EXHIBIT 10.28
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is entered into this
______ day of February, 1999, by and between Weeks Corporation, a Georgia
corporation, and ________________________________________________ ("Executive").
WHEREAS, Executive is employed by Weeks or provides services directly
or indirectly to Weeks as an employee of one, or more than one, Weeks Affiliate;
and
WHEREAS, Weeks desires to continue to retain Executive's services,
trust, confidence and complete and undivided attention if there is any
speculation regarding a Change in Control of Weeks;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Weeks and Executive
hereby agree as follows:
(S) 1.
Definitions
-----------
1.1 Board. The term "Board" for purposes of this Agreement shall mean the
-----
Board of Directors of Weeks.
1.2 Cause. The term "Cause" for purposes of this Agreement shall mean:
-----
(a) Executive is convicted of any felony or any misdemeanor that the
Board in good faith determines involves moral turpitude;
(b) Executive engages in a fraudulent or dishonest act that materially
damages or prejudices Weeks or a Weeks Affiliate or engages in conduct or
activities materially damaging to the property, business or reputation of
Weeks or a Weeks Affiliate, all as determined by the Board in good faith;
(c) Any act or omission by Executive involving gross malfeasance or
gross negligence in the performance of his duties and responsibilities to
Weeks to the material detriment of Weeks or a Weeks Affiliate, all as
determined by the Board in good faith, which has not been corrected by
Executive (as determined by the Board in good faith) within thirty (30)
days after written notice from the Board of any such act or omission;
(d) Any failure by Executive to comply in any material respect with
any appropriate and proper written policies or directives of Weeks or a
Weeks Affiliate, which failure has a material and adverse effect on the
business or reputation of Weeks or a Weeks Affiliate, all as determined by
the Board in good faith, which has not been corrected by Executive (as
determined by the Board in good faith) within thirty (30) days after
written notice from the Board of such failure;
(e) Executive's continued habitual insobriety or substance abuse, as
determined by the Board in good faith after written notice from the Board
and after a reasonable opportunity to undergo appropriate treatment for a
reasonable period; or
(f) Any diversion by Executive of any viable and significant business
opportunity from Weeks or a Weeks Affiliate (other than with the prior
written consent of the Board) which Executive effects directly or
indirectly for his own benefit.
1.3 Change in Control. The term "Change in Control" for purposes of this
-----------------
Agreement shall mean:
(a) a "change in control" of Weeks of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A for a proxy
statement filed under Section 14(a) of the Securities Exchange Act of 1934,
as amended ("1934 Act");
(b) a "person" (as that term is used in Section 14(d)(2) of the 0000
Xxx) becomes after the effective date of this Agreement the beneficial
owner (as defined in Rule 13d-3 under the 0000 Xxx) directly or indirectly
of securities representing 50% or more of the combined voting power for
election of directors of the then outstanding securities of Weeks;
(c) the individuals who at the beginning of any period of two
consecutive years or less constitute the Board cease for any reason during
such period to constitute at least a majority of the Board, unless the
election or nomination for election of each new member of the Board was
recommended or approved by vote of at least two-thirds of the members of
the Board then serving as such who were members of the Board at the
beginning of such period;
(d) the shareholders of Weeks approve any dissolution or liquidation
of Weeks or any sale or disposition of 50% or more of the assets or
business of Weeks; or
(e) the shareholders of Weeks approve a merger or consolidation to
which Weeks is a party (other than a merger or consolidation with a wholly-
owned subsidiary of Weeks) or a share exchange in which Weeks will exchange
Weeks shares for shares of another corporation as a result of which the
persons who were shareholders of Weeks immediately before the effective
date of such merger, consolidation or share exchange will have beneficial
ownership of less than 50% of the combined voting power for election of
directors of the surviving corporation immediately following the effective
date of such merger, consolidation or share exchange, based exclusively on
such beneficial ownership of such voting power which is held by such
persons in the surviving corporation immediately following such effective
date in substantially the same proportion by such persons as such
-2-
person's beneficial ownership in such voting power in Weeks was held
immediately before such effective date.
1.4 Code. The term "Code" for purposes of this Agreement shall mean the
----
Internal Revenue Code of 1986, as amended.
1.5 Confidential or Proprietary Information. The term "Confidential or
---------------------------------------
Proprietary Information" for purposes of this Agreement shall mean any secret,
confidential, or proprietary information of Weeks or a Weeks Affiliate (not
otherwise included in the definition of Trade Secret in (S) 1.13 of this
Agreement) that has not become generally available to the public by the act of
one who has the right to disclose such information without violating any right
of Weeks or a Weeks Affiliate.
1.6 Current Compensation Package. The term "Current Compensation Package"
----------------------------
for purposes of this Agreement shall mean:
(a) Executive's annual salary from Weeks and any Weeks Affiliate
(including any deferrals of such annual salary) as in effect on the date
his employment with Weeks or a Weeks Affiliate terminates or on any date in
the twenty-four (24) month period ending on such date, whichever is
greater; and
(b) the (i) highest average total annual cash bonus paid to Executive
by Weeks and any Weeks Affiliate in any three (3) calendar years (A) in the
five (5) calendar year period which includes the date his employment with
Weeks or a Weeks Affiliate terminates or, if no bonus has been paid before
his employment terminates in such calendar year, (B) in the five (5)
calendar year period immediately preceding the calendar year in which his
employment with Weeks or a Weeks Affiliate terminates or (ii) the average
total annual cash bonus that Executive has been paid each calendar year by
Weeks and any Weeks Affiliate if Executive has been paid bonuses in less
than three (3) calendar years; and
(c) the monthly family coverage premium Weeks charges for health care
continuation coverage under Section 602 of the Employee Retirement Income
Security Act of 1974, as amended, as of the date Executive's employment
with Weeks or a Weeks Affiliate terminates multiplied by twelve (12).
If a cash bonus described in (S) 1.6(b) was paid for a period of employment
which was less than a full calendar year, such cash bonus shall be converted
into an annualized cash bonus and taken into account under (S) 1.6(b) as an
annualized bonus. Such annualized cash bonus shall equal the cash bonus
actually paid for a calendar year, divided by the number of days Executive was
employed by Weeks or a Weeks Affiliate in such calendar year and then multiplied
by 365.
1.7 Disability. The term "Disability" for purposes of this Agreement
----------
means that Executive is unable as a result of a mental or physical condition or
illness to perform the essential functions of his job even with reasonable
accommodation for any consecutive 180-day period.
-3-
1.8 Good Reason. The term "Good Reason" for purposes of this Agreement
-----------
shall mean any of the following acts or failures to act by Weeks or a Weeks
Affiliate which Weeks or such Weeks Affiliate fails to correct within thirty
(30) days after notice thereof by Executive to the Board:
(a) Weeks or any Weeks Affiliate materially diminishes Executive's
basic duties and responsibilities (as distinguished from his title or
reporting relationships) without his express written consent;
(b) Weeks or any Weeks Affiliate materially reduces Executive's annual
salary, reduces his reasonable opportunity for an annual bonus comparable
to his most recent annual bonus opportunity or reduces any other part of
his compensation package (other than a reduction in such package which is
applicable to the compensation package made available to all other senior
executives) without his express written consent, or
(c) Weeks or any Weeks Affiliate transfers Executive's primary work
site, without his express written consent, to a location that is more than
thirty (30) miles from Executive's primary work site on the date of this
Agreement or, if Executive consents to a transfer to a new work site, that
is more than thirty (30) from such new work site.
If Executive consents in writing to any change under this (S) 1.8, such consent
shall be irrevocable.
1.9 Industrial or Office Property. The term "Industrial or Office
-----------------------------
Property" for purposes of this Agreement shall mean any real property on which a
distribution facility, service center or office building development, or any
combination of the foregoing, has been constructed or is now or hereafter
proposed to be constructed (for example, and not by way of limitation, a
property of the type managed by Weeks or a Weeks Affiliate).
1.10 Managerial Responsibilities. The term "Managerial Responsibilities"
---------------------------
for purposes of this Agreement means managerial and supervisory responsibilities
and duties that are substantially the same as those Executive is performing for
Weeks or a Weeks Affiliate on the effective date of this Agreement.
1.11 Restricted Period. The term "Restricted Period" for purposes of this
-----------------
Agreement shall mean the period which starts on the date Executive's employment
by Weeks or a Weeks Affiliate terminates under circumstances which create an
obligation for Weeks under (S) 2 of this Agreement and which ends (a)(i) on the
first anniversary of such termination date or, exclusively for purposes of (S)
3(b) of this Agreement and (S) 4 of this Agreement, (ii) on the second
anniversary of such termination date or (b) on the first date following such a
termination on which Weeks breaches any obligation to Executive under (S) 2 of
this Agreement, whichever period is shorter.
-4-
1.12 Territory. The term "Territory" for purposes of this Agreement shall
---------
mean the area within a thirty (30) mile radius of any Industrial or Office
Property that Weeks or a Weeks Affiliate has developed, operated, managed,
leased, constructed, or landscaped, or is in the process of developing,
operating, managing, leasing, constructing or landscaping, or has entered into a
binding, written agreement to do so on the effective date of this Agreement.
1.13 Trade Secret. The term "Trade Secret" for purposes of this Agreement
------------
shall mean information, including, but not limited to, technical or nontechnical
data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans,
or a list of actual or potential customers or suppliers that:
(a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(b) is the subject of reasonable efforts by Weeks or a Weeks Affiliate
to maintain its secrecy.
1.14 Weeks. The term "Weeks" for purposes of this Agreement shall mean
-----
Weeks Corporation and any successor to Weeks.
1.15 Weeks Affiliate. The term "Weeks Affiliate" for purposes of this
---------------
Agreement shall mean Weeks Realty, L.P., and any successor to Weeks Realty,
L.P., Weeks Realty Services, Inc. and any successor to Weeks Realty Services,
Inc., and Weeks Construction Services, Inc. and any successor to Weeks
Construction Services, Inc., and any organization whose employees would be
treated as employees of Weeks, Weeks Realty L.P., Weeks Realty Services, Inc.,
or Weeks Construction Services, Inc. under Section 414(b) or Section 414(c) of
the Code if "50 percent" were substituted for "80 percent" in the income tax
regulations under Code Section 414(b) or Code Section 414(c).
(S) 2.
Compensation
------------
(a) If Weeks or a Weeks Affiliate terminates Executive's employment
without Cause (i) during the sixty (60) day period which ends on the date
Weeks enters into any binding, written agreement which will effect a Change
in Control if approved by Weeks' shareholders or (ii) during the period
which starts on the date on which Weeks enters into any such agreement and
ends on the date such agreement terminates or on the effective date of the
related Change in Control, whichever comes first or (iii) during the one
hundred and twenty (120) day period that ends on the effective date of a
Change in Control (if no binding, written agreement had been entered into
by Weeks which effected such Change in Control),
-5-
(b) if Executive resigns for Good Reason during any period described
in (S) 2(a) of this Agreement, or
(c) if Weeks or a Weeks Affiliate terminates Executive's employment
without Cause or if Executive resigns for Good Reason within the twenty-
four (24) month period that ends on the second anniversary of the effective
date of a Change in Control, then:
(1) Weeks shall pay Executive 2 times his Current Compensation
Package in cash in a lump sum within ninety (90) days after the date
his employment so terminates or within thirty (30) days after a Change
in Control, whichever comes first, if Executive's employment
terminates before a Change in Control or, if Executive's employment
terminates on or after a Change in Control, within thirty (30) days
after his employment so terminates, and
(2) each outstanding stock option granted to Executive by Weeks
shall become fully vested and exercisable on the date his employment
so terminates and shall remain exercisable for the remaining term of
each such option (as if Executive had remained employed by Weeks or a
Weeks Affiliate) subject to the same terms and conditions as if
Executive had remained employed by Weeks or a Weeks Affiliate for such
term or such period (other than any term or condition which gives
Weeks the right to cancel any such option) and any restrictions on any
outstanding restricted stock grants to Executive by Weeks immediately
shall expire and Executive's right to such stock shall be
nonforfeitable.
(d) Executive expressly waives his right, if any, to have any payment
made under this (S) 2 taken into account to increase the benefits otherwise
payable to, or on behalf of, Executive under any employee benefit plan
maintained by Weeks or a Weeks Affiliate.
(e) Executive agrees that Weeks will have no obligation to Executive
under this (S) 2 if his employment terminates exclusively as a result of
his death or Disability.
(S) 3.
Noncompetition
--------------
(a) No Competitive Activity. Absent the Board's consent, Executive
-----------------------
shall not, during the Restricted Period and within the Territory, serve as
an owner, partner, employee, agent, consultant, advisor, contractor,
salesman, stockholder, investor, officer or director, or engage in any
Managerial Responsibilities, for or on behalf of, any corporation,
partnership, venture, or other business entity that engages directly or
indirectly in the development, operation, management, leasing,
construction, or landscaping of an Industrial or Office Property.
-6-
(b) No Solicitation of Customers or Clients. Executive shall not
---------------------------------------
during the Restricted Period solicit any customer or client of Weeks or any
Weeks Affiliate with whom Executive had any material business contact
during the two (2) year period which ends on the date his employment by
Weeks or a Weeks Affiliate terminates for the purpose of competing with
Weeks or any Weeks Affiliate for any reason, either individually, or as an
owner, partner, employee, agent, consultant, advisor, contractor, salesman,
stockholder, investor, officer or director of, or service provider to, any
corporation, partnership, venture or other business entity.
(S) 4.
Antipirating of Employees
-------------------------
Executive will not during the Restricted Period employ or seek to
employ on his own behalf or on behalf of any other person, firm or corporation
that engages, directly or indirectly, in the development, operation, management,
leasing, construction, or landscaping of an Industrial or Office Property, any
person who was employed by Weeks or a Weeks Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
Weeks or a Weeks Affiliate, with whom Executive had business dealings during the
two (2) year period which ends on the date Executive's employment by Weeks or a
Weeks Affiliate terminates (whether or not such employee would commit a breach
of contract), and who has not ceased to be employed by Weeks or a Weeks
Affiliate for a period of at least one (1) year.
(S) 5.
Trade Secrets and Confidential Information
------------------------------------------
Executive hereby agrees that he will hold in a fiduciary capacity for
the benefit of Weeks and each Weeks Affiliate, and will not directly or
indirectly use or disclose, any Trade Secret that Executive may have acquired
during the term of his employment by Weeks or a Weeks Affiliate for so long as
such information remains a Trade Secret.
Executive in addition agrees that during the Restricted Period he will
hold in a fiduciary capacity for the benefit of Weeks and each Weeks Affiliate,
and will not directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of his employment by Weeks or a Weeks Affiliate.
(S) 6.
Reasonable and Necessary Restrictions
-------------------------------------
Executive acknowledges that the restrictions, prohibitions and other
provisions set forth in this Agreement, including without limitation the
Territory and Restricted Period, are reasonable, fair and equitable in scope,
terms and duration; are
-7-
necessary to protect the legitimate business interests of Weeks; and are a
material inducement to Weeks to enter into this Agreement. Executive covenants
that he will not challenge the enforceability of this Agreement nor will he
raise any equitable defense to its enforcement.
(S) 7.
Specific Performance
--------------------
Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that Weeks likely will have no adequate remedy
at law if Executive shall fail to perform any of his obligations under this
Agreement, and Executive therefore confirms that Weeks' right to specific
performance of the terms of this Agreement is essential to protect the rights
and interests of Weeks. Accordingly, in addition to any other remedies that
Weeks may have at law or in equity, Weeks will have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by Executive, and Weeks will have the right to obtain
preliminary and permanent injunctive relief to secure specific performance and
to prevent a breach or contemplated breach of this Agreement by Executive, and
Executive submits to the jurisdiction of the courts of the State of Georgia for
this purpose.
-8-
(S) 8.
Tax Protection
--------------
If Weeks or Weeks' accountants determine that the payments called for
under this Agreement or any other payments or benefits made available to
Executive by Weeks or a Weeks Affiliate will result in Executive being subject
to an excise tax under Section 4999 of the Code and/or if such an excise tax is
assessed against Executive as a result of such payments or other benefits, Weeks
shall make a Gross Up Payment (as defined in this (S) 8) to or on behalf of
Executive as and when such determination(s) and assessment(s), as appropriate,
are made, provided Executive takes such action (other than waiving his right to
any payments or benefits) as Weeks reasonably requests under the circumstances
to mitigate or challenge such tax; provided, however, if Weeks or Weeks'
accountants makes such a determination and, further, determine that Executive
will not be subject to any such tax if he waives his right to receive a part of
such payments and such part does not exceed $25,000, Executive agrees to
irrevocably waive his right to receive such part if an independent accountant or
lawyer retained by Executive and paid by Weeks agrees with the determination
made by Weeks or Weeks' accountants. A "Gross Up Payment" for purposes of this
Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (i) any excise tax described in this (S) 8 in full, (ii) any
federal, state and local income tax and social security or other employment tax
on the payment made to pay such excise tax as well as any additional excise tax
on such payment and (iii) any interest or penalties assessed by the Internal
Revenue Service on Executive if such interest or penalties are attributable to
Weeks' failure to comply with its obligations under this (S) 8 or applicable
law. Any determination under this (S) 8 by Weeks or Weeks' accountants shall be
made in accordance with Section 280G of the Code and any applicable related
regulations (whether proposed, temporary or final) and any related Internal
Revenue Service rulings and any related case law and, if Weeks reasonably
requests that Executive take action to mitigate or challenge, or to mitigate and
challenge, any such tax or assessment and Executive complies with such request,
Weeks shall provide Executive with such information and such expert advice and
assistance from Weeks' accountants, lawyers and other advisors as he may
reasonably request and shall pay for all expenses incurred in effecting such
compliance and any related fines, penalties, interest and other assessments.
(S) 9.
Miscellaneous Provisions
------------------------
9.1 Assignment. This Agreement is for the personal services of Executive,
----------
and the rights and obligations of Executive under this Agreement are not
assignable or delegable in whole or in part by Executive without the prior
written consent of Weeks. This Agreement is assignable in whole or in part to
any parent, subsidiaries, or affiliates of Weeks, but only if such person or
entity is financially capable of fulfilling the obligations of Weeks under this
Agreement and Weeks as part of any Change in Control transaction shall assign
Weeks' obligations under this Agreement to Weeks' successor and such successor
shall expressly agree to such assignment or Weeks on the date of the Change in
Control (without any further action on the part of Executive) shall take the
action called for in (S) 2 of
-9-
this Agreement as if Executive had been terminated without Cause without regard
to whether his employment actually has terminated.
9.2 Governing Law. This Agreement will be governed by and construed under
-------------
the laws of the State of Georgia (without reference to the choice of law
principles thereof). Executive consents to jurisdiction and venue in the state
and federal courts of the State of Georgia for any action arising from a dispute
under this Agreement, and for any such action brought in such a court, expressly
waives any defense he might otherwise have based on lack of personal
jurisdiction or improper venue, or that the action has been brought in an
inconvenient forum.
9.3 Counterparts. This Agreement may be executed in counterparts, each of
------------
which will be deemed an original, but all of which together will constitute one
and the same instrument.
9.4 Headings, References. The headings and captions used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.5 Attorneys Fees. If any action at law or in equity is necessary for
--------------
Executive to enforce or interpret the terms of this Agreement, Weeks shall pay
Executive's reasonable attorneys' and other reasonable expenses incurred with
respect to such action. If any other action is taken with respect to this
Agreement, Weeks shall bear its own attorneys' fees and expenses and Executive
shall bear his own attorneys' fees and expenses.
9.6 Amendments and Waivers. Except as otherwise specified in this
----------------------
Agreement, this Agreement may be amended, and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Weeks and
Executive.
9.7 Severability. Any provision of this Agreement held to be
------------
unenforceable under applicable law will be enforced to the maximum extent
possible, and the balance of this Agreement will remain in full force and
effect.
9.8 Entire Agreement. This Agreement constitutes the entire understanding
----------------
and agreement of Weeks and Executive with respect to the transactions
contemplated in this Agreement, and supersedes all prior understandings and
agreements between Weeks and Executive with respect to such transactions.
9.9 Notices. Any notice required hereunder to be given by either Weeks or
-------
Executive will be in writing and will be deemed effectively given upon personal
delivery to the party to be notified or five (5) days after deposit with the
United States Post office by registered or certified mail, postage prepaid, to
the other party at the address set forth below or to such other address as
either party may from time to time designate by ten (10) days advance written
notice pursuant to this (S) 9.9. All such written communication will be
directed as follows:
-10-
If to Weeks:
Weeks Corporation
0000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
If to Executive:
9.10 Binding Effect. This Agreement shall be for the benefit of, and shall
--------------
be binding upon, Weeks and Executive and their respective heirs, personal
representatives, legal representatives, successors and assigns, subject,
however, to the provisions in (S) 9.1 of this Agreement.
9.11 Not an Employment Contract. This Agreement is not an employment
--------------------------
contract and shall not give Executive the right to continue in employment by
Weeks or a Weeks Affiliate for any period of time or from time to time.
Moreover, this Agreement shall not adversely affect the right of Weeks or a
Weeks Affiliate to terminate Executive's employment with or without cause at any
time.
IN WITNESS WHEREOF, Weeks and Executive have executed this Agreement
effective as of the date first above written.
WEEKS CORPORATION
By:_______________________________
Chief Executive Officer
EXECUTIVE
----------------------------------
-11-
