Exhibit 99.2
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment (this "Third Amendment") is effective July 1, 2004
by and among Kramont Operating Partnership, L.P., a Delaware limited partnership
(the "Company"), Kramont Realty Trust, a Maryland real estate investment trust
("Kramont") and Xxxxxx X. Xxxxxx ("Executive").
Background
WHEREAS, the parties hereto entered into an Employment Agreement dated
effective July 1, 2001, as amended by First Amendment dated July 1, 2002 and
Second Amendment dated July 1, 2003 (herein referred to as "Employment
Agreement") wherein the parties agreed to the terms and conditions of
Executive's employment with the Company; and
WHEREAS, the parties hereto desire to further amend certain of the
terms and conditions of the Employment Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. All capitalized terms used herein, but not otherwise defined,
shall have the meanings ascribed in the Employment Agreement, with the exception
of the definitions of "Change of Control" and "Good Reason", which shall be
defined as follows:
"Change of Control" means the closing of a transaction or a series of
related transactions which involves (i) a transfer of all or substantially all
of Kramont's or the Company's assets and business (whether structured as an
acquisition, sale of assets, merger, consolidation or otherwise, and whether or
not Kramont or the Company is the surviving entity of the transaction), (ii) an
exchange of 35% or more of equity securities of Kramont for assets or stock of
another entity or Person, or (iii) the election to the Company's Board of
Trustees after a transaction described in (i) or (ii) of this paragraph of new
trustees not formerly associated with Kramont constituting a majority of the
number of Trustees of the Company then in office. A Change of Control will not
be deemed to have occurred, with respect to the Executive, if the Executive is
part of or affiliated with the group that consummates the change of control
transaction.
"Good Reason" means: (a) a material breach by Company of any material
provision of this Agreement, (b) a material diminution in the level of
responsibilities or authority or compensation of Executive; or (c) Company's
requiring Executive to be based at any office or location outside of 50 miles
from the City of Philadelphia, provided, however, that no event or condition
described in clauses (a) through (c) of this definition shall constitute Good
Reason unless (i) Executive gives the Company written notice of his or her
objection to such event or condition, (ii) such event or condition is not
corrected by the Company within 20 business days of its receipt of such notice
(the "Cure Period") (or in the event that such event or condition is not
susceptible of correction within such 20 business day Cure Period, the Company
has not taken all reasonable steps within such Cure Period to correct such event
or condition as promptly as practicable thereafter and does, in fact, correct
such event or condition within ninety (90) days following the date that the
Executives gives the Company written notice of his or her objection)) and (iii)
Executive resigns his or her employment with the Company and its Affiliates by
written notice to the Company not more than 90 days following the expiration of
the 20 business day
Cure Period The closing of a transaction entered into with the prior consent of
the Board of Trustees of Kramont or events which would have constituted a Change
in Control shall not constitute "Good Reason" unless a violation of clauses (a),
(b) or (c) of this definition occurs within one year of the closing of the
transaction and the Executive complies with all the other requirements of this
definition
2. Notwithstanding anything to the contrary contained in Paragraph
6(c), "Termination and Severance Benefits" - Without Cause: Good Reason," the
following shall replace the language contained in the Employment Agreement:
6(d) Without Cause: Good Reason. If, prior to the expiration
of the Term of Employment, Executive's employment is terminated by the Company
without Cause or the Company fails to renew an employment agreement without
cause, or if Executive terminates employment hereunder for Good Reason:
Executive shall become immediately entitled to receive a lump sum payment by the
Company (or its successor in interest) in an amount equal to two (2) times the
annual Base Salary, plus all accrued and unpaid bonus and other awards and
unreimbursed expenses. In the event that the Executive terminates employment
hereunder for Good Reason, all stock options and other awards subject to vesting
periods not then expired shall become fully vested. Executive shall have no
further right to receive any other compensation or benefits after such
termination or resignation of employment. Executive shall have no obligation to
mitigate the Company's severance obligations under this paragraph and no amounts
earned by Executive following such termination shall be deemed to reduce the
payments required under this paragraph 6(d). Such payments shall be in lieu of
any and all entitlements that Executive may have by contract or otherwise." Any
payments hereunder shall be conditioned on the execution by the Executive of a
General Release in a form satisfactory to Kramont.
3. Notwithstanding anything to the contrary contained in
Paragraph 6(e) "Termination and Severance Benefits - Change of Control," the
following shall replace the language contained in the Employment Agreement:
6(d) Change in Control. In the event of a Change of
Control, and the Executive is not offered the same or similar position with the
same or similar salary and benefits with the Company prior to the closing of the
transaction, or its successor in interest, or the entity surviving the Change of
Control, Executive shall have the right to terminate his or her employment by
written notice to the Company given within thirty (30) days after the closing
("Closing") of the transactions giving rise to the Change of Control, in which
case, effective within ten (10) days following the Company's receipt of
Executive's termination notice: (i) Executive shall become immediately entitled
to receive a lump sum payment by the Company (or its successor in interest) in
an amount equal to two (2) times the sum of the annual Base Salary and bonus,
plus all accrued and unpaid bonus and other awards and unreimbursed expenses;
and (ii) all stock options and other awards subject to vesting periods not then
expired shall, effective upon such Closing, become fully vested. For purposes of
computing the sum of the base salary and bonus due hereunder, bonus shall mean
the regular average annual bonus as determined previously by the Board's
Compensation Committee paid to the Executive during the three years prior to the
event giving rise to the payment. Executive shall have no obligation to mitigate
the Company's severance obligations under this paragraph and no amounts earned
by Executive following such termination shall be deemed to reduce the payments
required under this paragraph 6(d). Such payments shall be in lieu of any and
all entitlements that Executive may have by contract or otherwise. Any payments
hereunder shall be conditioned on the execution by the Executive of a General
Release in a form satisfactory to Kramont.
4. Subject to the provisions contained in Paragraph 3 of the Employment
Agreement, the Term of Employment is hereby extended to December 31, 2005 (the
"Extended Term of Employment").
5. During the Extended Term of Employment, Executive's Base
Salary shall be $212,180.00 payable in equal bi-weekly installments in
accordance with the Company's normal payroll practices, subject to periodic
review by the Board of Trustees. Executive shall also be eligible to participate
in any bonus plan, as approved by the Board of Trustees.
6. This Third Amendment and the Employment Agreement represent
the entire understanding between the parties and supersede all other oral or
written agreements between the parties. The Employment Agreement, as amended by
this Third Amendment, is hereby ratified and confirmed and remains in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Third Amendment as of the date and year first above written.
KRAMONT OPERATING PARTNERSHIP, L.P
By: /s/ Xxxxx X. Xxxxxx, Xx.
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Dated: 12/20/04 Xxxxx X. Xxxxxx, Xx.
-------------------------- President
KRAMONT REALTY TRUST
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------
Dated: 12/20/04 Xxxxx X. Xxxxxx, Xx.
-------------------------- President
Executive
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Dated: 12/20/04 Xxxxxx X. Xxxxxx
--------------------------
