1
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER
REALTY TRUST, a Maryland real estate investment trust, with offices at 00 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx, Xxxx, 00000 ("GRT"), GLIMCHER PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership, with offices at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx, Xxxx, 00000 ("GPLP"), and XXXXXXX XXXXXXXX, an individual
residing at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxx, 00000, (the "Executive")
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates,
including entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's
contributions to the past and future growth of the Company have been and will
be substantial; and
WHEREAS, to induce the Executive to remain in the employ of
the Company, the parties hereto desire to set forth certain severance benefits
which GPLP will pay to the Executive in the event of a Change in Control of GRT
(as defined in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and
shall terminate upon the earlier of (a) the date on which GPLP and GRT have
satisfied all of their obligations hereunder, or (b) the date on which the
Executive is no longer an employee of the Company for any reason whatsoever
including, without limitation, termination without cause. Notwithstanding the
termination of this Agreement subsequent to a Change in Control of GRT, in the
event that the Executive is an employee of the Company at the moment
immediately prior to a Change in Control of GRT, the Executive shall be
entitled to receive all benefits described hereunder and the provisions hereof
related thereto shall survive such termination.
2
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement,
a "Change in Control of GRT" shall be deemed to occur if:
(i) there shall have occurred 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
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on
the date hereof, whether or not GRT is then subject to such reporting
requirement, provided, however, that there shall not be deemed to be a
Change in Control of GRT if immediately prior to the occurrence of
what would otherwise be a Change in Control of GRT (a) the Executive
is the other party to the transaction (a "Control of GRT Event") that
would otherwise result in a Change in Control of GRT or (b) the
Executive is an Executive officer, trustee, director or more than 5%
equity holder of the other party to the Control of GRT Event or of any
entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a
"Transaction"), provided, however, that a Transaction shall not be
deemed to result in a Change in Control of GRT if (a) immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist, or
(b) (1) the shareholders of GRT, immediately before such Transaction
own, directly or indirectly, immediately following such Transaction in
excess of fifty percent (50%) of the combined voting power of the
outstanding voting securities of the corporation or other entity
resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately
prior to the execution of the agreement providing for such Transaction
constitute at least a majority of the members of the board of
directors or the board of trustees, as the case may be, of the
Surviving Corporation, or of a corporation or other entity
beneficially directly or indirectly owning a majority of the
outstanding voting securities of the Surviving Corporation; or
-2-
3
(iii) GRT acquires assets of another company or a subsidiary
of GRT merges or consolidates with another company (each, an "Other
Transaction") and (a) the shareholders of GRT, immediately before such
Other Transaction own, directly or indirectly, immediately following
such Other Transaction 50% or less of the combined voting power of the
outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving
Corporation") in substantially the same proportion as their ownership
of the voting securities of GRT immediately before such Other
Transaction or (b) the individuals who were members of GRT's Board of
Trustees immediately prior to the execution of the agreement providing
for such Other Transaction constitute less than a majority of the
members of the board of directors or the board of trustees, as the
case may be, of the Other Surviving Corporation, or of a corporation
or other entity beneficially directly or indirectly owning a majority
of the outstanding voting securities of the Other Surviving
Corporation, provided, however, that an Other Transaction shall not be
deemed to result in a Change in Control of GRT if immediately prior
thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive the
compensation and benefits set forth below.
(a) GPLP shall pay to the Executive, not later than the date
of any Change in Control of GRT, unless otherwise agreed to in writing, a lump
sum severance payment (the "Severance Payment") equal to three (3) times the
Base Amount (as defined below). For purposes of this Section 3(a), the Base
Amount shall mean the Executive's annual compensation during the calendar year
period preceding the calendar year in which the Change in Control of GRT
occurs. For purposes of determining annual compensation in the preceding
sentence, there shall be included (i) all base salary and bonuses paid or
payable to the Executive by the Company with respect to the preceding calendar
year, (ii) all grants of restricted common shares of beneficial interest of GRT
(the "Shares"), if any, with respect to such preceding calendar year, which
Shares shall be valued based on their date of grant Fair Market Value (as
defined in Section 7.2 of the GRT's 1993 Employee Share Option Plan or 1993
Trustee Share Option Plan, as the case may be, or any other plan or agreement
pursuant to which they are issued), and (iii) the fair market value of any
other property or rights given or awarded to the Executive by the Company with
respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive
pursuant to any restricted Share grant shall vest on the day immediately prior
to the date of a Change in Control of GRT and no longer be subject to
repurchase or any other forfeiture restrictions.
-3-
4
(c) GRT and GPLP shall cause the Company to maintain in full
force and effect for the Executive's continued benefit for 18 months following
a Change in Control of GRT, all life, accident, medical and dental insurance
benefit plans and programs or arrangements in which the Executive was entitled
to participate immediately prior to the date of a Change in Control of GRT;
provided that the Executive's continued participation is possible under the
general terms and provisions of such plans and programs; and provided, further,
that in the event that the Executive becomes employed by any third party during
such 18-month period, then upon the date of such employment the Executive shall
no longer be entitled to any of the accident, medical or dental insurance
benefits described in the preceding clause. Subject to the preceding sentence,
in the event that the Executive's participation in any such plan or program is
barred, GRT and GPLP shall arrange to cause the Company to provide the
Executive with benefits substantially similar to those which the Executive was
entitled to receive under such plans and programs. Subject to the first
sentence of this paragraph, at the end of the period of coverage, the Executive
shall have the option to have assigned to him at no cost to the Executive and
with no apportionment of prepaid premiums, any assignable insurance policy
owned by the Company and relating specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted
to the Executive shall vest on the day immediately prior to the date of a
Change in Control of GRT and become fully exercisable in accordance with their
terms.
(e) The Executive shall not be required to mitigate the
amount of any payment provided for in this Section 3 by seeking other
employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 3 be reduced by any compensation earned by him as
the result of employment by another employer or by retirement benefits after
the date of termination, or otherwise, except as specifically provided in this
Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is
applicable, if in the opinion of tax counsel selected by the Executive and
reasonably acceptable to the Company, the Executive has or will receive any
compensation or recognize any income (whether or not pursuant to this Agreement
or any plan or other arrangement of the Company and whether or not the
Executive's employment with the Company has terminated) which constitutes an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
-4-
5
5. EXPENSES. GPLP shall pay or reimburse the Executive, as
the case may be, for all legal fees and related expenses (including the costs
of experts, evidence and counsel) paid by the Executive as a result of (i) the
Executive seeking to obtain or enforce any right or benefit provided by this
Agreement, or (ii) any action taken by the Company against the Executive in
enforcing its rights hereunder; provided, however, that GPLP shall reimburse
the legal fees and related expenses described in this Section 5 only if and
when a final judgement has been rendered in favor of the Executive and all
appeals related to any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained
herein shall confer upon the Executive the right to continue in the employment
or service of the Company or affect any right that the Company may have to
terminate the employment or service of the Executive at any time for any
reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all
obligations of, and the full and prompt payment of all amounts payable by, GPLP
hereunder. In addition, GRT guarantees the satisfaction of all obligations of
the Company hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State
of Maryland, without regard to Maryland's conflicts of law principles. Any
dispute or controversy arising under this Agreement, or out of the
interpretation hereof, or based upon the breach hereof, shall be resolved by
arbitration held at the offices of the American Arbitration Association in the
City of Philadelphia in accordance with the rules and regulations of such
association prevailing at the time of the demand for arbitration by either
party hereto, and the decision of the arbitrator or arbitrators shall be final
and binding upon both parties hereto, provided, however, that the arbitrator or
arbitrators shall only have the power and authority to interpret, and not to
modify or amend, the terms and provisions hereof. Judgment upon an award
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof. Notwithstanding anything contained in this Section 8,
either party shall have the right to seek preliminary injunctive relief in any
court in the City of Philadelphia in aid of, and pending the final decision in,
the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties and is intended to supersede all prior negotiations,
understandings and agreements with respect to the subject matter hereof. No
provision of this Agreement may be waived or changed, except by a writing
signed by the party to be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure
to the benefit of, be binding upon and be enforceable by GRT and GPLP, their
successors and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
-5-
6
11. NOTICES. All notices provided for in this Agreement shall
be in writing, and shall be deemed to have been duly given when delivered
personally to the party to receive the same, when given by telex, telegram or
mailgram, or when mailed first class postage prepaid, by registered or
certified mail, return receipt requested, addressed to the party to receive the
same at his or its address above set forth, or such other address as the party
to receive the same shall have specified by written notice given in the manner
provided for in this Section 11. All notices shall be deemed to have been given
as of the date of personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is
determined to be invalid, it shall not affect the validity or enforceability of
any of the other remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents,
agreements, understandings and arrangements relating to the matters described
herein have been executed by the undersigned representative of GRT in his/her
capacity as an officer or trustee of GRT which has been formed as a Maryland
real estate investment trust pursuant to an Amended and Restated Declaration of
Trust of GRT, as amended, and not individually, and neither the trustees,
officers or shareholders of GRT shall be bound or have any personal liability
hereunder or thereunder. The Executive shall look solely to the assets of GRT
for satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to this
transaction and will not seek recourse or commence any action against any of
the trustees, officers or shareholders of GRT or any of their personal assets
for the performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements, understandings,
arrangements and transactions between the parties hereto.
-6-
7
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GLIMCHER REALTY TRUST
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
President
EXECUTIVE:
/s/ Xxxxxxx Xxxxxxxx
--------------------
Xxxxxxx Xxxxxxxx
-7-
