting their business operations or providing services as of the Date of
Termination, in any business which is being engaged in by the Designated
Entities as of the Date of Termination or pursue or attempt to develop any
project known to Executive and which the Designated Entities are pursuing,
developing or attempting to develop as of the Date of Termination, unless such
project has been inactive for over nine (9) months (a "Project"), directly or
indirectly, alone, in association with or as a shareholder, principal, agent,
partner, officer, director, employee or consultant of any other organization,
(ii) divert to any entity which is engaged in any business conducted by the
Designated Entities in the same geographic area as the Designated Entities, any
Project or any customer of any of the Designated Entities, or (iii) solicit any
officer, employee (other than secretarial staff) or consultant of any of the
Designated Entities to leave the employ of any of the Designated Entities.
Notwithstanding the preceding sentence, Executive shall not be
prohibited from owning less than three (3%) percent of any publicly traded
corporation, whether or not such corporation is in competition with the Company,
and Executive shall not be prohibited from owning equity securities of, and
acting as an officer and director of, Legacy. If, at any time, the provisions of
this Section 10(c) shall be determined to be invalid or unenforceable, by reason
of being vague or unreasonable as to area, duration or scope of activity, this
Section 10(c) shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Executive agrees that this Section 10(c) as so amended
shall be valid and binding as though any invalid or unenforceable provision had
not been included herein.
(d) Injunctive Relief. In the event of a breach or threatened breach
of this Section 10, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(e) Continuing Operation. Except as specifically provided in this
Section 10, the termination of Executive's employment or of this Agreement shall
have no effect on the continuing operation of this Section 10.
11. Indemnification.
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(a) General. The Company agrees that if Executive is made a party or a
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that Executive is or was a trustee, director or officer of the Company or
any subsidiary of the Company or is or was serving at the request of the Company
or any subsidiary as a trustee, director, officer, member, employee or agent of
another corporation or a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a trustee, director, officer, member, employee or agent while
serving as a trustee, director, officer, member, employee or agent, Executive
shall be indemnified and held harmless by the Company to the fullest extent
authorized by Maryland law, as the same exists or may hereafter be amended,
against all Expenses incurred or suffered by Executive in connection therewith,
and such indemnification shall continue as to Executive even if Executive has
ceased to be an officer, director, trustee or agent, or is no longer employed by
the Company and shall inure to the benefit of his heirs, executors and
administrators.
(b) Expenses. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements, and costs, attorneys' fees, accountants'
fees, and disbursements and costs of attachment or similar bonds,
investigations, and any expenses of establishing a right to indemnification
under this Agreement.
(c) Enforcement. If a claim or request under this Section 11 is not
paid by the Company or on its behalf, within thirty (30) days after a written
claim or request has been received by the Company, Executive may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or request and if successful in whole or in part, Executive shall be
entitled to be paid also the expenses of prosecuting such suit. All obligations
for indemnification hereunder shall be subject to, and paid in accordance with,
applicable Maryland law.
(d) Partial Indemnification. If Executive is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Expenses, but not, however, for the total amount thereof, the
Company, shall nevertheless indemnify Executive for the portion of such Expenses
to which Executive is entitled.
(e) Advances of Expenses. Expenses incurred by Executive in connection
with any Proceeding shall be paid by the Company in advance upon request of
Executive that the Company pay such Expenses; but, only in the event that
Executive shall have delivered in writing to the Company (i) an undertaking to
reimburse the Company for Expenses with respect to which Executive is not
entitled to indemnification and (ii) an affirmation of his good faith belief
that the standard of conduct necessary for indemnification by the Company has
been met.
(f) Notice of Claim. Executive shall give to the Company notice of any
claim made against him for which indemnification will or could be sought under
this Agreement. In addition, Executive shall give the Company such information
and cooperation as it may reasonably require and as shall be within Executive's
power and at such times and places as are convenient for Executive.
(g) Defense of Claim. With respect to any Proceeding as to which
Executive notifies the Company of the commencement thereof:
(i) The Company will be entitled to participate therein at its
own expense; and
(ii) Except as otherwise provided below, to the extent that it may
wish, the Company will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to Executive, which in the Company's sole
discretion may be regular counsel to the Company and may be counsel to other
officers and directors of the Company or any subsidiary. Executive also shall
have the right to employ his own counsel in such action, suit or proceeding
if he reasonably concludes that failure to do so would involve a conflict of
interest between the Company and Executive, and under such circumstances the
fees and expenses of such counsel shall be at the expense of the Company.
(iii) The Company shall not be liable to indemnify Executive under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action
or claim in any manner which would impose any penalty or limitation on
Executive without Executive's written consent. Neither the Company nor
Executive will unreasonably withhold or delay their consent to any proposed
settlement.
(h) Non-exclusivity. The right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in this Section 11 shall not be exclusive of any other right which
Executive may have or hereafter may acquire under any statute, provision of the
declaration of trust or certificate of incorporation or by-laws of the Company
or any subsidiary, agreement, vote of shareholders or disinterested directors or
trustees or otherwise.
12. Legal Fees and Expenses. If any contest or dispute shall arise between
-----------------------
the Company and Executive regarding any provision of this Agreement, the Company
shall reimburse Executive for all legal fees and expenses reasonably incurred by
Executive in connection with such contest or dispute, but only if Executive is
successful in respect of substantially all of Executive's claims brought and
pursued in connection with such contest or dispute. Such reimbursement shall be
made as soon as
practicable following the final resolution of such contest or dispute to the
extent the Company receives reasonable written evidence of such fees and
expenses.
13. Successors; Binding Agreement.
-----------------------------
(a) Company's Successors. No rights or obligations of the Company
under this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executive's Successors. No rights or obligations of Executive
under this Agreement may be assigned or transferred by Executive other than his
rights to payments or benefits hereunder, which may be transferred only by will
or the laws of descent and distribution. Upon Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by Executive's beneficiary or beneficiaries, personal or legal
representatives, or estate, to the extent any such person succeeds to
Executive's interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by giving the Company
written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s). If Executive should die following his Date of
Termination while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts unless otherwise provided herein shall be
paid in accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to his legal representatives or
estate.
14. Notice. For the purposes of this Agreement, notices, demands and all
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other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered either personally or by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive:
Xxxx X. Xxxxx
c/o Excel Realty Trust, Inc.
00000 Xxx Xxx Xxxxx
Xxx Xxxxx, XX 00000
If to the Company:
Excel Realty Trust, Inc.
0000 Xxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: CEO
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
-------------
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The respective rights and obligations of the
parties hereunder of this Agreement shall survive Executive's termination of
employment and the termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without regard to its conflicts of law
principles.
16. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Entire Agreement. This Agreement sets forth the entire agreement of
----------------
the parties hereto in respect of the subject matter contained herein and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter. Any prior agreement of the parties hereto in respect of the
subject matter contained herein is hereby terminated and canceled.
19. Shareholder Approval. The Company represents and warrants to Executive
--------------------
that no shareholder approval is required for the Company to enter into this
Agreement and provide the benefits hereunder and to enter into the agreements
described in Section 5.
20. Withholding. All payments hereunder shall be subject to any required
-----------
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
21. Noncontravention. The Company represents that the Company is not
----------------
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or certificate of incorporation, or
any agreement to which it is a party, other than which would not have a material
adverse effect on the Company's ability to enter into or perform this Agreement.
22. Section Headings. The section headings in this Employment Agreement
----------------
are for convenience of reference only, and they form no part of this Agreement
and shall not affect its interpretation.
23. Resignation and Termination. As of the Effective Time, (i) Executive
---------------------------
shall resign as Chief Executive Officer of the Company and Chairman of the
Board, and (ii) Executive's Employment Agreement with the Company dated April 1,
1993 shall be deemed terminated without any termination payments being owed to
him; provided, that for purposes of vesting any existing stock options, his
employment shall not be terminated and his employment after the relevant grant
date (whether before or after the Effective Time) shall be counted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
EXCEL REALTY TRUST, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxx
------------------------
Name: /s/ Xxxxxxx X. Xxxx
------------------------
Title: Executive Vice President
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/s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
