EXHIBIT 10.05
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement, dated April 25, 2002, is between
Glenborough Realty Trust (the "Company") and Xxxxxxx Xxxxxx ("Executive").
I. POSITION AND RESPONSIBILITIES
A. POSITION. Executive is employed by the Company to render services to
the Company in the position of Executive Vice President. Executive shall perform
such duties and responsibilities as are normally related to such position in
accordance with the standards of the industry and any additional duties now or
hereafter assigned to Executive by the Company. Executive shall abide by the
rules, regulations, and practices as adopted or modified from time to time in
the Company's sole discretion.
B. OTHER ACTIVITIES. Except upon the prior written consent of the Company,
Executive will not, during the term of this Agreement, (i) pursue any other
employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that might interfere
with Executive's duties and responsibilities hereunder or create a conflict of
interest with the Company.
C. NO CONFLICT. Executive represents and warrants that Executive's
execution of this Agreement, Executive's employment with the Company, and the
performance of Executive's proposed duties under this Agreement shall not
violate any obligations Executive may have to any other employer, person or
entity, including any obligations with respect to proprietary or confidential
information of any other person or entity.
II. COMPENSATION AND BENEFITS
A. BASE SALARY. In consideration of the services to be rendered under this
Agreement, the Company shall pay Executive a salary at the rate of Two Hundred
and Fifty Thousand Dollars ($250,000) per year ("Base Salary"). The Base Salary
shall be paid in accordance with the Company's regularly established payroll
practice. Executive's Base Salary will be reviewed from time to time in
accordance with the established procedures of the Company for adjusting salaries
for similarly situated employees and may be adjusted in the sole discretion of
the Company.
B. BONUS. Executive shall be eligible for an annual bonus equal to one
hundred percent (100%) of Executive's Base Salary, subject to Executive meeting
individual performance standards established in writing by the Board of
Directors and subject to the Company meeting corporate performance standards as
established by the Compensation Committee of the Board of Directors ("Bonus").
The Compensation Committee of the Board of Directors shall have sole discretion
to establish corporate and individual performance standards.
C. STOCK GRANT. Upon approval by the Company's Board of Directors, the
Company shall grant Executive Twelve Thousand and Five Hundred (12,500) shares
of the Common Stock of the Company. The terms and conditions of this grant shall
be governed by the Stock Grant Agreement.
D. ADDITIONAL STOCK GRANTS AND BONUS. Subject to Executive's performance
and the approval of the Compensation Committee of the Board of Directors,
Executive shall be eligible to receive additional stock grants and/or stock
options and to participate in other bonus programs as established by the
Company.
E. TEMPORARY HOUSING AND RELOCATION ALLOWANCES. The Company agrees to
provide Executive with a temporary housing allowance for up to three (3) months,
to assist with Executive's reasonable costs in obtaining temporary housing
during his relocation. In addition, the Company agrees to provide Executive with
a relocation allowance to assist with Executive's actual reasonable costs in
relocating to California, including reimbursing Executive's realtor commission
and closing payments on the sale of his home in Geneva, Illinois. The amounts of
these allowances shall be agreed upon between the Company and Executive, and in
no event shall exceed Executive's actual expenses. Executive agrees to provide
documentation of his temporary housing and relocation expenses to the Company at
the Company's request.
F. BENEFITS. Executive shall be eligible to participate in the benefits
made generally available by the Company to similarly-situated Executives, in
accordance with the benefit plans established by the Company, and as may be
amended from time to time in the Company's sole discretion.
G. EXPENSES. The Company shall reimburse Executive for reasonable business
expenses incurred in the performance of Executive's duties hereunder in
accordance with the Company's expense reimbursement guidelines.
III. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
A. AT-WILL TERMINATION BY COMPANY. The employment of Executive shall be
"at-will" at all times. The Company may terminate Executive's employment with
the Company at any time, without any advance notice, for any reason or no reason
at all, notwithstanding anything to the contrary contained in or arising from
any statements, policies or practices of the Company relating to the employment,
discipline or termination of its employees. Upon and after such termination, all
obligations of the Company under this Agreement shall cease, except as
specifically provided herein.
X. XXXXXXXXX. Except in situations where the employment of Executive is
terminated For Cause, By Death, By Disability, or within one (1) year of a
Change of Control (as defined in Section IV(E) below), in the event that the
Company terminates the employment of Executive at any time, Executive will be
eligible to receive an amount equal to twelve (12) months of the then-current
Base Salary of the Executive, payable in the form of salary continuation.
Executive's eligibility for severance is conditioned on Executive having first
signed a release agreement in the form attached as Exhibit A. Executive shall
not be entitled to any severance payments if Executive's employment is
terminated For Cause, By Death or By Disability (as defined in Section IV below)
or if Executive's employment is terminated by Executive (in accordance with
Section V below). In the event Executive is eligible for Change of Control
severance benefits as set forth in in Section IV(D) or Section V(B) below,
Executive shall be ineligible for the severance benefit described in this
Section III(B).
IV. OTHER TERMINATIONS BY COMPANY
A. TERMINATION FOR CAUSE. For purposes of this Agreement, "For Cause"
shall mean: (i) Executive commits a crime involving dishonesty, breach of trust,
or physical harm to any person; (ii) Executive willfully engages in conduct that
is in bad faith and materially injurious to the Company, including but not
limited to, misappropriation of trade secrets, fraud or embezzlement; (iii)
Executive commits a material breach of this Agreement, which breach is not cured
within twenty days after written notice to Executive from the Company; (iv)
Executive willfully refuses to implement or follow a lawful policy or directive
of the Company, which breach is not cured within twenty days after written
notice to Executive from the Company; or (v) Executive engages in misfeasance or
malfeasance demonstrated by a pattern of failure to perform job duties
diligently and professionally. The Company may terminate Executive's employment
For Cause at any time, without any advance notice. The Company shall pay to
Executive all compensation to which Executive is entitled up through the date of
termination, subject to any other rights or remedies of Employer under law; and
thereafter all obligations of the Company under this Agreement shall cease.
B. BY DEATH. Executive's employment shall terminate automatically upon
Executive's death. The Company shall pay to Executive's beneficiaries or estate,
as appropriate, any compensation then due and owing. Thereafter all obligations
of the Company under this Agreement shall cease. Nothing in this Section shall
affect any entitlement of Executive's heirs or devisees to the benefits of any
life insurance plan or other applicable benefits.
C. BY DISABILITY. If Executive becomes eligible for the Company's long
term disability benefits or if, in the sole opinion of the Company, Executive is
unable to carry out the responsibilities and functions of the position held by
Executive by reason of any physical or mental impairment for more than ninety
consecutive days or more than one hundred and twenty days in any twelve-month
period, then, to the extent permitted by law, the Company may terminate
Executive's employment. The Company shall pay to Executive all compensation to
which Executive is entitled up through the date of termination, and thereafter
all obligations of the Company under this Agreement shall cease. Nothing in this
Section shall affect Executive's rights under any disability plan in which
Executive is a participant.
D. TERMINATION FOLLOWING CHANGE OF CONTROL. In the event that the Company
terminates Executive's employment without Cause within one (1) year of a Change
of Control (as defined below), Executive will be eligible to receive an amount
equal to Two Hundred and Ninety-Nine Percent (299%) of the combined amount of
Executive's then-current annual Base Salary and Bonus, payable in the form of
salary continuation. Executive's eligibility for severance is conditioned on
Executive having first signed a release agreement in the form attached as
Exhibit A. Executive shall not be entitled to any severance payments if
Executive's employment is terminated For Cause, By Death or By Disability (as
defined in Section IV above) or if Executive's employment is terminated by
Executive without Good Reason (as defined in Section V(B) below). In the event
that the Company terminates Executive's employment without Cause and such
termination does not occur within one (1) year of a Change of Control, the
Executive will be eligible to receive the benefits described in Section III(B)
above.
E. "CHANGE OF CONTROL." For purposes of this Agreement, "Change of
Control" shall mean a change in ownership or control of the Company effected
through a merger, consolidation or acquisition by any person or related group of
persons (other than an acquisition by the Company or by a Company-sponsored
employee benefit plan or by a person or persons that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934) of securities possessing more than fifty percent of the
total combined voting power of the outstanding securities of the Company.
V. TERMINATION BY EXECUTIVE
A. AT-WILL TERMINATION BY EXECUTIVE. Executive may terminate employment
with the Company at any time for any reason or no reason at all, upon four
weeks' advance written notice. During such notice period Executive shall
continue to diligently perform all of Executive's duties hereunder. The Company
shall have the option, in its sole discretion, to make Executive's termination
effective at any time prior to the end of such notice period as long as the
Company pays Executive all compensation to which Executive is entitled up
through the last day of the four week notice period. Thereafter all obligations
of the Company shall cease.
B. TERMINATION FOR GOOD REASON AFTER CHANGE OF CONTROL. Executive's
termination shall be for "Good Reason" if Executive provides written notice to
the Company of the Good Reason within six months of the event
constituting Good Reason and provides the Company with a period of twenty days
to cure the Good Reason and the Company fails to cure the Good Reason within
that period. For purposes of this Agreement, "Good Reason" shall mean any of the
following events if (i) the event is effected by the Company without the consent
of Executive and (ii) such event occurs within one (1) year after a Change in
Control (as hereinafter defined): (A) a change in Executive's position with
Employer which materially reduces Executive's level of responsibility; (B) a
reduction in Executive's Base Salary, except for reductions that are comparable
to reductions generally applicable to similarly situated executives of the
Company; or (C) a relocation of Executive's principal place of employment by
more than twenty miles (which shall include all of San Francisco's city limits).
In such event Executive may terminate his employment for Good Reason, in which
case Executive will be eligible to receive an amount equal to Two Hundred and
Ninety-Nine Percent (299%) of the combined total of Executive's then-current
annual Base Salary and Bonus, payable in the form of salary continuation.
Executive's eligibility for severance is conditioned on Executive having first
signed a release agreement in the form attached as Exhibit A. Thereafter all
obligations of the Company or its successor under this Agreement shall cease.
VI. TERMINATION OBLIGATIONS
A. RETURN OF PROPERTY. Executive agrees that all property (including
without limitation all equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) furnished to or
created or prepared by Executive incident to Executive's employment belongs to
the Company and shall be promptly returned to the Company upon termination of
Executive's employment.
B. RESIGNATION AND COOPERATION. Upon termination of Executive's
employment, Executive shall be deemed to have resigned from all offices and
directorships then held with the Company. Following any termination of
employment, Executive shall cooperate with the Company in the winding up of
pending work on behalf of the Company and the orderly transfer of work to other
employees. Executive shall also cooperate with the Company in the defense of any
action brought by any third party against the Company that relates to
Executive's employment by the Company.
VII. SECTION 280G PAYMENTS
A. EFFECT OF SECTION 280G. In the event that any payment or benefit
(within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code")) to Executive or for Executive's benefit, paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, Executive's employment with
the Company or a Change in Control (a "Payment" or "Payments"), would be subject
to the excise tax imposed by Code Section 4999, or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then Executive will be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties (other than interest and
penalties imposed by reason of Executive's failure to file timely a tax return
or pay taxes shown due on Executive's return) imposed with respect to such taxes
and the Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
B. DETERMINATION BY ACCOUNTANT. An initial determination as to whether a
Gross-Up Payment is required pursuant to this Agreement and the amount of such
Gross-Up Payment shall be made by the Company. The Company shall provide its
determination (the "Determination"), together with detailed supporting
calculations and documentation, to Executive within fifteen (15) days of the
Termination Date, if applicable, or such other time as
requested by Executive (provided Executive reasonably believes that any of the
Payments may be subject to the Excise Tax). If requested by Executive, the
Company shall furnish Executive, at the Company's expense, with an opinion
reasonably acceptable to Executive from the Company's accounting firm (or an
accounting firm of equivalent stature reasonably acceptable to Executive) that
there is a reasonable basis for the Determination. Any Gross-Up Payment
determined pursuant to this Section VII shall be paid by the Company to
Executive within five (30) days of receipt of the Determination.
C. ADJUSTMENT OF PAYMENT. As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is possible that the
Payments to be made to, or provided for the benefit of, Executive will be either
greater (an "Excess Payment") or less (an "Underpayment") than the amounts
provided for by the limitations contained in Section VII.
1. If it is established, pursuant to a final determination of a court or
an Internal Revenue Service (the "IRS") proceeding which has been finally and
conclusively resolved, that an Excess Payment has been made, such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the date
Executive received the Excess Payment, which loan Executive must repay to the
Company together with interest at the applicable federal rate under Code Section
7872(f)(2); provided, that no loan shall be deemed to have been made and no
amount will be payable by Executive to the Company unless, and only to the
extent that, the deemed loan and payment would either reduce the amount on which
Executive is subject to tax under Code Section 4999 or generate a refund of tax
imposed under Code Section 4999.
2. In the event that it is determined (i) by the Accounting Firm, the
Company (which shall include the position taken by the Company, or together with
its consolidated group, on its federal income tax return) or the IRS, (ii)
pursuant to a determination by a court, or (iii) upon the resolution to
Executive's satisfaction of the Dispute, that an Underpayment has occurred, the
Company shall pay an amount equal to the Underpayment to Executive within ten
(10) days after such determination or resolution, together with interest on such
amount at the applicable federal rate under Code Section 7872(f)(2) from the
date such amount would have been paid to Executive until the date of payment.
VIII. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY
INFORMATION
A. PROPRIETARY INFORMATION AGREEMENT. Executive agrees to sign and be
bound by the terms of the Company's Proprietary Information and Inventions
Agreement.
B. NON-SOLICITATION. Executive acknowledges that because of Executive's
position in the Company, Executive will have access to material intellectual
property and confidential information. During the term of Executive's employment
and for one year thereafter, in addition to Executive's other obligations
hereunder or under the Proprietary Information Agreement, Executive shall not,
for Executive or any third party, directly or indirectly (a) divert or attempt
to divert from the Company any business of any kind, including without
limitation the solicitation of or interference with any of its customers,
clients, members, business partners or suppliers, or (b) solicit or otherwise
induce any person employed by the Company to terminate his employment.
C. NON-DISCLOSURE OF THIRD PARTY INFORMATION. Executive represents and
warrants and covenants that Executive shall not disclose to the Company, or use,
or induce the Company to use, any proprietary information or trade secrets of
others at any time, including but not limited to any proprietary information or
trade secrets of any former employer, if any; and Executive acknowledges and
agrees that any violation of this provision shall be grounds for Executive's
immediate termination and could subject Executive to substantial civil
liabilities and
criminal penalties. Executive further specifically and expressly acknowledges
that no officer or other employee or representative of the Company has requested
or instructed Executive to disclose or use any such third party proprietary
information or trade secrets.
IX. ARBITRATION
Executive agrees to sign and be bound by the terms of the Company's Arbitration
Agreement.
X. AMENDMENTS; WAIVERS; REMEDIES
This Agreement may not be amended or waived except by a writing signed by
Executive and by a duly authorized representative of the Company other than
Executive. Failure to exercise any right under this Agreement shall not
constitute a waiver of such right. Any waiver of any breach of this Agreement
shall not operate as a waiver of any subsequent breaches. All rights or remedies
specified for a party herein shall be cumulative and in addition to all other
rights and remedies of the party hereunder or under applicable law.
XI. ASSIGNMENT; BINDING EFFECT
A. ASSIGNMENT. The performance of Executive is personal hereunder, and
Executive agrees that Executive shall have no right to assign and shall not
assign or purport to assign any rights or obligations under this Agreement. This
Agreement may be assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets.
B. BINDING EFFECT. Subject to the foregoing restriction on assignment by
Executive, this Agreement shall inure to the benefit of and be binding upon each
of the parties; the affiliates, officers, directors, agents, successors and
assigns of the Company; and the heirs, devisees, spouses, legal representatives
and successors of Executive.
XII. 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: (a) by
hand; (b) by a nationally recognized overnight courier service; or (c) by United
States first class registered or certified mail, return receipt requested, to
the principal address of the other party, as set forth below. The date of notice
shall be deemed to be the earlier of (i) actual receipt of notice by any
permitted means, or (ii) five business days following dispatch by overnight
delivery service or the United States Mail. Executive shall be obligated to
notify the Company in writing of any change in Executive's address. Notice of
change of address shall be effective only when done in accordance with this
paragraph.
Company's Notice Address:
Glenborough Realty Trust
000 Xxxxx Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxxxxx, President
Executive's Notice Address:
Glenborough Realty Trust
000 Xxxxx Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
XIII. SEVERABILITY
If any provision of this Agreement shall be held by a court or arbitrator to be
invalid, unenforceable, or void, such provision shall be enforced to the fullest
extent permitted by law, and the remainder of this Agreement shall remain in
full force and effect. In the event that the time period or scope of any
provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.
XIV. TAXES
All amounts paid under this Agreement (including without limitation Base Salary
and severance) shall be paid less all applicable state and federal tax
withholdings and any other withholdings required by any applicable jurisdiction.
XV. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of California.
XVI. INTERPRETATION
This Agreement shall be construed as a whole, according to its fair meaning, and
not in favor of or against any party. Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning or interpretation of this Agreement. Whenever the context
requires, references to the singular shall include the plural and the plural the
singular.
XVII. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
Executive agrees that any and all of Executive's obligations under this
agreement, including but not limited to Exhibits B and C, shall survive the
termination of employment and the termination of this Agreement.
XVIII. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement, but all of which together shall
constitute one and the same instrument.
XIX. AUTHORITY
Each party represents and warrants that such party has the right, power and
authority to enter into and execute this Agreement and to perform and discharge
all of the obligations hereunder; and that this Agreement constitutes the valid
and legally binding agreement and obligation of such party and is enforceable in
accordance with its terms.
XX. ENTIRE AGREEMENT
This Agreement is intended to be the final, complete, and exclusive statement of
the terms of Executive's employment by the Company and may not be contradicted
by evidence of any prior or contemporaneous statements or agreements, except for
agreements specifically referenced herein (including the Proprietary Information
and Inventions Agreement , the Arbitration Agreement, and the Stock Grant
Agreement). To the extent that the practices, policies or procedures of the
Company, now or in the future, apply to Executive and are inconsistent with the
terms of this Agreement, the provisions of this Agreement shall control. Any
subsequent change in Executive's duties, position, or compensation will not
affect the validity or scope of this Agreement.
XXI. EXECUTIVE ACKNOWLEDGEMENT
EXECUTIVE ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL
COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE
AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE
HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE'S OWN JUDGMENT AND NOT ON ANY
REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
GLENBOROUGH REALTY TRUST: XXXXXXX XXXXXX:
/s/ Xxxxxx Xxxxxxxxxx /s/ Xxxxxxx Xxxxxx
----------------------------- -----------------------------------
By: Xxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxx
President Executive Vice President
