Exhibit 10.12 Employment contract dated September 29, 1995 between the Trust
and Xx. Xxxxxxxxx.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
September 29, 1995, by and between Value Property Trust (formerly known as
Mortgage and Realty Trust), a Maryland business trust having its principal place
of business at 000 Xxxxxx Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxx Xxxxxx 00000 (the
"Trust"), and Xxxxxx X. Xxxxxxxxx, an individual residing at the address set
forth below his name on the signature page hereof ("Executive").
WHEREAS, the Trust desires to employ Executive as the President and
Chief Executive Officer of the Trust, and Executive has agreed to become the
President and Chief Executive Officer of the Trust, on the terms set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the Trust and Executive agree as follows:
1. Term. The Trust agrees to employ Executive, and Executive hereby
agrees to work for the Trust as a full-time employee, for a period commencing on
the date first set forth above and ending on the third anniversary of such date
(the "Original Term"). The Original Term shall be extended automatically for
additional one-year periods (each a "Renewal Term") unless notice that this
Agreement will not be extended is given by either party to the other 30 days
prior to the expiration of the Original Term or any Renewal Term. (The period of
Executive's employment hereunder within the Original Term and any Renewal Term
is herein referred to as the "Employment Period".)
2. Employment. During the Employment Period, Executive shall be employed
as the President and Chief Executive Officer of the Trust. In the performance of
his duties, Executive shall be subject to the direction of the Board of Trustees
of the Trust (the "Board of Trustees") and shall not be required to take
direction from or report to any other person. Executive's duties and authority
shall be commensurate with his title and position with the Trust. Executive
agrees to his employment as described in this Section 2 and agrees to devote
substantially all of his business time and efforts to the business and affairs
of the Trust. Executive agrees to serve the Trust faithfully and to the best of
his ability, and to perform such services and duties in connection with the
business, affairs and operations of the Trust as may be assigned or delegated to
him from time to time by or under, and in accordance with, the authority and
direction of the Board of Trustees, and to use his reasonable best efforts in
the promotion and advancement of the Trust and its welfare.
3. Noncompetition During Employment Period. Because Executive's services
to the Trust are essential and because Executive has access to the Trust's
confidential information, Executive covenants and agrees that during the
Employment Period, Executive will be a full-time employee of the Trust as
provided in Section 2 hereof and Executive will not, without the express prior
written consent of the Board of Trustees, invest in any real estate in which the
Trust has an investment or has reviewed as a possible investment or become
actively involved in any business or venture which competes, directly or
indirectly, with the Trust or which would materially impair Executive's ability
to perform fully his obligations under this Agreement. Notwithstanding anything
contained herein to the contrary, Executive is not prohibited by this Section 3
from (a) making investments in any entity that owns, invests in, refurbishes,
manages, leases or markets real estate if the shares of such entity are publicly
traded and Executive's aggregate investments in such entity's constitute less
than 5% of the equity ownership or $250,000, whichever is greater, of such
entities, (b) participating as an officer, director or advisor to any charitable
or tax-exempt organization, or (c) making investments of up to $100,000 in any
private real estate investment (other than real estate in which the Trust has an
investment or has reviewed as a possible investment) after the Board of Trustees
has been duly informed of such Proposed investment.
4. Base Salary. During the Employment Period, Executive's salary will be
at the rate of $200,000 per year ("Base Salary"). Base Salary shall be payable
in accordance with the Trust's normal business practices for senior executive
officers, but no less frequently than monthly. Executive's Base Salary shall be
reviewed no less frequently than annually by the Compensation and Nominating
Committee of the Board of Trustees and may be increased, but not decreased,
during the Employment Period.
5. Performance Incentive Bonus Plan and Share Option Plan. Executive
will be eligible for annual bonus compensation pursuant to the Trust's
Performance Incentive Bonus Plan (the "Bonus Plan") and the 1995 Share Option
Plan and any other share option or incentive compensation plan that is adopted
by the Trust and in which the Trust's executive officers generally participate
(the "Other Plans"). Awards, if any, made under the Bonus Plan or the Other
Plans shall be determined in the discretion of the Compensation and Nominating
Committee of the Board of Trustees. Upon commencement of the Employment Period,
Executive will receive share options to purchase 244,000 shares of beneficial
interest of the Trust, subject to vesting at a rate of 33 1/3% per year over
three years, pursuant to the Trust's 1995 Share Option Plan. The exercise price
and other terms applicable to such options will be determined by the
Compensation and Nominating Committee of the Board of Trustees in its discretion
pursuant to the 1995 Share Option Plan.
6. Other Benefits. During the Employment Period, Executive shall have
the right to participate in the Trust's 401 (k) Savings Plan, and any health,
dental, retirement, pension or other benefit plans that are made generally
available to the executive officers of the Trust from time to time. Executive
shall be entitled to reasonable paid vacation time in accordance with the then
regular procedures of the Trust for senior executive officers.
7. Termination.
(a) Employment. Executive's employment hereunder may be
terminated by the Trust at any time for other than Good Reason (as
defined in Section 7 (c)), by a majority vote of all of the members of
the Board of Trustees upon written notice to Executive. In the event of
such termination, all compensation and benefits provided to Executive
under this Agreement shall cease except that the Trust shall continue to
pay only the Executive's Base Salary at the same rate for six (6)
months. Any unexercised vested options shall remain exercisable only to
the extent provided in the applicable share option plan and option
agreements.
(b) Termination by Executive Under Certain Circumstances.
Executive's employment hereunder may be terminated effective immediately
by Executive by written notice to the Board of Trustees in the event of
(i) a failure by the Board of Trustees to elect Executive to offices
with the same or substantially the same duties and responsibilities as
set forth in Section 2, (ii) a failure by the Trust to comply with the
provisions of Sections 4, 5 or 6 or a material breach by the Trust of
any other provision of this Agreement, or (iii) personal health
problems. In the event of such termination, all compensation and
benefits provided to Executive under this Agreement shall cease except
that the Trust shall continue to pay only the Executive's Base Salary at
the same rate for six (6) months. Any unexercised vested options shall
remain exercisable only to the extent provided in the applicable share
option plan and option agreements.
(c) Termination by the Trust for Good Reason or by Executive
Without Cause. If (A) Executive is terminated for Good Reason (as
defined below) or (B) if Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7 (b) hereof), then
the Employment Period shall terminate as of the effective date set forth
in the written notice of such termination (the "Termination Date") and
Executive shall be entitled to receive only his Base Salary at the rate
provided pursuant to Section 4 which is payable prior to the Termination
Date. Any unexercised vested options shall remain exercisable only to
the extent provided in the applicable share option plan and option
agreements. "Good Reason" shall mean a finding by the Board of Trustees
that the Executive has (i) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder and has not corrected such action within fifteen (15) days of
receipt of written notice thereof; (ii) defaulted in the performance of
his material duties hereunder and has not corrected such action within
fifteen (15) days of receipt of written notice thereof; (iii) committed
a material act of common law fraud against the Trust or its employees,
which act has had an adverse impact on the financial affairs of the
Trust; or (iv) been convicted of a felony and such conviction has had an
adverse effect on the interests of the Trust. In the case of a
termination pursuant to Section 7(c)(B), the Executive shall continue to
comply with the provisions of Section 3 until the first anniversary of
the Termination Date.
(d) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Trust will pay
Executive's Base Salary for a period of three (3) months from the date
of his death or such other period as the Board of Trustees may
determine, to Executive's estate or a beneficiary designated by
Executive in writing prior to his death. Any unexercised or unvested
options shall remain exercisable or vest upon Executive's death only to
the extent provided in the applicable share option plan and option
agreements.
(e) Termination by Reason of Disability. In the event that
Executive shall become unable to efficiently perform his duties
hereunder because of any physical or mental disability or illness,
Executive shall be entitled to be paid his Base Salary until the earlier
of such time when (i) the period of disability or illness (whether or
not the same disability or illness) shall exceed 180 consecutive days
during the Employment Period or (ii) Executive becomes eligible to
receive benefits under a comprehensive disability insurance policy
obtained by the Trust (the "Disability Period"). Following the
expiration of the Disability Period, the Trust may terminate this
Agreement upon written notice of such termination. Any unexercised or
unvested share options shall remain exercisable or vest upon such
termination only to the extent provided in the applicable share option
plan and option agreements.
8. Remedies For Breach. If Executive breaches the terms of this
Agreement, in addition to any other remedies which it may have, the Trust may
terminate Executive's employment and any further participation in any employee
plan in accordance with employment policies of the Trust, as in effect from time
to time, and Executive shall forfeit any further compensation. In addition, the
provisions of Sections 3 and 9 of this Agreement may be specifically enforced if
not performed according to their terms. Without limiting the generality of the
foregoing, the parties acknowledge that the Trust would be irreparably damaged
and there would be no adequate remedy at law for Executive's breach of Sections
3 and 9 hereof and, accordingly, Executive hereby consents to the entry of any
temporary restraining order or preliminary or ex parte injunction, in addition
to any other remedies available at law or in equity, to enforce the provisions
thereof. This Section shall survive the termination of this Agreement.
9. Records and Nondisclosure of Confidential Information. All records,
financial statements and similar documents obtained, reviewed or compiled by
Executive in the course of the performance by him of services for the Trust,
whether or not confidential information or trade secrets, shall be the exclusive
property of the Trust. Executive shall have no rights in such documents upon any
termination of this Agreement. The agreement set forth in this Section 9 shall
survive the expiration of the Employment Period and any termination of this
Agreement.
10. Waiver. The failure of the Trust to require the performance of any
term or obligation provided for herein, or the waiver by the Trust of any breach
of this Agreement, shall not prevent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach.
11. Conflicting Agreements. Executive hereby represents and warrants
that the execution of this Agreement and the performance of his duties and
obligations hereunder will not breach or be in conflict with any other agreement
to which he is a party or is bound, and that he is not now subject to any
covenants against competition or similar covenants in favor of any other person
or entity which could affect the performance of his duties hereunder.
12. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement supersedes and replaces any prior agreement or arrangement relative to
Executive's employment by the Trust, and all such prior agreements and
arrangements are hereby terminated.
13. Governing Law and Severability. This Agreement shall be governed by
and construed under the laws of the State of New Jersey and shall not be
modified or discharged in whole or in part except by an agreement in writing
signed by the parties hereto. In case any one or more of the provisions or parts
of a provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable provision or part of a provision had been limited or
modified (consistent with its general intent) to the extent necessary so that it
shall be valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained herein,
and the parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose and
intent of the provision or part of such provision originally contained herein.
14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns; provided, however, that this Agreement may not be assigned by
Executive without the prior written consent of the Trust. The Trust shall
require any successor of the Trust which shall acquire, directly or indirectly,
by merger, consolidation, purchase or otherwise, all or substantially all of the
assets of the Trust, by an agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Trust would be required to perform if no
such succession had taken place.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as an instrument under seal as of the date first set forth above.
VALUE PROPERTY TRUST
By: Xxxxxx Xxxxxxxxx
Compensation and Nominating Committee
Value Propert Trust
/s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
Signed 9/29/95
