EMPLOYMENT AGREEMENT
FOR
XXXXXXX XXXXXXXX
TABLE OF CONTENTS
PAGE
----
1. EMPLOYMENT........................................................................... 1
2. EMPLOYMENT PERIOD.................................................................... 1
3. SERVICES / PLACE OF EMPLOYMENT....................................................... 2
4. COMPENSATION AND BENEFITS............................................................ 3
5. TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL...................................... 6
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY FOR
CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON............................................ 8
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT UPON DEATH OR
DISABILITY........................................................................... 9
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON........................................ 11
9. CHANGE IN CONTROL.................................................................... 12
10. MITIGATION / EFFECT ON EMPLOYEE BENEFIT PLANS AND PROGRAMS........................... 14
11. CONFIDENTIAL INFORMATION............................................................. 15
12. RETURN OF DOCUMENTS.................................................................. 16
13. NONCOMPETE........................................................................... 16
14. REMEDIES............................................................................. 17
15. INDEMNIFICATION/LEGAL FEES........................................................... 18
16. SUCCESSORS AND ASSIGNS............................................................... 19
17. TIMING OF AND NO DUPLICATION OF PAYMENTS............................................. 21
18. MODIFICATION OR WAIVER............................................................... 21
19. NOTICES.............................................................................. 22
20. GOVERNING LAW........................................................................ 22
21. SEVERABILITY......................................................................... 22
22. LEGAL REPRESENTATION................................................................. 23
23. COUNTERPARTS......................................................................... 23
24. HEADINGS............................................................................. 23
25. ENTIRE AGREEMENT..................................................................... 23
26. SURVIVAL OF AGREEMENTS............................................................... 24
XXXXXXX XXXXXXXX EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
December 5, 2000, by and between Xxxxxxx Xxxxxxxx, an individual residing at
000 Xxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Executive"), and Xxxx-Xxxx
Realty Corporation, a Maryland corporation with offices at 00 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company").
RECITALS
WHEREAS, Executive has been promoted to Executive Vice President as
of December 5, 2000; and
WHEREAS, the Company desires to continue to employ Executive in his
new capacity of Executive Vice President, and Executive desires to continue
to be employed by the Company in his new capacity, pursuant to the terms set
forth herein
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as
follows:
1. EMPLOYMENT.
The Company hereby agrees to employ Executive, and Executive hereby
agrees to accept such employment during the period and upon the terms and
conditions set forth in this Agreement.
2. EMPLOYMENT PERIOD.
(a) Except as otherwise provided in this Agreement to the
contrary, the terms and conditions of this Agreement shall be and remain in
effect during the period of employment (the "Employment Period") established
under this Paragraph 2. The initial Employment Period shall be for a term
commencing on the date of this
Agreement and ending on the third (3rd) anniversary of the date of this
Agreement provided, however, that commencing on January 1, 2003 and on each
day thereafter, the Employment Period shall be extended automatically for one
additional day so that a constant one (1) year Employment Period shall be in
effect unless the Company or Executive elects not to extend the term of this
Agreement by giving written notice to the other party, in which case, the
term of this Agreement shall become fixed. Any extension of this Agreement
shall not create an obligation of the Company to issue new awards to
Executive hereunder.
(b) Notwithstanding anything contained herein to the
contrary: (i) Executive's employment with the Company may be terminated by
the Company or Executive during the Employment Period, subject to the terms
and conditions of this Agreement; and (ii) nothing in this Agreement shall
mandate or prohibit a continuation of Executive's employment following the
expiration of the Employment Period upon such terms and conditions as the
Board of Directors of the Company (the "Board") and Executive may mutually
agree.
(c) If Executive's employment with the Company is
terminated, for purposes of this Agreement the term "Unexpired Employment
Period" shall mean the period commencing on the date of such termination and
ending on the last day of the Employment Period.
3. SERVICES / PLACE OF EMPLOYMENT.
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SERVICES. During the Employment Period, Executive shall
hold the position of Executive Vice President of the Company. Executive shall
devote his best efforts and substantially all of his business time, skill and
attention to the business of the Company (other than absences due to
vacation, illness, disability or approved leave of absence), and shall
perform such duties as are customarily performed by similar executive
officers and as may be more specifically enumerated from time to time by the
Chief Executive Officer; PROVIDED, HOWEVER, that the foregoing is not
intended to preclude Executive from (i) owning and managing personal
investments, including real estate investments, subject to the restrictions
set forth in Paragraph 13 hereof or (ii) engaging in charitable activities
and community affairs, provided that the performance of the activities
referred to in clauses (i) and (ii) does not prevent Executive from devoting
substantially all of his business time to the Company.
4. COMPENSATION AND BENEFITS.
(a) SALARY. During the Employment Period, the Company shall
pay Executive a minimum annual base salary in the amount of $315,000 (the
"Annual Base Salary") payable in accordance with the Company's regular
payroll practices. Executive's Annual Base Salary shall be reviewed annually
in accordance with the policy of the Company from time to time and may be
subject to upward adjustment based upon, among other things, Executive's
performance, as determined in the sole discretion of the Chief Executive
Officer. In no event shall Executive's Annual Base Salary in effect at a
particular time be reduced without his prior written consent.
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(b) INCENTIVE COMPENSATION/BONUSES. In addition, Executive
shall be eligible for incentive compensation payable each year in such
amounts as may be determined by the Option and Executive Compensation
Committee of the Board (the "Compensation Committee"). Executive shall be
entitled to receive such bonuses, restricted share awards and options to
purchase shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock") as the Board or the Compensation Committee as the case
may be shall approve, in its sole discretion, including, without limitation,
options, restricted share awards and bonuses contingent upon Executive's
performance and the achievement of specified financial and operating
objectives.
(c) RESTRICTED SHARE AWARD/TAX GROSS-UP PAYMENT. Pursuant
to the Employee Stock Option Plan of Xxxx-Xxxx Realty Corporation which was
originally effective August 31, 1994 and amended and restated as of December
1, 1998 (the "SOP"), Executive has been awarded a restricted share award in
1999 of 4,000 shares of Common Stock and a restricted share award of 18,519
shares of Common Stock ("Restricted Shares") as of December 5, 2000 (the
"Restricted Share Awards"). Commencing with vesting that will occur in
calendar year 2002, Executive shall be entitled to receive a tax gross-up
payment (the "Tax Gross-Up Payment") from the Company with respect to each
tax year in which Restricted Shares granted pursuant to the Restricted Share
Awards vest and are distributed to him. Each Tax Gross-Up Payment shall be a
dollar amount equal to forty-three (43%) percent of the fair market value of
the Restricted Shares at time of vesting, exclusive of dividends. In the
event vesting occurs with respect to any Restricted Shares as a result of the
achievement of
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the required performance goals, such payment shall be made as soon as
practicable after a determination that the performance goals have been
achieved but in no event later than the 90th day of the fiscal year of the
Company immediately following the fiscal year as to which the performance
goals were achieved. In the event vesting occurs for any other reason,
including, without limitation, termination of Executive's employment by the
Company without Cause or by Executive for Good Reason (but excluding a
termination by the Company for Cause or a voluntary quit without Good Reason
by Executive), such payment shall be made as soon as practicable after the
date of vesting but in no event later than the tenth (10th) business day
following such vesting.
(d) TAXES AND WITHHOLDING. The Company shall have the right
to deduct and withhold from all compensation all social security and other
federal, state and local taxes and charges which currently are or which
hereafter may be required by law to be so deducted and withheld.
(e) ADDITIONAL BENEFITS. In addition to the compensation
specified above and other benefits provided pursuant to this Paragraph 4,
Executive shall be entitled to the following benefits:
(i) participation in the SOP, the Xxxx-Xxxx Realty Corporation
401(k) Savings and Retirement Plan (subject to statutory
rules and maximum contributions and non-discrimination
requirements applicable to 401(k) plans) and such other
benefit plans and programs, including but not limited to
restricted stock, phantom stock and/or unit awards, loan
programs and any other incentive compensation plans or
programs (whether or not employee benefit plans or
programs), as maintained by the Company from time to time
and made generally available to executives of the Company
with such participation to be consistent with reasonable
Company guidelines;
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(ii) participation in any health insurance, disability insurance,
paid vacation, group life insurance or other welfare benefit
program made generally available to executives of the
Company; and
(iii) reimbursement for reasonable business expenses incurred by
Executive in furtherance of the interests of the Company
including a monthly allowance of one thousand ($1,000)
dollars which is intended to cover the cost of local
business-related travel expenses exclusive of amounts paid
to third-parties (E.G. taxi service).
5. TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL.
(a) Executive's employment hereunder may be terminated
during the Employment Period under the following circumstances:
(i) CAUSE. The Company shall have the right to terminate
Executive's employment for Cause upon Executive's: (A)
willful and continued failure to use best efforts to
substantially perform his duties hereunder (other than any
such failure resulting from Executive's incapacity due to
physical or mental illness) for a period of thirty (30) days
after written demand for substantial performance is
delivered by the Company specifically identifying the manner
in which the Company believes Executive has not
substantially performed his duties; (B) willful misconduct
and/or willful violation of Paragraph 11 hereof, which is
materially economically injurious to the Company and the
partnership taken as a whole; (C) the willful violation of
the provisions of Paragraph 13 hereof; or (D) conviction of,
or plea of guilty to a felony. For purposes of this
sub-paragraph 5(a), no act, or failure to act, on
Executive's part shall be considered "willful" unless done,
or omitted to be done, by him (I) not in good faith and (II)
without reasonable belief that his action or omission was in
furtherance of the interests of the Company.
(ii) DEATH. Executive's employment hereunder shall terminate upon
his death.
(iii) DISABILITY. The Company shall have the right to terminate
Executive's employment due to "Disability" in the event that
there is a determination by the Company, upon the advice of
an independent qualified physician, reasonably acceptable to
Executive, that Executive has become physically or mentally
incapable of performing his duties under this Agreement and
such
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disability has disabled Executive for a cumulative
period of one hundred eighty (180) days within a twelve (12)
month period.
(iv) GOOD REASON. Executive shall have the right to terminate his
employment for "Good Reason": (A) upon the occurrence of any
material breach of this Agreement by the Company which shall
include but not be limited to; an assignment to Executive of
duties materially and adversely inconsistent with
Executive's status as Executive Vice President, or a
material adverse alteration in the nature of a diminution in
Executive's duties and/or responsibilities, reporting
obligations, titles or authority; (B) upon a reduction in
Executive's Annual Base Salary or a material reduction in
other benefits (except for bonuses or similar discretionary
payments) as in effect at the time in question, a failure to
pay such amounts when due or any other failure by the
Company to comply with Paragraph 4 hereof; or (C) upon any
purported termination of Executive's employment for Cause
which is not effected pursuant to the procedures of
sub-paragraph 5(a)(i) (and for purposes of this Agreement,
in the event of such failure to comply, no such purported
termination shall be effective).
(v) WITHOUT CAUSE. The Company shall have the right to terminate
the Executive's employment hereunder without Cause subject
to the terms and conditions of this Agreement.
(vi) WITHOUT GOOD REASON. The Executive shall have the right to
terminate his employment hereunder without Good Reason
subject to the terms and conditions of this Agreement.
(vii) CHANGE IN CONTROL. For purposes of this Agreement "Change
in Control" shall mean that any of the following events has
occurred: (A) any "person" or "group" of persons, as such
terms are used in Sections 13 and 14 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), other
than any employee benefit plan sponsored by the Company,
becomes the "beneficial owner", as such term is used in
Section 13 of the Exchange Act, (irrespective of any vesting
or waiting periods) of (I) Common Stock or any class of
stock convertible into Common Stock and/or (II) Common OP
Units or preferred units or any other class of units
convertible into Common OP Units, in an amount equal to
twenty (20%) percent or more of the sum total of the Common
Stock and the Common OP Units (treating all classes of
outstanding stock, units or other securities convertible
into stock units as if they were converted into Common Stock
or Common OP Units as the case may be and then treating
Common Stock and Common OP Units
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as if they were a single class) issued and outstanding
immediately prior to such acquisition as if they were a
single class and disregarding any equity raise in connection
with the financing of such transaction; (B) any Common Stock
is purchased pursuant to a tender or exchange offer other
than an offer by the Company; (C) the dissolution or
liquidation of the Company or the consummation of any merger
or consolidation of the Company or any sale or other
disposition of all or substantially all of its assets, if
the shareholders of the Company and unitholders of the
partnership taken as a whole and considered as one class
immediately before such transaction own, immediately after
consummation of such transaction, equity securities and
partnership units possessing less than fifty (50%) percent
of the surviving or acquiring company and partnership taken
as a whole; or (D) a turnover, during any two (2) year
period, of the majority of the members of the Board, without
the consent of the remaining members of the Board as to the
appointment of the new Board members.
(b) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company or any such termination by Executive (other than on
account of death) shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated. In the event of the termination of
Executive's employment on account of death, written Notice of Termination shall
be deemed to have been provided on the date of death.
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY FOR
CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON.
In the event the Company terminates Executive's employment for Cause or
Executive terminates his employment without Good Reason, the Company shall pay
8
Executive any unpaid Annual Base Salary at the rate then in effect accrued
through and including the date of termination. In addition, in such event,
Executive shall be entitled (i) to receive any earned but unpaid incentive
compensation or bonuses and (ii) to exercise any options which have vested and
are exercisable in accordance with the terms of the applicable option grant
agreement or plan, and (iii) to retain and/or receive any Restricted Shares
which have vested as of the last day of the Company's fiscal year coincident or
immediately preceding Executive's termination of employment and the
corresponding Tax Gross-Up Payment (irrespective of whether the determination is
made after Executive's termination of employment).
Except for any rights which Executive may have to unpaid salary amounts
through and including the date of termination, earned but unpaid incentive
compensation or bonuses, vested options, vested Restricted Shares and the
corresponding Tax Gross-Up Payment, the Company shall have no further
obligations hereunder following such termination. The aforesaid amounts shall be
payable in full immediately upon such termination.
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT UPON DEATH OR
DISABILITY.
In the event of termination of Executive's employment as a result of
either Executive's death or Disability, the Company shall pay to Executive, his
estate or his personal representative the aggregate of (i) a cash payment of one
million dollars ($1,000,000) in full immediately upon such termination (the
"Fixed Amount") and (ii) reimbursement of expenses incurred prior to date of
termination ("Expense Reimbursement"). Executive (and Executive's dependents)
shall also receive
9
continuation of health coverage through the end of the Unexpired Employment
Period on the same basis as health coverage is provided by the Company for
active employees and as may be amended from time to time
("Medical Continuation").
In addition, all (A) incentive compensation payments or programs of
any nature whether stock based or otherwise that are subject to a vesting
schedule including, without limitation, the Restricted Share Awards or any
other restricted stock, phantom stock, units and any loan forgiveness
arrangements granted to Executive ("Incentive Compensation") shall
immediately vest as of the date of such termination ("Vested Incentive
Compensation"), (B) options granted to Executive shall immediately vest as of
the date of such termination (the "Vested Options") and Executive shall be
entitled at the option of Executive, his estate or his personal
representative, within one (1) year of the date of such termination, to
exercise the Vested Options and/or other options which have vested
(including, without limitation, all other options which have previously
vested in accordance with any applicable option grant agreement or plan) (the
"Total Vested Options") and are exercisable in accordance with the terms of
the applicable option grant agreement or plan and/or any other methods or
procedures for exercise applicable to optionees or to require the Company
(upon written notice delivered within one hundred eighty (180) days following
the date of Executive's termination) to repurchase all or any portion of
Executive's vested options to purchase shares of Common Stock at a price
equal to the difference between the Repurchase Fair Market Value (as
hereinafter defined) of the shares of Common Stock for which the options to
be repurchased are exercisable and the exercise price of such options as of
the date of Executive's termination of employment (the "Vested Option
Exercise Election"), and (C)
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the Tax Gross-Up Payment(s) applicable to the Restricted Share Awards shall
vest and be paid to Executive at such time as provided in sub-paragraph 4(c)
above (the "Vested Tax Gross-Up Payments"). In the event of a conflict
between any Incentive Compensation grant agreement or program or any option
grant agreement or plan and this Agreement, the terms of this Agreement shall
control.
Except for any rights which Executive or Executive's estate in the
event of Executive's death may have to all of the above including the Fixed
Amount, Vested Incentive Compensation, Total Vested Options and the Vested
Option Exercise Election, the Vested Tax Gross-Up Payment, Expense
Reimbursement and Medical Continuation (which, in the event of Executive's
death, shall be provided to Executive's dependents), the Company shall have
no further obligations hereunder following such termination.
For purposes of this Agreement, "Repurchase Fair Market Value" shall
mean the average of the closing price on the New York Stock Exchange (or such
other exchange on which the Common Stock is primarily traded) of the Common
Stock on each of the trading days within the thirty (30) days immediately
preceding the date of termination of Executive's employment.
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON.
In the event the Company terminates Executive's employment for any
reason other than Cause or Executive terminates his employment for Good
Reason, the Company shall pay to Executive and Executive shall be entitled to
receive the aggregate of (i) the Fixed Amount and (ii) Vested Incentive
Compensation, Total Vested
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Options and the Vested Option Exercise Election, the Vested Tax Gross-Up
Payment, Expense Reimbursement and Medical Continuation. In the event of a
conflict between any Incentive Compensation grant agreement or program or any
option grant agreement or plan and this Agreement, the terms of this
Agreement shall control. Executive understands that any options exercised
more than ninety (90) days following the date of his termination of
employment which were granted as incentive stock options shall automatically
be converted into non-qualified options.
Except for any rights which Executive may have to the Fixed Amount,
Vested Incentive Compensation, Total Vested Options and the Vested Option
Exercise Election, the Vested Tax Gross-Up Payment, Expense Reimbursement and
Medical Continuation, the Company shall have no further obligations hereunder
following such termination. The parties both agree that the agreement to make
these payments was consideration and an inducement to obtain Executive's
consent to enter into this Agreement. The payments are not a penalty and
neither party will claim them to be a penalty. Rather, the payments represent
a fair approximation of reasonable amounts due to Executive for the
Employment Period.
9. CHANGE IN CONTROL.
(a) OPTIONS. Any Incentive Compensation and options granted to
Executive that have not vested as of the date of a Change in Control shall
immediately vest upon the date of the Change in Control. Neither the occurrence
of a Change in Control, nor the vesting in any options as a result thereof shall
require Executive to exercise any options. In the event of a conflict between
any Incentive Compensation
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grant agreement or program or any option grant agreement or plan and this
Agreement, the terms of this Agreement shall control.
(b) EXCISE TAX GROSS UP. If it is determined by an independent
accountant mutually acceptable to the Company and Executive that as a result
of any payment in the nature of compensation made by the Company to (or for
the benefit of) Executive pursuant to this Agreement or otherwise, an excise
tax may be imposed on Executive pursuant to Section 4999 of the Code (or any
successor provisions), the Company shall pay Executive in cash an amount
equal to X determined under the following formula: (the "Excise Tax Gross
Up"):
E x P
X =
---------------------------------
1-[(FI x (1-SLI)) + SLI + E + M]
where
E = the rate at which the excise tax is assessed under
Section 4999 of the Code (or any successor
provisions);
P = the amount with respect to which such excise tax is
assessed, determined without regard to the Excise Tax
Gross Up;
FI = the highest effective marginal rate of
income tax applicable to Executive under the
Code for the taxable year in question
(taking into account any phase-out or loss
of deductions, personal exemptions or other
similar adjustments);
SLI = the sum of the highest effective marginal
rates of income tax applicable to Executive
under all applicable state and local laws
for the taxable year in question (taking
into account any phase-out or loss of
deductions, personal exemptions and other
similar adjustments); and
M = the highest marginal rate of Medicare tax
applicable to Executive under the Code for
the taxable year in question.
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With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise
and on which an excise tax under Section 4999 of the Code (or any successor
provisions) may be assessed, the payment determined under this sub-paragraph
9(c) shall be paid to Executive at the time of the Change in Control but
prior to the consummation of the transaction with any successor. It is the
intention of the parties that the Company provide Executive with a full tax
gross-up under the provisions of this sub-paragraph, so that on a net
after-tax basis, the result to Executive shall be the same as if the excise
tax under Section 4999 of the Code (or any successor provisions) had not been
imposed. The Excise Tax Gross Up may be adjusted if alternative minimum tax
rules are applicable to Executive.
10. MITIGATION / EFFECT ON EMPLOYEE BENEFIT PLANS AND PROGRAMS.
(a) MITIGATION. Executive shall not be required to mitigate
amounts payable under this Agreement by seeking other employment or
otherwise, and there shall be no offset against amounts due Executive under
this Agreement on account of subsequent employment. Amounts owed to Executive
under this Agreement shall not be offset by any claims the Company may have
against Executive and such payment shall not be affected by any other
circumstances, including, without limitation, any counterclaim, recoupment,
defense, or other right which the Company may have against Executive or
others.
(b) EFFECT ON EMPLOYEE BENEFIT PROGRAMS. The termination of
Executive's employment hereunder, whether by the Company or Executive, shall
have
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no effect on the rights and obligations of the parties hereto under the
Company's (i) welfare benefit plans including, without limitation, Medical
Continuation as provided for herein and, health coverage thereafter but only
to the extent required by law, and on the same basis applicable to other
employees and (ii) 401(k) Plan but only to the extent required by law and
pursuant to the terms of the 401(k) Plan.
11. CONFIDENTIAL INFORMATION.
(a) Executive understands and acknowledges that during his
employment with the Company, he will be exposed to Confidential Information
(as defined below), all of which is proprietary and which will rightfully
belong to the Company. Executive shall hold in a fiduciary capacity for the
benefit of the Company such Confidential Information obtained by Executive
during his employment with the Company and shall not, directly or indirectly,
at any time, either during or after his employment with the Company, without
the Company's prior written consent, use any of such Confidential Information
or disclose any of such Confidential Information to any individual or entity
other than the Company or its employees, attorneys, accountants, financial
advisors, consultants, or investment bankers except as required in the
performance of his duties for the Company or as otherwise required by law.
Executive shall take all reasonable steps to safeguard such Confidential
Information and to protect such Confidential Information against disclosure,
misuse, loss or theft.
(b) The term "Confidential Information" shall mean any
information not generally known in the relevant trade or industry or otherwise
not generally available to the public, which was obtained from the Company or
its predecessors or which
15
was learned, discovered, developed, conceived, originated or prepared during
or as a result of the performance of any services by Executive on behalf of
the Company or its predecessors. For purposes of this Paragraph 11, the
Company shall be deemed to include any entity which is controlled, directly
or indirectly, by the Company and any entity of which a majority of the
economic interest is owned, directly or indirectly, by the Company.
12. RETURN OF DOCUMENTS.
Except for such items which are of a personal nature to Executive
(E.G., daily business planner), all writings, records, and other documents
and things containing any Confidential Information shall be the exclusive
property of the Company, shall not be copied, summarized, extracted from, or
removed from the premises of the Company, except in pursuit of the business
of the Company and at the direction of the Company, and shall be delivered to
the Company, without retaining any copies, upon the termination of
Executive's employment or at any time as requested by the Company.
13. NONCOMPETE.
Executive agrees that:
(a) During the Employment Period and, in the event (i) the
Company terminates Executive's employment for Cause, or (ii) Executive
terminates his employment without Good Reason, for a one (1) year period
thereafter, Executive shall not, directly or indirectly, within the continental
United States, engage in, or own, invest in, manage or control any venture or
enterprise primarily engaged in any office-service,
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flex, or office property development, acquisition or management activities
without regard to whether or not such activities compete with the Company.
Nothing herein shall prohibit Executive from being a passive owner of not
more than five percent (5%) of the outstanding stock of any class of
securities of a corporation or other entity engaged in such business which is
publicly traded, so long as he has no active participation in the business of
such corporation or other entity.
(b) If, at the time of enforcement of this Paragraph 13, a
court shall hold that the duration, scope, area or other restrictions stated
herein are unreasonable, the parties agree that reasonable maximum duration,
scope, area or other restrictions may be substituted by such court for the
stated duration, scope, area or other restrictions and upon substitution by such
court, this Agreement shall be automatically modified without further action
by the parties hereto.
(c) For purposes of this Paragraph 13, the Company shall be
deemed to include any entity which is controlled, directly or indirectly, by the
Company and any entity of which a majority of the economic interest is owned,
directly or indirectly, by the Company.
14. REMEDIES.
The parties hereto agree that the Company would suffer irreparable
harm from a breach by Executive of any of the covenants or agreements
contained in Paragraphs 11, 12 or 13 of this Agreement. Therefore, in the
event of the actual or threatened breach by Executive of any of the
provisions of Paragraphs 11, 12 or 13 of this Agreement, the Company may, in
addition and supplementary to other rights and
17
remedies existing in its favor, apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violation of the provisions thereof.
15. INDEMNIFICATION/LEGAL FEES.
(a) INDEMNIFICATION. In the event the Executive is made party or
threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason
of Executive's employment with or serving as an officer or director of the
Company, whether or not the basis of such Proceeding is alleged action in an
official capacity, the Company shall indemnify, hold harmless and defend
Executive to the fullest extent authorized by Maryland law, as the same
exists and may hereafter be amended, against any and all claims, demands,
suits, judgments, assessments and settlements including all expenses incurred
or suffered by Executive in connection therewith (including, without
limitation, all legal fees incurred using counsel reasonably acceptable to
Executive) and such indemnification shall continue as to Executive even after
Executive is no longer employed by the Company and shall inure to the benefit
of his heirs, executors, and administrators. Expenses incurred by Executive
in connection with any Proceeding shall be paid by the Company in advance
upon request of Executive that the Company pay such expenses; but, only in
the event that Executive shall have delivered in writing to the Company an
undertaking to reimburse the Company for expenses with respect to which
Executive is not entitled to indemnification. The provisions of this
Paragraph shall remain in effect after this Agreement is terminated
irrespective of the reasons for
18
termination. The indemnification provisions of this Paragraph shall not
supersede or reduce any indemnification provided to Executive under any
separate agreement, or the by-laws of the Company since it is intended that
this Agreement shall expand and extend the Executive's rights to receive
indemnity.
(b) LEGAL FEES. If any contest or dispute shall arise between the
Company and Executive regarding or as a result of any provision of this
Agreement, the Company shall reimburse Executive for all legal fees and
expenses reasonably incurred by Executive in connection with such contest or
dispute, but only if Executive is successful in respect of substantially all
of Executive's claims pursued or defended in connection with such contest or
dispute. Such reimbursement shall be made as soon as practicable following
the resolution of such contest or dispute (whether or not appealed).
16. SUCCESSORS AND ASSIGNS.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement
in form and substance satisfactory to Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of an such succession shall be a breach of this Agreement and
shall entitle Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if Executive
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terminated his employment hereunder for Good Reason except that for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the date of termination. In the event of such a
breach of this Agreement, the Notice of Termination shall specify such date
as the date of termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to all or substantially
all of its business and/or its assets as aforesaid which executes and
delivers the agreement provided for in this Paragraph 16 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation
of law. Any cash payments owed to Executive pursuant to this Paragraph 16
shall be paid to Executive in a single sum without discount for early payment
immediately prior to the consummation of the transaction with such successor.
(b) This Agreement and all rights of Executive hereunder may be
transferred only by will or the laws of descent and distribution. Upon
Executive's death, this Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent any
such person succeeds to Executive's interests under this Agreement. Executive
shall be entitled to select and change a beneficiary or beneficiaries to receive
any benefit or compensation payable hereunder following Executive's death by
giving the Company written notice thereof. If Executive should die following the
date of termination while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to such person or
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persons so appointed in writing by Executive, including, without limitation,
under any applicable plan, or otherwise to his legal representatives or
estate.
17. TIMING OF AND NO DUPLICATION OF PAYMENTS.
All payments payable to Executive pursuant to this Agreement shall
be paid as soon as practicable after such amounts have become fully vested
and determinable. In addition, Executive shall not be entitled to receive
duplicate payments under any of the provisions of this Agreement.
18. MODIFICATION OR WAIVER.
No amendment, modification, waiver, termination or cancellation of
this Agreement shall be binding or effective for any purpose unless it is
made in a writing signed by the party against whom enforcement of such
amendment, modification, waiver, termination or cancellation is sought. No
course of dealing between or among the parties to this Agreement shall be
deemed to affect or to modify, amend or discharge any provision or term of
this Agreement. No delay on the part of the Company or Executive in the
exercise of any of their respective rights or remedies shall operate as a
waiver thereof, and no single or partial exercise by the Company or Executive
of any such right or remedy shall preclude other or further exercise thereof.
A waiver of right or remedy on any one occasion shall not be construed as a
bar to or waiver of any such right or remedy on any other occasion.
21
The respective rights and obligations of the parties hereunder shall
survive the Executive's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such
rights and obligations.
19. NOTICES.
All notices or other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered by hand or delivered by a recognized delivery service or mailed,
postage prepaid, by express, certified or registered mail, return receipt
requested, and addressed to the Chief Executive Officer of the Company or
Executive, as applicable, at the address set forth above (or to such other
address as shall have been previously provided in accordance with this Paragraph
19).
20. GOVERNING LAW.
This agreement will be governed by and construed in accordance with
the laws of the State of New Jersey except as to Paragraph 15(a), without
regard to principles of conflicts of laws thereunder.
21. SEVERABILITY.
Whenever possible, each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement shall be held to be prohibited by
or invalid under
22
such applicable law, then, subject to the provisions of Paragraph 13(b)
above, such provision or term shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provisions or term or the remaining
provisions or terms of this Agreement.
22. LEGAL REPRESENTATION.
Each of the Company and Executive have been represented by counsel with
respect to this Agreement.
23. COUNTERPARTS.
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and both of which taken together shall constitute
one and the same agreement.
24. HEADINGS.
The headings of the Paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof and shall
not affect the construction or interpretation of this Agreement.
25. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and undertakings, both written and oral, among the parties with respect to the
subject matter hereof.
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26. SURVIVAL OF AGREEMENTS.
The covenants made in Paragraphs 5 through 15 and 21 each shall survive
the termination of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
XXXX-XXXX REALTY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx
Chief Executive Officer
/s/ Xxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxx
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