Exhibit (10)(d)
CHANGE IN CONTROL AGREEMENT
AGREEMENT by and between Parkway Properties, Inc.,
a Maryland corporation (the "Company"), with offices at 300
One Xxxxxxx Place, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000-0000, and ________________ (the
"Executive"), an individual residing at
__________________________________________, dated as of the
6th of December, 1996.
WHEREAS, the Company recognizes that the current
business environment makes it difficult to attract and
retain highly qualified executives unless a certain degree
of security can be offered to such individuals against
organizational and personnel changes which frequently follow
changes in control of a corporation; and
WHEREAS, even rumors of acquisitions or mergers
may cause executives to consider major career changes in an
effort to assure financial security for themselves and their
families; and
WHEREAS, the Company desires to assure fair
treatment of its executives in the event of a Change in
Control (as defined below) and to allow them to make
critical career decisions without undue time pressure and
financial uncertainty, thereby increasing their willingness
to remain with the Company notwithstanding the outcome of a
possible Change in Control transaction; and
WHEREAS, the Company recognizes that its
executives will be involved in evaluating or negotiating any
offers, proposals or other transactions which could result
in Changes in Control of the Company and believes that it is
in the best interest of the Company and its stockholders for
such executives to be in a position, free from personal
financial and employment considerations, to be able to
assess objectively and pursue aggressively the interests of
the Company's stockholders in making these evaluations and
carrying on such negotiations; and
WHEREAS, the Board of Directors (the "Board") of
the Company believes it is essential to provide the
Executive with compensation arrangements upon a Change in
Control which provide the Executive with individual
financial security and which are competitive with those of
other corporations, and in order to accomplish these
objectives, the Board has caused the Company to enter into
this Agreement.
NOW THEREFORE, the parties, for good and valuable
consideration and intending to be legally bound, agree as
follows:
1. Operation and Term of Agreement. This
Agreement shall be effective immediately upon its execution.
This Agreement may be terminated by the Company upon 24
months' advance written notice to the Executive; provided,
however, that after a Change in Control of the Company
during the term of this Agreement, this Agreement shall
remain in effect until all of the obligations of the parties
under the Agreement are satisfied and the Protection Period
has expired. Prior to a Change in Control this Agreement
shall immediately terminate upon termination of the
Executive's employment or upon the Executive's ceasing to be
an elected officer of the Company.
2. Certain Definitions. For purposes of this
Agreement, the following words and phrases shall have the
following meanings:
(a) "Cause" shall mean (i) the
continued failure by the Executive to perform his material
responsibilities and duties toward the Company (other than
any such failure resulting from the Executive's incapacity
due to physical or mental illness), (ii) the engaging by the
Executive in willful or reckless conduct that is
demonstrably injurious to the Company monetarily or
otherwise, (iii) the conviction of the Executive of a
felony, or (iv) the commission or omission of any act by the
Executive that is materially inimical to the best interests
of the Company and that constitutes on the part of the
Executive common law fraud or malfeasance, misfeasance, or
nonfeasance of duty; provided, however, that "cause" shall
not include the Executive's lack of professional
qualifications. For purposes of this Agreement, an act, or
failure to act, on the Executive's part shall be considered
"willful" or "reckless" only if done, or omitted, by him not
in good faith and without reasonable belief that his action
or omission was in the best interest of the Company. The
Executive's employment shall not be deemed to have been
terminated for "cause" unless the Company shall have given
or delivered to the Executive (A) reasonable notice setting
forth the reasons for the Company's intention to terminate
the Executive's employment for "cause," (B) a reasonable
opportunity, at any time during the 30-day period after the
Executive's receipt of such notice, for the Executive,
together with his counsel, to be heard before the Board, and
(C) a Notice of Termination (as defined in Section 10 below)
stating that, in the good faith opinion of not less than a
majority of the entire membership of the Board, the
Executive was guilty of the conduct set forth in clauses
(i), (ii), (iii) or (iv) of the first sentence of this
Section 2(a).
(b) "Change in Control" shall mean a change
in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities and Exchange Act of
1934, as amended (the Exchange Act), whether or not the
Company is then subject to such reporting requirements;
provided that, without limitation, such a Change in Control
shall be deemed to have occurred if (a) any person (as such
term is used in section 13(d) and 14(d) of the Exchange Act)
is or becomes beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Company representing 30 percent or more of
the combined voting power of the Company's then outstanding
securities; or (B) during any period of two consecutive
years, the following persons (the Continuing Directors)
cease for any reason to constitute a majority of the Board:
individuals who at the beginning of such period constitute
the Board and new Directors each of whose election to the
Board or nomination for election to the Board by the
Company's security holders was approved by a vote of at
least two-thirds of the Directors then still in office who
either were Directors at the beginning of the period or
whose election or nomination for election was previously so
approved; or (C) the security holders of the Company approve
a merger or consolidation of the Company with any other
corporation, other than (i) a merger or consolidation that
would result in the voting securities of the Company
outstanding immediately before the merger or consolidation
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the Company or
of such surviving entity outstanding immediately after such
merger or consolidation or (ii) a merger of consolidation
that is approved by a Board having a majority of its members
persons who are Continuing Directors, of which Continuing
Directors not less than two-thirds have approved the merger
or consolidation; or (D) the security holders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
(c) "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(d) "Disability," for purposes of this
Agreement, shall mean total disability as defined in any
long-term disability plan sponsored by the Company in which
the Executive participates, or, if there is no such plan or
it does not define such term, then it shall mean the
physical or mental incapacity of the Executive that prevents
him from substantially performing the duties of the office
or position to which he was elected or appointed by the
Board for a period of at least 180 days and the incapacity
is expected to be permanent and continuous through the
Executive's 65th birthday.
(e) The "Change in Control Date" shall be
any date during the term of this Agreement on which a Change
in Control occurs. Anything in this Agreement to the
contrary notwithstanding, if the Executive's employment or
status as an elected officer with the Company is terminated
within six months before the date on which a Change in
Control occurs, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has
taken steps reasonably calculated or intended to effect a
Change in Control or (ii) otherwise arose in connection with
or anticipation of a Change in Control, then for all
purposes of this Agreement the "Change in Control Date"
shall mean the date immediately before the date of such
termination.
(f) "Good Reason" means:
(i) the assignment to the Executive
within the Protection Period of any duties inconsistent in
any respect with the Executive's position (including status,
offices, titles and reporting requirements, authority,
duties or responsibilities), or any other action that
results in a diminution in such position, authority, duties,
or responsibilities excluding for this purpose an isolated,
insubstantial, and inadvertent action not taken in bad faith
and that is remedied by the Company promptly after receipt
of notice given by the Executive;
(ii) a reduction by the Company in the
Executive's base salary in effect immediately before the
beginning of the Protection Period or as increased from time
to time after the beginning of the Protection Period;
(iii) a failure by the Company to
maintain plans providing benefits at least as beneficial as
those provided by any benefit or compensation plan
(including, without limitation, any incentive compensation
plan, bonus plan or program, retirement, pension or savings
plan, life insurance plan, health and dental plan or
disability plan) in which the Executive is participating
immediately before the beginning of the Protection Period,
or any action taken by the Company that would adversely
affect the Executive's participation in or reduce the
Executive's opportunity to benefit under any of such plans
or deprive the Executive of any material fringe benefit
enjoyed by him immediately before the beginning of the
Protection Period; provided, however, that a reduction in
benefits under the Company's tax-qualified retirement,
pension, or savings plans or its life insurance plan, health
and dental plan, disability plans or other insurance plans,
which reduction applies generally to participants in the
plans and has a de minimis effect on the Executive shall not
constitute "Good Reason" for termination by the Executive;
(iv) the Company's requiring the
Executive, without the Executive's written consent, to be
based at any office or location in excess of 50 miles from
his office location immediately before the beginning of the
Protection Period, except for travel reasonably required in
the performance of the Executive's responsibilities;
(v) any purported termination by the
Company of the Executive's employment for Cause otherwise
than as referred to in Section 10 of this Agreement; or
(vi) any failure by the Company to
obtain the assumption of the obligations contained in this
Agreement by any successor as contemplated in Section 9(c)
of this Agreement.
(g) "Parent" means any entity that directly
or indirectly through one or more other entities owns or
controls more than 50 percent of the voting stock or common
stock of the Company.
(h) "Protection Period" means the period
beginning on the Change in Control Date and ending on the
last day of the 20th calendar month following the Change in
Control Date.
(i) "Subsidiary" means a company 50 percent
or more of the voting securities of which are owned,
directly or indirectly, by the Company.
3. Benefits Upon Termination Within a Protection
Period. If, during a Protection Period, the Executive's
employment is terminated by the Company other than for Cause
or Disability or other than as a result of the Executive's
death or if the Executive terminates his employment for Good
Reason, the Company shall, subject to Section 7, pay to the
Executive in a lump sum in cash within 10 days after the
date of termination the aggregate of the following amounts:
(a) The Executive's full base salary and
vacation pay (for vacation not taken) accrued but unpaid
through the date of termination at the rate in effect at the
time of the termination; and
(b) A lump sum severance payment in an
amount equal to 1.667 times the Executive's "Annual
Compensation." For purposes of this Agreement, "Annual
Compensation" shall be an amount equal to the average for
the three year period ending on the December 31 prior to the
Change in Control Date of (i) the Executive's annual base
salary from the Company and its Subsidiaries plus (ii) the
amount of bonus accrued by the Company for the Executive;
and
(c) Within 30 days of the date of
termination, upon surrender by the Executive of his
outstanding options to purchase common shares of the Company
("Common Shares") granted to the Executive by the Company
(the "Outstanding Options") and any stock appreciation
rights ("SARs"), an amount in respect of each Outstanding
Option and SAR (whether vested or not) equal to the
difference between the exercise price of such Outstanding
Options and SARs and the higher of (x) the fair market value
of the Common Shares at the time of such termination (but
not less than the closing price for the Common Shares on the
New York Stock Exchange, or such other national stock
exchange on which such shares may be listed, on the last
trading day such shares traded prior to the date of
termination), and (y) the highest price paid for Common
Shares or, in the cases of securities convertible into
Common Shares or carrying a right to acquire Common Shares,
the highest effective price (based on the prices paid for
such securities) at which such securities are convertible
into Common Shares or at which Common Shares may be
acquired, by any person or group whose acquisition of voting
securities has resulted in a Change in Control of the
Company; provided, however, that this Section 3(c) shall not
apply to the surrender of any Outstanding Option that is an
incentive stock option (within the meaning of section 422 of
the Code).
4. Executive's Right to Leave Employment. At
any time during the six month period following a Change in
Control Date, the Executive shall have the right to
terminate the Executive's employment with the Company at the
Executive's sole discretion (the "Executive Termination
Right"). In the event the Executive exercises the Executive
Termination Right, the Company shall pay the Executive in a
lump sum in cash within 10 days after the date of
termination the aggregate of the following amounts:
(a) The amounts set forth in Sections 3(a)
and 3(c); and
(b) 0.8335 times the Executive's Annual
Compensation.
5. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing
or future participation in any benefit, bonus, incentive, or
other plans, practices, policies, or programs provided by
the Company or any of its Subsidiaries and for which the
Executive may qualify, nor shall anything in this Agreement
limit or otherwise affect such rights as the Executive may
have under any stock option or other agreements with the
Company or any of its Subsidiaries. Amounts that are vested
benefits or that the Executive is otherwise entitled to
receive under any plan, practice, policy, or program of the
Company or any of its Subsidiaries at or subsequent to the
date of termination shall be payable in accordance with such
plan, practice, policy, or program; provided, however, that
the Executive shall not be entitled to severance pay, or
benefits similar to severance pay, under any plan, practice,
policy, or program generally applicable to employees of the
Company or any of its Subsidiaries.
6. Full Settlement; No Obligation to Seek Other
Employment; Legal Expenses. The Company's obligation to
make the payments provided for in this Agreement and
otherwise to perform its obligations under this Agreement
shall not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right, or action that
the Company may have against the Executive or others. The
Executive shall not be obligated to seek other employment or
take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this
Agreement. The Company agrees to pay, upon written demand
by the Executive, all legal fees and expenses the Executive
may reasonably incur as a result of any dispute or contest
(regardless of outcome) by or with the Company or others
regarding the validity or enforceability of, or liability
under, any provision of this Agreement. In any such action
brought by the Executive for damages or to enforce any
provisions of this Agreement, he shall be entitled to seek
both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company's
obligations under this Agreement, in his sole discretion.
7. Cut Back in Benefits. Notwithstanding any
other provision of this Agreement, the cash lump sum payment
and other benefits otherwise to be provided pursuant to
Sections 3 and 4 of this Agreement (the "Severance Benefit")
shall be reduced as described below if the Company would, by
reason of section 280G of the Code, not be entitled to
deduct for federal income tax purposes any part of the
Severance Benefit or any part of any other payment or
benefit to which Executive is entitled under any plan,
practice, policy, or program. For the purposes of this
Agreement, the Company's independent auditors shall
determine the value of any deferred payments or benefits in
accordance with the principles of section 280G of the Code,
and tax counsel selected by the Company's independent
auditors and acceptable to the Company shall determine the
deductibility of payments and benefits to which the
Executive is entitled. The Severance Benefit shall be
reduced only to the extent required, in the opinion of such
tax counsel, to prevent such nondeductibility of any part of
the remaining Severance Benefit and other payments and
benefits to which the Executive is entitled. The Company
shall determine which elements of the Severance Benefit
shall be reduced to conform to the provisions of this
Section. Any determination made by the Company's
independent auditors or by tax counsel pursuant to this
Section shall be conclusive and binding on the Executive.
8. Confidential Information. The Executive
shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge,
or data relating to the Company or any of its Subsidiaries,
and their respective businesses, obtained by the Executive
during the Executive's employment by the Company or any of
its Subsidiaries and that has not become public knowledge
(other than by acts of the Executive or his representatives
in violation of this Agreement). After the date of
termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent
of the Company, communicate or divulge any such information,
knowledge, or data to anyone other than the Company and
those designated by it. In no event shall an asserted
violation of the provisions of this Section 8 constitute a
basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
9. Successors.
(a) This Agreement is personal to the
Executive and without the prior written consent of the
Company shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives or successor(s) in
interest. The Executive may designate a successor (or
successors) in interest to receive any and all amounts due
the Executive in accordance with this Agreement should the
Executive be deceased at any time of payment. Such
designation of successor(s) in interest shall be made in
writing and signed by the Executive, and delivered to the
Company pursuant to Section 13(b). This Section 9(a) shall
not supersede any designation of beneficiary or successor in
interest made by the Executive, or separately covered, under
any other plan, practice, policy, or program of the Company.
(b) This Agreement shall inure to the
benefit of and be binding upon the Company and its
successors and assigns.
(c) The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of
the business or assets of the Company and any Parent of the
Company or any successor and without regard to the form of
transaction utilized to acquire the business or assets of
the Company, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such
succession or parentage had taken place. As used in this
Agreement, "Company" shall mean the Company as defined above
and any successor to its business or assets as aforesaid
(and any Parent of the Company or any successor) that is
required by this clause to assume and agree to perform this
Agreement or which otherwise assumes and agrees to perform
this Agreement.
10. Notice of Termination. Any termination of
the Executive's employment by the Company for Cause or by
the Executive for Good Reason shall be communicated by
Notice of Termination to the other party given in accordance
with Section 13(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice
that (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable
detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under
the provision so indicated, and (iii) if the date of
termination is other than the date of receipt of such
notice, specifies the termination date (which date shall be
not more than 15 days after the giving of such notice). The
failure by the Executive to set forth in the Notice of
Termination any fact or circumstance that contributes to a
showing of Good Reason shall not waive any right of the
Executive under this Agreement or preclude the Executive
from asserting such fact or circumstance in enforcing his
rights.
11. Requirements and Benefits if Executive Is
Employee of Subsidiary of Company. If the Executive is an
employee of any Subsidiary of the Company, he shall be
entitled to all of the rights and benefits of this Agreement
as though he were an employee of the Company and the term
"Company" shall be deemed to include the Subsidiary by whom
the Executive is employed. The Company guarantees the
performance of its Subsidiary under this Agreement.
12. Arbitration. The Company and the Executive
shall attempt to resolve between them any dispute that
arises under this Agreement. If they cannot agree within
ten days after either party submits a demand for arbitration
to the other party, then the issue shall be submitted to
arbitration with each party having the right to appoint one
arbitrator and those two arbitrators mutually selecting a
third arbitrator. The rules of the American Arbitration
Association for the arbitration of commercial disputes shall
apply and the decision of two of the three arbitrators shall
be final. The arbitrators must reach a decision within 60
days after the selection of the third arbitrator. The
arbitration shall take place in Jackson, Mississippi. The
arbitrators shall apply Mississippi law.
13. Miscellaneous.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of
Mississippi, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties or their
respective successors and legal representatives.
(b) All notices and other communications
under this Agreement shall be in writing and shall be given
by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid,
to the addresses for each party as first written above or to
such other address as either party shall have furnished to
the other in writing in accordance with this Section.
Notices and communications to the Company shall be addressed
to the attention of the Company's Corporate Secretary.
Notice and communications shall be effective when actually
received by the addressee.
(c) Whenever reference is made in this
Agreement to any specific plan or program of the Company, to
the extent that the Executive is not a participant in the
plan or program or has no benefit accrued under it, whether
vested or contingent, as of the Change in Control Date, then
such reference shall be null and void, and the Executive
shall acquire no additional benefit as a result of such
reference.
(d) The invalidity or unenforceability of
any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this
Agreement.
(e) The Company may withhold from any
amounts payable under this Agreement such Federal, state, or
local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
(f) The Executive's failure to insist upon
strict compliance with any provision of this Agreement shall
not be deemed to be a waiver of such provision or any other
provision.
(g) Upon a termination of the Executive's
employment or upon the Executive's ceasing to be an elected
officer of the Company, in each case, prior to the Change in
Control Date, there shall be no further rights under this
Agreement.
IN WITNESS WHEREOF, the Executive has set his hand
to this Agreement and, pursuant to the authorization from
the Board, the Company has caused this Agreement to be
executed as of the day and year first above written.
PARKWAY PROPERTIES, INC.
By___________________________
EXECUTIVE
_____________________________
