EXHIBIT 10.46
AMENDED AND RESTATED SEVERANCE AGREEMENT
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THIS AMENDED AND RESTATED SEVERANCE AGREEMENT ("Amended and Restated
Severance Agreement"), made and entered into as of this 6th day of March, 1998
by and between FEDERAL REALTY INVESTMENT TRUST, an unincorporated business trust
organized under the laws of the District of Columbia ("Employer"), and Xxx X.
Xxxxxx ("Employee").
WHEREAS, Employee and Employer entered into a Severance Agreement
("Severance Agreement") dated as of December 31, 1994; and
WHEREAS, Employee and Employer wish to amend and restate that
Severance Agreement as set forth herein;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained and of other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree to amend and restate the Severance Agreement as
follows:
1. Termination of Severance Agreement. As of the date first written
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above, the Severance Agreement shall be null and void and of no further force or
effect.
2. Effective Date of Amended and Restated Severance Agreement. This
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Amended and Restated Severance Agreement shall be effective as of the date first
written above and shall continue and remain in full force and effect until
terminated by the parties in writing.
3. Termination Without Cause. In the event that Employee's
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employment with Employer is terminated under any of the circumstances in
Sections 3(a) or 3(b), Employee will be deemed to have been Terminated Without
Cause and shall receive payments and benefits as described in this Section 3;
provided, however, in the event Employee's employment with Employer is
terminated pursuant to Section 3(b)(iii), Employee shall receive such payments
and benefits as are set forth in the Executive Agreement between Employee and
Employer in effect from time to time ("Executive Agreement") in lieu of the
payments and benefits under this Section 3:
(a) by Employer other than with Cause (as "Cause" is defined in
Section 5, hereof);
(b) by Employee within six (6) months following the occurrence of
one or more of the following events:
(i) the nature of Employee's duties or the scope of
Employee's responsibilities as of the date first
written above are materially modified by Employer
without Employee's written consent where such material
modification constitutes a demotion of Employee or a
substantial reduction in Employee's responsibilities;
provided, however, that a change in the person(s) to
whom Employee reports shall not by itself constitute a
material modification of Employee's responsibilities;
(ii) Employer changes the location of its principal office
to outside a fifty (50) mile radius of Washington,
D.C.;
(iii) the occurrence of a Change in Control as defined in
Section 1 of Employee's Executive Agreement;
(iv) Employer's setting of Employee's base salary for any
year at an amount which is less than ninety percent
(90%) of the greater of (x) Employee's base salary for
the 1998 calendar year, or (y) Employee's highest base
salary during the three (3) then most recent calendar
years (including the year of termination), regardless
of whether such salary reduction occurs in one year or
over the course of years;
(v) this Amended and Restated Agreement is not expressly
assumed by any successor (directly or indirectly, and
whether by purchase, merger, consolidation or
otherwise) to all or substantially all of the business
and/or assets of Employer, in a situation other than a
Change in Control.
(c) Decision by Employer to Terminate Without Cause. Employer's
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decision to terminate Employee's employment Without Cause
shall be made by the Board of Trustees.
(d) Severance Payment Upon Termination Without Cause. In the
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event of Termination Without Cause, Employee will receive as
severance pay an amount in cash equal to one (1) year's
salary plus one (1) month's pay for each year of service to
Employer in excess of five (5) years, with a maximum of
eighteen (18) months' salary payable. The number of months
for which such a payment is due shall determine the length of
the severance term ("Severance Term"). For the purpose of
calculating amounts payable pursuant to this Section 3(d),
"salary" shall be an amount equal to (i) the greater of
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(x) Employee's highest annual base salary paid during the
previous three (3) years or (y) Employee's annual base salary
in the year of termination, plus (ii) the greatest annual
aggregate amount of any cash or stock bonus paid to Employee
in respect of any of the three (3) fiscal years immediately
preceding such termination (it being understood and agreed
that such amount shall not include compensation paid pursuant
to performance share awards), plus (iii) the greatest annual
aggregate amount of compensation paid pursuant to restricted
share "service" awards during the previous three (3) years.
The maximum aggregate annual bonus (it being understood and
agreed that a bonus shall not include compensation paid
pursuant to performance share awards) which can be awarded to
Employee is 100% of his then current annual base salary.
Payment also will be made for vacation time that has accrued,
but is unused as of the date of termination. No payments will
be made for any partial year of service.
(e) Benefits. In the event of Termination Without Cause,
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Employee shall receive "Full Benefits" for nine (9) months.
Employer shall have satisfied its obligation to provide Full
Benefits to Employee if it (i) pays premiums due in
connection with COBRA continuation coverage to continue
Employee's medical and dental insurance coverage at not less
than the levels of coverage immediately prior to termination
of Employee's employment; (ii) maintains, at Employer's
expense, at not less than his highest levels of coverage
during the last twelve (12) months prior to the Termination
Without Cause, accidental death and dismemberment policies
for the benefit of Employee and pay the annual premiums
associated therewith; (iii) maintains, at Employer's expense,
the split dollar individual life insurance policy (or
policies) for the benefit of Employee in accordance with the
agreement with respect to such policy (or policies) to be
entered into by Employee and Employer (the "Split Dollar Life
Insurance Agreement"); (iv) maintains, at Employer's expense,
any other individual life insurance policy (or policies) in
effect on the Termination Date for one (1) year following the
Termination Without Cause; (v) to the extent that Employer
maintains a long-term disability policy (or policies) that
provided coverage to Employee in excess of the coverage
provided under Employer's group long-term disability policy,
maintains at not less than his highest levels of coverage
during the last twelve (12) months prior to the Termination
Without Cause an individual long-term disability policy for
the benefit of Employee and pays the annual premiums
associated therewith; and (vi) converts its group long-term
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disability policy to an individual policy for the benefit of
Employee and pays the annual premiums associated with
Employee's continued participation thereunder for a period of
one (1) year following Termination Without Cause.
Notwithstanding the foregoing, Employee shall be required to
pay the premiums and any other costs of such Full Benefits in
the same dollar amount that he was required to pay for such
costs immediately prior to Termination Without Cause.
(f) Loan Forgiveness. Notwithstanding any agreement to the
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contrary other than the Executive Agreement and its
application to the Termination Without Cause described in
Section 3(b)(iii), in the event of any other Termination
Without Cause, Employee will continue to receive forgiveness
as otherwise scheduled to occur during the Severance Term of
his loan(s) issued pursuant to Employer's Share Purchase Plan
dated January 31, 1991, as modified from time to time
thereafter, ("Share Purchase Loan(s)") at a rate of
forgiveness equal to one-sixteenth (1/16th) of the principal
amount of each loan for every twelve (12) month period. The
Share Purchase Loan(s) shall become due and payable twelve
(12) months after the expiration of the Severance Term.
(g) Stock Options. Notwithstanding any agreement to the contrary
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other than the Executive Agreement and its application to the
Termination Without Cause described in Section 3(b)(iii), in
the event of any other Termination Without Cause, the vesting
of options to purchase shares of Employer's common stock
("Shares") granted to Employee and outstanding as of the date
of Employee's termination and scheduled to vest during the
Severance Term shall be accelerated such that all such
options will be vested as of the date of Employee's
termination of employment with Employer; provided, however,
that if the terms of any option agreement between the Trust
and Employee provides for more favorable treatment in the
event of Termination without Cause than that provided above
of the vesting of options to purchase Shares granted to
Employee and outstanding as of the date of Employee's
termination, the terms of such option agreement shall
determine the vesting of the options granted thereunder in
the event of Termination without Cause. The terms of the
Trust's stock option plans, as amended shall determine the
period during which any vested options may be exercisable;
provided, however, that if the terms of any option agreement
between the Trust and Employee provides for more favorable
treatment in the event of Termination without Cause than that
provided in the Trust's stock
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option plans with respect to the exercisability of vested
options, the terms of such option agreement shall determine
the period for which any vested options granted thereunder
may be exercisable.
(h) Outplacement Services. In the event of Termination Without
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Cause, Employer shall make available at Employer's expense to
Employee at Employee's option the services of an employment
search/outplacement agency selected by Employer for a period
not to exceed six (6) months during the Severance Term.
(i) Provision of Telephone/Secretary. In the event of
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Termination Without Cause, Employer shall provide Employee
for a period not to exceed six (6) months from Employee's
date of termination with a telephone number assigned to
Employee at Employer's offices, telephone mail and a
secretary to answer the telephone. Such benefits shall not
include an office or physical access to Employer's offices
and will cease upon commencement by Employee of employment
with another employer.
4. Severance Benefits Upon Voluntary Resignation. In the event that
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Employee resigns from employment in all capacities with Employer upon (i) sixty
(60) days' written notice to Employer if Employee is not an executive officer of
Employer or (ii) ninety (90) days' written notice if Employee is an executive
officer of Employer, Employee shall be entitled to receive as severance pay an
amount in cash equal to one (1) month's salary for every year of service to the
Trust in excess of five (5) years of service; such resignation payment shall not
exceed six (6) months' pay. The number of months for which such a payment is
due shall determine the length of the resignation term ("Resignation Term").
For the purposes of this Section 4 only, "salary" shall mean Employee's then
current annual base salary and shall not include any bonus or other
compensation. Payment also shall be made for accrued, but unused vacation time.
(a) Benefits. Subject to Section 4(d) below, Employee shall receive
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Full Benefits (as defined above) for the Resignation Term
(subject to the provisions of the Split Dollar Life Insurance
Agreement).
(b) Loan Forgiveness. In the event that Employee resigns, the terms
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of the Share Purchase Plan shall determine Employee's rights and
responsibilities with respect to Employee's Share Purchase
Loan(s).
(c) Stock Options. In the event that Employee resigns, the terms of
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the stock option agreements between Employer and Employee shall
determine the vesting of any options held by Employee as of the
date of resignation and the exercise period for any vested
option.
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(d) Cessation of Benefits. In the event that, following Employee's
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voluntary resignation, Employee becomes employed by or affiliated
with, as a partner, consultant, contractor or otherwise, any
entity which is substantially engaged in the business of property
investment or management ("Competitor"), all payments specified
in this Section 4 shall cease upon the date Employee commences
such employment or affiliation; provided, however, Employee shall
continue to receive medical and dental care benefits from
Employer until (i) Employee is eligible to receive medical and
dental care benefits from the Competitor, or (ii) the date of
expiration of Employee's Resignation Term, whichever comes first
("Cessation Date").
5. Severance Benefits Upon Termination With Cause. Employee shall be
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deemed to have been terminated with Cause in the event that the employment of
Employee is terminated for any of the following reasons:
(a) willful and continual failure to use reasonable best efforts
(other than failure due to disability or Employee's termination
of his employment with Employer under Section 3(b) hereof) to
substantially perform his duties with Employer after demand for
substantial performance is delivered by Employer in writing
specifically identifying the manner in which Employer believes
Employee has not used reasonable best efforts to substantially
perform his duties and after expiration of a reasonable time for
Employee to pursue diligently a cure to such demand;
(b) willful misconduct which is demonstrably and materially injurious
to Employer or an affiliate thereof, monetarily or otherwise; or
(c) conviction of, or plea of guilty or nolo contendere to, a felony
provided, however, that no termination of Employee under clause
(a) or (b) shall occur until (x) there shall have been delivered
to Employee a copy of the written resolution adopted by two
third's of the Board in good faith at a duly called meeting
thereof setting forth that Employee was guilty of the conduct set
forth in any such clause and specifying the particulars thereof
in detail and (y) Employee shall have been provided an
opportunity to be heard by the Board at such meeting with 45
days' advance written notice thereof, and; provided, further,
that no act or failure to act shall be considered willful unless
done or omitted to be done in bad faith and without reasonable
belief that the action or omission was in the best interests of
Employer and no failure to perform by Employee after a notice of
termination hereunder is given by Employer shall constitute
"Cause" for purposes of this definition. Employee shall be
entitled to the assistance of his counsel (at the expense of
Employer) in contesting or otherwise
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disputing any allegation or finding of such conduct in any Board
meeting or any subsequent judicial or other proceeding instigated
by Employee, Employer, or any third party. Under no circumstances
shall Employee be obligated to pay or reimburse the Trust for any
attorneys' fees, costs or expenses incurred by Employer.
(d) Decision by Employer to Terminate With Cause. The decision to
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terminate the employment of Employee with Cause shall be made by
the Board of Trustees.
(e) Severance Payment Upon Termination with Cause. In the event of
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termination with Cause, the terms of the stock option agreements
between Employer and Employee will determine the terms of the
vesting of options and the exercisability of vested options.
(i) For Cause Termination. In the event that Employee's
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employment is terminated with Cause, Employee shall
receive all base salary due and payable as of the date
of Employee's termination of employment. No payment
shall be made for bonus or other compensation. Payment
also will be made for accrued, but unused vacation
time.
(g) Loan Forgiveness. In the event that Employee's employment is
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terminated with Cause, the terms of the Share Purchase Plan shall
determine Employee's rights and responsibilities with respect to
Employee's Share Purchase Loan(s).
6. Severance Benefits Upon Termination Upon Disability. Employer may
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terminate Employee upon thirty (30) days' prior written notice if (i) Employee's
Disability has disabled Employee from rendering service to Employer for at least
a six (6) month consecutive period during the term of his employment, (ii)
Employee's "Disability" is within the meaning of such defined term in Employer's
group long-term disability policy, and (iii) Employee is covered under such
policy. In the event of Employee's Termination Upon Disability, Employee shall
be entitled to receive as severance pay each month for the year immediately
following the date of termination an amount in cash equal to the difference, if
any, between (i) the sum of (y) the amount of payments Employee receives or will
receive during that month pursuant to the disability insurance policies
maintained by Employer for Employee's benefit and (z) the adjustment described
in the next sentence and (ii) Employee's base monthly salary on the date of
termination due to Disability. The adjustment referred to in clause (z) of the
preceding sentence is the amount by which any tax-exempt payments referred to in
clause (y) would need to be increased if such payments were subject to tax in
order to make the after-tax proceeds of such payments equal to the actual amount
of such tax-exempt payments.
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(a) Benefits. Employee shall receive Full Benefits (as defined
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above) for one (1) year following termination due to Disability
(subject to the provisions of the Split Dollar Life Insurance
Agreement).
(b) Loan Forgiveness. In the event that Employee's employment is
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terminated due to Disability, the terms of the Share Purchase
Plan shall determine Employee's rights and responsibilities with
respect to Employee's Share Purchase Loan(s).
(c) Stock Options. In the event that that Employee's employment is
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terminated due to Disability, the terms of the stock option
agreements between Employer and Employee shall determine the
vesting of any options held by Employee as of the date of
termination due to Disability and the exercise period for any
vested option.
7. Severance Benefits Upon Termination Upon Death. If Employee dies,
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Employee's estate shall be entitled to receive an amount in cash equal to his
then-current base salary through the last day of the month in which Employee's
death occurs plus any bonus previously awarded but unpaid and any accrued
vacation pay through the last day of the month in which Employee's death occurs.
(a) Loan Forgiveness. If Employee dies, the terms of the Share
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Purchase Plan shall determine the rights and responsibilities of
Employee's estate with respect to Employee's Share Purchase
Loan(s).
(b) Stock Options. If Employee dies, the terms of the stock option
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agreements between Employer and Employee shall determine the
vesting of any options held by Employee as of the date of his
death and the exercise period for any vested option.
8. Confidentiality - Employer's Obligations. Unless Employee and
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Employer mutually agree on appropriate language for such purposes, in the event
that Employee's employment is Terminated Without Cause or With Cause pursuant to
Section 5(a) above, or Employee voluntarily resigns, Employer, except to the
extent required by law, will not make or publish, without the express prior
written consent of Employee, any written or oral statement concerning Employee's
work related performance or the reasons or basis for the severing of Employee's
employment relationship with Employer; provided, however, that the foregoing
restriction is not applicable to information which was or became generally
available to the public other than as a result of a disclosure by Employer.
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9. Confidentiality - Employee's Obligations. Employee acknowledges
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and reaffirms that Employee will comply with the terms of the confidentiality
letter executed by Employee upon commencement of Employee's employment with
Employer.
10. Payments. In the event of Employee's voluntary resignation,
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severance payments made pursuant to this Amended and Restated Severance
Agreement shall be made pro rata on a monthly basis. All other severance
payments payable to Employee pursuant to the terms of this Amended and Restated
Severance Agreement may be made either as a lump sum payment or pro rata on a
monthly basis, at Employee's option.
11. Tax Withholding. Employer may withhold from any benefits payable
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under this Amended and Restated Severance Agreement, and pay over to the
appropriate authority, all federal, state, county, city or other taxes as shall
be required pursuant to any law or governmental regulation or ruling.
12. Arbitration.
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(a) Any controversy, claim or dispute arising out of or relating
to this Amended and Restated Severance Agreement or the
breach thereof, other than any controversy, claim or dispute
arising out of or relating to Section 5 of this Amended and
Restated Agreement, shall be settled by arbitration in
accordance with the then existing Commercial Arbitration
Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. The parties
irrevocably consent to the jurisdiction of the federal and
state courts located in Maryland for this purpose. Each such
arbitration proceeding shall be located in Maryland.
(b) The arbitrator(s) may, in the course of the proceedings,
order any provisional remedy or conservatory measure
(including, without limitation, attachment, preliminary
injunction or the deposit of specified security) that the
arbitrator(s) consider to be necessary, just and equitable.
The failure of a party to comply with such an interim order
may, after due notice and opportunity to cure with such
noncompliance, be treated by the arbitrator(s) as a default,
and some or all of the claims or defenses of the defaulting
party may be stricken and partial or final award entered
against such party, or the arbitrator(s) may impose such
lesser sanctions as the arbitrator(s) may deem appropriate. A
request for interim or provisional relief by a party to a
court shall not be deemed incompatible with the agreement to
arbitrate or a waiver of that agreement.
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(c) The parties acknowledge that any remedy at law for breach of
this Amended and Restated Severance Agreement may be
inadequate, and that, in the event of a breach by Employee of
Section 9, any remedy at law would be inadequate in that such
breach would cause irreparable competitive harm to Employer.
Consequently, in addition to any other relief that may be
available, the arbitrator(s) also may order permanent
injunctive relief, including, without limitation, specific
performance, without the necessity of the prevailing party
proving actual damages and without regard to the adequacy of
any remedy at law.
(d) In the event that Employee is the prevailing party in such
arbitration, then Employee shall be entitled to reimbursement
by Employer for all reasonable legal and other professional
fees and expenses incurred by him in such arbitration or in
enforcing the award, including reasonable attorney's fees.
(e) The parties agree that the results of any such arbitration
proceeding shall be conclusive and binding upon them.
13. No Assignment. Neither this Amended and Restated Severance
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Agreement nor any right, remedy, obligation or liability arising hereunder or by
reason hereof shall be assignable by either Employer or Employee without the
prior written consent of the other party.
14. Mitigation. Employee shall not be required to mitigate the
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amount of any payment, benefit or other Trust obligation provided for in this
Amended and Restated Severance Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Employee in any subsequent employment.
15. Continued Employment. This Amended and Restated Severance
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Agreement shall not confer upon the Employee any right with respect to
continuance of employment by Employer.
16. Amendment. This Amended and Restated Severance Agreement may be
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terminated, amended, modified or supplemented only by a written instrument
executed by Employee and Employer.
17. Waiver. Either party hereto may by written notice to the other:
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(i) extend the time for performance of any of the obligations or other actions
of the other party under this Amended and Restated Severance Agreement; (ii)
waive compliance with any of the conditions or covenants of the other party
contained in this Amended and Restated
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Severance Agreement; (iii) waive or modify performance of any of the obligations
of the other party under this Amended and Restated Severance Agreement. Except
as provided in the preceding sentence, no action taken pursuant to this Amended
and Restated Severance Agreement shall be deemed to constitute a waiver by the
party taking such action of compliance with any representations, warranties,
covenants or agreements contained herein. The waiver by any party hereto of a
breach of any provision of this Amended and Restated Severance Agreement shall
not operate or be construed as a waiver of any preceding or succeeding breach.
No failure by either party to exercise any right or privilege hereunder shall be
deemed a waiver of such party's rights to exercise the same any subsequent time
or times hereunder.
18. Severability. In case any one or more of the provisions of this
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Amended and Restated Severance Agreement shall, for any reason, be held or found
by determination of the arbitrator(s) pursuant to an arbitration held in
accordance with Section 12 above to be invalid, illegal or unenforceable in any
respect (i) such invalidity, illegality or unenforceability shall not affect any
other provisions of this Amended and Restated Severance Agreement, (ii) this
Amended and Restated Severance Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. Failure to
insist upon strict compliance with any provision of this Amended and Restated
Severance Agreement shall not be deemed a waiver of such provision or of any
other provision of this Amended and Restated Severance Agreement.
19. Governing Law. This Amended and Restated Severance Agreement has
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been executed and delivered in the State of Maryland and its validity,
interpretation, performance and enforcement shall be governed by the laws of
said State; provided, however, that any arbitration under Section 12 hereof
shall be conducted in accordance with the Federal Arbitration Act as then in
force.
20. No Attachment. Except as required by law, no right to receive
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payments under this Amended and Restated Severance Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation or the execution, attachment, levy, or similar process
or assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
21. Source of Payments. All payments provided under this Amended and
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Restated Severance Agreement shall be paid in cash from the general funds of
Employer, and no special or separate fund shall be established and no other
segregation of assets shall be made to assure payment.
22. Exculpatory Clause. Neither the Trust's shareholders nor the
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Trustees, officers, employees or agents of the Trust shall be liable under this
Amended and Restated Severance Agreement, and the Employee shall look solely to
the Trust's estate
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for the payment of any claim under or for performance of this Amended and
Restated Severance Agreement. The Trust is organized pursuant to a Third
Amended and Restated Declaration of Trust dated as of May 24, 1984.
23. Headings. The section and other headings contained in this
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Amended and Restated Severance Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Amended and Restated
Severance Agreement.
24. Notices. Any notice required or permitted to be given under this
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Amended and Restated Severance Agreement shall be in writing and shall be deemed
to have been given when delivered in person or when deposited in the U.S. mail,
registered or certified, postage prepaid, and mailed to Employee's addresses set
forth herein and the business address of Employer, unless a party changes its
address for receiving notices by giving notice in accordance with this Section,
in which case, to the address specified in such notice.
25. Counterparts. This Amended and Restated Severance Agreement may
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be executed in multiple counterparts with the same effect as if each of the
signing parties had signed the same document. All counterparts shall be
construed together and constitute the same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amended and Restated Severance Agreement to be effective as of the day and year
indicated above.
/s/ Xxx X. Xxxxxx
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Employee's Signature
Employee's Permanent Address:
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
FEDERAL REALTY INVESTMENT TRUST
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Chair, Compensation Committee
Address: 0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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