================================================================================
EMPLOYMENT AGREEMENT
FOR
XXXXXX SPRING
==============================================================================
TABLE OF CONTENTS
Page
----
1. Employment...............................................................1
2. Services.................................................................2
3. Compensation and Benefits................................................3
4. Termination of Employment and Change in Control..........................7
5. Confidential Information................................................15
6. Return of Documents.....................................................16
7. Noncompete..............................................................17
8. Remedies................................................................18
9. Successors and Assigns..................................................19
10. Timing of and No Duplication of Payments/ Tax Withholding...............20
11. Modification or Waiver..................................................20
12. Notices.................................................................21
13. Governing Law...........................................................21
14. Severability............................................................21
15. Counterparts............................................................22
16. Headings................................................................22
17. Entire Agreement........................................................22
18. Survival of Agreements..................................................22
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of January
21, 1997, by and between Xxxxxx Spring, an individual residing at 00 Xxxxxxxxxx
Xxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 ("Executive"), and Cali Realty Corporation,
a Maryland corporation with offices at 00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx
00000 (the "Company").
RECITALS
WHEREAS, the Executive has served as Vice President - Operations of the
Company and, through such service, has acquired special and unique knowledge,
abilities and expertise; and
WHEREAS, the Company desires to continue to employ the Executive, and the
Executive desires to continue to be employed by the Company, 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 be employed by the Company, for a term commencing on the date hereof and
expiring on January 21, 2002; provided, however, that commencing on January 21,
2002 and each January 21 thereafter, the term of this Agreement shall be
extended automatically for one (1) additional year unless at least ninety (90)
days prior to the
applicable expiration date either the Company or Executive shall have given
written notice to the other party that such party does not wish to extend this
Agreement. It being agreed and understood that the extension of this Agreement
shall not create an obligation of the Company to issue new awards to Executive
hereunder. The term of this Agreement, as it may be extended from time to time
in accordance with this Paragraph 1, is referred to herein as the "Employment
Period."
2. Services.
During the Employment Period, Executive shall hold the position of Vice
President - Operations and shall devote his best efforts and substantially all
of his business time, skill and attention to the business of the Company, 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
Board of Directors of the Company (the "Board") or the Executive Committee of
the Board, if any; provided, however, that the foregoing is not intended to (a)
preclude Executive from (i) owning and managing personal investments, including
real estate investments, subject to the restrictions set forth in Paragraph 7
hereof or (ii) engaging in charitable activities and community affairs, or (b)
restrict or otherwise limit Executive from conducting real estate development,
acquisition or management activities with respect to those properties described
in Schedule A, attached hereto, (the "Excluded Properties"), provided that the
performance of the activities referred to in clauses (a) and (b) does not
prevent Executive from devoting substantially all of his business time to the
Company.
2
3. Compensation and Benefits.
During the Employment Period, the Company shall pay Executive a minimum
annual base salary in the amount of $140,000 (the "Annual Base Salary"), payable
in accordance with the Company's regular payroll practices. In addition,
Executive also shall be eligible for incentive compensation payable each year in
such amounts as may be determined by the Compensation Committee of the Board
(the "Compensation Committee") based upon, among other factors, growth in Funds
from Operations per Common Share (as hereinafter defined) for the year.
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 on, among other things, Executive's performance, as determined in the sole
discretion of the Compensation Committee. 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. In addition to the compensation
specified above and other benefits provided pursuant to this Paragraph 3,
Executive shall be entitled to the following benefits:
(a) participation in the Employee Stock Option Plan of Cali Realty
Corporation (the "Stock Option Plan") and other benefit plans
(including without limitation the Cali Realty Corporation
401(k) Savings and Retirement Plan and any other stock option
plans which may be adopted or maintained by the Company) made
generally available to executives of the Company with such
participation to be consistent with reasonable Company
guidelines;
(b) participation in any health insurance, disability insurance,
group life insurance or other welfare benefit program made
generally available to executives of the Company; and
3
(c) reimbursement for reasonable business expenses incurred by
Executive in furtherance of the interests of the Company.
In addition, Executive shall be entitled to receive such bonuses and
options to purchase shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock") as the Board shall approve, in its sole discretion,
including, without limitation, options and bonuses contingent upon Executive's
performance and the achievement of specified financial and operating objectives
for Funds from Operations per Common Share. For purposes of this Agreement,
"Funds from Operations per Common Share" for any period shall mean (i) net
income (loss) before minority interest of unit holders, computed in accordance
with generally accepted accounting principles ("GAAP"), excluding gains (or
losses) from debt restructuring and sale of property, plus real estate return,
depreciation and amortization as calculated in accordance with the National
Association of Real Estate Investment Trusts definition published in March 1995,
as amended from time to time, and as applied in accordance with the accounting
practices and policies of the Company in effect from time to time on a
consistent basis to the entire Employment Period, divided by (ii) the sum of (A)
the primary weighted average number of outstanding shares of Common Stock as it
appears in the Company's financial statement for the applicable period and (B)
the primary weighted average number of outstanding limited partnership units of
Cali Realty, L.P., a Delaware limited partnership of which the Company is the
sole general partner, for the applicable period.
As further consideration for Executive agreeing to serve as an
officer and entering into this Agreement upon the terms set forth herein,
including, without
4
limitation, the terms relating to noncompetition set forth in Paragraph 7 below,
the Company shall, concurrently herewith or as soon as practicable after the
execution of this Agreement:
(a) grant to Executive 6,480 Restricted shares of Common Stock
("Restricted Shares") pursuant to the terms and conditions
of this Agreement and the written agreement issued pursuant
to this Agreement, evidencing such award executed between
the Company and Executive (the "Restricted Share
Agreement"). In the event of a conflict between the
Restricted Share Agreement and this Agreement, the terms of
this Agreement shall control.
The Restricted Share Award (as defined in the Restricted Share
Agreement) is scheduled to vest over five (5) years with
twenty percent (20%) of the Restricted Shares vesting on each
of the first anniversary of the date hereof (the "First
Anniversary"), the second anniversary of the date hereof (the
"Second Anniversary"),the third anniversary of the date hereof
(the "Third Anniversary"), the fourth anniversary of the date
hereof (the "Fourth Anniversary") and the fifth anniversary of
the date hereof (the "Fifth Anniversary"), provided, that
certain Performance Goals as defined and set forth in the
Restricted Share Agreement are met. Vesting shall be
cumulative in accordance with the provisions of the Restricted
Share Agreement and the Performance Goals may be achieved as
specified therein up until the seventh anniversary of the date
hereof. Except as otherwise provided in Paragraph 4 hereof,
Executive must be employed by the Company on the applicable
anniversary date to vest in the Restricted Shares scheduled to
vest in a particular year. The measurement date to determine
such vesting shall be the last day of the Company's fiscal
year preceding the year in which the applicable anniversary
date occurs.
In addition, upon vesting of the Restricted Shares on each
applicable anniversary date, the Company shall make a cash
payment to Executive on that anniversary date in an amount
equal to forty percent (40%) of the Fair Market Value
(determined as of such anniversary date) of the Restricted
Shares that vest on such anniversary date (the "Restricted
Share Tax Gross-Up Payment").
(b) loan on a non-recourse basis to Executive $350,000 (the
"Stock Acquisition Loan"), with the loan proceeds to be
used by Executive simultaneously to purchase newly issued
Common Stock from the Company. Interest shall accrue on
the Stock Acquisition Loan at
5
the rate of 6.21% per year and shall be payable, on the entire
outstanding balance, annually in arrears. The Stock
Acquisition Loan is being granted and secured pursuant to the
terms and conditions of this Agreement, and a Secured
Non-Recourse Promissory Note and Stock Pledge Agreement
evidencing and securing such Loan as executed between the
Company and Executive. In the event of a conflict between the
aforementioned documents and this Agreement, the terms of this
Agreement shall control.
The Stock Acquisition Loan shall be forgiven over a period of
five (5) years from the date hereof, with twenty percent (20%)
of the principal and interest on the then outstanding balance
of the principal to be forgiven on each applicable anniversary
date (the "Forgiven Amount"). In addition, on each applicable
anniversary date as the Stock Acquisition Loan and interest
accrued thereon is forgiven, in order to enable Executive to
meet his tax liability with respect to the forgiveness of the
Stock Acquisition Loan, the Company shall make a cash payment
to Executive on that anniversary date in an amount equal to
forty percent (40%) of the respective Forgiven Amount (the
"Acquisition Loan Tax Gross-Up Payment"). Since the Stock
Acquisition Loan will be forgiven over a five (5) year period,
a total of five (5) Acquisition Loan Tax Gross-Up Payments
will be made to Executive over the period of forgiveness. No
additional payments will be made to Executive with respect to
any Acquisition Loan Tax Gross-Up Payments made hereunder.
Except as otherwise provided in Paragraph 4 hereof, the
aforementioned forgiveness of the Stock Acquisition Loan
inclusive of interest thereon and respective Acquisition Loan
Tax Gross-Up Payment shall only occur if Executive is employed
by the Company on the applicable anniversary date.
The Stock Acquisition Loan shall be initially secured by the
shares of Common Stock purchased by Executive from the Company
with the proceeds of the Stock Acquisition Loan. Beginning on
the First Anniversary, the outstanding balance of the Stock
Acquisition Loan shall be secured only by shares of Common
Stock having a Fair Market Value of one hundred and ten
percent (110%) of the outstanding principal amount of the
Stock Acquisition Loan (together with interest accrued
thereon). On the First Anniversary, and on each anniversary
date, March 31, June 30 and September 30 through the Fifth
Anniversary (each such date a "Determination Date"), the
Company shall reasonably determine the aggregate Fair Market
Value of the collateral (the "Market Value") being held. If on
such Determination Date the Market Value exceeds one
6
hundred ten percent (110%) of the outstanding balance of the
Stock Acquisition Loan (together with interest accrued
thereon) on such Determination Date (the "Base Value"), the
Company shall, unless otherwise requested by Executive,
automatically release to Executive such portion of the
collateral the aggregate Fair Market Value of which equals the
Market Value less 110% of the Base Value, free and clear of
any and all encumbrances under the Stock Pledge Agreement.
Executive shall be required to execute the aforementioned
Stock Pledge Agreement and Secured Non-Recourse Promissory
Note. The Company shall then issue shares of Common Stock to
Executive in exchange for the Stock Acquisition Loan. The
Company shall, upon receipt from Executive of the Stock Pledge
Agreement and Secured Non-Recourse Promissory Note for the
purchase of the shares of Common Stock purchased with the
proceeds of the Stock Acquisition Loan, make prompt delivery
of the certificates evidencing the shares of Common Stock to
Executive, subject to any requirements set forth in the Stock
Pledge Agreement; provided, however, that if any law or
regulation requires the Company to take any action with
respect to such shares prior to the delivery thereof, then the
date of the delivery of the shares shall be extended for the
period necessary to complete such action. Certificates for
shares of Common Stock when issued to Executive may have
restrictive legends or statements of other applicable
restrictions endorsed thereon and may not be immediately
transferable.
4. Termination of Employment and Change in Control.
(a) Termination of Employment by the Company for Cause or By Executive
without Good Reason. In the event (i) the Company terminates Executive's
employment for Cause (as hereinafter defined) or (ii) Executive terminates his
employment without Good Reason (as hereinafter defined), the Company shall pay
Executive any unpaid salary accrued through and including the date of
termination. In addition, in such event, Executive shall be entitled (i) to
exercise any options which have vested and are exercisable in accordance with
the terms of the applicable option
7
grant agreement or plan, (ii) to retain any Restricted Shares previously awarded
to Executive pursuant to this Agreement and the Restricted Share Agreement and
any Restricted Share Tax Gross-Up Payments which are fully vested on the date of
termination, and (iii) to retain any shares of Common Stock purchased by
Executive with the proceeds of the Stock Acquisition Loan which are no longer
pledged as collateral for the outstanding balance of the Stock Acquisition Loan
and any Acquisition Loan Tax Gross-Up Payments applicable to Forgiven Amounts
and to retain the balance of the shares of Common Stock which are still pledged
as collateral for the outstanding balance of the Stock Acquisition Loan,
provided, that Executive immediately repays to the Company the outstanding
balance of the Stock Acquisition Loan including interest accrued thereon through
the date of termination. Except for any rights which Executive may have to
unpaid salary amounts through and including the date of termination, vested
options, vested Restricted Shares and related Restricted Share Tax Gross-Up
Payments, and shares of Common Stock purchased with the proceeds of the Stock
Acquisition Loan and related Acquisition Loan Tax Gross-Up Payments, all as set
forth above, the Company shall have no further obligations hereunder following
such termination.
(b) Termination of Employment Upon Death or Disability . In the event of
termination of Executive's employment as a result of either (i) Executive's
death or Disability (as hereinafter defined), the Company shall pay to
Executive, his estate or his personal representative (A) the unpaid salary
through the end of the Employment Period remaining (assuming no such termination
occurred) and (B) a pro-rata portion, based upon the number of days in the
period beginning with January 1 of the calendar
8
year in which such termination occurred and ending with the date the Employment
Period ends (assuming such termination did not occur), of the average annual
amount of incentive compensation payments paid to Executive during each previous
year of Executive's employment hereunder (the "Pro-Rata Portion of Incentive
Compensation"). The aforesaid amount shall be payable, at the option of
Executive, his estate or his personal representative, either (i) in full
immediately upon such termination or (ii) monthly over the remainder of the
Employment Period. In addition, Executive shall be entitled (i) at the option of
Executive, his estate or his personal representative, within one (1) year of the
date of such termination, to exercise any options which have vested (including,
without limitation, by acceleration in accordance with the terms of the
applicable option grant agreement or plan) and are exercisable in accordance
with the terms of the applicable option grant agreement or plan 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 option as of the date of
Executive's termination of employment, (ii) to retain all Restricted Shares
awarded to Executive pursuant to this Agreement and the Restricted Share
Agreement whether or not such Restricted Shares had previously vested as of the
date of termination. In the event any Restricted Shares have not vested as of
the date of termination, such Restricted Shares shall immediately vest and
Executive, his estate or his personal representative shall receive a cash
payment from the Company
9
on the date of termination in an amount equal to forty percent (40%) of the Fair
Market Value (determined as of the date of termination) of the Restricted Shares
that vest on the date of termination (the "Termination Restricted Share Tax
Gross-Up Payment"), (iii) to retain all shares of Common Stock purchased by
Executive with the proceeds of the Stock Acquisition Loan without regard to
whether or not the Stock Acquisition Loan has been forgiven or repaid. In the
event there is an outstanding balance on the Stock Acquisition Loan, such
outstanding balance including interest accrued thereon shall on the first day of
the calendar month next succeeding Executive's Disability or death be forgiven
(and any shares pledged under the Stock Pledge Agreement shall be released to
Executive, his estate or his personal representative) and Executive, his estate
or his personal representative shall receive a cash payment from the Company on
that date in an amount equal to forty percent (40%) of the outstanding balance
of the Stock Acquisition Loan and interest accrued thereon that is forgiven on
the date of termination (the "Termination Acquisition Loan Tax Gross-Up
Payment"). Except for any rights which Executive may have to unpaid salary
amounts through the end of the Employment Period, the Pro-Rata Portion of
Incentive Compensation, vested options, Restricted Shares (and the full vesting
thereof) and the Termination Restricted Share Tax Gross-Up Payment, and shares
of Common Stock purchased with the proceeds of the Stock Acquisition Loan (and
the forgiveness of the outstanding balance of the Stock Acquisition Loan
inclusive of interest accrued thereon) and the Termination Acquisition Loan Tax
Gross-Up Payment, all as set forth above, the Company shall have no further
obligations hereunder following such termination.
10
(c) Termination of Employment By the Company Without Cause or By the
Executive for Good Reason. In the event (i) the Company terminates Executive's
employment for any reason other than Cause or (ii) Executive terminates his
employment for Good Reason, the Company shall pay to Executive (A) the unpaid
salary through the end of the Employment Period remaining (assuming no such
termination occurred) and (B) a pro-rata portion, based upon the number of days
in the period beginning with January 1 of the calendar year in which such
termination occurred and ending with the date the Employment Period ends
(assuming such termination did not occur), of the average annual amount of
incentive compensation payments paid to Executive during each previous year of
Executive's employment hereunder. The aforesaid amount shall be payable, at the
option of Executive, either (i) in full immediately upon such termination or
(ii) monthly over the remainder of the Employment Period. In addition, Executive
shall be entitled (i) at the option of Executive, within ninety (90) days of the
date of such termination, to exercise any options which have vested (including,
without limitation, by acceleration in accordance with the terms of the
applicable option grant agreement or plan) and are exercisable in accordance
with the terms of the applicable option grant agreement or plan, it being agreed
and understood that this Agreement does not require the Company to issue options
to Executive, (ii) to retain any Restricted Shares previously awarded to
Executive pursuant to this Agreement and the Restricted Share Agreement and any
Restricted Share Tax Gross-Up Payments which are fully vested on the date of
termination, and (iii) to retain any shares of Common Stock purchased by
Executive with the proceeds of the Stock Acquisition Loan which are no longer
pledged as
11
collateral for the outstanding balance of the Stock Acquisition Loan and any
Acquisition Loan Tax Gross-Up Payments applicable to Forgiven Amounts and to
retain the balance of the shares of Common Stock which are still pledged as
collateral for the outstanding balance of the Stock Acquisition Loan, provided,
that Executive immediately repays to the Company the outstanding balance of the
Stock Acquisition Loan including interest accrued thereon through the date of
termination. Except for any rights which Executive may have to unpaid salary
amounts through the end of the Employment Period, the Pro-Rata Portion of
Incentive Compensation, vested options, vested Restricted Shares and related
Restricted Share Tax Gross-Up Payments, and shares of Common Stock purchased
with the proceeds of the Stock Acquisition Loan and related Acquisition Loan Tax
Gross-Up Payments, all as set forth above, the Company shall have no further
obligations hereunder following such termination.
(d) Upon a Change in Control. In the event of a Change in Control (as
hereinafter defined), Executive shall be entitled (i) to all Restricted Shares
awarded to Executive pursuant to this Agreement and the Restricted Share
Agreement whether or not such Restricted Shares had previously vested as of the
date of the Change in Control. In the event any Restricted Shares have not
vested as of the date of the Change in Control, such Restricted Shares shall
immediately vest and Executive shall receive a cash payment from the Company on
the date of the Change in Control in an amount equal to forty percent (40%) of
the Fair Market Value (determined as of the date of the Change in Control) of
the Restricted Shares that vest on the date of the Change in Control (the
"Change in Control Restricted Share Tax Gross-Up Payment"), and (ii) to all
shares of Common Stock purchased by Executive with the proceeds of the
12
Stock Acquisition Loan without regard to whether or not the Stock Acquisition
Loan has been forgiven or repaid. In the event there is an outstanding balance
on the Stock Acquisition Loan, such outstanding balance including interest
accrued thereon through the date of the Change in Control shall be immediately
forgiven (and any shares pledged under the Stock Pledge Agreement shall be
released to Executive) and Executive shall receive a cash payment from the
Company on the date of the Change in Control in an amount equal to forty percent
(40%) of the outstanding balance of the Stock Acquisition Loan and interest
accrued thereon that is forgiven on the date of the Change in Control (the
"Change in Control Acquisition Loan Tax Gross-Up Payment"). Any cash payments
owed to Executive pursuant to this Paragraph 4(d) shall be paid to Executive in
a single sum on or immediately prior to date of the Change in Control but prior
to the consummation of the transaction with any successor.
In addition, any other options previously or hereafter granted to
Executive that have not vested as of the date of the Change in Control shall
immediately vest upon the occurrence of and on the date of a Change in Control
irrespective of whether Executive's employment terminates in connection with
such Change in Control.
(e) For purposes of this Agreement:
(i) "Cause" shall mean (A) the willful and continued
failure by Executive 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, or (B)
willful misconduct by Executive which is materially
injurious to the Company, monetarily or otherwise, or
(C) the willful violation by Executive of the
provisions of Paragraph 5 or 7
13
hereof. For purposes of this Paragraph 4(e)(i), 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) "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, of thirty percent
(30%) or more of the Common Stock of the Company
issued and outstanding immediately prior to such
acquisition; (b) any Common Stock of the Company is
purchased pursuant to a tender or exchange offer
other than an offer by the Company; or (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 immediately before such transaction
own, immediately after consummation of such
transaction, equity securities (other than options
and other rights to acquire equity securities)
possessing less than thirty percent (30%) of the
voting power of the surviving or acquiring company.
(iii) "Disability" shall mean the 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
disability has disabled Executive for a cumulative
period of one hundred eighty (180) days within a twelve
(12) month period.
(iv) "Fair Market Value" shall mean the closing price of the
Common Stock as quoted on the New York Stock Exchange at
the end of the last business day preceding the
Determination Date, the applicable anniversary or the
date of termination, as the case may be, as reported in
the New York edition of the Wall Street Journal.
(v) "Good Reason" shall mean (A) any material and
substantial breach of this Agreement by the Company,
(B) a material
14
reduction in the Executive's Annual Base Salary or other
benefits (except for bonuses or similar discretionary
payments) as in effect at the time in question, or any
other failure by the Company to comply with Paragraph 3
hereof, or (C) the Company shall have given notice
pursuant to Paragraph 1 hereof at any time prior to the
sixth anniversary of the date hereof that it does not
wish to extend this Agreement, except in connection with
termination of Executive's employment for Cause or by
reason of death or Disability.
(vi) "Repurchase Fair Market Value" shall mean the average of
the closing price on the New York Stock Exchange 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;
(f) 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.
5. 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. The
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
15
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, 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 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 5, 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.
6. 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,
16
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.
7. 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 State of New York, the State of
New Jersey, the State of Pennsylvania, and the State of Connecticut, engage in,
or own, invest in, manage or control any venture or enterprise primarily engaged
in any office-service, office, industrial, or flex 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. Moreover, the
foregoing limitations shall not be deemed to restrict or otherwise limit
Executive from conducting real estate development, acquisition or management
activities with respect to the Excluded Properties, if any, provided that during
the Employment Period the performance of such activities does not prevent
Executive from devoting substantially all of his business time to the Company.
17
(b) If, at the time of enforcement of this Paragraph 7, 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 7, 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.
8. 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
Paragraph 5, 6 or 7 of this Agreement. Therefore, in the event of the actual or
threatened breach by Executive of any of the provisions of Paragraph 5, 6 or 7
of this Agreement, the Company may, in addition and supplementary to other
rights and 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.
18
9. 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 his employment terminated due to Disability,
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 9 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
9 shall be paid to Executive in a single sum immediately prior to the
consummation of the transaction with such successor.
(b) This Agreement and all rights of Executive hereunder shall inure to
the benefit of and be enforceable by Executive's personal or legal
representatives,
19
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die 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
Executive's beneficiary as determined under any applicable plan, Executive's
devisee, legatee, or other designee or, if there be no such designee, to
Executive's estate.
10. Timing of and No Duplication of Payments/ Tax Withholding.
(a) 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.
(b) The Company shall have the right to deduct and withhold from any
amounts which become taxable to Executive hereunder all employment and other
federal, state and local taxes and charges which are, or which may hereafter, be
required by law to be so deducted or withheld.
11. 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
20
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.
12. 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 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 12).
13. Governing Law.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS THEREUNDER.
14. 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
21
such applicable law, then, subject to the provisions of Paragraph 7(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.
15. 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.
16. 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.
17. 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.
18. Survival of Agreements.
The covenants made in Paragraphs 4, 5, 6, 7, 8 and 14 each shall survive
the termination of this Agreement.
22
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
CALI REALTY CORPORATION
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: President
/s/ Xxxxxx Spring
---------------------------------
Xxxxxx Spring
23
SCHEDULE A
