Exhibit 10.7
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SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
FOR
XXXXX X. XXXXXX
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TABLE OF CONTENTS
Page
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1. EMPLOYMENT................................................................2
2. EMPLOYMENT PERIOD.........................................................2
3. SERVICES / PLACE OF EMPLOYMENT............................................3
4. COMPENSATION AND BENEFITS.................................................4
5. TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL...........................6
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY FOR
CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON....................................9
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT UPON DEATH OR DISABILITY.....10
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT
CAUSE OR BY EXECUTIVE FOR GOOD REASON.......................................12
9. CHANGE IN CONTROL........................................................13
10. MITIGATION / EFFECT ON EMPLOYEE BENEFIT PLANS AND PROGRAMS..............16
11. CONFIDENTIAL INFORMATION................................................16
12. RETURN OF DOCUMENTS.....................................................17
13. NONCOMPETE..............................................................18
14. REMEDIES................................................................19
15. INDEMNIFICATION/LEGAL FEES..............................................19
16. SUCCESSORS AND ASSIGNS..................................................21
17. TIMING OF AND NO DUPLICATION OF PAYMENTS................................22
18. MODIFICATION OR WAIVER..................................................23
19. NOTICES.................................................................23
20. GOVERNING LAW...........................................................24
21. SEVERABILITY............................................................24
22. LEGAL REPRESENTATION....................................................24
23. COUNTERPARTS............................................................25
24. HEADINGS................................................................25
25. ENTIRE AGREEMENT........................................................25
26. SURVIVAL OF AGREEMENTS..................................................25
XXXXX X. XXXXXX
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into as of July 1, 1999, by and between Xxxxx X. Xxxxxx, an individual
residing at 00 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Executive"), and
Xxxx-Xxxx Realty Corporation, a Maryland corporation with offices at 00 Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company").
RECITALS
WHEREAS, Executive has served as Executive Vice President, General Counsel
and Assistant Secretary of the Company pursuant to his prior employment
agreement dated as of December 1997 (the "Prior Agreement") entered into as of
the closing of the combination of Cali Realty Corporation with the Xxxx
Companies (the "Xxxx Combination");
WHEREAS, the Company and the Executive wish to amend and restate the Prior
Agreement in its entirety to provide for an award of Restricted Shares and a Tax
Gross-Up Payment (as defined in sub-paragraph 4(c) below), to change the
Employment Period (as defined in sub-paragraph 2(a) below) to (4) years and to
amend the amount of the severance payment Executive may be eligible to receive
upon termination of employment with the Company; and
WHEREAS, the Company desires to continue to employ Executive as Executive
Vice President, General Counsel and Secretary, and Executive desires to continue
to be employed by the Company as Executive Vice President, General Counsel and
Secretary, pursuant to the amended and restated terms set forth herein and to
restate the Prior Agreement in its entirety
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. Employment.
The Company hereby agrees to employ Executive, and Executive hereby agrees
to accept such employment during the period and upon the terms and conditions
set forth in this Agreement.
2. Employment Period.
(a) Except as otherwise provided in this Agreement to the contrary,
the terms and conditions of this Agreement shall be and remain in effect during
the period of employment (the "Employment Period") established under this
Paragraph 2. The initial Employment Period shall be for a term commencing on the
date of this Agreement and ending on the fourth anniversary of the date of this
Agreement provided, however, that commencing on the day after the date of this
Agreement and on each day thereafter, the Employment Period shall be extended
for one additional day so that a constant four (4) year Employment Period shall
be in effect, unless (i) the Company or Executive elects not to extend the term
of this Agreement by giving written notice to the other party in accordance with
Paragraph 19, in which case, subject to the provisions of sub-paragraph 5(a)(iv)
below, the term of this Agreement shall become fixed and shall end on the fourth
anniversary of the date of such written notice ("Notice of Non-Renewal"), or
(ii) Executive's employment terminates hereunder.
(b) Notwithstanding anything contained herein to the contrary: (i)
Executive's employment with the Company may be terminated by the Company or
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Executive during the Employment Period, subject to the terms and conditions of
this Agreement; and (ii) nothing in this Agreement shall mandate or prohibit a
continuation of Executive's employment following the expiration of the
Employment Period upon such terms and conditions as the Board of Directors of
the Company (the "Board") and Executive may mutually agree.
(c) If Executive's employment with the Company is terminated, for
purposes of this Agreement the term "Unexpired Employment Period" shall mean the
period commencing on the date of such termination and ending on the last day of
the Employment Period.
3. Services / Place of Employment.
(a) Services. During the Employment Period, Executive shall hold the
positions of Executive Vice President, General Counsel and Secretary of the
Company. Executive shall devote his best efforts and substantially all of his
business time, skill and attention to the business of the Company (other than
absences due to vacation, illness, disability or approved leave of absence), and
shall perform such duties as are customarily performed by similar executive
officers and as may be more specifically enumerated from time to time by the
Chief Executive Officer; provided, however, that the foregoing is not intended
to (a) preclude Executive from (i) owning and managing personal investments,
including real estate investments, subject to the restrictions set forth in
Paragraph 13 hereof or (ii) engaging in charitable activities and community
affairs, or (b) restrict or otherwise limit Executive from conducting real
estate development, acquisition or management activities with respect to those
properties
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described in Schedule A, attached hereto, (the "Excluded Properties"), provided
that the performance of the activities referred to in clauses (a) and (b) does
not prevent Executive from devoting substantially all of his business time to
the Company.
(b) Place of Employment. The principal place of employment of
Executive shall be at the Company's principal executive offices in Cranford, New
Jersey.
4. Compensation and Benefits.
(a) Salary. During the Employment Period, the Company shall pay
Executive a minimum annual base salary in the amount of $325,000 (the "Annual
Base Salary") payable in accordance with the Company's regular payroll
practices. Executive's Annual Base Salary shall be reviewed annually in
accordance with the policy of the Company from time to time and may be subject
to upward adjustment based upon, among other things, Executive's performance, as
determined in the sole discretion of the Chief Executive Officer. In no event
shall Executive's Annual Base Salary in effect at a particular time be reduced
without his prior written consent.
(b) Incentive Compensation/Bonuses. In addition, Executive shall be
eligible for incentive compensation payable each year in such amounts as may be
determined by the Option and Executive Compensation Committee of the Board (the
"Compensation Committee"). Executive shall be entitled to receive such bonuses,
restricted share awards and options to purchase shares of common stock, par
value $0.01 per share, of the Company (the "Common Stock") as the Board or the
Compensation Committee as the case may be shall approve, in its sole discretion,
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including, without limitation, options, restricted share awards and bonuses
contingent upon Executive's performance and the achievement of specified
financial and operating objectives.
(c) Restricted Share Award/Tax Gross-Up Payment. Pursuant to the
Employee Stock Option Plan of Xxxx-Xxxx Realty Corporation which was originally
effective August 31, 1994 and amended and restated as of December 1, 1998 (the
"SOP"), Executive has been awarded a restricted share award of 22,031 shares of
Common Stock ("Restricted Shares") as of July 1, 1999 (the "Restricted Share
Award"). Executive shall be entitled to receive a tax gross-up payment (the "Tax
Gross-Up Payment") from the Company with respect to each tax year in which
Restricted Shares granted pursuant to the Restricted Share Award vest and are
distributed to him. Each Tax Gross-Up Payment shall be a dollar amount equal to
forty-three (43%) percent of the fair market value of the Restricted Shares at
time of vesting, exclusive of dividends. In the event vesting occurs with
respect to any Restricted Shares as a result of the achievement of the required
performance goals, such payment shall be made as soon as practicable after a
determination that the performance goals have been achieved but in no event
later than the 90th day of the fiscal year of the Company immediately following
the fiscal year as to which the performance goals were achieved. In the event
vesting occurs for any other reason, including, without limitation, termination
of Executive's employment by the Company without Cause or by Executive for Good
Reason (but excluding a termination by the Company for Cause or a voluntary quit
without Good Reason by Executive), such payment shall be made as soon as
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practicable after the date of vesting but in no event later than the tenth
(10th) business day following such vesting.
(d) Taxes and Withholding. The Company shall have the right to
deduct and withhold from all compensation all social security and other federal,
state and local taxes and charges which currently are or which hereafter may be
required by law to be so deducted and withheld.
(e) Additional Benefits. In addition to the compensation specified
above and other benefits provided pursuant to this Paragraph 4, Executive shall
be entitled to the following benefits:
(i) participation in the SOP, the Xxxx-Xxxx Realty Corporation
401(k) Savings and Retirement Plan (subject to statutory rules
and maximum contributions and non-discrimination requirements
applicable to 401(k) plans) and such other benefit plans and
programs, including but not limited to restricted stock,
phantom stock and/or unit awards, loan programs and any other
incentive compensation plans or programs (whether or not
employee benefit plans or programs), as maintained by the
Company from time to time and made generally available to
executives of the Company with such participation to be
consistent with reasonable Company guidelines;
(ii) participation in any health insurance, disability insurance,
paid vacation, group life insurance or other welfare benefit
program made generally available to executives of the Company;
and
(iii) reimbursement for reasonable business expenses incurred by
Executive in furtherance of the interests of the Company
including a monthly allowance of twelve hundred ($1,200) which
is intended to cover the cost of local business-related travel
expenses exclusive of amounts paid to third-parties (e.g. taxi
service).
5. Termination of Employment and Change in Control.
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(a) Executive's employment hereunder may be terminated during the
Employment Period under the following circumstances:
(i) Cause. The Company shall have the right to terminate
Executive's employment for Cause upon Executive's: (A) willful
and continued failure to use best efforts to substantially
perform his duties hereunder (other than any such failure
resulting from Executive's incapacity due to physical or
mental illness) for a period of thirty (30) days after written
demand for substantial performance is delivered by the Company
specifically identifying the manner in which the Company
believes Executive has not substantially performed his duties;
(B) willful misconduct and/or willful violation of Paragraph
11 hereof, which is materially economically injurious to the
Company and the Partnership taken as a whole; (C) the willful
violation of the provisions of Paragraph 13 hereof; or (D)
conviction of, or plea of guilty to a felony. For purposes of
this sub-paragraph 5(a), no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or
omitted to be done, by him (I) not in good faith and (II)
without reasonable belief that his action or omission was in
furtherance of the interests of the Company.
(ii) Death. Executive's employment hereunder shall terminate upon
his death.
(iii) Disability. The Company shall have the right to terminate
Executive's employment due to "Disability" in the event that
there is a determination by the Company, upon the advice of an
independent qualified physician, reasonably acceptable to
Executive, that Executive has become physically or mentally
incapable of performing his duties under this Agreement and
such disability has disabled Executive for a cumulative period
of one hundred eighty (180) days within a twelve (12) month
period.
(iv) Good Reason. Executive shall have the right to terminate his
employment for "Good Reason": (A) upon the occurrence of any
material breach of this Agreement by the Company which shall
include but not be limited to; an assignment to Executive of
duties materially and adversely inconsistent with Executive's
status as Executive Vice President, General Counsel or
Secretary or a material or adverse alteration in the nature of
or diminution in Executive's duties and/or responsibilities,
reporting obligations, titles or authority; (B) upon a
reduction in Executive's Annual Base Salary or a material
reduction in other benefits (except for bonuses or similar
discretionary payments) as in effect at the time in
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question, a failure to pay such amounts when due or any other
failure by the Company to comply with Paragraph 4 hereof; (C)
on or within six (6) months following the date a Notice of
Non-Renewal is issued by the Company pursuant to Paragraph 2
hereof; (D) on or within six (6) months following a Change in
Control (as hereinafter defined) in accordance with the
provisions set forth in sub-paragraph 5(a)(vii) hereof; (E)
upon any purported termination of Executive's employment for
Cause which is not effected pursuant to the procedures of
sub-paragraph 5(a)(i) (and for purposes of this Agreement, in
the event of such failure to comply, no such purported
termination shall be effective); or (F) upon the relocation of
the Company's principal executive offices or Executive's own
office location to a location more than thirty (30) miles away
from Cranford, New Jersey.
(v) Without Cause. The Company shall have the right to terminate
the Executive's employment hereunder without Cause subject to
the terms and conditions of this Agreement.
(vi) Without Good Reason. The Executive shall have the right to
terminate his employment hereunder without Good Reason subject
to the terms and conditions of this Agreement.
(vii) Change in Control. Executive shall have the right to terminate
his employment hereunder on or within six (6) months following
a Change in Control. Such termination shall be deemed a
termination for Good Reason hereunder. For purposes of this
Agreement "Change in Control" shall mean that any of the
following events has occurred: (A) any "person" or "group" of
persons, as such terms are used in Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than any employee benefit plan sponsored by the
Company, becomes the "beneficial owner", as such term is used
in Section 13 of the Exchange Act, (irrespective of any
vesting or waiting periods) of (I) Common Stock or any class
of stock convertible into Common Stock and/or (II) Common OP
Units or preferred units or any other class of units
convertible into Common OP Units, in an amount equal to twenty
(20%) percent or more of the sum total of the Common Stock and
the Common OP Units (treating all classes of outstanding
stock, units or other securities convertible into stock units
as if they were converted into Common Stock or Common OP Units
as the case may be and then treating Common Stock and Common
OP Units as if they were a single class) issued and
outstanding immediately prior to such acquisition as if they
were a single class and disregarding any equity raise in
connection with
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the financing of such transaction; (B) any Common Stock is
purchased pursuant to a tender or exchange offer other than an
offer by the Company; (C) the dissolution or liquidation of
the Company or the consummation of any merger or consolidation
of the Company or any sale or other disposition of all or
substantially all of its assets, if the shareholders of the
Company and unitholders of the Partnership taken as a whole
and considered as one class immediately before such
transaction own, immediately after consummation of such
transaction, equity securities and partnership units
possessing less than fifty (50%) percent of the surviving or
acquiring company and partnership taken as a whole; or (D) a
turnover, during any two (2) year period, of the majority of
the members of the Board, without the consent of the remaining
members of the Board as to the appointment of the new Board
members.
(b) Notice of Termination. Any termination of Executive's employment
by the Company or any such termination by Executive (other than on account of
death) shall be communicated by written Notice of Termination to the other party
hereto. 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. In the event of the termination of Executive's
employment on account of death, written Notice of Termination shall be deemed to
have been provided on the date of death.
6. Compensation Upon Termination of Employment By the Company for Cause
or By Executive without Good Reason.
In the event the Company terminates Executive's employment for Cause or
Executive terminates his employment without Good Reason, the Company shall pay
Executive any unpaid Annual Base Salary at the rate then in effect accrued
through and
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including the date of termination. In addition, in such event, Executive shall
be entitled (i) to receive any earned but unpaid incentive compensation or
bonuses and (ii) to exercise any options which have vested and are exercisable
in accordance with the terms of the applicable option grant agreement or plan,
and (iii) to retain and/or receive any Restricted Shares which have vested as of
the last day of the Company's fiscal year coincident or immediately preceding
Executive's termination of employment and the corresponding Tax Gross-Up Payment
(irrespective of whether the determination is made after Executive's termination
of employment).
Except for any rights which Executive may have to unpaid salary amounts
through and including the date of termination, earned but unpaid incentive
compensation or bonuses, vested options, vested Restricted Shares and the
corresponding Tax Gross-Up Payment, the Company shall have no further
obligations hereunder following such termination. The aforesaid amounts shall be
payable in full immediately upon such termination.
7. Compensation Upon Termination of Employment Upon Death or
Disability.
In the event of termination of Executive's employment as a result of
either Executive's death or Disability, the Company shall pay to Executive, his
estate or his personal representative the aggregate of (i) a cash payment of two
million five hundred thousand dollars ($2,500,000)in full immediately upon such
termination (the "Fixed Amount") and (ii) reimbursement of expenses incurred
prior to date of termination ("Expense Reimbursement"). Executive (and
Executive's dependents) shall also receive continuation of health coverage
through the end of the Unexpired Employment
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Period on the same basis as health coverage is provided by the Company for
active employees and as may be amended from time to time ("Medical
Continuation").
In addition, all (A) incentive compensation payments or programs of any
nature whether stock based or otherwise that are subject to a vesting schedule
including, without limitation, the Restricted Share Award or any other
restricted stock, phantom stock, units and any loan forgiveness arrangements
granted to Executive ("Incentive Compensation") shall immediately vest as of the
date of such termination ("Vested Incentive Compensation"), (B) options granted
to Executive shall immediately vest as of the date of such termination (the
"Vested Options") and Executive shall be entitled at the option of Executive,
his estate or his personal representative, within one (1) year of the date of
such termination, to exercise the Vested Options and/or other options which have
vested (including, without limitation, all other options which have previously
vested in accordance with the Prior Agreement, any applicable option grant
agreement or plan) (the "Total Vested Options") and are exercisable in
accordance with the terms of the applicable option grant agreement or plan
and/or any other methods or procedures for exercise applicable to optionees or
to require the Company (upon written notice delivered within one hundred eighty
(180) days following the date of Executive's termination) to repurchase all or
any portion of Executive's vested options to purchase shares of Common Stock at
a price equal to the difference between the Repurchase Fair Market Value (as
hereinafter defined) of the shares of Common Stock for which the options to be
repurchased are exercisable and the exercise price of such options as of the
date of Executive's termination of employment (the "Vested Option Exercise
Election"), and (C) the Tax Gross-Up Payment(s) applicable to the Restricted
Share
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Award shall vest and be paid to Executive at such time as provided in
sub-paragraph 4(c) above (the "Vested Tax Gross-Up Payments"). In the event of a
conflict between any Incentive Compensation grant agreement or program or any
option grant agreement or plan and this Agreement, the terms of this Agreement
shall control.
Except for any rights which Executive or Executive's estate in the event
of Executive's death may have to all of the above including the Fixed Amount,
Vested Incentive Compensation, Total Vested Options and the Vested Option
Exercise Election, the Vested Tax Gross-Up Payment, Expense Reimbursement and
Medical Continuation (which, in the event of Executive's death, shall be
provided to Executive's dependents), the Company shall have no further
obligations hereunder following such termination.
For purposes of this Agreement, "Repurchase Fair Market Value" shall mean
the average of the closing price on the New York Stock Exchange (or such other
exchange on which the Common Stock is primarily traded) of the Common Stock on
each of the trading days within the thirty (30) days immediately preceding the
date of termination of Executive's employment.
8. Compensation Upon Termination of Employment By the Company Without
Cause or By Executive for Good Reason.
In the event the Company terminates Executive's employment for any reason
other than Cause or Executive terminates his employment for Good Reason, the
Company shall pay to Executive and Executive shall be entitled to receive the
aggregate of (i) the Fixed Amount and (ii) Vested Incentive Compensation, Total
Vested Options and the Vested Option Exercise Election, the Vested Tax Gross-Up
Payment,
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Expense Reimbursement and Medical Continuation. In the event of a conflict
between any Incentive Compensation grant agreement or program or any option
grant agreement or plan and this Agreement, the terms of this Agreement shall
control. Executive understands that any options exercised more than ninety (90)
days following the date of his termination of employment which were granted as
incentive stock options shall automatically be converted into non-qualified
options.
Except for any rights which Executive may have to the Fixed Amount, Vested
Incentive Compensation, Total Vested Options and the Vested Option Exercise
Election, the Vested Tax Gross-Up Payment, Expense Reimbursement and Medical
Continuation, the Company shall have no further obligations hereunder following
such termination. The parties both agree that the agreement to make these
payments was consideration and an inducement to obtain Executive's consent to
enter into this Agreement. The payments are not a penalty and neither party will
claim them to be a penalty. Rather, the payments represent a fair approximation
of reasonable amounts due to Executive for the Employment Period.
9. Change in Control.
(a) Options. Any Incentive Compensation and options granted to
Executive that have not vested as of the date of a Change in Control shall
immediately vest upon the date of the Change in Control. Neither the occurrence
of a Change in Control, nor the vesting in any options as a result thereof shall
require Executive to exercise any options. In the event of a conflict between
any Incentive Compensation
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grant agreement or program or any option grant agreement or plan and this
Agreement, the terms of this Agreement shall control.
(b) Upon Termination. In the event Executive terminates his
employment on or following a Change in Control as set forth in sub-paragraph
5(a)(vii), the Company shall pay to Executive and Executive shall be entitled to
all the payments and rights Executive would have had if Executive had terminated
his employment with Good Reason as set forth in Paragraph 8.
Except for any rights which Executive may have to the Fixed Amount,
Vested Incentive Compensation, Total Vested Options (including, without
limitation, by acceleration in accordance with sub-paragraph 9(a)) and the
Vested Option Exercise Election, the Vested Tax Gross-Up Payment, Expense
Reimbursement, Medical Continuation and the Excise Tax Gross Up set forth in
subparagraph 9(c), the Company shall have no further obligations hereunder
following such termination.
(c) Excise Tax Gross Up. In addition, if it is determined by an
independent accountant mutually acceptable to the Company and Executive that as
a result of any payment in the nature of compensation made by the Company to (or
for the benefit of) Executive pursuant to this Agreement or otherwise, an excise
tax may be imposed on Executive pursuant to Section 4999 of the Code (or any
successor provisions), the Company shall pay Executive in cash an amount equal
to X determined under the following formula: (the "Excise Tax Gross Up"):
E x P
X = --------------------------------
1-[(FI x (1-SLI)) + SLI + E + M]
where
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E = the rate at which the excise tax is assessed under
Section 4999 of the Code (or any successor provisions);
P = the amount with respect to which such excise tax is
assessed, determined without regard to the Excise Tax
Gross Up;
FI = the highest effective marginal rate of income tax
applicable to Executive under the Code for the taxable
year in question (taking into account any phase-out or
loss of deductions, personal exemptions or other similar
adjustments);
SLI = the sum of the highest effective marginal rates of
income tax applicable to Executive under all applicable
state and local laws for the taxable year in question
(taking into account any phase-out or loss of
deductions, personal exemptions and other similar
adjustments); and
M = the highest marginal rate of Medicare tax applicable to
Executive under the Code for the taxable year in
question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under Section 4999 of the Code (or any successor
provisions) may be assessed, the payment determined under this sub-paragraph
9(c) shall be paid to Executive at the time of the Change in Control but prior
to the consummation of the transaction with any successor. It is the intention
of the parties that the Company provide Executive with a full tax gross-up under
the provisions of this sub-paragraph, so that on a net after-tax basis, the
result to Executive shall be the same as if the excise tax under Section 4999 of
the Code (or any successor provisions) had not been imposed. The Excise Tax
Gross Up may be adjusted if alternative minimum tax rules are applicable to
Executive.
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10. Mitigation / Effect on Employee Benefit Plans and Programs.
(a) Mitigation. Executive shall not be required to mitigate amounts
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. Amounts owed to Executive under this Agreement shall
not be offset by any claims the Company may have against Executive and such
payment 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.
(b) Effect on Employee Benefit Programs. The termination of
Executive's employment hereunder, whether by the Company or Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Company's (i) welfare benefit plans including, without limitation, Medical
Continuation as provided for herein and, health coverage thereafter but only to
the extent required by law, and on the same basis applicable to other employees
and (ii) 401(k) Plan but only to the extent required by law and pursuant to the
terms of the 401(k) Plan.
11. Confidential Information.
(a) Executive understands and acknowledges that during his
employment with the Company, he will be exposed to Confidential Information (as
defined below), all of which is proprietary and which will rightfully belong to
the Company. Executive shall hold in a fiduciary capacity for the benefit of the
Company such Confidential Information obtained by Executive during his
employment with the
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Company and shall not, directly or indirectly, at any time, either during or
after his employment with the Company, without the Company's prior written
consent, use any of such Confidential Information or disclose any of such
Confidential Information to any individual or entity other than the Company or
its employees, attorneys, accountants, financial advisors, consultants, or
investment bankers except as required in the performance of his duties for the
Company or as otherwise required by law. Executive shall take all reasonable
steps to safeguard such Confidential Information and to protect such
Confidential Information against disclosure, misuse, loss or theft.
(b) The term "Confidential Information" shall mean any information
not generally known in the relevant trade or industry or otherwise not generally
available to the public, which was obtained from the Company or its predecessors
or which was learned, discovered, developed, conceived, originated or prepared
during or as a result of the performance of any services by Executive on behalf
of the Company or its predecessors. For purposes of this Paragraph 11, the
Company shall be deemed to include any entity which is controlled, directly or
indirectly, by the Company and any entity of which a majority of the economic
interest is owned, directly or indirectly, by the Company.
12. Return of Documents.
Except for such items which are of a personal nature to Executive (e.g.,
daily business planner), all writings, records, and other documents and things
containing any Confidential Information shall be the exclusive property of the
Company, shall not be copied, summarized, extracted from, or removed from the
premises of the Company,
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except in pursuit of the business of the Company and at the direction of the
Company, and shall be delivered to the Company, without retaining any copies,
upon the termination of Executive's employment or at any time as requested by
the Company.
13. Noncompete.
Executive agrees that:
(a) During the Employment Period and, in the event (i) the Company
terminates Executive's employment for Cause, or (ii) Executive terminates his
employment without Good Reason, for a one (1) year period thereafter, Executive
shall not, directly or indirectly, within the continental United States, engage
in, or own, invest in, manage or control any venture or enterprise primarily
engaged in any office-service, flex, or office property development, acquisition
or management activities without regard to whether or not such activities
compete with the Company. Nothing herein shall prohibit Executive from being a
passive owner of not more than five percent (5%) of the outstanding stock of any
class of securities of a corporation or other entity engaged in such business
which is publicly traded, so long as he has no active participation in the
business of such corporation or other entity. Moreover, the foregoing
limitations shall not be deemed to restrict or otherwise limit Executive from
conducting real estate development, acquisition or management activities with
respect to the Excluded Properties, if any, provided that during the Employment
Period the performance of such activities does not prevent Executive from
devoting substantially all of his business time to the Company.
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(b) If, at the time of enforcement of this Paragraph 13, a court
shall hold that the duration, scope, area or other restrictions stated herein
are unreasonable, the parties agree that reasonable maximum duration, scope,
area or other restrictions may be substituted by such court for the stated
duration, scope, area or other restrictions and upon substitution by such court,
this Agreement shall be automatically modified without further action by the
parties hereto.
(c) For purposes of this Paragraph 13, the Company shall be deemed
to include any entity which is controlled, directly or indirectly, by the
Company and any entity of which a majority of the economic interest is owned,
directly or indirectly, by the Company.
14. Remedies.
The parties hereto agree that the Company would suffer irreparable harm
from a breach by Executive of any of the covenants or agreements contained in
Paragraphs 11, 12 or 13 of this Agreement. Therefore, in the event of the actual
or threatened breach by Executive of any of the provisions of Paragraphs 11, 12
or 13 of this Agreement, the Company may, in addition and supplementary to other
rights and remedies existing in its favor, apply to any court of law or equity
of competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violation of the provisions thereof.
15. Indemnification/Legal Fees.
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(a) Indemnification. In the event the Executive is made party or
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of
Executive's employment with or serving as an officer or director of the Company,
whether or not the basis of such Proceeding is alleged action in an official
capacity, the Company shall indemnify, hold harmless and defend Executive to the
fullest extent authorized by Maryland law, as the same exists and may hereafter
be amended, against any and all claims, demands, suits, judgments, assessments
and settlements including all expenses incurred or suffered by Executive in
connection therewith (including, without limitation, all legal fees incurred
using counsel reasonably acceptable to Executive) and such indemnification shall
continue as to Executive even after Executive is no longer employed by the
Company and shall inure to the benefit of his heirs, executors, and
administrators. 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 an undertaking to reimburse the Company for
expenses with respect to which Executive is not entitled to indemnification. The
provisions of this Paragraph shall remain in effect after this Agreement is
terminated irrespective of the reasons for termination. The indemnification
provisions of this Paragraph shall not supersede or reduce any indemnification
provided to Executive under any separate agreement, or the by-laws of the
Company since it is intended that this Agreement shall expand and extend the
Executive's rights to receive indemnity.
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(b) Legal Fees. If any contest or dispute shall arise between the
Company and Executive regarding or as a result of 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 pursued or defended in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed).
16. Successors and Assigns.
(a) The Company shall 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, by agreement in
form and substance satisfactory to Executive, 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.
Failure of the Company to obtain such agreement prior to the effectiveness of an
such succession shall be a breach of this Agreement and shall entitle Executive
to compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if Executive terminated his employment hereunder
within six (6) months of a Change in Control as set forth in Paragraph 9, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the date of termination. In the
event of such a breach of this Agreement, the Notice of Termination
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shall specify such date as the date of termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
all or substantially all of its business and/or its assets as aforesaid which
executes and delivers the agreement provided for in this Paragraph 16 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law. Any cash payments owed to Executive pursuant to this Paragraph
16 shall be paid to Executive in a single sum without discount for early payment
immediately prior to the consummation of the transaction with such successor.
(b) This Agreement and all rights of Executive hereunder 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 Company written notice thereof. If Executive should die following the
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, including, without limitation,
under any applicable plan, or otherwise to his legal representatives or estate.
17. Timing of and No Duplication of Payments.
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All payments payable to Executive pursuant to this Agreement shall be paid
as soon as practicable after such amounts have become fully vested and
determinable. In addition, Executive shall not be entitled to receive duplicate
payments under any of the provisions of this Agreement.
18. Modification or Waiver.
No amendment, modification, waiver, termination or cancellation of this
Agreement shall be binding or effective for any purpose unless it is made in a
writing signed by the party against whom enforcement of such amendment,
modification, waiver, termination or cancellation is sought. No course of
dealing between or among the parties to this Agreement shall be deemed to affect
or to modify, amend or discharge any provision or term of this Agreement. No
delay on the part of the Company or Executive in the exercise of any of their
respective rights or remedies shall operate as a waiver thereof, and no single
or partial exercise by the Company or Executive of any such right or remedy
shall preclude other or further exercise thereof. A waiver of right or remedy on
any one occasion shall not be construed as a bar to or waiver of any such right
or remedy on any other occasion.
The respective rights and obligations of the parties hereunder shall
survive the Executive's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations.
19. Notices.
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All notices or other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered by
hand or delivered by a recognized delivery service or mailed, postage prepaid,
by express, certified or registered mail, return receipt requested, and
addressed to the Chief Executive Officer of the Company or Executive, as
applicable, at the address set forth above (or to such other address as shall
have been previously provided in accordance with this Paragraph 19).
20. Governing Law.
This agreement will be governed by and construed in accordance with the
laws of the State of New Jersey except as to Paragraph 15(a), without regard to
principles of conflicts of laws thereunder.
21. Severability.
Whenever possible, each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement shall be held to be prohibited by
or invalid under such applicable law, then, subject to the provisions of
sub-paragraph 13(b) above, such provision or term shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provisions or term or the
remaining provisions or terms of this Agreement.
22. Legal Representation.
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Each of the Company and Executive have been represented by counsel with
respect to this Agreement.
23. Counterparts.
This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and both of which taken together shall constitute one
and the same agreement.
24. Headings.
The headings of the Paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof and shall
not affect the construction or interpretation of this Agreement.
25. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and undertakings, both written and oral, among the parties with respect to the
subject matter hereof. The parties recognize that the Prior Agreement has been
amended and restated in its entirety by this Agreement and the terms of the
Prior Agreement are of no further force and effect.
26. Survival of Agreements.
The covenants made in Paragraphs 5 through 15 and 21 each shall survive
the termination of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
XXXX-XXXX REALTY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxxx X. Xxxxx
Chief Executive Officer
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxx
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SCHEDULE A
61,342 square foot Shopping Center located at 000-00 Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxx Xxxx.
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