EXHIBIT 10.05
SEVERANCE BENEFITS AGREEMENT
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AGREEMENT, dated as of February 1, 2007, by and among GLIMCHER REALTY
TRUST, a Maryland real estate investment trust, with offices at 000 Xxxx Xxx
Xxxxxx, Xxxxxxxx, Xxxx 00000 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 000 Xxxx Xxx Xxxxxx, Xxxxxxxx,
Xxxx 00000 ("GPLP"), and XXX X. XXXXX, an individual (the "Executive").
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services for and on
behalf of the Company upon terms and conditions upon which the Company and the
Executive have previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
future growth of the Company will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement; provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or
(b) the Executive is an Executive officer, trustee, director or more than
5% equity holder of the other party to the Control of GRT Event or of any
entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"); provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist or (b) (1) the shareholders of GRT, immediately
before such transaction, own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially, directly or indirectly, owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly of indirectly, immediately following such Other Transaction
fifty percent (50%) or less of the combined voting power of the outstanding
voting securities of the corporation or other entity resulting from such
Other Transaction (the "Other Surviving Corporation") in substantially the
same proportion as their ownership of the voting securities of GRT
immediately before such Other Transaction or (b) the individuals who were
members of GRT's Board of Trustees immediately prior to the execution of
the agreement providing for such Other Transaction constitute less than a
majority of the members of the board of directors or board of trustees, as
the case may be, of the Other Surviving Corporation, or of a corporation or
other entity beneficially, directly or indirectly, owing a majority of the
outstanding voting securities of the Other Surviving Corporation; provided,
however, that an Other Transaction shall not be deemed to result in a
Change in Control of GRT if immediately prior thereto the circumstances in
(i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to two (2) times the Base Amount (as
defined below). For purposes of the Section 3(a), the Base Amount shall mean the
Executive's annual compensation during the calendar year period preceding the
calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in this Section 3(a), there shall be included
(i) all base salary and bonuses paid or payable to the Executive by the Company
with respect to the preceding calendar year (except that for purposes of
determining the Executive's base salary under this subsection for a Change of
Control that occurs during GRT's 2007 fiscal year, the Executive's base salary
shall be equal to $250,000); (ii) all grants of restricted common shares of
beneficial interest of GRT (the "Shares"), if any, with respect to such
preceding calendar year, which Shares shall be valued based on their date of
grant at the then Fair Market Value (as defined in GRT's Amended and Restated
2004 Incentive Plan, or any other plan or agreement pursuant to which they are
issued) and (iii) the fair market value of any other property or rights given or
awarded to the Executive by the Company with respect to such preceding calendar
year, or partial first year of employment.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on the day immediately prior to the date of a
Change in Control of GRT and no longer be subject to repurchase or any other
forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for eighteen (18) months following
a Change in Control of GRT, all life, accident, medical and dental insurance
benefit plans and programs or arrangements in which the Executive was entitled
to participate immediately prior to the date of a Change in Control of GRT,
provided that the Executive's continued participation is allowable under the
general terms and provisions of such plans and programs and provided, further,
that in the event that the Executive becomes employed by any third party during
such 18-month period, then upon the date of such employment the Executive shall
no longer be entitled to any accident, medical or dental insurance benefits
described in the preceding clause. Subject to the preceding sentence, in the
event that the Executive's participation in any such plan or program is barred,
GRT and GPLP shall arrange to cause the Company to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans and programs. Subject to the first sentence of this
paragraph, at the end of the period of coverage, the Executive shall have the
option to have assigned to him at no cost to the Executive and with no
apportionment of prepaid premiums, any assignable insurance policy owned by the
Company and relating specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an "excess of parachute payment"
within the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986,
as amended (the "Code") (or for which a tax is otherwise payable under Section
4999 of the Code), then GPLP shall pay the Executive an additional amount (the
"Additional Amount") equal to the sum of (i) all taxes payable by the Executive
under Section 4999 of the Code with respect to all such excess parachute
payments (or otherwise) including, without limitation, the Additional Amount,
plus (ii) all Federal, state and local income taxes for which the Executive may
be liable with respect to the Additional Amount. The amounts payable pursuant to
this Section 4 shall be paid by GPLP to the Executive not later than the date of
any Change in Control of GRT, unless otherwise agreed to in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in Section 5 only if and when a final judgment
has been rendered in favor of the Executive and all appeals related to any such
action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8 GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Maryland, without
regard to Maryland's conflicts of law principles. Any dispute or controversy
arising under this Agreement, or out of the interpretation hereof, or based upon
the breach hereof, shall be resolved by arbitration held at the offices of the
American Arbitration Association in The Commonwealth of Pennsylvania, in the
City of Philadelphia, in accordance with the rules and regulations of such
association prevailing at the time of the demand for arbitration by either party
hereto; provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret, and not modify or amend, the terms and
provisions hereof. Judgment upon an award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding anything contained in this Section 8, either party shall have
the right to seek preliminary injunctive relief in any court in the City of
Philadelphia in aid of (and pending the final decision) the arbitration
proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This shall inure to the benefit of, be
binding upon and enforceable by GRT and GPLP, their successors and assigns, and
the Executive and the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same. All notices shall
be deemed to have been given as of the date of personal delivery, transmittal or
mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to the Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect to this Agreement and all
documents, agreements, understandings and arrangements relating to this
transaction and will not seek recourse or commence any action against any of the
trustees, officers or shareholders or GRT or any of their personal assets for
the performance or payment of any obligation hereunder or thereunder. The
foregoing shall also apply to any future documents, agreements, understandings,
arrangements and transactions between the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
BY: GLIMCHER PROPERTIES CORPORATION,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
EXECUTIVE:
/s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
