Exhibit 10.3
EMPLOYMENT EXTENSION AND SEPARATION AGREEMENT
Xxxxxx X. Xxxxxx, having been a valued and trusted employee
and friend of the Pennsylvania Real Estate Investment Trust ("PREIT") for 25
years, and having received notice of the termination of his employment
contract with PREIT effective September 30, 1997, and Xx. Xxxxxx and PREIT
desiring to extend the employment relationship through December 31, 1997 on
new terms and to enter into a separation agreement, both parties hereby state
their agreement as follows:
1. Xx. Xxxxxx' regular daily duties will conclude September
30, 1997, although he will continue employment at his current rate of pay,
benefits, and other compensation through December 31, 1997. During such
period, Xx. Xxxxxx will be available on an "as needed" basis via phone, or
will come into the office at reasonable times should his presence be required
for meetings or other matters. Thereafter, Xx. Xxxxxx will make himself
available for business consulting up to three times per month in the period
January 1, 1998 through March 31, 1998 for no additional compensation (though
with his reasonable expenses to be reimbursed by PREIT). For any business
consulting in excess of three times in a month during the January 1 through
March 31 period, and for any business consulting after March 31, 1998, Xx.
Xxxxxx will be compensated at a rate of $750 per day or any part thereof. For
purposes of this Agreement, "business consulting" shall mean work rendered by
Xx. Xxxxxx on the premises of PREIT or at another location away from his home
to which PREIT asks him to go; "business consulting" shall not include
occasional phone calls from PREIT to Xx. Xxxxxx at his home.
It is also agreed that Xx. Xxxxxx will arrange to be
available to meet with PREIT's attorneys and to submit to deposition in the
pending Xxxxxx and Tyson litigation involving PREIT at no additional
compensation (though with his reasonable expenses to be reimbursed by PREIT)
through December 31, 1999. For any litigation assistance rendered by Xx.
Xxxxxx after 1999, and for any litigation assistance rendered by Xx. Xxxxxx
after March 31, 1998 on matters not involving the Xxxxxx or Xxxxx litigation,
he will be compensated at a rate of $750 per day or any part thereof, provided
that he will not be paid for the same day for both litigation assistance and
business consulting.
For any business consulting or litigation assistance
rendered by Xx. Xxxxxx after December 31, 1997, Xx. Xxxxxx will be considered
an independent contractor of PREIT for such work.
2. In addition to the above compensation, PREIT shall
pay to Xx. Xxxxxx $50,000 on January 2, 1998 (with such payment to be
delivered or posted by Federal Express to a mailing address to be supplied),
and there shall be two additional payments of $25,000 each to be made in
similar fashion on or before December 26, 1998 and the second on or before
December 26, 1999. It is understood that payments referred to in this
paragraph are subject to normal income withholding taxes, but no other
deductions.
3. PREIT will promptly reimburse Xx. Xxxxxx and his spouse,
Xxxxx, for the cost of maintaining medical insurance coverage for the balance
of their natural lives. The amount to be reimbursed will be the lesser of (i)
the cost of the actual medical insurance they purchase, or (ii) the sum of the
premium for Medicare Part B plus the premium for Plan J sponsored by the
American Association of Retired Persons (whether or not such plans are
actually purchased) as those premiums may be changed from time to time and
subject to the adjustments set forth below. (Xxx. Xxxxxx is not presently
eligible for Medicare coverage.)
If Part B and/or Plan J are unavailable, the maximum monthly
amount to be reimbursed will be adjusted by multiplying the monthly cost on
the last date before such non-availability by a fraction, the numerator of
which shall be the Consumer Price Index, Medical Care Expenditure Class on the
date on which reimbursement is required and the denominator of which shall be
the same Index on the date before such nonavailability.
By way of example:
Medicare Part B Premium in December, 2000 $ 70
Plan J Premium in December, 2000 200
Total Monthly Maximum Reimbursement
Per Person 270
Times two 540
The Plans are discontinued in December, 2000; what is the
Maximum Reimbursement for January, 2002?
Consumer Price Index, Medical Care Expenditure
Class (denominator): 125 in December 2000
Consumer Price Index, Medical Care Expenditure
Class, December, 2001 (numerator): 130
Maximum Monthly Reimbursement January, 2002 =
$561.60 ($540 x 130/125)
In December, 2002, the Consumer Price Index,
Medical Care Expenditure Class, increases
to 135. In January, 2003 the Maximum
Reimbursement would become $583.20 ($540 x 135/125).
The reimbursements shall be made in monthly payments, the
first of which will be on January 15th, 1998 and will continue until
notification by Xx. Xxxxxx of any changes required. Upon the death of Xx.
Xxxxxx or his spouse, the reimbursement described above shall be reduced
accordingly. The reimbursement shall end with the month in which occurs the
death of the surviving spouse.
4. PREIT hereby agrees to vest immediately all options which
have previously been granted to Xx. Xxxxxx by PREIT and have not yet vested,
and to extend the period for exercise of all such options that have not as of
this date been exercised, regardless of their nature or classification,
including those issued pursuant to the PREIT 1990 Incentive and Nonqualified
Stock Option Plan, as amended and restated in 1997; provided, that the
shareholders of PREIT approve such amendment and restatement. Xx. Xxxxxx, or
his estate in the event of his death, may exercise such options, at the
purchase price described at the time of their grant, on or before June 30,
2000.
The options referred to herein shall include 9,500 referred
to in correspondence from PREIT dated January 18, 1991 (3,000 options of the
12,500 referred to in that correspondence having previously been exercised),
12,500 options referred to in correspondence dated December 16, 1992, 15,000
options referred to in correspondence dated December 15, 1993, 10,000 options
referred to in correspondence dated December 22, 1994, and 5,000 options
referred to in correspondence dated January 3, 1996. This listing is not
intended to exclude any options issued, but not listed herein.
5. It is acknowledged and agreed that PREIT will take no
action to prevent the trustees of the rabbi trust associated with Xx. Xxxxxx'
supplemental retirement plan from making the distributions as required and
intended heretofore during the existence of PREIT, provided that PREIT does
not become "Insolvent" (as defined in the applicable trust agreement).
6. Beginning on or after January 2, 1998, Xx. Xxxxxx shall
be free to work in an enterprise for himself or with or for others of any
nature whatsoever and by way of example such endeavors may include investment
in real estate.
7. Based upon the consideration described above, both
parties waive and release the other, their shareholders, directors, trustees,
agents, successors and assigns (the "Released Parties") from all claims,
actions, suits and grievances and restrictions, whether known or unknown, from
the beginning of the world to the
date of this agreement, including, without limitation of the foregoing general
release, any and all claims against the Released Parties related to Xx.
Xxxxxx' employment by PREIT to date, and any and all claims arising from any
alleged violation to date by the Released Parties of the Age Discrimination in
Employment Act (the "ADEA"), 29 U.S.C. ss.621 et seq., claims arising to date
from any alleged violation by the Released Parties of the Pennsylvania Human
Relations Act, 43 P.S. ss.951, et seq., and claims arising to date from any
other federal, state, or local statutes, ordinances, or common law principles
(collectively, the "Employment Claims"). Nothing in this Agreement is intended
to, nor shall it be deemed to, constitute a waiver or release of any claim
under the ADEA arising after this Agreement is executed by Xx. Xxxxxx.
However, Xx. Xxxxxx agrees that, prior to the payment of the amounts described
in Paragraph 2 above and as consideration for such payment, he will enter into
a separate release, in substantially the form attached hereto as Exhibit A, in
which he will discharge the Released Parties from any and all Employment
Claims against the Released Parties related to his employment by PREIT or the
termination of such relationship. PREIT will not pay the amounts described in
Paragraph 2 above unless Xx. Xxxxxx enters into such a separate release.
8. All persons dealing with PREIT must look solely to PREIT
property for the enforcement of any claims against PREIT, as neither the
Trustees, officers, agents or shareholders of PREIT assume any personal
liability for obligations entered into by PREIT by reason of their status as
said Trustee, officer, agent or shareholder.
9. Xx. Xxxxxx shall not at any time (other than in the good
faith performance of his services to PREIT) disclose to anyone other than
employees of PREIT or its affiliates (the "Companies") any trade secrets or
other information confidential to the business of the Companies.
10. Any breach of this agreement shall be resolved by
arbitration before a single arbitrator selected from one panel of 11
arbitrators supplied by the American Arbitration Association. If the parties
do not mutually agree to an arbitrator from the panel, the parties shall each
list arbitrators in order of preference and the Association shall designate
the arbitrator highest on both parties listing preference. If one party fails
to timely submit a preference, the Association shall designate an arbitrator
from the sole party submitting a listing of order of preference. An arbitrator
shall be selected within 30 days of request for arbitration to the AAA, and a
hearing shall be held at the earliest possible date available to the
arbitrator (although with at least two weeks' notice) regardless of the then
existing schedules of the parties. The award of the arbitrator will be final
and binding and the cost of the arbitrator shall be paid by the losing party.
Agreed to:/s/ Xxxxxxxx X. Xxxxxx Agreed to:/s/ Xxxxxx X. Xxxxxx
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Pennsylvania Real Estate Xxxxxx X. Xxxxxx
Investment Trust
TRUSTEE
DATED: October 1, 1997 DATED: October 3, 1997
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EXHIBIT A
GENERAL RELEASE
THIS GENERAL RELEASE is entered into this _______ day of
_________, 199_, by and between Xxxxxx X. Xxxxxx ("Executive") and the
Pennsylvania Real Estate Investment Trust (the "Trust").
WHEREAS, Executive has been employed by the Trust pursuant
to an Employment Extension and Separation Agreement dated ______________ (the
"EES Agreement") from a date on or before ________________________ to the date
of this General Release (the "Release"), and Executive and the Trust desire to
settle fully and finally all differences, claims, and potential claims arising
out of the EES Agreement or out of the predecessor Amended and Restated
Employment Agreement, dated October 1, 1990, as amended July 12, 1993, or out
of Executive's course of employment by the Trust;
NOW, THEREFORE, in consideration of the mutual promises
herein contained, and intending to be legally bound hereby, Executive and the
Trust AGREE as follows:
1. Release. In consideration of the payment by the Trust to
Executive set forth in paragraph 2 of the EES Agreement (which payment
Executive acknowledges that he is not otherwise entitled to receive),
Executive hereby irrevocably and unconditionally remises, releases, and
forever discharges the Trust and each of the Trust's owners, stockholders,
agents, trustees, directors, officers, employees, representatives, attorneys,
divisions, parents, subsidiaries, affiliates (and agents, trustees, directors,
officers, employees, representatives, and attorneys of such divisions,
parents, subsidiaries, and affiliates), and it and their predecessors,
successors, heirs, executors, administrators, and assigns, and all persons
acting by, through, under, or in concert with any of them (collectively, the
"Released Parties"), of and from any and all actions, causes of action, suits,
debts, contracts, charges, and expenses (including attorney's fees and costs),
of any nature whatsoever, arising to the date hereof, asserted or unasserted,
known or unknown, which he ever had, now has, or hereafter may have, against
the Released Parties, to the date of this Agreement, including without
limitation of the foregoing general terms, any and all claims against the
Released Parties related to Executive's employment by the Trust or the
termination of such relationship, and any and all claims arising from any
alleged violation by the Released Parties of the Age Discrimination in
Employment Act (the "ADEA"), 29 U.S.C. ss.621 et seq., claims arising from any
alleged violation by the Released Parties of the Pennsylvania Human Relations
Act, 43 P.S. ss.951, et seq., and the New Jersey Law Against Discrimination,
10 N.J.S.A. ss.951, et seq., and any other federal, state, or local statutes,
ordinances, or common law principles. However, nothing in this Agreement is
intended to, nor shall it be deemed to, constitute a waiver or release of any
claim under
the ADEA arising after this Agreement is executed by Executive.
2. Covenant Not To Xxx. In exchange for the consideration
described in paragraph 1 above, Executive also hereby covenants and agrees
never to institute a claim against or to xxx the Released Parties concerning
any potential claim described in paragraph 1 above. If Executive violates this
Agreement by filing such a claim against or suing any of the Released Parties,
Executive agrees to pay all costs and expenses of defending against the suit
incurred by such Released Parties, including reasonable attorney's fees.
3. Time Allowed to Review Agreement; Advice of Attorney.
Executive acknowledges that he has carefully read and fully understands all of
the provisions and effects of this Agreement; that the Trust has advised him
in writing to consult and thoroughly discuss all aspects of this Agreement
with an attorney; that the Trust has provided him with no fewer than 21
calendar days to consider this Agreement before executing it; that he is
voluntarily entering into this Agreement; and that neither the Trust nor its
agents or attorneys made any representations or promises concerning the terms
or effects of this Agreement other than those contained herein and in the
explanatory letter to Executive dated _________ __, 199_ which is incorporated
by reference herein.
4. Right to Revoke. This Agreement will become binding,
irrevocable, and enforceable seven calendar days after it has been executed by
Executive. Executive has the right to revoke this Agreement, by giving written
notice of his intent to do so to the President of the Trust, at any time
during that seven-calendar-day period. Executive is not obligated to sign this
Agreement, and refusal to do so will not jeopardize Executive's right to
benefits to which Executive is already entitled.
5. Other Representations. Executive hereby acknowledges that
neither the Trust nor its agents or employees made any representations or
promises concerning the terms or effects of this Agreement other than those
contained in this Agreement.
6. Applicable Law. This Agreement is made and entered into
in the Commonwealth of Pennsylvania, and shall in all respects be interpreted,
enforced, and governed under the laws of said Commonwealth, to the extent not
preempted by federal law. The language of all parts of this Agreement shall in
all cases be construed as a whole, according to its fair meaning, and not
strictly for or against any of the parties.
7. Entire Agreement. This Agreement sets forth the entire
agreement between the parties hereto, and fully supersedes any and all prior
agreements or understandings between the parties hereto pertaining to the
subject matter hereto.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS, AND BARS FUTURE LEGAL ACTION AGAINST THE TRUST BY EXECUTIVE.
* * * * *
IN WITNESS WHEREOF, and intending to be legally bound
hereby, Executive and the Trust have executed the foregoing Agreement.
Executed this ______ day of _________, 199_.
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Witness Executive
Attest: PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By:
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