XXXXX X. XXXX
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), is made and entered into
with effect as of the 1st day of October, 1999 (the "Effective Date"), by and
between Wellington Properties Trust, a Maryland real estate investment trust
(the "Employer"), and Xxxxx X. Xxxx (the "Executive").
RECITALS
A. The Employer desires to employ the Executive as the Chief Executive
Officer of the Employer for a specified term.
B. The Executive is willing to accept such employment, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
1. Position and Duties. The Employer hereby employs the Executive as
Chief Executive Officer of the Employer, or in such other comparable or other
capacity as shall be mutually agreed between the Employer and the Executive.
During the period of the Executive's employment hereunder, the Executive shall
devote his best efforts and full working time, energy, skills and attention to
the business and affairs of the Employer. The Executive's duties and authority
shall consist of and include all duties and authority customarily performed and
held by persons holding equivalent positions with real estate investment trusts
("REITs") similar in nature and size to the Employer, as such duties and
authority are reasonably defined, modified and delegated from time to time by
the Board of Trustees of the Employer (the "Board"). The Executive shall have
the powers necessary to perform the duties assigned to him, and shall be
provided such supporting services, staff, secretarial and other assistance,
office space and accoutrements as shall be reasonably necessary and appropriate
in light of such assigned duties.
2. Compensation. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:
(a) Base Salary. The Executive shall receive a "Base Salary" at the
rate of Eighty Thousand Dollars ($80,000) per annum, payable in periodic
installments in accordance with the regular payroll practices of the Employer.
(b) Performance Bonus. Provided that company performance criteria (as
described below) are met, in the opinion of the Board or its Compensation
Committee, the
Executive shall also receive an annual cash performance bonus of one hundred
percent (100%) of the Executive's Base Salary for each fiscal year of the
Employer, or portion thereof, during the term of this Agreement, payable within
thirty (30) days after the end of such fiscal year. The Executive's prorated
cash performance bonus of Twenty Thousand Dollars ($20,000) for 1999 shall be
earned if the Employer's earnings for the period from October 1, 1999 through
December 31, 1999 equal or exceed $0.1375 per common share. The Executive's cash
performance bonus of Eighty Thousand Dollars ($80,000) for 2000 shall be earned
if the Employer's earnings for 2000 equal or exceed $0.64 per common share.
(c) Benefits. The Executive shall be entitled to all perquisites, plans
and benefits extended to similarly situated executives, including as such are
stated in the Employer's Executive Perquisite Policy (the "Perquisite Policy")
promulgated for the Board by its Compensation Committee, and which Perquisite
Policy is hereby incorporated by reference, as amended from time to time. In
addition, the Executive shall be entitled to participate in all plans and
benefits generally, from time to time, accorded to employees of the Employer
("Benefit Plans"), all as determined by the Board or its Compensation Committee
from time to time.
(d) Withholding. The Employer shall be entitled to withhold, from
amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which, from time to time, it is required
to withhold. The Employer shall be entitled to rely upon the advice and counsel
of its independent accountants with regard to any question concerning the amount
or requirement of any such withholding.
3. Term and Termination.
(a) Term. The term of this Agreement and the Executive's employment
hereunder shall be extend through December 31, 2000, unless sooner terminated at
any time by either party, with or without cause, such termination to be
effective as of either (i) one (1) business day after written notice to that
effect is delivered by the Employer to the Executive except as and to the extent
otherwise required under subparagraphs (e) and (g) of this Section 3; or (ii)
thirty (30) days after written notice to that effect is delivered to the
Employer by the Executive, whichever is applicable to the termination in
question.
(b) Voluntary Termination by Executive. In the event that the Executive
voluntarily terminates his employment under this Agreement, other than pursuant
to Section 3(d) of this Agreement, then the Employer shall only be required to
pay the Executive such Base Salary and other benefits as shall have accrued
through the effective date of the termination, and the Employer shall not be
obligated to pay any performance bonus for the then-current fiscal year, or have
any further obligations whatsoever to the Executive (other than payment of
amounts remaining unpaid pursuant to declared performance bonuses for prior
fiscal years and reimbursement of approved expenses).
(c) Premature Termination by Employer. In the event of the termination
of the employment of the Executive under this Agreement: (A) by the Employer for
any reason other than in accordance with the provisions of subparagraph (e)
("for cause"), subparagraph (f)
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(death), or subparagraph (g) (disability) of this Section 3, then,
notwithstanding any actual or allegedly available alternative employment or
other mitigation of damages by (or which may be available to) the Executive, the
Executive shall be entitled to a "Lump Sum Payment" equal to the product of: (y)
his monthly Base Salary then payable, multiplied by twelve (12). In the event of
a termination governed by this subparagraph (c)(i) of Section 3, the Employer
shall also: (z) continue for the Executive (provided that such items are not
available to him by virtue of other employment secured after termination) the
perquisites, plans and benefits provided under the Employer's Perquisite Policy
and Benefit Plans as of and after the date of termination, provided such plans
or benefits permit such continuation, all items in (z) being collectively
referred to as "Post-Termination Perquisites and Benefits," for twelve (12)
months following such termination. The payments and benefits provided under (y)
and (z) above shall be in addition to such Base Salary as shall have accrued and
remain unpaid as well as any expense reimbursements or other payments relating
to the period preceding such termination and remaining due and owing to the
Executive but shall be in lieu of any performance bonus that the Executive might
have otherwise earned for the then-current fiscal year; and shall be in addition
to the payment of any theretofore declared performance bonus compensation for
any prior fiscal year that remains unpaid as of the date of termination.
(d) Constructive Discharge. If, at any time during the term of this
Agreement, except in connection with a "for cause" termination pursuant to
subparagraph (e) of this Section 3 or the Executive's death or disability
termination pursuant to subparagraphs (f) or (g), respectively, of this Section
3, the Executive is Constructively Discharged (as hereinafter defined), then the
Executive shall have the right, by written notice to the Employer given within
one hundred and twenty (120) days of such Constructive Discharge, to terminate
his services hereunder, effective as of thirty (30) days after such notice, and
the Executive shall have no further rights or obligations under this Agreement
except as specified in Section 5 hereof. The Executive shall in such event be
entitled to a Lump Sum Payment of his Base Salary, as well as, all of the
Post-Termination Perquisites and Benefits, as if such termination of his
employment had been effectuated pursuant to subparagraph (c) of this Section 3
and subject to all of the conditions set forth in subparagraph (c) of this
Section 3.
For purposes of this Agreement, the Executive shall be deemed to have
been "Constructively Discharged" upon the occurrence of any one of the following
events:
(i) The Executive is removed from the position with the
Employer set forth in Section 1 hereof, other than as a result of the
Executive's appointment to a position of comparable or superior
authority and responsibility, or other than for cause, and provided
further, that the Employer shall be permitted to broaden and expand the
Executive's responsibilities, whether in the same or different position
without such change constituting a "Constructive Discharge" hereunder;
(ii) The Executive shall fail to be vested by the Employer
with the powers, authority and support services customarily attendant
to said office within the REIT industry, other than for cause;
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(iii) The Employer shall formally notify the Executive in
writing, that the employment of the Executive will be terminated (other
than for cause) or materially modified (other than for cause) in the
future, or that the Executive will be Constructively Discharged in the
future; or
(iv) The Employer changes the primary employment location of
the Executive to a place that is more than one hundred (100) miles from
the primary employment location as of the Effective Date of this
Agreement; or
(v) The Employer commits a material breach of its obligations
under this Agreement, which it fails to cure or commence to cure within
thirty (30) days after receipt of written notice thereof from the
Executive (or if cure is not possible within such thirty (30) days,
then the Employer must have failed to either commence to cure within
thirty (30) days of have failed to complete to cure within sixty (60)
days).
(e) Termination for Cause. The employment of the Executive under this
Agreement may be terminated by the Employer on a "for cause" basis, as
hereinafter defined. If the Executive's employment is terminated by the Employer
"for cause" under this subparagraph (e), then the Employer shall only be
obligated to pay the Executive such Base Salary as shall have accrued through
the effective date of the termination, and the Employer shall not be required to
pay the Executive any performance bonus for the current fiscal year, or have any
further obligations whatsoever to the Executive (other than payment of amounts
remaining unpaid pursuant to declared performance bonuses for prior fiscal years
and reimbursement for previously approved expenses). Termination "for cause"
shall mean the termination of Executive's employment on the basis of, or as a
result of, one or more of the following circumstances: (i) a violation by the
Executive of any applicable material law or regulation respecting the business
of the Employer; (ii) the Executive being found guilty of, or being publicly
associated with, a felony or an act of dishonesty or an act of willful or
reckless behavior in connection with the performance of his duties as an officer
of the Employer, or otherwise; or (iii) the Executive's course of conduct
constituting the willful or negligent failure of the Executive to perform his
duties hereunder and which is, or may result in a material detriment to the
Company as reasonable determined by the Board. The Executive shall be entitled
to thirty (30) days' prior written notice (the "Termination Notice") of the
Employer's intention to terminate his employment for cause and such Termination
Notice shall specify the grounds for such termination; afford the Executive a
reasonable opportunity to cure any conduct or act (if curable) alleged as
grounds for such termination; and afford the Executive a reasonable opportunity
to present to the Board his position regarding any dispute relating to the
existence of such cause. Notwithstanding the foregoing procedure, the Employer
(through the Board) shall have the unilateral right to make the final
substantive determination as to whether the Executive has properly remedied or
otherwise addressed those matters described in the Termination Notice as grounds
for termination of the Executive's employment; and in the event that the
Employer determines (as of the expiration of the above-contemplated 30-day
period), that the Executive has not appropriately remedied or otherwise
addressed those matters, then the Executive's term of employment shall in all
events automatically terminate as of the thirtieth (30th) day after the Employer
delivers the Termination Notice, without any
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responsibility of obligation of the Employer to provide the Executive with any
further notice or explanation of the grounds for his termination.
(f) Payments Upon Death. This Agreement shall terminate upon the death
of the Executive. Upon the Executive's death and the termination of the
Agreement the Employer shall only be obligated to pay: (i) such Base Salary as
shall have accrued through the date of death; plus (ii) one-twenty-fourth (1/24)
of the average of the two (2) most recent annual performance bonuses that the
Executive received from the Employer, multiplied by the number of full calendar
months the Executive was employed during the then-current fiscal year of the
Employer, and the Employer shall not have any further obligations to the
Executive (other than payment of amounts remaining unpaid pursuant to declared
performance bonuses for prior fiscal years and reimbursement of approved
expenses). The amount the Employer shall be obligated to pay upon the
Executive's death shall be made to such beneficiary, designee or fiduciary as
Executive may have designated in writing or, failing such designation, to the
executor or administrator of his estate, in full settlement and satisfaction of
all claims and demands on behalf of the Executive. Such payments shall be in
addition to any other death benefits of the Employer made available for the
benefit of the Executive, and in full settlement and satisfaction of all
payments provided for in this Agreement.
(g) Disability Determination. The Employer may deliver a Termination
Notice and terminate the Executive's employment if the Executive is determined
to be "disabled," which term shall mean the Executive's inability, as a result
of physical or mental incapacity, substantially to perform his duties hereunder
for a period of either six (6) consecutive months, or one hundred and twenty
(120) business days within a consecutive twelve (12) month period. In the event
of a dispute regarding the Executive's "disability," such dispute shall be
resolved through arbitration as provided in subparagraph (d) of Section 9
hereof, except that the arbitrator appointed by the American Arbitration
Association shall be a duly licensed medical doctor. The Executive shall be
entitled to the compensation and benefits provided under this Agreement during
any period of incapacitation occurring during the term of this Agreement prior
to the establishment of Executive's "disability" and subsequent termination of
his employment. Upon the Executive's termination of employment under this
Section 3(g), the Employer shall only be obligated to pay the Executive: (i)
such Base Salary as shall have accrued through the effective date of
termination; plus (ii) one-twenty-fourth (1/24) of the average of the two (2)
most recent annual performance bonuses that the Executive received from the
Employer, multiplied by the number of full calendar months the Executive was
employed during the then-current fiscal year of the Employer, and the Employer
shall not have any further obligations to the Executive (other than payment of
amounts remaining unpaid pursuant to declared performance bonuses for prior
fiscal years and reimbursement of approved expenses).
(h) Termination Upon Change in Control.
(i) In the event of a Change in Control (as defined below) of the
Employer and the termination of the Executive's employment by Executive or by
the Employer under either of subparagraphs (1) or (2) below in connection
therewith ("Change in Control
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Termination"), the Executive shall be entitled to the Severance Amount
determined under subparagraph (c) of this Section 3. The following shall
constitute Change in Control Termination under this subparagraph (g):
(1) The Executive terminates his employment under this
Agreement pursuant to a written notice to that effect
delivered to the Board within sixty (60) days after
the occurrence of an event constituting a Change in
Control.
(2) Executive's employment is terminated (other than for
cause or death or disability), but including
Constructive Discharge, by the Employer or its
successor, either within one (1) year prior to or
following an event constituting a Change in Control.
(ii) For purposes of this subparagraph, the term "Change in Control"
shall mean the approval by the shareholders of the Employer of: (1) a merger or
consolidation of the Employer, if the shareholders 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; (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; or (3) a complete or substantial liquidation or
dissolution or an agreement for the sale or other disposition of its general
partnership interests in Wellington Properties Investments, L.P. 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: (1) a trustee or other fiduciary holding securities
under one or more employee benefit plans maintained for employees of the entity;
or (2) any corporation or other entity which, immediately prior to such
acquisition, is substantially 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.
(iii) If it is determined, in the opinion of the Employer's independent
accountants, in consultation with the Employer's independent counsel, that any
amount payable to the Executive by the Employer under this Agreement, or any
other plan or agreement under which the Executive participates or is a party,
would constitute an "Excess Parachute Payment" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and be
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), the Employer shall pay to the Executive a "grossing-up" amount equal to
the amount of such Excise Tax and all federal and state income or other taxes
with respect to the payment of the amount of such Excise Tax, including all such
taxes with respect to any such grossing-up amount. If, at a later date, the
Internal Revenue Service assesses a deficiency
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against the Executive for the Excise Tax which is greater than that which was
determined at the time such amounts were paid, the Employer shall pay to the
Executive the amount of such unreimbursed Excise Tax plus any interest,
penalties and professional fees or expenses, incurred by the Executive as a
result of such assessment, including all such taxes with respect to any such
additional amount. The highest marginal tax rate applicable to individuals at
the time of payment of such amounts will be used for purposes of determining the
federal and state income and other taxes with respect thereto. The Employer
shall withhold from any amounts paid under this Agreement the amount of any
Excise Tax or other federal, state or local taxes then required to be withheld.
Computations of the amount of any grossing-up supplemental compensation paid
under this subparagraph shall be made by the Employer's independent accountants,
in consultation with the Employer's independent legal counsel. The Employer
shall pay all accountant and legal counsel fees and expenses.
4. Confidentiality and Loyalty. The Executive acknowledges that during
the course of his employment, prior to his entry into this Agreement, he has
produced, received and had access to, and may hereafter continue to produce,
receive and otherwise have access to various materials, records, data, trade
secrets and information not generally available to the public (collectively,
"Confidential Information") regarding the Employer and its subsidiaries and
affiliates. Accordingly, during and subsequent to any termination of this
Agreement, on any basis, the Executive shall hold in confidence and shall not,
directly or indirectly, disclose, use, copy or make lists of any such
Confidential Information, except to the extent that (a) such information is or
thereafter becomes a lawfully available from public sources or (b) such
disclosure is authorized in writing by the Employer; or (c) such disclosure is
required by law or by any competent administrative agency or judicial authority;
or (d) such disclosure is otherwise reasonably necessary or appropriate in
connection with the performance by the Executive of his duties hereunder. All
records, files, documents, computer diskettes, computer programs and other
computer-generated material, as well as all other materials or copies thereof
relating to the Employer's business, which the Executive shall prepare or use,
shall be and remain the sole property of the Employer, shall not be removed from
the Employer's premises without its written consent, and shall be promptly
returned to the Employer upon termination of the Executive's employment
hereunder. The Executive agrees to abide by the Employer's general policies, as
in effect from time to time, respecting confidentiality and the avoidance of
interests conflicting or appearing to be in conflict with those of the Employer.
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5. Non-Competition Covenant.
(a) Restrictive Covenant. The Employer and the Executive have jointly
reviewed the tenant lists, property submittals, logs, broker lists, and
operations of the Employer, and have agreed that, in consideration of this
Agreement, and the payment of the amounts described in Sections 2 and 3 hereof,
the Executive hereby agrees that, except with the express prior written consent
of the Employer, during the term of Executive's employment with the Employer
hereunder (the "Restrictive Period"), he will not, directly or indirectly,
compete with the business of the Employer, including, but not by way of
limitation, by directly or indirectly violating any duty the Executive owes the
Employer under applicable state law, owning, managing, operating, controlling,
financing, or by directly or indirectly serving as an employee, officer or
director of or consultant to, or by soliciting or inducing, or attempting to
solicit or induce, any employee or agent of Employer to terminate employment
with Employer and become employed by any person, firm, partnership, corporation,
trust or other entity which owns or operates a business similar to that of the
Employer (the "Restrictive Covenant"). For purposes of this subparagraph (a), a
business shall be considered "similar" to that of the Employer if it is engaged
in the ownership, acquisition, development, ownership, operation, management or
leasing of multi-unit residential, commercial or industrial property (i) in any
geographic market or territory in which the Employer owns properties, either as
of the date hereof or as of the date of termination of the Executive's
employment; or (ii) in any "Target Market" publicly identified by the Employer;
or (iii) in any market in which an acquisition is pending at the time of the
termination of the Executive's employment. If the Executive violates the
Restrictive Covenant and the Employer brings legal action or injunctive or other
relief, the Employer shall not, as a result of the time involved in obtaining
such relief, be deprived of the benefit of the full period of the Restrictive
Covenant. Accordingly, the Restrictive Covenant shall be deemed to have the
duration specified in this paragraph (a), computed from the date the relief is
granted, but reduced by the time between the period when the Restrictive Period
began to run and the date of the first violation of the Restrictive Covenant by
the Executive. In the event that a successor of the Employer assumes and agrees
to perform this Agreement or otherwise acquires the Employer, this Restrictive
Covenant shall continue to apply only to the primary service area of the
Employer as it existed immediately before such assumption or acquisition and
shall not apply to any of the successor's other offices or markets. The
foregoing Restrictive Covenant shall not prohibit the Executive from owning,
directly or indirectly, capital stock or similar securities which are listed on
a securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System which do not represent more than five percent
(5%) of the outstanding capital stock of any corporation.
(b) Remedies for Breach of Restrictive Covenant. The Executive
acknowledges that the restrictions contained in Sections 4 and 5 of this
Agreement are reasonable and necessary for the protection of the legitimate
proprietary business interests of the Employer; that any violation of these
restrictions would cause substantial injury to the Employer and such interests;
that the Employer would not have entered into this Agreement with the Executive
without receiving the additional consideration offered by the Executive in
binding himself to
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these restrictions; and that such restrictions were a material inducement to the
Employer to enter into this Agreement. In the event of any violation or
threatened violation of these restrictions, the Employer shall be relieved of
any further obligations under this Agreement, shall be entitled to any rights,
remedies or damages available at law, in equity or otherwise under this
Agreement, and shall be entitled to preliminary and temporary injunctive relief
granted by a court of competent jurisdiction to prevent or restrain any such
violation by the Executive and any and all persons directly or indirectly acting
for or with him, as the case may be, while awaiting the decision of the
arbitrator selected in accordance with paragraph (d) of Section 9 of this
Agreement, which decision, if rendered adverse to the Executive, may include
permanent injunctive relief to be granted by the court.
6. Intercorporate Transfers. If the Executive shall be transferred by
the Employer to an affiliate of the Employer, such transfer shall not be deemed
a Constructive Termination or otherwise be deemed to terminate or modify this
Agreement, and the employing corporation to which the Executive shall have been
transferred shall, for all purposes of this Agreement, be construed as standing
in the same place and stead as the Employer as of the date of such transfer. For
purposes hereof, an affiliate of the Employer shall mean any corporation or
other entity directly or indirectly controlling, controlled by, or under common
control with the Employer. For all relevant purposes hereof, the tenure of the
Executive shall be deemed to include the aggregate term of his employment by
both the Employer and its affiliate.
7. Interest in Assets and Payments. Neither the Executive nor his
estate shall acquire any rights in any funds or other assets of the Employer,
otherwise than by and through the actual payment of amounts payable hereunder;
nor shall the Executive or his estate have any power to transfer, assign,
anticipate, pledge, hypothecate or otherwise encumber any of said payments; nor
shall any of such payments be subject to seizure for the payment of any debt,
judgment, alimony, separate maintenance or be transferable by operation of law
in the event or as a result of any bankruptcy, insolvency or other legal
proceeding otherwise relating to the Executive.
8. Indemnification.
(a) The Employer shall provide the Executive (including his heirs,
personal representatives, executors and administrators), during the term of this
Agreement and thereafter, throughout all applicable limitations periods, with
coverage under the Employer's then-current directors' and officers' liability
insurance policy, at the Employer's expense.
(b) In addition to the insurance coverage provided for in paragraph (a)
of this Section 8, the Employer shall defend, hold harmless and indemnify the
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law, and subject to the requirements, limitations and
specifications set forth in the Bylaws and other organizational documents of the
Employer, against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been an officer of the Employer (whether or
not he continues to be an officer at the time of incurring such expenses or
liabilities), such expenses
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and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
(c) In the event the Executive becomes a party, or is threatened to be
made a party, to any action, suit or proceeding for which the Employer has
agreed to provide insurance coverage or indemnification under this Section 8,
the Employer shall, to the full extent permitted under applicable law, advance
all expenses (including the reasonable attorneys' fees of the attorneys selected
by Employer and approved by Executive for the representation of the Executive),
judgments, fines and amounts paid in settlement (collectively "Expenses")
incurred by the Executive in connection with the investigation, defense,
settlement, or appeal of any threatened, pending or completed action, suit or
proceeding, subject to receipt by the Employer of a written undertaking from the
Executive covenanting: (i) to reimburse the Employer for all Expenses actually
paid by the Employer to or on behalf of the Executive in the event it shall be
ultimately determined by a court of competent jurisdiction that the Executive is
not entitled to indemnification by the Employer for such Expenses; and (ii) to
assign to the Employer all rights of the Executive to insurance proceeds, under
any policy of directors' and officers' liability insurance or otherwise, to the
extent of the amount of Expenses actually paid by the Employer to or on behalf
of the Executive.
9. General Provisions.
(a) Successors; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer, the Executive's personal
representatives, the Employer's successors and assigns, and any successor or
assignee of the Employer shall be deemed the successor to all or substantially
all of the business and/or assets of the Employer, whether directly or
indirectly, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Employer would be required to perform if no such
succession had taken place. The Executive may neither assign his duties or
obligations this Agreement, nor sell, assign, pledge, encumber, transfer or
hypothecate his entitlement hereunder, and the Employer shall have no obligation
to recognize any such purported alienation, or pay any funds to any party
claiming the benefit thereof.
(b) Entire Agreement; Modifications. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral, including, without limitation,
that certain Employment Agreement, dated as of November 16, 1998. Except as
otherwise explicitly provided herein, this Agreement may not be amended or
modified except by written agreement signed by the Executive and the Employer.
(c) Enforcement and Governing Law. The provisions of this Agreement
shall be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the
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remaining provisions shall not be affected thereby. This Agreement shall be
construed and the legal relations of the parties hereto shall be determined in
accordance with the laws of the State of Minnesota as it constitutes the situs
of the corporation and the employment hereunder, without reference to the law
regarding conflicts of law.
(d) Arbitration. Except as otherwise provided in paragraph (b) of
Section 5, any dispute or controversy arising under or in connection with this
Agreement or the Executive's employment by the Employer shall be settled
exclusively by arbitration, conducted by a single arbitration sitting in
Minneapolis, Minnesota, in accordance with the rules of the American Arbitration
Association (the "AAA") then in effect. The arbitrator shall be selected by the
parties from a list of eleven (11) arbitrators provided by the AAA, provided
that no arbitrator shall be related to or affiliated with either of the parties.
No later than ten (10) days after the list of proposed arbitrators is received
by the parties, the parties, or their respective representatives, shall meet at
a mutually convenient location in Minneapolis, Minnesota, or telephonically. At
that meeting, the party who sought arbitration shall eliminate one (1) proposed
arbitrator and then the other party shall eliminate one (1) proposed arbitrator.
The parties shall continue to alternatively eliminate names from the list of
proposed arbitrators in this manner until each party has eliminated five (5)
proposed arbitrators. The remaining arbitrator shall arbitrate the dispute. Each
party shall submit, in writing, the specific requested action or decision it
wishes to take, or make, with respect to the matter in dispute ("Proposed
Solution"), and the arbitrator shall be obligated to choose one (1) party's
specific Proposed Solution, without being permitted to effectuate any compromise
or "new" position; provided, however, that the arbitrator is authorized to award
amounts not in dispute during the pendency of any dispute or controversy arising
under or in connection with this Agreement. The party whose Proposed Solution is
not selected shall bear the costs of all counsel, experts or other
representatives that are retained by both parties, together with all costs of
the arbitration proceeding, including, without limitation, the fees, costs and
expenses imposed or incurred by the arbitrator. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; including, if applicable,
entry of a permanent injunction under paragraph (b) of Section 5.
(e) Press Releases and Public Disclosure. Any press release or other
public communication by either the Executive or the Employer with any other
person concerning the terms, conditions or circumstances of Executive's
employment, or the termination of such employment, shall be subject to prior
written approval of both the Executive and the Employer, subject to the proviso
that the Employer shall be entitled to make requisite and appropriate public
disclosure of the terms of this Agreement and any termination hereof, without
the Executive's consent or approval, as may be required under applicable
statutes, and the rules and regulations of the Securities and Exchange
Commission and Nasdaq. The Employer shall be entitled to rely on the advice and
counsel of its professional advisors in determining whether any such disclosure
is required.
-11-
(f) Waiver. No waiver by either party, at any time, of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
(g) Notices. Notices given pursuant to this Agreement shall be in
writing, and shall be deemed given when received if personally delivered, or on
the first (1st) business day after deposit with a commercial overnight delivery
service. Notices to the Employer shall be addressed and delivered to the
principal headquarters office of the Employer, Attention: Chairman. Notices to
the Executive shall be sent to the address set forth below the Executive's
signature on this Agreement, or to such other address as Executive may hereafter
designate in a written notice given to the Employer and its counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WELLINGTON PROPERTIES TRUST, XXXXX X. XXXX
By: /s Xxxxxx X. Xxxx /s/ Xxxxx X. Xxxx
------------------------------ --------------------------------
Xxxxxx X. Xxxx Address of Executive:
President 0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
