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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made as of this 9th day of December,
1997 by and between XXXXX XXXXX (hereinafter "Sealy") and FIRST INDUSTRIAL
REALTY TRUST, INC., a Maryland corporation (hereinafter "Employer"). Capitalized
terms contained herein and otherwise undefined shall have the respective
meanings given to each of them in that certain Contribution Agreement, dated as
of December 9, 1997, by and among FR Acquisitions, Inc. and the other parties
thereto (the "Contribution Agreement").
The parties hereto agree as follows:
ARTICLE I - TERM OF EMPLOYMENT
1.01 Employer hereby employs Sealy and Sealy hereby accepts employment
by Employer commencing on the date hereof and pursuant to the terms hereof.
1.02 The term of this Agreement (the "Term") shall end at 12:01 a.m.,
Chicago time, on the third anniversary of the date hereof (the "Expiration
Date"), except as otherwise provided herein.
ARTICLE II - DUTIES AND POWERS OF SEALY
2.01 Except as may be otherwise approved by the Board of Directors of
Employer (the "Board") or as otherwise expressly provided herein, during the
Term, Sealy shall devote his diligent and good faith efforts to carry out his
duties with respect to the operation of the business of Employer, as more fully
detailed below, at all times in accordance with any and all written rules and
policies of Employer. Additionally during the Term, except as may otherwise be
permitted by this Agreement or the Contribution Agreement, Employer shall be
entitled to the exclusive benefits of Sealy's knowledge, experience, business
contacts and opportunities relating to the "Business of Employer". The "Business
of Employer" shall consist of the acquisition, development, ownership,
management, leasing and sale of warehouse, distribution and other industrial
real estate property. Notwithstanding any provision herein to the contrary, so
long as Sealy performs his duties to Employer as provided in this Agreement in a
manner reasonably acceptable to Employer, it shall not be a breach of this
Agreement if Sealy participates in (and Employer acknowledges that Sealy shall
participate in) the following activities and businesses (collectively referred
to herein as "Permitted Activities and Businesses"):
(a) Sealy may engage in activities and businesses unrelated to
the real estate business;
(b) Sealy may engage in activities and businesses in the real
estate business that are unrelated to the "Business of
Employer" (i.e., Sealy may engage in the acquisition,
development, management, leasing, sale, syndication of any
type of real estate exclusive of warehouse, distribution and
other industrial property);
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(c) Except as provided in clause (f) below, Sealy may engage in the
direct and indirect ownership of entities, whether existing as
of the date hereof or hereafter created (including the right to
make future investments in and the right to provide credit for
and/or guaranties for financing and development on behalf of
such entities) that engage in the acquisition, management,
leasing, development and/or financing of real estate properties
(including but not limited to industrial/distribution/warehouse
properties subject to the restriction hereinafter set forth);
provided, however, in respect to
industrial/distribution/warehouse properties Sealy, acting in
his individual capacity, shall only have the right to
participate in (1) the significant, non-routine and strategic
business decisions (e.g., sale and refinance) but not the
day-to-day decision making of such entities and (2) such other
decisions and activities for such entities and/or in his
individual capacity as is reasonable and necessary to protect
Sealy from a substantial loss of his investment and/or any
personal liability associated with such entities.
Notwithstanding anything to the contrary in this clause (c),
Sealy shall not initiate any action to acquire any
industrial/distribution/warehouse properties, although Sealy may
retain his interest in the Retained Properties (hereinafter
defined); provided, however, if Sealy is first contacted by any
third party affiliated with Xxxx Xxxxx or any of Sealy's
existing partners in respect of any property located in the
Territory (hereinafter defined), or other third party in respect
of a property outside the Territory, then Sealy may participate
in a direct or indirect investment in such property, but only on
the basis provided above in this clause (c);
(d) Sealy may engage in, except as provided in clauses (e) and (f)
below, the strategic and significant business decisions (e.g.,
sale and refinance), but not day-to-day decision making,
concerning those industrial/distribution/warehouse properties
located in the Territory and identified in Exhibit "A" (the
"Retained Properties"). In addition, Sealy shall have the right
to participate in such other decisions and activities
for the owners of the Retained Properties and/or in his
individual capacity as is reasonable and necessary to protect
Sealy from a substantial loss of his investment and/or any
personal liability associated with the Retained Properties,
(including the Transition Properties as defined below).
(e) Notwithstanding clause (d) above, certain of the Retained
Properties identified on Exhibit "A" as "Transition Properties"
(e.g., properties in a stage of planning and development that are
not yet fully completed, leased and financed) are in transition
and shall require Sealy to engage in day-to-day involvement in
order to complete as necessary the construction, leasing and
financing of the Transition Properties to stabilization. Employer
agrees that, so long as Sealy continues to perform his duties
hereunder and for no more than 18 months from the date hereof,
Sealy may participate in such day-to-day activities in connection
with development, construction, leasing and financing of the
Transition Properties, but only as necessary for each of such
properties to attain, and only until each of such properties
attains, commercially reasonable "stabilization" (i.e., complete
the construction, significant leasing and permanent financing)
and as necessary to
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discharge Sealy's obligations as a general partner and/or
manager of entities that own such Transition Properties;
provided, however, that Employer shall be reimbursed for the
time and expense of Sealy to the extent of his activity relating
to the Transition Properties in accordance with the term set
forth on Exhibit "B" attached hereto. Regardless of the
"stabilization" of any and all of the Transition Properties at
such time, from and after the 18-month anniversary of this
Agreement, Sealy shall no longer perform any day-to-day
management activities in connection with the Transition
Properties, but Sealy may undertake strategic and significant
business decisions with respect to such properties for so long
as they remain Retained Properties and may exercise his rights
as provided in the last sentence of clause (d) above.
(f) Notwithstanding anything to the contrary contained herein, Sealy
agrees that it may not and shall not engage in any decision
making, management, operational or other activity in connection
with (i) that certain real property located at 1103-1109 AFS
Airport Business Park, Euless, Texas, or (ii) the Excluded Parcel
(as defined in the Contribution Agreement). Sealy further agrees
that it shall not have a direct or indirect ownership interest in
either of such properties that either exceeds 49% or represents
the largest direct or indirect ownership interest among all
investors in such property.
Sealy shall be responsible to Employer to perform and/or oversee the following:
1. The day-to-day management and operation of real property
assets located in the States of Louisiana and Texas (collectively, the
"Territory") that are owned by Employer or by entities in which
Employer holds an ownership interest ("Property Management");
2. The marketing for lease or sale of real property assets
located in the Territory and owned or managed by Employer or entities
in which Employer holds an ownership interest (together with Employer,
the "Employer Entities") and the negotiation, documentation and
consummation of lease and sale transactions involving real property
assets located in the Territory and owned or managed by Employer
Entities (the "Real Property Assets") [collectively, "Marketing"]; and
3. The acquisition of Real Property Assets, if and to the
extent such acquisitions are approved by the Board (or the Board's
Investment Committee, as the case may be) or the appropriate partners,
officers or directors of any other applicable affiliate of Employer
("Acquisition").
2.02 Sealy will hold the title of Senior Regional Director ("SRD") of
the Territory, and shall have primary responsibility for the conducting of
Employer's business in the Territory.
2.03 If (a) a proposed Acquisition is presented to Employer by Sealy;
(b) Employer approves such Acquisition in accordance with its policies and
procedures then in effect; and (c) the
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property to be acquired (the "New Property") is located outside the
then-applicable geographic boundaries of the Territory, then, upon the closing
of such Acquisition, the Territory shall automatically be expanded to include
the city (or township, village or municipality, as the case may be) in which the
New Property is located unless (i) the New Property is located in the existing
territory of another SRD of Employer (it being understood and agreed that,
except as is otherwise expressly provided in this Section 2.03 with respect to
the Territory, the senior officers of Employer shall have the sole discretion to
establish the geographic boundaries of each SRD's respective territory); or (ii)
the Board (or the Investment Committee, as the case may be), in the process of
approving the acquisition of the New Property, specifically determines that the
Territory shall not so expand. In the event that either (i) or (ii) above is
applicable, then none of Sealy and the employees engaged by Employer in the
Territory shall be responsible for the day-to-day management and operation of
that particular New Property. Except as otherwise expressly provided above in
this Section 2.03, any other expansion or contraction of the Territory shall be
made by amendment to this Agreement.
2.04 Subject to: (a) with respect to those matters that may require
Board approval, the specific approval of the Board; (b) policies or guidelines
implemented by Employer out of its Chicago headquarters or by the Board; and (c)
any budget adopted by Employer, from time to time during the Term, with respect
to all or some portion of the Territory (a "Budget"), Sealy shall have the right
and obligation within the Territory to: (i) hire and fire employees (pursuant to
Employer's personnel policies, as such policies may be modified or amended from
time to time); (ii) establish, review, and revise the compensation of employees
engaged to perform services in the Territory (excepting only himself); (iii)
negotiate, document, and enter into contracts for Property Management and
Marketing; (iv) negotiate, document, and enter into contracts with such
suppliers of products and services as Sealy deems appropriate for the rendering
of Property Management and Marketing services to Employer; (v) purchase or lease
equipment for Employer for the performance and rendering of Property Management,
Marketing and Acquisition services, and tend to all matters relating thereto;
(vi) with the prior written approval of the Chief Operating Officer of Employer,
lease building space for occupancy by Employer for Employer's offices and for
such other reasonable functions as Sealy deems appropriate for the business of
Employer in the Territory; and (vii) negotiate, document, execute and perform
under leases on behalf of any Employer Entities, whether as landlord or
management/leasing agent, as the case may be ("Leases"). Notwithstanding
anything to the contrary contained in this Section 2.04, if any expenditure
proposed to be made by Sealy pursuant to his duties to Employer (1) is not
contemplated or provided for in the relevant Budget and (2) exceeds $25,000, per
item or occasion, except with respect to leasing commissions and tenant
improvements as provided in Section 2.06(iv), in which case Section 2.06 shall
govern, Sealy shall refrain from making such expenditure until Sealy receives
the approval for such expenditure from any Vice President or more senior officer
based in the Chicago headquarters of Employer.
2.05 Without the prior approval of the Board or the Investment
Committee, as the case may be (which, as in all cases requiring the approval or
consent of the Board or Investment Committee under this Agreement, may be given
or withheld in the Board's or the Investment Committee's sole discretion), Sealy
shall not do any or all of the following:
1. Increase his compensation or extend the Term;
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2. Purchase, or contract to purchase, any real property on
behalf of Employer or any Employer Entities; or
3. Sell or refinance, or contract to sell or refinance, any
Real Property Assets on behalf of Employer or any Employer Entities.
Sealy agrees that he shall promptly advise the Employer's Chief Investment
Officer of the pendency of any acquisition or disposition of any real property
on behalf of Employer or any Employer Entities, and shall follow the directions
of the Chief Investment Officer with respect to the further pursuit of any such
potential acquisition or disposition. If, at any time during the Term, however,
Sealy seeks approval or direction from the Chief Investment Officer with respect
to a particular acquisition or disposition, and the Chief Investment Officer is
not available, then Sealy may seek approval or direction from Employer's Chief
Operating Officer (the "COO"). If Sealy receives the approval of the Chief
Investment Officer or the COO, as applicable, to pursue an acquisition or
disposition, and Sealy desires that a formal purchase and sale contract be
executed in connection therewith, then any one of the President, Chief Operating
Officer, Chief Financial Officer or Chief Investment Officer of Employer shall
be the signatory to any such contract for an acquisition or disposition. Sealy
acknowledges that, as of the date of this Agreement, no acquisition or
disposition may be consummated on behalf of the Employer without the approval of
the Investment Committee or, in certain instances, the Board. As of the date of
this Agreement, acquisitions or dispositions of real property on behalf of
Employer require only the approval of the Investment Committee if the aggregate
consideration required to be paid for such acquisition or disposition does not
exceed $30,000,000. Currently, then, the Board must approve acquisitions or
dispositions involving consideration in excess of $30,000,000. Notwithstanding
anything to the contrary contained in this Section 2.05, if the Board modifies
its policies with respect to the matters provided in this Section 2.05, then
Sealy shall abide by such modified policies to the extent such policies differ
from what is provided above in this Section 2.05.
2.06 Notwithstanding anything to the contrary contained above, without
the prior approval of the COO, or such other officer designated by the COO for
such purpose, Sealy shall not enter into any Lease (i) with respect to premises
exceeding 100,000 rentable square feet, or (ii) with annual fixed net base rent
exceeding $500,000 for any year of the lease term, assuming the exercise of all
options in the Lease, or (iii) with an initial term exceeding five (5) years, or
with a full term, assuming the exercise of all options in the Lease, exceeding
ten (10) years, or (iv) that requires the expenditure of $100,000 or more, in
the aggregate, by Employer to both satisfy the obligations imposed on the
landlord under that Lease to perform tenant improvements and pay any leasing
commissions owed by Employer in connection with such Lease.
2.07 As an SRD, Sealy shall also have the authority to negotiate the
terms and provisions of, and enter into, any third-party management contracts
for the day-to-day leasing, operation and management of New Properties if and to
the extent that, in the process of approving an Acquisition, the Investment
Committee or the Board (if the Board's approval of the Acquisition is required)
approve the engagement of a third-party manager for the applicable New Property.
In such an event, Sealy must engage the third-party manager in accordance with
any additional terms, with respect to such third-party management arrangement,
required by the Investment Committee and the Board (if the Board's approval of
the Acquisition is required).
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ARTICLE III - COMPENSATION
3.01 Sealy shall receive an aggregate annual base salary ("Annual
Salary") at the rate of $150,000 per annum, beginning January 1, 1998 (and at
the rate of $130,000 per annum for 1997). The Annual Salary for calendar year
1997 shall be prorated, based on the period of time Sealy is employed during
1997. Following 1997, Sealy shall receive a guaranteed minimum annual salary,
based on the duration of his employment during any year, equal to no less than
the Annual Salary payable to all other SRDs engaged by Employer, from time to
time; and such Annual Salary shall be payable in twenty-four (24) equal
installments on the fifteenth day and last day of each month during the Term (a
"Payment Date"); provided, however, that the Annual Salary shall be no less than
$150,000 during 1998. If any Payment Date falls on other than a normal business
day, the salary payment due on such Payment Date shall instead be payable on the
last normal business day preceding such Payment Date.
3.02 In addition to the Annual Salary, Sealy shall also be entitled to
participate in all incentive, bonus and stock option programs offered by
Employer from time to time to the SRDs, as such may be approved or implemented
from time to time by the Compensation Committee of the Board. Sealy's right to
participate in, and to receive compensation under, such programs shall in no
event be on lesser terms or in lesser amounts than those offered to the SRDs;
provided, however, that incentive or bonus arrangements (a) for which Sealy and
the SRDs are eligible; (b) that are based upon the achievement or surpassing of
performance goals established by Employer, and (c) that are based upon specified
commercial criteria made known to Sealy and the SRDs in advance, may vary among
the different regions of Employer based upon relative regional performance.
3.03 Employer shall be entitled to withhold from those amounts payable
to Sealy from time to time under this Agreement any and all federal, state or
local withholding or other taxes or charges which Employer is, from time to
time, required (by applicable law, statute, ordinance or regulation) to
withhold. Employer shall be entitled to rely upon the opinion of its legal
counsel with regard to any question concerning the amount or requirement of any
such withholding.
ARTICLE IV - SEALY'S BENEFITS
4.01 Employer, at Employer's cost, will provide Sealy with
medical/hospitalization/ major medical insurance coverage, including dental
benefits, in the same amounts, pursuant to the same terms, and subject to the
same deductible, as is provided pursuant to the insurance coverage made
available, from time to time, to the SRDs.
4.02 Employer, at Employer's cost, will provide Sealy with, and keep in
effect during the Term, a term life insurance policy which Employer will
purchase from an insurer satisfactory to Sealy and providing coverage in an
amount equal to the amount of such term life insurance provided to the SRDs.
Sealy shall have the right to designate such individual or other entity as he
wishes as the owner of such life insurance policy, and shall have the power to
designate and change, from time-to-time, the beneficiary under such insurance
policy.
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4.03 Employer, at Employer's cost, will provide Sealy with a disability
income insurance policy that will (i) provide Sealy with income per year equal
to that amount of annual income provided to the SRDs under their respective
disability insurance policies, (ii) have a waiting period of not greater than
three (3) months from the date of sickness, injury or other disability prior to
any disability payment, (iii) provide for lifetime benefits, and (iv) contain a
waiver of premium clause. At Sealy's option, he may elect to pay the annual
premiums for such disability insurance himself, in which case his Annual Salary
will be increased by the amount equal to such annual premium. The foregoing
disability income insurance policy will define disability in terms of the
functions which Sealy is required to perform pursuant to this Agreement, and
should Sealy not be able to perform such functions, he shall be deemed disabled
under such policy.
4.04 Sealy shall be entitled to vacation leave of five (5) weeks during
each calendar year, beginning January 1, 1998, with full pay (determined on a
pro rata basis, based on the then-applicable Annual Salary). The time for
vacation shall be chosen by Sealy and must be taken within fifteen (15) months
after the start of the calendar year with respect to which such vacation leave
is made available. Sealy's right to be paid in lieu of any vacation leave not
timely taken shall be determined by the Compensation Committee of the Board and
shall be consistent with the policy established for the SRDs.
4.05 Sealy shall be entitled to the following paid holidays per year
(if falling on a day other than a Saturday or Sunday): New Year's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
4.06 Sealy shall be entitled to an aggregate of ten (10) days per
calendar year, including 1997, as sick and/or personal leave days with full pay
(determined on a pro rata basis, based on the then-applicable Annual Salary).
Sick and/or personal leave days may be accumulated up to a total of twenty (20)
days.
4.07 If Sealy becomes disabled during the Term for any reason that
prevents him from fully performing his duties under this Agreement and, as a
result, he would be entitled, but for any waiting period, to disability payments
under the disability insurance policy described above, Employer agrees to
continue his salary (determined on a pro rata basis, based on the
then-applicable Annual Salary) during the period of his disability until such
time as benefits due under the disability income insurance policy (provided
pursuant to Section 4.03 above), begin to accrue, but in no event beyond the end
of the Term.
4.08 In addition to the foregoing, it is understood and agreed that, in
order to properly perform his duties, Sealy must have the use of a mobile
telephone. Employer agrees to pay directly, or to reimburse Sealy for, any and
all costs associated with the purchase, installation, activation, and business
use of such mobile telephone (in the ordinary course of Sealy's performance of
his duties under this Agreement).
4.09 Executive shall receive an automobile allowance determined in
accordance with an annual budget submitted to, and approved by, Employer from
time to time with respect to the operation of the Territory during the
applicable calendar year (the "Auto Allowance"), which Auto Allowance shall be
paid in accordance with Employer's policy for payment of comparable
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allowances. Employer shall have no obligation to make any payments of the Auto
Allowance from and after the date on which Executive's employment with Employer
is terminated in accordance with this Agreement.
ARTICLE V - REIMBURSEMENT OF SEALY'S EXPENSES
5.01 Sealy is authorized to incur reasonable business expenses for
promoting the business of Employer, including expenditures for entertainment,
gifts, and travel. Employer will reimburse Sealy in accordance with its normal
expense-reimbursement procedure for all business expenses reasonably incurred,
provided that Sealy presents to Employer both of the following:
(a) A monthly expense report in which Sealy records:
(i) the amount of each expenditure;
(ii) the date, place, and designation of the type of
entertainment, travel, or other expenses or the date
and description of any gift given by Sealy for a
business purpose;
(iii) the business purpose for each expenditure; and
(iv) the name, occupation, address, and other relevant
information of each person who is entertained or
given a gift sufficient to establish the business
relationship to Employer.
(b) Documentary evidence (such as receipts or paid bills) providing
sufficient information to establish the amount, date, place, and essential
character of each business expenditure of $75.00 or more.
ARTICLE VI - TERMINATION
6.01 Employer may terminate this Agreement for any reason whatsoever,
including, without limitation, under the following circumstances:
(a) The occurrence of a material breach of this Agreement by
Sealy that Sealy does not cure, whether or not such breach is capable
of being cured, within ten (10) days after Employer delivers to Sealy
written notice of the alleged breach ("Default Notice"). A termination
pursuant to this paragraph shall take effect upon the expiration of the
relevant cure period, if the subject breach has not been cured.
(b) For "cause," which, for purposes of this Agreement, shall
include, without limitation, (i) the fraudulent or criminal conduct of
Sealy adversely affecting Employer, (ii) alcoholism of, or illegal
substance abuse by, Sealy, (iii) any willful, reckless, or grossly
negligent act, or failure to act, of Sealy, or any breach of the
fiduciary duty owed by Sealy to Employer, or (iv) any dishonesty,
disclosure of Confidential Information (as hereinafter
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defined) or, except as provided above or in the Contribution
Agreement in respect of Permitted Activities and Businesses, aiding a
competitor of Employer. A termination "for cause" shall take effect
immediately upon written notice to Sealy from Employer;
(c) Sealy suffering a long-term disability. A long-term
disability shall be defined as Sealy's inability (based on the standard
for honoring a claim established under the disability insurance policy
procured for Sealy pursuant to this Agreement), due to illness or
injury (including alcoholism or illegal substance abuse), to perform
his duties as established in Article II above, for a period of three
(3) consecutive months. A termination pursuant to this paragraph shall
take effect immediately upon written notice to Sealy from Employer
after the expiration of such three-month period;
(d) Sealy's death, in which case the Agreement shall
terminate immediately; and
(e) The occurrence of a breach of this Agreement for which
written notice is sent to Sealy on three or more occasions during any
12-month period of the Term (regardless of whether or not such breaches
are cured in a timely fashion), in which case this Agreement shall
terminate immediately upon the third of such written notices to Sealy
from Employer, except as otherwise provided in such third written
notice.
In the event Employer exercises its right of termination for reasons other than
any of those specified for in paragraphs (a) through (e) above (such reasons
other than those specified by (a) through (e) being referred to as "Unstated
Reasons"), such termination shall be effective thirty (30) days after Employer's
delivery of its written notice of such termination; provided, however, from and
after the effective date of a termination for any Unstated Reason, and
continuing for a period of three (3) months, or through the Expiration Date,
whichever occurs first, Employer shall continue to pay to Sealy, the benefits to
which he would have been entitled (under the express terms of this Agreement, as
of the date of such termination), but for the accelerated termination hereof. In
addition, on the first day of each of the 12 calendar months immediately
following the effective date of a termination for any Unstated Reason (the
"Termination Date"), regardless of the Expiration Date, Employer shall pay to
Sealy, at the rate of one-twelfth of the following amounts on each of such 12
payment dates: (i) the Annual Salary being paid to Sealy as of the Termination
Date and (ii) the most recent annual bonus paid to Sealy or, if, as of the
Termination Date, Sealy will not have worked for Employer long enough to qualify
for an annual bonus, the average of the most recent annual bonuses paid to all
senior regional directors of Employer (the foregoing payments in the aggregate
shall be hereinafter referred to as the "Severance Payment").
6.02 Sealy shall have no right to terminate this Agreement, except (a)
as provided in Sections 6.06 and 6.07 below, and (b) in the event of the
occurrence of a breach of this Agreement by Employer, which Employer does not
cure within ten days after delivery of Sealy's written notice of such alleged
breach.
6.03 Termination of this Agreement by Employer or by Sealy pursuant to
any of the provisions of this Article VI shall not prejudice any other remedy to
which the terminating party may be entitled as a result of a breach of this
Agreement by the non-terminating party, whether at
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law, in equity, or under this Agreement; provided, however, and notwithstanding
any provision in this Agreement to the contrary or in any other agreement
related to the Contribution Agreement, that if Sealy is terminated due to a
breach of his obligations in Section 2.01(f), Employer's remedy hereunder shall
be limited to termination of this Agreement only (although Employer may seek to
enjoin such breach without terminating this Agreement).
6.04 In the event this Agreement is terminated for any reason, in
addition to such other payments required to be paid to Sealy as expressly
provided herein, Sealy shall be entitled to receive a prorated portion of his
Annual Salary through the effective date of such termination. In addition, in
the event this Agreement is terminated for any reason, Sealy shall be entitled
to reimbursement of all business expenses incurred by him (pursuant to Section
5.01) prior to the effective date of termination that would otherwise be
reimbursable hereunder. Further, Sealy shall also be entitled to the
remuneration provided in Sections 6.01, 6.06 and 6.07.
6.05 Upon the termination of this Agreement for any reason, Sealy shall
forthwith return and deliver to Employer, and shall not retain any originals or
copies of, any books, papers, price lists or customer contracts, written
proposals of Employer or prospective customers or tenants, customer/tenant
lists, rent rolls, leases, files, books of account, notebooks and other
documents and data relating to the performance of services rendered by Sealy
hereunder, except for those materials relating to the Retained Properties or in
Sealy's possession immediately prior to the commencement of the Term
(collectively, "Employer's Materials"), all of which Employer Materials are
hereby deemed to constitute the property of Employer.
6.06 Constructive Termination. If, at any time during the Term, except
in connection with a termination pursuant to Section 6.01(a), (b) or (e) above,
Sealy is Constructively Discharged (as hereinafter defined), then Sealy shall
have the right, by written notice to the Employer, given within one hundred and
twenty (120) days of the effective date of such Constructive Discharge, to
terminate his services hereunder (the "Termination Notice"), effective as of the
date that is thirty (30) days after the date on which such Termination Notice is
delivered, and Sealy shall have no further rights or obligations under this
Agreement other than as provided in this Section 6.06 and in Article VII. For
purposes of this Agreement, Sealy shall be deemed to have been "Constructively
Discharged" upon the occurrence of any of the following events:
(i) Sealy is not re-elected to, or is otherwise removed from,
his position as the SRD in the Territory with the Employer other than
as a result of (x) Sealy's election or appointment to positions of
equal or superior scope and responsibility (an "Alternative Position")
or (y) Sealy's breach of, or default under, the terms of this
Agreement; or
(ii) Employer fails to vest Sealy with the powers, authority
and support services normally attendant, from time to time, to the
other SRDs, or with those attendant to the Alternative Position that
may be applicable from time to time, as the case may be; or
(iii) The Employer notifies Sealy, in writing, that Sealy's
employment will be terminated (other than pursuant to Section 6.01(a),
(b) or (e) above) or materially and adversely modified in the future,
or that Sealy will be Constructively Discharged in the future.
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If Sealy is Constructively Discharged and timely delivers a Termination
Notice, then from and after the effective date of a termination
pursuant to a Termination Notice, Employer shall pay to Sealy an amount
equal to the Severance Payment, as though such termination was a
termination for Unstated Reasons.
6.07 Termination Upon Change of Control.
(a) In the event of a Change in Control (as defined below) of
the Employer and the termination of Sealy's employment by Sealy or by
the Employer under either (i) or (ii) below, Sealy shall be entitled to
receive, from and after the effective date of a termination pursuant to
a Change in Control, the Severance Payment, as though such termination
was a termination for Unstated Reasons. The Severance Payment shall not
be offset against or diminish any other compensation or benefits
accrued as of the effective date of termination. The following shall
constitute termination under this Section 6.07:
(i) Sealy terminates his employment under this Agreement
pursuant to a written notice to that effect delivered to the Board
within six (6) months after the occurrence of the Change in Control; or
(ii) Sealy's employment is terminated, including
Constructively Discharged, by the Employer or its successor either in
contemplation of or within two (2) years after the Change in Control,
other than pursuant to Section 6.01(a), (b) or (e) above.
(b) For purposes of this paragraph, the term "Change in Control" shall
mean the following:
(i) The consummation of the acquisition by any person [as such
term is defined in Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")] of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
forty percent (40%) or more of the combined voting power embodied in
the then-outstanding voting securities of the Employer; or
(ii) Approval by the stockholders of the Employer of: (1) a
merger or consolidation of the Employer, if the stockholders of the
Employer immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the
then-outstanding voting securities of the entity resulting from such
merger or consolidation in substantially the same proportion as was
represented by their ownership of the combined voting power of the
voting securities of the Employer outstanding immediately before such
merger or consolidation; or (2) a complete or substantial liquidation
or dissolution, or an agreement for the sale or other disposition, of
all or substantially all of the assets of the Employer.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because forty percent (40%) or more of the combined voting power
of the then-outstanding securities is acquired by: (x) a trustee or other
fiduciary holding securities under one or more
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employee benefit plans maintained for employees of the entity; or (y)
any corporation or other entity which, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of the Employer in the same
proportion as their ownership of stock in the Employer immediately prior to
such acquisition.
ARTICLE VII - NONCOMPETITION AND CONFIDENTIALITY
7.01 In consideration of (i) this Agreement; (ii) the payment of the
amounts described herein; (iii) the terms and provisions of the Contribution
Agreement; and (iv) the benefits afforded Sealy by virtue of Employer's national
support staff, brokerage relationships, databases and reputation; Sealy hereby
covenants and agrees that: (a) during the period of his employment with
Employer, except in respect of the Permitted Activities and Businesses, and then
only as provided in Section 2.01, he shall not, and he shall cause any entity in
which he has a direct or indirect, non-passive ownership interest (collectively,
the "Non-Compete Parties") to not, directly or indirectly, within those counties
in the State of Texas or those parishes in the State of Louisiana set forth on
Exhibit "C" attached hereto (collectively and subject to the penultimate
sentence of this Section 7.01, the "Non-Compete Area"), in any manner
whatsoever: (i) own, manage, control, participate in, consult with, render
services for, or otherwise deal with, in any manner (including, without
limitation, independently or as an employee), any entity involved in the
development, management, leasing or operation of other projects or properties
used, or contemplated to be used, for industrial/warehouse/distribution purposes
(any such entity, a "Competitor"), or (ii) solicit, initiate contact with,
negotiate with, hold discussions with or approach any customer or tenant, or any
potential customer or tenant, for the benefit of or on behalf of any Competitor;
and (b) subject to the last sentence of this Section 7.01, during the period of
Sealy's employment with Employer and until the second anniversary of his
termination of employment with Employer, Sealy shall not, and he shall cause
each Non-Compete Party to not, initiate contact with or solicit any of the
current tenants ("Tenants") or any future tenant at any of the Projects (as
defined in the Contribution Agreement) ["New Tenants"] with respect to
alternative locations or opportunities concerning
industrial/distribution/warehouse real property for such Tenants or New Tenants,
whether for purposes of leasing, selling or build-to-suit (an "Alternative
Site"). In the event, during the period of Sealy's employment with Employer, any
Non-Compete Party is contacted by any of the Tenants or New Tenants concerning
an Alternative Site without having solicited or initiated contact, Sealy shall,
and shall cause any other applicable Non-Compete Party to, immediately notify
Employer of such fact and shall refer such Tenant or New Tenant to Employer.
Sealy further agrees that, in the event of breach of any or all of the covenants
contained in this Section 7.1, Employer shall be entitled to all available
remedies against any or all of the Non-Compete Parties, at law or in equity,
including, without limitation, injunctive relief, all of which remedies shall be
cumulative and non-exclusive. Sealy hereby acknowledges that Employer performs
one or more of the following business activities (the "Business Activities")
within the parishes and counties set forth in Exhibit "C": (i) managing and
operating industrial/warehouse/distribution real property assets; (ii)
soliciting, meeting and negotiating with prospective tenants for occupancy in
industrial/warehouse/distribution real property assets of Employer; and (iii)
investigating potential acquisitions and developments of
industrial/warehouse/distribution real property assets. The parties agree that,
upon receipt of notice by Sealy from time to time from Employer indicating an
expansion of the Business Activities to additional parish(es) or county(ies), as
the case may be, the
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Non-Compete Area shall, upon receipt of such notice by Sealy, be expanded
to include such parish(es) and county(ies), as the case may be, reflected
in such notice, and Sealy shall thereupon treat such additional parish(es)
and county(ies) as part of the Non-Compete Area for purposes of this
Section 7.01. Notwithstanding anything herein to the contrary, if Sealy is no
longer employed by Employer and the Non-Compete Period has not otherwise
terminated pursuant to clause (2) of this Section 7.01, the Non-Compete Period
shall terminate on the day that is three years from the date hereof.
7.02 Employer acknowledges that heretofore or hereafter during the
course of Sealy's employment, Employer has produced, and Sealy may hereafter
produce or have access to, records, data, trade secrets and information not
generally available to the public, including, but not limited to, the Employer's
Materials ("Confidential Information"), regarding Employer, its subsidiaries and
affiliates, the business of Employer, and its real properties and tenants in the
Territory and elsewhere in the United States. Accordingly, during and subsequent
to the Term, Sealy shall hold in confidence and not directly or indirectly
disclose, copy or make lists of any or all of such Confidential Information,
except to the extent that (i) such information is or hereafter becomes lawfully
available from public sources; (ii) such disclosure is authorized in writing by
Employer; (iii) such disclosure is required by a law or any competent
administrative agency or judicial authority; or (iv) otherwise as is reasonably
necessary or appropriate in connection with the performance by Sealy of his
duties hereunder. All records, files, documents and other materials or copies
thereof relating to Employer's business that Sealy prepares, has access to, or
utilizes (including, but not limited to, the Employer Materials), shall be and
remain the sole property of Employer; and shall be promptly returned to Employer
upon termination of Sealy's employment hereunder. Subject to Section 7.01,
during the term of this Agreement, Sealy agrees to abide by Employer's
reasonable policies, as in effect from time to time and applicable to the SRDs,
respecting avoidance of interests conflicting with those of Employer.
ARTICLE VIII - GENERAL PROVISIONS
8.01 Any notices to be given under this Agreement by either party to
the other must be in writing and may be effected either by personal delivery or
by a reputable next-day overnight delivery service which obtains a signed
receipt for its deliveries. Notices delivered personally shall be deemed
communicated as of the actual receipt by the addressee. Notices sent by next-day
overnight delivery service shall be deemed communicated on the next business day
after being sent. Notices shall be addressed as follows:
If intended for Sealy:
Xxxxx Xxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
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with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
If intended for Employer:
First Industrial Realty Trust, Inc.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx,
Chief Operating Officer
with a copy to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx-Xxxxx, Esq.
8.02 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Texas, except that the internal laws of
Louisiana shall govern with respect to any violations of Section 7.01 alleged to
have occurred within the State of Louisiana.
8.03 This Agreement is a contract for personal services of Sealy, and
as such, is not assignable by Sealy.
8.04 This Agreement shall not be assignable by Employer except with the
prior written approval of an assignment and of the proposed assignee by Sealy.
Notwithstanding the foregoing, Employer may assign its rights under this
Agreement to any entity which acquires title to all of Employer's Real Property
Assets in the Territory, without Sealy's prior approval, subject to the
following two (2) conditions:
1. Employer shall stand as surety for the performance of the
assignee under this Agreement; and
2. If, after being informed of the assignment and of the
identity of the assignee, Sealy is not willing to be employed by the assignee,
upon three (3) months' prior written notice to Employer and to the assignee,
Sealy may terminate this Agreement.
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8.05 In the event that any one or more provisions contained in this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have caused this Employment Agreement to be duly signed
the day and year first above written.
FIRST INDUSTRIAL REALTY TRUST, INC.
By: /s/ JOHANNSON X. XXX
-----------------------------------
Name: Johannson X. Xxx
Title: Chief Investment Officer
/s/ XXXXX XXXXX
---------------------------------------
Xxxxx Xxxxx
S-1
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EXHIBIT A
RETAINED PROPERTIES
I. Transition Properties and Retained Properties
A. Currently Owned:
1. 0000 Xxxx xx Xxxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx
2. 0000 Xxxx xx Xxxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx
3. 00000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxx
B. To be Acquired:
1. 20 acres in Interstate Park Subdivision, Baton Rouge,
Louisiana
2. Xxxxx Xxxx Warehouse, St. Xxxxxxx Xxxxxx, Louisiana
II. Retained Properties Only
1. Xxxxxxx Properties
i) 0000 Xxxxxx Xxxx, Xxxxxx, Xxxxx
ii) 0000-0000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx
iii) 0000 Xxxxxxxxxxx, Xxxxxx, Xxxxx
iv) 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
2.
i) 0000-0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx
ii) Slack Industrial Park, Shreveport, Louisiana
3. Xxxxxxx Properties
i) 00000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx
ii) 0000 Xxxxxxxxx Xxxxxxx, Xx. Xxxxx, Xxxxx
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EXHIBIT B
REIMBURSEMENT AGREEMENT
B-1
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EXHIBIT C
NON-COMPETE AREA
LOUISIANA:
East Baton Rouge Parish
Xxxxxxxxx Xxxxxx
St. Xxxxxxx Xxxxxx
Caddo Parish
Orleans Parish
West Baton Rouge Parish
Bossier Parish
TEXAS:
Tarrant County
Xxxxxx County
Dallas County
Collin County
Xxxxxx County
El Paso County
C-1
