================================================================================
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXX
================================================================================
TABLE OF CONTENTS
Page
----
1. Employment.................................................................2
2. Services...................................................................2
3. Compensation and Benefits..................................................3
4. Termination of Employment and Change in Control............................8
5. Confidential Information..................................................16
6. Return of Documents.......................................................17
7. Noncompete................................................................17
8. Remedies..................................................................18
9. Successors and Assigns....................................................19
10. Timing of and No Duplication of Payments/ Tax Withholding.................20
11. Modification or Waiver....................................................20
12. Notices...................................................................21
13. Governing Law.............................................................21
14. Severability..............................................................22
15. Counterparts..............................................................22
16. Headings..................................................................22
17. Entire Agreement..........................................................22
18. Survival of Agreements....................................................23
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is entered
into as of January 21, 1997, by and between Xxxxxx X. Xxxx, an individual
residing at 00 Xxxxxxx Xxxxx, Xxxxx, Xxx Xxxxxx 00000 ("Executive"), and Cali
Realty Corporation, a Maryland corporation with offices at 00 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company").
RECITALS
WHEREAS, the Executive held the positions of President and Chief Financial
Officer and served as a member of the Board of Directors of the Company (the
"Board") pursuant to his Employment Agreement with the Company dated August 31,
1994 ("Prior Agreement") and, through such service, has acquired special and
unique knowledge, abilities and expertise; and
WHEREAS, the Executive now holds the positions of President and Chief
Executive Officer and serves as a member of the Board; and
WHEREAS, the Company desires to extend Executive's Employment Period (as
defined in the Prior Agreement) to January 21, 2002, and the Company and
Executive desires to restructure certain terms of the Prior Agreement and
otherwise to amend and restate the Prior Agreement in its entirety as set forth
in this Agreement.
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 be employed by the Company, for a term commencing on the date hereof and
expiring on January 21, 2002; provided, however, that commencing on January 21,
2002 and each January 21 thereafter, the term of this Agreement shall be
extended automatically for one (1) additional year unless at least ninety (90)
days prior to the applicable expiration date either the Company or Executive
shall have given written notice to the other party that such party does not wish
to extend this Agreement. It being agreed and understood that the extension of
this Agreement shall not create an obligation of the Company to issue new awards
to Executive hereunder. The term of this Agreement, as it may be extended from
time to time in accordance with this Paragraph 1, is referred to herein as the
"Employment Period."
2. Services.
During the Employment Period, Executive shall hold the positions of
President and Chief Executive Officer and shall serve as a member of the Board.
Executive shall devote his best efforts and substantially all of his business
time, skill and attention to the business of the Company, 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 Board or the Executive
Committee of the Board, if any; 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 7 hereof or (ii) engaging in charitable activities
2
and community affairs, or (b) restrict or otherwise limit Executive from
conducting real estate development, acquisition or management activities with
respect to those properties 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.
3. Compensation and Benefits.
During the Employment Period, the Company shall pay Executive a minimum
annual base salary in the amount of $450,000 (the "Annual Base Salary"), payable
in accordance with the Company's regular payroll practices. In addition,
Executive also shall be eligible for incentive compensation payable each year in
such amounts as may be determined by the Compensation Committee of the Board
(the "Compensation Committee") based upon, among other factors, growth in Funds
from Operations per Common Share (as hereinafter defined) for the year.
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 on, among other things, Executive's performance, as determined in the sole
discretion of the Compensation Committee. 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. In addition to the compensation
specified above and other benefits provided
3
pursuant to this Paragraph 3, Executive shall be entitled to the following
benefits:
(a) participation in the Employee Stock Option Plan of Cali Realty
Corporation (the "Stock Option Plan") and other benefit plans
(including without limitation the Cali Realty Corporation 401(k)
Savings and Retirement Plan and any other stock option plans which may
be adopted or maintained by the Company) made generally available to
executives of the Company with such participation to be consistent
with reasonable Company guidelines;
(b) participation in any health insurance, disability insurance, group
life insurance or other welfare benefit program made generally
available to executives of the Company; and
(c) reimbursement for reasonable business expenses incurred by Executive
in furtherance of the interests of the Company.
In addition, Executive shall be entitled to receive such bonuses and
options to purchase shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock") as the Board shall approve, in its sole discretion,
including, without limitation, options and bonuses contingent upon Executive's
performance and the achievement of specified financial and operating objectives
for Funds from Operations per Common Share. For purposes of this Agreement,
"Funds from Operations per Common Share" for any period shall mean (i) net
income (loss) before minority interest of unit holders, computed in accordance
with generally accepted accounting principles ("GAAP"), excluding gains (or
losses) from debt restructuring and sale of property, plus real estate return,
depreciation and amortization as calculated in accordance with the National
Association of Real Estate Investment Trusts definition published in March 1995,
as amended from time to time, and as applied in accordance with the accounting
practices and policies of the Company in effect from time to time on a
consistent basis to the entire Employment Period, divided
4
by (ii) the sum of (A) the primary weighted average number of outstanding shares
of Common Stock as it appears in the Company's financial statement for the
applicable period and (B) the primary weighted average number of outstanding
limited partnership units of Cali Realty, L.P., a Delaware limited partnership
of which the Company is the sole general partner, for the applicable period.
As further consideration for Executive agreeing to serve as an officer and
entering into this Agreement upon the terms set forth herein, including, without
limitation, the terms relating to noncompetition set forth in Paragraph 7 below,
the Company shall, concurrently herewith or as soon as practicable after the
execution of this Agreement:
(a) grant to Executive 55,555 restricted shares of Common Stock
("Restricted Shares") pursuant to the terms and conditions of this
Agreement, and the written agreement, issued pursuant to this
Agreement, evidencing such award executed between the Company and
Executive (the "Restricted Share Agreement"). In the event of a
conflict between the Restricted Share Agreement and this Agreement,
the terms of this Agreement shall control.
The Restricted Share Award (as defined in the Restricted Share
Agreement) is scheduled to vest over five (5) years with twenty
percent (20%) of the Restricted Shares vesting on each of the first
anniversary of the date hereof (the "First Anniversary"), the second
anniversary of the date hereof (the "Second Anniversary"),the third
anniversary of the date hereof (the "Third Anniversary"), the fourth
anniversary of the date hereof (the "Fourth Anniversary") and the
fifth anniversary of the date hereof (the "Fifth Anniversary"),
provided, that certain Performance Goals as defined and set forth in
the Restricted Share Agreement are met. Vesting shall be cumulative in
accordance with the provisions of the Restricted Share Agreement and
the Performance Goals may be achieved as specified therein up until
the seventh anniversary of the date hereof. Except as otherwise
provided in Paragraph 4 hereof, Executive must be employed by the
Company on the applicable anniversary date to vest in the Restricted
Shares scheduled to vest in a particular year. The measurement date to
determine such
5
vesting shall be the last day of the Company's fiscal year preceding
the year in which the applicable anniversary date occurs.
In addition, upon vesting of the Restricted Shares on each applicable
anniversary date, the Company shall make a cash payment to Executive
on that anniversary date in an amount equal to forty percent (40%) of
the Fair Market Value (determined as of such anniversary date) of the
Restricted Shares that vest on such anniversary date (the "Restricted
Share Tax Gross-Up Payment").
(b) loan on a non-recourse basis to Executive $3,000,000 (the "Stock
Acquisition Loan"), with the loan proceeds to be used by Executive
simultaneously to purchase newly issued Common Stock from the Company.
Interest shall accrue on the Stock Acquisition Loan at the rate of
6.21% per year and shall be payable, on the entire outstanding
balance, annually in arrears. The Stock Acquisition Loan is being
granted and secured pursuant to the terms and conditions of this
Agreement, and a Secured Non-Recourse Promissory Note and Stock Pledge
Agreement evidencing and securing such Loan as executed between the
Company and Executive. In the event of a conflict between the
aforementioned documents and this Agreement, the terms of this
Agreement shall control.
The Stock Acquisition Loan shall be forgiven over a period of five (5)
years from the date hereof, with twenty percent (20%) of the principal
and interest on the then outstanding balance of the principal to be
forgiven on each applicable anniversary date (the "Forgiven Amount").
In addition, on each applicable anniversary date as the Stock
Acquisition Loan and interest accrued thereon is forgiven, in order to
enable Executive to meet his tax liability with respect to the
forgiveness of the Stock Acquisition Loan, the Company shall make a
cash payment to Executive on that anniversary date in an amount equal
to forty percent (40%) of the respective Forgiven Amount (the
"Acquisition Loan Tax Gross-Up Payment"). Since the Stock Acquisition
Loan will be forgiven over a five (5) year period, a total of five (5)
Acquisition Loan Tax Gross-Up Payments will be made to Executive over
the period of forgiveness. No additional payments will be made to
Executive with respect to any Acquisition Loan Tax Gross-Up Payments
made hereunder. Except as otherwise provided in Paragraph 4 hereof,
the aforementioned forgiveness of the Stock Acquisition Loan inclusive
of interest thereon and respective Acquisition Loan Tax Gross-Up
Payment shall only occur if Executive is employed by the Company on
the applicable anniversary date.
6
The Stock Acquisition Loan shall be initially secured by the shares of
Common Stock purchased by Executive from the Company with the proceeds
of the Stock Acquisition Loan. Beginning on the First Anniversary, the
outstanding balance of the Stock Acquisition Loan shall be secured
only by shares of Common Stock having a Fair Market Value of one
hundred and ten percent (110%) of the outstanding principal amount of
the Stock Acquisition Loan (together with interest accrued thereon).
On the First Anniversary, and on each anniversary date, March 31, June
30 and September 30 through the Fifth Anniversary (each such date a
"Determination Date"), the Company shall reasonably determine the
aggregate Fair Market Value of the collateral (the "Market Value")
being held. If on such Determination Date the Market Value exceeds one
hundred ten percent (110%) of the outstanding balance of the Stock
Acquisition Loan (together with interest accrued thereon) on such
Determination Date (the "Base Value"), the Company shall, unless
otherwise requested by Executive, automatically release to Executive
such portion of the collateral the aggregate Fair Market Value of
which equals the Market Value less 110% of the Base Value, free and
clear of any and all encumbrances under the Stock Pledge Agreement.
Executive shall be required to execute the aforementioned Stock Pledge
Agreement and Secured Non-Recourse Promissory Note. The Company shall
then issue shares of Common Stock to Executive in exchange for the
Stock Acquisition Loan. The Company shall, upon receipt from Executive
of the Stock Pledge Agreement and Secured Non-Recourse Promissory Note
for the purchase of the shares of Common Stock purchased with the
proceeds of the Stock Acquisition Loan, make prompt delivery of the
certificates evidencing the shares of Common Stock to Executive,
subject to any requirements set forth in the Stock Pledge Agreement;
provided, however, that if any law or regulation requires the Company
to take any action with respect to such shares prior to the delivery
thereof, then the date of the delivery of the shares shall be extended
for the period necessary to complete such action. Certificates for
shares of Common Stock when issued to Executive may have restrictive
legends or statements of other applicable restrictions endorsed
thereon and may not be immediately transferable.
7
As consideration for entering into the Prior Agreement upon the terms set
forth therein, including without limitation, the terms relating to
noncompetition set forth in Paragraph 7 thereof, the Company, concurrently
therewith, pursuant to Paragraph 3 of the Prior Agreement granted to Executive
options to purchase 200,000 shares of Common Stock at a purchase price of $17.25
per share (the "1994 Options"). Such options were granted pursuant to the terms
and conditions of the Stock Option Plan, having a ten (10) year term and vesting
over a three (3) year period beginning on August 31, 1994, with one-third of
such options vested on the August 31, 1995, and one-third vested on August 31,
1996, and one-third vesting on August 31, 1997, subject to acceleration in
accordance with the terms of the Stock Option Plan.
The 1994 Options were and are intended to qualify as incentive stock
options within the meaning of Section 422(b) of the Internal Revenue Code of
1986, as amended (the "Code"); provided, however, that to the extent that any of
such options did not or do not satisfy the requirements of Section 422(b) of the
Code, then they shall be treated as non-qualified options.
4. Termination of Employment and Change in Control.
(a) Termination of Employment by the Company for Cause or By Executive
without Good Reason. In the event (i) the Company terminates Executive's
employment for Cause (as hereinafter defined) or (ii) Executive terminates his
employment without Good Reason (as hereinafter defined), the Company shall pay
Executive any unpaid salary accrued through and including the date of
termination. In addition, in such event, Executive shall be entitled (i) to
exercise any options which
8
have vested and are exercisable in accordance with the terms of the applicable
option grant agreement or plan, (ii) to retain any Restricted Shares previously
awarded to Executive pursuant to this Agreement and the Restricted Share
Agreement and any Restricted Share Tax Gross-Up Payments which are fully vested
on the date of termination, and (iii) to retain any shares of Common Stock
purchased by Executive with the proceeds of the Stock Acquisition Loan which are
no longer pledged as collateral for the outstanding balance of the Stock
Acquisition Loan and any Acquisition Loan Tax Gross-Up Payments applicable to
Forgiven Amounts and to retain the balance of the shares of Common Stock which
are still pledged as collateral for the outstanding balance of the Stock
Acquisition Loan, provided, that Executive immediately repays to the Company the
outstanding balance of the Stock Acquisition Loan including interest accrued
thereon through the date of termination. Except for any rights which Executive
may have to unpaid salary amounts through and including the date of termination,
vested options, vested Restricted Shares and related Restricted Share Tax
Gross-Up Payments, and shares of Common Stock purchased with the proceeds of the
Stock Acquisition Loan and related Acquisition Loan Tax Gross-Up Payments, all
as set forth above, the Company shall have no further obligations hereunder
following such termination.
(b) Termination of Employment Upon Death or Disability . In the event of
termination of Executive's employment as a result of either (i) Executive's
death or Disability (as hereinafter defined), the Company shall pay to
Executive, his estate or his personal representative (A) the unpaid salary
through the end of the Employment Period remaining (assuming no such termination
occurred) and (B) a pro-rata portion,
9
based upon the number of days in the period beginning with January 1 of the
calendar year in which such termination occurred and ending with the date the
Employment Period ends (assuming such termination did not occur), of the average
annual amount of incentive compensation payments paid to Executive during each
previous year of Executive's employment hereunder (the "Pro-Rata Portion of
Incentive Compensation"). The aforesaid amount shall be payable, at the option
of Executive, his estate or his personal representative, either (i) in full
immediately upon such termination or (ii) monthly over the remainder of the
Employment Period. In addition, Executive shall be entitled (i) at the option of
Executive, his estate or his personal representative, within one (1) year of the
date of such termination, to exercise any options which have vested (including,
without limitation, by acceleration in accordance with the terms of the
applicable option grant agreement or plan) and are exercisable in accordance
with the terms of the applicable option grant agreement or plan 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 option as of the date of
Executive's termination of employment, (ii) to retain all Restricted Shares
awarded to Executive pursuant to this Agreement and the Restricted Share
Agreement whether or not such Restricted Shares had previously vested as of the
date of termination. In the event any Restricted Shares have not vested as of
the date of termination, such Restricted Shares shall immediately vest and
Executive, his
10
estate or his personal representative shall receive a cash payment from the
Company on the date of termination in an amount equal to forty percent (40%) of
the Fair Market Value (determined as of the date of termination) of the
Restricted Shares that vest on the date of termination (the "Termination
Restricted Share Tax Gross-Up Payment"), (iii) to retain all shares of Common
Stock purchased by Executive with the proceeds of the Stock Acquisition Loan
without regard to whether or not the Stock Acquisition Loan has been forgiven or
repaid. In the event there is an outstanding balance on the Stock Acquisition
Loan, such outstanding balance including interest accrued thereon shall on the
first day of the calendar month next succeeding Executive's Disability or death
be forgiven (and any shares pledged under the Stock Pledge Agreement shall be
released to Executive, his estate or his personal representative) and Executive,
his estate or his personal representative shall receive a cash payment from the
Company on that date in an amount equal to forty percent (40%) of the
outstanding balance of the Stock Acquisition Loan and interest accrued thereon
that is forgiven on the date of termination (the "Termination Acquisition Loan
Tax Gross-Up Payment"). Except for any rights which Executive may have to unpaid
salary amounts through the end of the Employment Period, the Pro-Rata Portion of
Incentive Compensation, vested options, Restricted Shares (and the full vesting
thereof) and the Termination Restricted Share Tax Gross-Up Payment, and shares
of Common Stock purchased with the proceeds of the Stock Acquisition Loan (and
the forgiveness of the outstanding balance of the Stock Acquisition Loan
inclusive of interest accrued thereon) and the Termination Acquisition Loan Tax
Gross-Up Payment, all as set forth above, the Company shall have no further
obligations hereunder following such termination.
11
(c) Termination of Employment By the Company Without Cause or By the
Executive for Good Reason. In the event (i) the Company terminates Executive's
employment for any reason other than Cause or (ii) Executive terminates his
employment for Good Reason, the Company shall pay to Executive and Executive
shall be entitled to all the payments and rights Executive would have had if
Executive's employment had been terminated due to Disability as set forth in
sub-paragraph 4(b) (including all benefits under this Agreement and the
Restricted Share Agreement), except that Executive must exercise any options
which have vested within ninety (90) days of the date of termination. Except for
any rights which Executive may have to unpaid salary amounts through the end of
the Employment Period, the Pro-Rata Portion of Incentive Compensation, vested
options, Restricted Shares (and full vesting thereof) and the Termination
Restricted Share Tax Gross-Up Payment, and shares of Common Stock purchased with
the proceeds of the Stock Acquisition Loan (and the forgiveness of the
outstanding balance of the Stock Acquisition Loan inclusive of interest accrued
thereon) and the Termination Acquisition Loan Tax Gross-Up Payment, all as set
forth above, the Company shall have no further obligations hereunder following
such termination.
(d) Upon a Change in Control. In the event of a Change in Control (as
hereinafter defined), Executive shall be entitled (i) to all Restricted Shares
awarded to Executive pursuant to this Agreement and the Restricted Share
Agreement whether or not such Restricted Shares had previously vested as of the
date of the Change in Control. In the event any Restricted Shares have not
vested as of the date of the Change in Control, such Restricted Shares shall
immediately vest and Executive shall
12
receive a cash payment from the Company on the date of the Change in Control in
an amount equal to forty percent (40%) of the Fair Market Value (determined as
of the date of the Change in Control) of the Restricted Shares that vest on the
date of the Change in Control (the "Change in Control Restricted Share Tax
Gross-Up Payment"), (ii) to all shares of Common Stock purchased by Executive
with the proceeds of the Stock Acquisition Loan without regard to whether or not
the Stock Acquisition Loan has been forgiven or repaid. In the event there is an
outstanding balance on the Stock Acquisition Loan, such outstanding balance
including interest accrued thereon through the date of the Change in Control
shall be immediately forgiven (and any shares pledged under the Stock Pledge
Agreement shall be released to Executive) and Executive shall receive a cash
payment from the Company on the date of the Change in Control in an amount equal
to forty percent (40%) of the outstanding balance of the Stock Acquisition Loan
and interest accrued thereon that is forgiven on the date of the Change in
Control (the "Change in Control Acquisition Loan Tax Gross-Up Payment") and
(iii) an excise tax gross-up payment. If it is determined by an indpendent
accountant mutually acceptable to the Company and Executive that as a result of
compensation paid and other benefits provided to Executive by the Company
pursuant to this Agreement or otherwise, a tax will 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 the excise tax for which the
Executive is liable under Section 4999 of the Code. Any cash payments owed to
Executive pursuant to this Paragraph 4(d) shall be paid to Executive in a single
sum on or immediately prior to date of the Change in Control but prior to the
consummation of the transaction with any successor.
In addition, other than the 1994 Options, any other options previously or
hereafter granted to Executive that have not vested as of the date of the Change
in Control shall immediately vest upon the occurrence of and on the date of a
Change in Control irrespective of whether Executive's employment terminates in
connection with such Change in Control.
13
(e) For purposes of this Agreement:
(i) "Cause" shall mean (A) the willful and continued failure by
Executive 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, or (B)
willful misconduct by Executive which is materially
injurious to the Company, monetarily or otherwise, or (C)
the willful violation by Executive of the provisions of
Paragraph 5 or 7 hereof. For purposes of this Paragraph
4(e)(i), 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) "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, of thirty percent
(30%) or more of the Common Stock of the Company issued and
outstanding immediately prior to such acquisition; (b) any
Common Stock of the Company is purchased pursuant to a
tender or exchange offer other than an offer by the Company;
or (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
immediately before such transaction own, immediately after
consummation of such transaction, equity securities (other
than options and other rights to acquire equity securities)
possessing less than thirty percent (30%) of the voting
power of the surviving or acquiring company.
(iii) "Disability" shall mean the 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
14
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) "Fair Market Value" shall mean the closing price of the
Common Stock as quoted on the New York Stock Exchange at the
end of the last business day preceding the Determination
Date, the applicable anniversary or the date of termination,
as the case may be, as reported in the New York edition of
the Wall Street Journal.
(v) "Good Reason" shall mean (A) any material and substantial
breach of this Agreement by the Company, (B) a material
reduction in the Executive's Annual Base Salary or other
benefits (except for bonuses or similar discretionary
payments) as in effect at the time in question, or any other
failure by the Company to comply with Paragraph 3 hereof, or
(C) the Company shall have given notice pursuant to
Paragraph 1 hereof at any time prior to the sixth
anniversary of the date hereof that it does not wish to
extend this Agreement, except in connection with termination
of Executive's employment for Cause or by reason of death or
Disability.
(vi) "Repurchase Fair Market Value" shall mean the average of the
closing price on the New York Stock Exchange 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;
(f) 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.
15
5. 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. The
Executive shall hold in a fiduciary capacity for the benefit of the Company such
Confidential Information obtained by Executive during his employment with the
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, 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 5, 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.
16
6. 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, 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.
7. 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 State of New York, the State of
New Jersey, the State of Pennsylvania, and the State of Connecticut, engage in,
or own, invest in, manage or control any venture or enterprise primarily engaged
in any office-service, office, industrial, or flex 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
17
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.
(b) If, at the time of enforcement of this Paragraph 7, 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 7, 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.
8. 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
Paragraph 5, 6 or 7 of this Agreement. Therefore, in the event of the actual or
threatened breach by Executive of any of the provisions of Paragraph 5, 6 or 7
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
18
performance and/or injunctive or other relief in order to enforce or prevent any
violation of the provisions thereof.
9. 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 his employment terminated due to Disability,
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 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 9 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
9 shall be paid to Executive in a single sum immediately prior to the
consummation of the transaction with such successor.
19
(b) This Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die 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
Executive's beneficiary as determined under any applicable plan, Executive's
devisee, legatee, or other designee or, if there be no such designee, to
Executive's estate.
10. Timing of and No Duplication of Payments/ Tax Withholding.
(a) 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.
(b) The Company shall have the right to deduct and withhold from any
amounts which become taxable to Executive hereunder all employment and other
federal, state and local taxes and charges which are, or which may hereafter, be
required by law to be so deducted or withheld.
11. 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,
20
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.
12. Notices.
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 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 12).
13. Governing Law.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS THEREUNDER.
21
14. 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
Paragraph 7(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.
15. 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.
16. 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.
17. 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.
22
18. Survival of Agreements.
The covenants made in Paragraphs 4, 5, 6, 7, 8 and 14 each shall survive
the termination of this Agreement.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
23
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
CALI REALTY CORPORATION
By: /s/ Xxxx X. Xxxx
----------------------------------
Name: Xxxx X. Xxxx
Title: Chief Administrative Officer
/s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx
25
SCHEDULE A
Those properties described in the Prospectus of Cali Realty Corporation for the
sale of 10,500,000 Shares dated August 24, 1994, in the section entitled
"Business and Properties -- Excluded Properties".
25
