SEVERANCE AND CHANGE IN CONTROL AGREEMENT
This
Severance and Change in Control Agreement (this "Agreement") is made and entered
into as of this 11th day of November, 1998, by and between Xxxxxxxxxx Realty
Investors, a Texas real estate investment company (the "Company") and XXXXXXX X.
XXXXXXX ("Executive"). Unless defined elsewhere in this Agreement,
all initial capitalized terms shall have the meanings set forth in Section 8 of
this Agreement.
RECITALS
WHEREAS,
Executive is currently employed by the Company as Senior Vice President and
Treasurer.
WHEREAS,
to encourage Executive to remain employed with the Company, the Company desires
to provide Executive with an opportunity for certain severance compensation in
the event of a Change in Control of the Company and termination of Executive’s
employment following such Change in Control on the terms and conditions set
forth herein;
WHEREAS,
the Company and Executive each recognize and hereby acknowledge that Executive's
employment with the Company is and shall continue to be terminable at will,
without prior notice, by either the Company or Executive; and
WHEREAS,
the Company and Executive each hereby acknowledge that this Agreement is not
intended to be, and shall not be construed as, an express or implied contract of
employment between the Company and Executive;
NOW,
THEREFORE, for and in consideration of the mutual promises hereinafter contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the Company and Executive hereby
agree as follows:
AGREEMENTS
1. Change in
Control. In the event of the occurrence of a Change in
Control, Executive's employment may be terminated by the Company during the
Severance Period without Executive becoming entitled to the Severance Benefit or
the other benefits described in Section 3 below only upon the occurrence of his
termination for cause. If Executive's employment is terminated by the
Company after a Change in Control during the Severance Period for any other
reason, Executive shall be entitled to the benefits provided in Section
3.
2. Termination
Following a Change in Control. The Company shall pay the
Severance Benefit to Executive if, during the Severance Period, (i) Executive's
employment with the Company is terminated by the Company other than for Cause;
(ii) Executive becomes
permanently
disabled; or dies; (iii) Executive terminates his employment with the
Company (which he shall be entitled to do) due to the:
(a) failure to
elect or reelect or otherwise maintain Executive in the office or the position,
or a substantially equivalent office or position, of or with the Company which
Executive held immediately prior to a Change in Control, or the removal of
Executive as a Trust Manager of the Company (or any successor thereto) if
Executive had been a Trust Manager of the Company immediately prior to the
Change in Control;
(b) significant
change in the nature or scope of the authorities, powers, functions,
responsibilities or duties attached to the position with the Company which
Executive held immediately prior to the Change in Control, a reduction in the
aggregate of Executive's base pay and incentive pay received from the Company,
or the termination or denial of Executive's rights to Employee Benefits or a
reduction in the scope or value thereof, except for any such termination or
denial, or reduction in the scope of value, of any Employee Benefits applicable
generally to all recipients of or participants in such Employee
Benefits;
(c) the
determination by Executive (which determination will be conclusive and binding
upon the parties hereto provided it has been made in good faith and in all
events will be presumed to have been made in good faith unless otherwise shown
by the Company by clear and convincing evidence) that a change in circumstances
has occurred following a Change in Control, including without limitation, a
change in the scope of the business or other activities for which Executive was
responsible immediately prior to the Change in Control, which has rendered
Executive substantially unable to carry out, has substantially hindered
Executive's performance of, or has caused Executive to suffer a substantial
reduction in, any of the authorities, powers, functions, responsibilities, or
duties attached to the position held by Executive immediately prior to the
Change in Control, which situation is not remedied within five calendar days
after written notice to the Company from Executive of such
determination;
(d) the
liquidation, dissolution, merger, consolidation or reorganization of the Company
or transfer of all or substantially all of its business and/or assets, unless
the successor or successors (by liquidation, merger, consolidation,
reorganization, transfer or otherwise) to which all or substantially all of the
Company's business and/or assets have been transferred (directly or by operation
of law) assumes all duties and obligations of the Company under this
Agreement;
(e) the Company
relocates its principal executive offices, or requires Executive to have
Executive's principal location of work changed, to any location which is in
excess of 25 miles from the location thereof immediately prior to the Change in
Control, or requires Executive to travel away from Executive's office in the
course of discharging Executive's responsibilities or duties hereunder at least
20% more (in terms of aggregate days in any calendar year or in any calendar
quarter when annualized for purposes of comparison to any prior year) than was
required of Executive in any of the three full years immediately prior to the
Change in Control without, in either case, Executive's prior written consent;
and/or
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(f) without
limiting the generality or effect of the foregoing, any material breach of this
Agreement by the Company or any successor thereto.
Any
Severance Benefit due under this Section 2 shall be due and payable within five
business days after the occurrence of the event giving rise to the Company's
obligation to pay the Severance Benefit.
3. Severance
Benefits.(a) In
addition to the Severance Benefit, during the Severance Period, the Company will
arrange to provide Executive with Employee Benefits that are welfare benefits
(including, but not limited to, medical/dental program, life insurance,
etc. but not share options, share purchase, share appreciation,
dividend equivalent rights or similar compensatory benefits) substantially
similar to those which Executive was receiving or entitled to receive
immediately prior to the Change in Control. Such one year period will
be considered service with the Company for the purpose of determining service
credits and benefits due and payable to Executive under the Company's retirement
income, supplemental executive retirement, and other benefit plans of the
Company applicable to Executive, Executive's dependents, or Executive's
beneficiaries immediately prior to the Change in Control. If and to
the extent that any benefit described in the immediately preceding sentence is
not or cannot be paid or provided under any policy, plan, program or arrangement
of the Company, then the Company will itself pay or provide for the payment of
such Employee Benefits to Executive, and, if applicable, Executive's dependents
and beneficiaries. Without otherwise limiting the purposes or effect
of Section 4, Employee Benefits otherwise receivable by Executive pursuant to
this Section 3(a) will be reduced to the extent comparable welfare benefits are
actually received by Executive from another employer during the Severance Period
following Executive's termination date. The immediately preceding
sentence is not intended to modify the provisions of Paragraph 4 of the
Agreement.
(b) There will be
no right of set-off or counterclaim in respect of any claim, debt or obligation
against any payment to or benefit for Executive provided for in this Agreement,
except as expressly provided in the last sentence of Section 3(a).
(c) Notwithstanding any
other provision hereof, the parties' respective rights and obligations under
this Section 3 and under Sections 5 and 6 will survive any termination or
expiration of this Agreement following a Change in Control.
4. No
Mitigation Obligation.Executive will not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment.
5. Certain
Additional Payments by the Company.(a) Notwithstanding anything
in this Agreement to the contrary, in the event it is determined (as hereafter
provided) that any payment or distribution by the Company to or for the benefit
of Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any share option, share appreciation right, dividend
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equivalent
right, restricted shares or similar right, the lapse or termination of any
restriction on or the vesting or exercise ability of any of the foregoing (any
such payment or distribution, a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (or any successor provision thereto), by reason of being considered
"contingent on a change in ownership or control" of the Company, within the
meaning of Section 280G of the Code (or any successor provision thereto) or to
any similar tax imposed by state or local law, or any interest or penalties with
respect to such tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the "Excise Tax"), then
Executive will be entitled to receive an additional payment or payments
(collectively, a "Gross-Up Payment"); provided, however, that no
Gross-up Payment will be made with respect to the Excise Tax, if any,
attributable to (A) any incentive share option ("ISO") granted prior to the
execution of this Agreement or (B) any share appreciation or similar right,
whether or not limited, granted in tandem with any ISO described in clause (A)
of this sentence. The Gross-Up Payment will be in an amount such
that, after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
upon the Gross-Up Payment, Executive will have received an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.
(b) Subject to
the provisions of Section 5(f), all determinations required to be made under
this Section 5, including whether an Excise Tax is payable by Executive and the
amount of such Excise Tax and whether a Gross-Up Payment is required to be paid
by the Company to Executive and the amount of such Gross-Up Payment, if any,
will be made by a nationally recognized accounting firm (the "Accounting Firm")
selected by Executive in Executive's sole discretion. Executive will
direct the Accounting Firm to submit its determination and detailed supporting
calculations to both the Company and Executive within 30 calendar days after
Executive's termination date, and any such other time or times as may be
requested by the Company or Executive. If the Accounting Firm
determines that any Excise Tax is payable by Executive, the Company will pay the
required Gross-Up Payment to Executive within five business days after receipt
of such determination and calculations with respect to any Payment to
Executive. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it will, at the same time as it makes such determination,
furnish the Company and Executive an opinion that Executive has substantial
authority not to report any Excise Tax on Executive's federal, state or local
income or other tax return. As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision thereto) and
the possibility of similar uncertainty regarding applicable state or local tax
law at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts
or fails to pursue its remedies pursuant to Section 5(f) and Executive
thereafter is required to make a payment of any Excise Tax, Executive will
direct the Accounting Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations to
both the Company and Executive as promptly as
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possible. Any
such Underpayment will be promptly paid by the Company to, or for the benefit
of, Executive within five business days after receipt of such determination and
calculations.
(c) The Company
and Executive will each provide the Accounting Firm access to and copies of any
books, records and documents in the possession of the Company or Executive, as
the case may be, reasonably requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with the preparation and
issuance of the determinations and calculations contemplated by Section
5(b). Any determination by the Accounting Firm as to the amount of
the Gross-Up Payment will be binding upon the Company and
Executive.
(d) The federal,
state and local income or other tax returns filed by Executive will be prepared
and filed on a consistent basis with the determination of the Accounting Firm
with respect to the Excise Tax payable by Executive. Executive will
make proper payment of the amount of any Excise Payment and, at the request of
the Company, provide to the Company true and correct copies (with any
amendments) of Executive's federal income tax return as filed with the Internal
Revenue Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents reasonably
requested by the Company, evidencing such payment. If prior to the
filing of Executive's federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, Executive will within five business days pay
to the Company the amount of such reduction.
(e) The fees and
expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by Section 5(b) will be borne by
the Company; provided that such fees and expenses are customary and reasonable
and do not exceed the hourly rates then being charged by the accounting firm
regularly retained by the Company. If such fees and expenses are
initially paid by Executive, the Company will reimburse Executive the full
amount of such fees and expenses within five business days after receipt from
Executive of a statement therefor and reasonable evidence of Executive's payment
thereof.
(f) Executive
will notify the Company in writing of any claim by the Internal Revenue Service
or any other taxing authority that, if successful, would require the payment by
the Company of a Gross-Up Payment. Such notification will be given as
promptly as practicable but no later than 10 business days after Executive
actually receives notice of such claim and Executive will further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by
Executive). Executive will not pay such claim prior to the earlier of
(i) the expiration of the 30-calendar day period following the date on which
Executive gives such notice to the Company and (ii) the date that any payment of
amount with respect to such claim is due. If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive will:
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(A) provide the
Company with any written records or documents in Executive's possession relating
to such claim reasonably requested by the Company;
(B) take such
action in connection with contesting such claim as the Company may reasonably
request in writing from time to time, including without limitation accepting
legal representation with respect to such claim by an attorney competent in
respect of the subject matter and reasonably selected by the
Company;
(C) cooperate
with the Company in good faith in order effectively to contest such claim;
and
(D) permit the
Company to participate in any proceedings relating to such claims; provided, however, that the
Company will bear and pay directly all costs and expenses (including interest
and penalties) incurred in connection with such contest and will indemnify and
hold harmless Executive, on an after-tax basis, for and against any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this Section
5(f), the Company will control all proceedings taken in connection with the
contest of any claim contemplated by this Section 5(f) and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim (provided, however, that
Executive may participate therein at Executive's own cost and expense) and may,
at its option, either direct Executive to pay the tax claimed and xxx for a
refund or contest the claim in any permissible manner, and Executive will
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction, and in one or more appellate courts, as the
Company may determine; provided, however, that if the
Company directs Executive to pay the tax claimed and xxx for a refund, the
Company will advance the amount of such payment to Executive on an interest-free
basis and will indemnify and hold Executive harmless, on an after-tax basis,
from any Excise Tax or income or other tax, including interest or penalties with
respect thereto, imposed with respect to such advance; and provided further, however, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of Executive with respect to which the contested amount is claimed
to be due is limited solely to such contested amount. The Company's
control of any such contested claim will be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive will be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(g) If, after the
receipt by Executive of an amount advanced by the Company pursuant to Section
5(f), Executive receives any refund with respect to such claim, Executive will
(subject to the Company's complying with the requirements of Section 5(f)) pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto) within 30 calendar days
after such receipt and the Company's satisfaction of all accrued
obligations under this Agreement. If, after the receipt by Executive
of any amount advanced by the Company pursuant to Section 5(f), a determination
is made that
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Executive
will not be entitled to any refund with respect to such claim and the Company
does not notify Executive in writing of its intent to contest such determination
prior to the expiration of 30 calendar days after such determination, then such
advance will be forgiven and will not be required to be repaid and the amount of
any such advance will offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid by the Company to Executive pursuant to this Section
5.
6. Legal
Fees and Expenses; Security. It is the intent of the Company
that Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Executive's rights
to compensation upon a Change in Control by litigation or otherwise because the
cost and expense thereof would substantially detract from the benefits intended
to be extended to Executive hereunder. Accordingly, if it should
appear to Executive that the Company has failed to comply with any of its
obligations under this Agreement or in the event that the Company or any other
person takes or threatens to take any action to declare the agreement to pay
Executive compensation upon a Change in Control void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to
recover from, Executive the benefits provided or intended to be provided to
Executive hereunder, the Company irrevocably authorizes Executive from time to
time to retain counsel of Executive's choice, at the expense of the Company as
hereinafter provided, to advise and represent Executive in connection with any
such interpretation, enforcement or defense, including without limitation the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any Company Manager, officer, shareholder, or other
person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to Executive's entering into an attorney-client relationship with such
counsel, and in that connection the Company and Executive agree that a
confidential relationship will exist between Executive and such
counsel. Without regard to whether Executive prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys' and related fees and
expenses incurred by Executive in connection with any of the
foregoing.
7. Employment
Rights; Termination Prior to Change in Control. Nothing expressed
or implied in this Agreement will create any right or duty on the part of the
Company or Executive to have Executive remain in the employ of the Company prior
to or following any Change in Control. Any termination of the
employment of Executive by the Company for any reason other than Cause following
the commencement of any discussion with a third person that results in a Change
in Control within 180 calendar days after such termination or removal will
entitle Executive to receive all benefits he would have received under this
Agreement had he been an employee of the Company on the date of the Change in
Control.
8. Certain
Defined Terms. In addition to
terms defined elsewhere herein, the following terms have the following meanings
when used herein with initial capital letters:
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(a) "Change in
Control" means the occurrence during the term of this Agreement of any of the
following events:
(i) the Company
is merged, consolidated, or reorganized into or with another corporation or
other legal entity and the Company is not the "surviving entity;"
(ii) the Company
sells or otherwise transfers 50% or more of its assets to another corporation or
other legal entity or in a series of related transactions;
(iii) there is a
report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form
or report or item therein), each as promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), disclosing that any
person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing over 25% of the
combined voting power of the securities of the Company entitled to vote
generally in the election of Company Managers (the "Voting Shares") of the
Company or could become the owner of over 25% of the Company’s Common Shares of
Beneficial Interest through the conversion of the Company’s debt or equity
securities;
(iv) the Company
files a report or proxy statement with the Securities and Exchange Commission
pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) that a change in
control of the Company has occurred or will occur in the future pursuant to any
then-existing contract or transaction; provided, however, a Change in Control
shall be deemed to occur only when the transaction described in the Form 8-K or
Schedule 14A (or any successor schedule, form or report or item therein) is
consummated; or
(v) if, during
any period of 12 months, individuals who at the beginning of any such period
constitute the Trust Managers of the Company cease for any reason
(other than death or disability) to constitute at least a majority
thereof;
Notwithstanding
the foregoing provisions of Section 8(a), a "Change in Control" will not be
deemed to have occurred for purposes of this Section 8(a) solely because (A) an
entity in which the Company, directly or indirectly, beneficially owns 50% or
more of the voting securities (a "Subsidiary"), or (B) any employee share
ownership plan or any other employee benefit plan of the Company or any
Subsidiary either files or becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K, or
Schedule 14A (or any successor schedule, form, or report or item therein) under
the Exchange Act disclosing beneficial ownership by it of shares of Voting
Shares, whether in excess of 25% or otherwise, or
because the Company reports that a change in control of the Company has occurred
or will occur in the future by reason of such beneficial ownership.
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The
determination as to which party to a merger, consolidation or reorganization is
the "surviving entity" within the meaning of Section 8(a) shall be made on the
basis of the relative equity interests of the shareholders in the entity
existing after the merger, consolidation or reorganization, as follows: if
following any merger, consolidation or reorganization the holders of outstanding
Voting Shares of the Company immediately prior to the merger, consolidation or
reorganization own equity securities possessing more than 50% of the voting
power of the entity existing following the merger, consolidation or
reorganization, the Company shall be the surviving entity. In all
other cases, the Company shall not be the surviving entity. In making
the determination of ownership of equity securities by the shareholders of an
entity immediately after the merger, consolidation or reorganization pursuant to
this paragraph, equity securities which the shareholders owned immediately
before the merger, consolidation or reorganization as shareholders of another
party to the transaction shall be disregarded. Further, for purposes
of this paragraph only, outstanding voting securities of an entity shall be
calculated by assuming the conversion of all equity securities convertible
(immediately or at some future time) into shares entitled to vote.
(b) "Employee
Benefits" means the perquisites, benefits and service credit for benefits as
provided under any and all employee retirement income and welfare benefit
policies, plans, programs or arrangements in which Executive is entitled to
participate, including without limitation any share option, share purchase,
share appreciation, dividend equivalent rights, savings, pension, supplemental
executive retirement or other retirement income or welfare benefit, deferred
compensation, incentive compensation, group or other life, health,
medical/hospital, or other insurance (whether funded by actual insurance or
self-insured by the Company), disability, salary continuation, expense
reimbursement, and other employee benefit policies, plans, programs or
arrangements that may now exist or any equivalent successor policies, plans,
programs or arrangements that may be adopted hereafter by the Company, providing
perquisites, benefits and service credit for benefits at least as great in the
aggregate as are payable thereunder prior to a Change in Control.
(c) The term
"Severance Benefit" shall mean an amount equal to 2.99 times (i) Executive's
annualized base salary rate as of the date of the first event constituting a
Change in Control or, if higher, (ii) Executive's highest base salary received
for any year in the previous five fiscal years immediately preceding the first
event constituting a Change in Control, plus 2.99 times Executive's targeted
bonus amount as accrued on the books of the Company for the fiscal year in which
the first event constituting a Change in Control occurs. If Executive
has been employed by the Company for less than five years, this Section 8(c)
shall be deemed to mean such actual period of employment.
(d) "Severance
Period" means the period of time commencing on the date of an occurrence of each
Change in Control and continuing until the earliest of (i) the expiration of one
year after each occurrence of an event constituting a Change in Control, or (ii)
Executive's attainment of age 65.
(e) "Cause" means
the occurrence of any of the following events:
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"Cause"
means the following grounds for termination: (i) any act by Executive of fraud
or sexual harassment with respect to any aspect of the Company's business; (ii)
drug or alcohol abuse or behavior that impedes Executive's job performance;
(iii) failure by Executive to perform hereunder after notice of such failure
(with a 30-day cure period) and explanation of such failure of performance,
which is reasonably determined by the Board of Trust Managers to be materially
injurious to the business or interests of the Company; (iv) misappropriation of
funds or any corporate opportunity; or (v) conviction of Executive of a crime of
moral turpitude (or a plea of nolo contendere thereto).
9. Term. The term of this
Agreement shall be deemed to commence and be effective as of the date of this
Agreement and shall continue for a five-year term and shall automatically renew
for one-year terms unless either party gives notice of its intent not to renew
at least 180 days prior to the end of any term or, unless earlier terminated in
accordance with the provisions hereof.
10. Termination. Except
with respect to the provisions of this Agreement that provide for payments to be
made to Executive after termination of employment, this Agreement shall
terminate automatically without further action by either of the parties hereto
upon the death or permanent disability of Executive or the termination of
Executive's employment with the Company for any reason or no reason, in
accordance with Executive's status as an employee at will. As used
herein, the term "permanent disability" means physical or mental disability or
both that is determined by the Company, in its reasonable discretion, to
substantially impair the ability of Executive to perform the day-to-day
functions normally performed by Executive if the disability is suffered (or is
reasonably expected to be suffered) by Executive for a period of not less than
six consecutive calendar months. Notwithstanding the foregoing and
except as set forth in Section 7, Executive (or his estate, heirs or personal
representatives, as applicable) shall not be entitled to severance compensation
except to the extent that a Change in Control of the Company occurs 180 days or
less prior to the termination of this Agreement.
11. Representation
by Executive. Executive hereby
represents and warrants to the Company that there are no agreements or
understandings that would make unlawful his execution or delivery of this
Agreement.
12. Notices. All notices,
renewals and other communications required or permitted under this Agreement
must be in writing and shall be deemed to have been given if delivered or
mailed, by certified mail, first class postage prepaid, to the parties at the
addresses set forth in this Agreement, as the same may be changed in writing by
the parties from time to time.
13. Entire
Agreement. The parties
expressly agree that this Agreement is contractual in nature and not a mere
recital, and that it contains all the terms and conditions of the agreement
between the parties with respect to the matters set forth herein. All
prior negotiations, agreements, arrangements, understandings and statements
between the parties relating to the matters set forth herein that have occurred
at any time or contemporaneously with the execution of this Agreement are
superseded and merged into this completely
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integrated
Agreement. The Recitals set forth above shall be deemed to be part of
this Agreement.
14. Governing
Law. This Agreement
was negotiated and is performable in Xxxxxx County, Texas and shall be governed
by the laws of the State of Texas without giving effect to principles of
conflicts of law.
15. Severability. If any provision
of this Agreement is held to be illegal, invalid or unenforceable under any
present or future law, such provisions shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance here from, and in lieu of such provision, there shall be added
automatically as a part of this Agreement, a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible, and the Company and Executive hereby request the
court or any arbitrator to whom disputes relating to this Agreement are
submitted to reform the otherwise unenforceable covenant in accordance with the
proceeding provision.
16. Counterparts. This Agreement
may be executed in multiple identical counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute but one and
the same instrument. In making proof of this Agreement, it shall not
be necessary to produce or account for more than one counterpart executed by the
party sought to be charged with performance hereunder.
17. Assignment
and Delegation. All rights,
covenants and agreements of the Company set forth in this Agreement shall,
unless otherwise provided herein, be binding upon and inure to the benefit of
the Company's respective successors and assigns. All rights,
covenants and agreements of Executive set forth in this Agreement shall, unless
otherwise provided herein, not be assignable by Executive, and shall be
considered personal to Executive for all purposes.
18. Death. If
Executive dies before receiving payment under this Agreement, a lump-sum payment
shall be made to Executive's estate or designated beneficiary.
19. Waiver of
Breach. Failure by either party to demand strict compliance
with any of the terms, covenants or provisions hereof shall not be deemed a
waiver of the term, covenant or provision, nor any waiver or relinquishment by
the Company of any power at any other time or times.
20. Withholding
of Taxes. The Company shall withhold taxes from amounts paid
pursuant to this Agreement as required by law, and, to the extent deemed
necessary by the Company, in good faith.
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21. Vesting
of Benefits. Notwithstanding anything in this Agreement, the
Company's Stock Option Plan (the "Plan"), any agreement entered into under the
Plan, or under any retirement, pension, profit sharing or other similar plan,
upon the occurrence of a Change in Control, all deferred or unvested portions of
any award made to Executive under any of the foregoing plans and agreements
shall automatically become fully vested in Executive and shall be in effect and
redeemable by or payable to Executive, or Executive's designated beneficiary or
estate, on the same conditions (other than vesting) as would have applied had
the Change in Control not occurred. All unvested awards under the
Plan shall immediately vest upon the Change in Control and Executive shall have
the right to exercise any vested awards during the balance of the awards'
term.
IN
WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as
of the date first set forth above.
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XXXXXXXXXX
REALTY INVESTORS
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By:
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/s/
Xxxxxx Xxxxxxxxx
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Title:
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Notice
Address:
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0000
Xxxxxxx Xxxxx Xxxxx
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Xxxxxxx,
Xxxxx 00000
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EXECUTIVE:
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XXXXXXXXXX
REALTY INVESTORS
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/s/
Xxxxxxx X. Xxxxxxx
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XXXXXXX
X. XXXXXXX
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Notice
Address:
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0000
Xxxxxxx Xxxxx Xxxxx
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Xxxxxxx,
Xxxxx 00000
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