EXHIBIT 10.31
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of
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_______________, 1997, by and between ▇▇▇▇▇▇ Realty Corporation, a Maryland
corporation (the "REIT"), ▇▇▇▇▇▇ Realty, L.P., a Delaware limited partnership
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(the "Operating Partnership") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇. (the "Executive").
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1. EMPLOYMENT
The REIT and the Operating Partnership hereby agree to employ the
Executive, and the Executive hereby agrees to be employed by the REIT and the
Operating Partnership, on the terms and conditions set forth herein. The REIT
and the Operating Partnership shall collectively be referred to herein as the
"Company." The allocation of the obligations of the Company between the REIT
and the Operating Partnership shall be determined as set forth in Section 8
hereof.
2. TERM AND RENEWAL
2.1 Term. The employment of the Executive by the Company as provided
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in Section 1 will commence on the date hereof and will terminate three years
from the date hereof (the "Expiration Date") unless automatically extended for
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an additional 12-month period pursuant to Section 2.2 hereof or sooner
terminated as hereinafter provided (each such period, an "Employment Period").
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2.2 Renewal. Following the expiration of the initial Employment
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Period and provided that this Agreement has not been terminated by the Executive
or the Company pursuant to Section 5 hereof, and every year thereafter, this
Agreement shall be automatically renewed on the terms set forth herein for an
additional 12-month period, effective on each anniversary date of the date
hereof.
3. POSITION AND DUTIES
3.1 Position. The Executive hereby agrees to serve as Executive Vice
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President, Chief Financial Officer and Secretary of the Company. In addition,
if, at the discretion of the Board of Directors of the Company (the "Board"),
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the Company nominates the Executive for election to the Board, and in the event
that such Executive is elected by the Company's stockholders to serve as a
member of the Board, then, for so long as the Executive is an employee of the
Company, the Executive hereby agrees to serve as a member thereof. At the
Company's request, the Executive may, at the Executive's discretion, serve the
Company and/or its respective subsidiaries and affiliates in other offices and
capacities in addition to the foregoing, but shall not be required to do so. In
the event that the Executive, during the term of this Agreement, serves in any
one or more of the aforementioned capacities, the Executive's compensation shall
not be increased beyond that specified in Section 4 of this Agreement. In
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addition, in the event the Company and the Executive mutually agree that the
Executive shall terminate the Executive's service in any one or more of the
aforementioned capacities, or the Executive's service in one or more of the
aforementioned capacities is terminated, the Executive's compensation, as
specified in Section 4 of this Agreement, shall not be diminished or reduced in
any manner.
3.2 Duties. The Company agrees that the duties that may be assigned
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to the Executive shall be the usual and customary duties of the offices of
Executive Vice President, Chief Financial Officer and Secretary which duties
shall include, without limitation, the responsibility to:
(i) maintain the custody of the corporate funds and securities;
(ii) keep full and accurate accounts of receipts and disbursements
in books belonging to the Company;
(iii) deposit all moneys, and other valuable effects in the name and
to the credit of the Company, in such depositories as may be
designated from time to time by the Board;
(iv) disburse the funds of the Company as may be ordered by the
Board;
(v) take proper vouchers for such disbursements;
(vi) comply with all financial reporting obligations, including all
periodic financial reports required to be filed under federal
and state securities laws;
(vii) maintain shareholder relations, including preparation of press
releases with respect to quarterly and annual earnings and
other appropriate matters;
(viii) maintain appropriate contacts and relationships with financial
analysts and the investment community;
(ix) render to the Board, at its regular meetings, or when the Board
so requires, an account of the Executive's transactions as
Executive Vice President and Chief Financial Officer of the
Company; and
(x) attend meetings of the Board and record the minutes of such
meetings.
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3.3 Devotion of Time and Effort. The Executive shall devote
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substantially all of his business time and attention to the performance of
services to the Company in his capacity as an officer thereof and as may
reasonably be requested by the Board.
3.4 Other Activities. The Executive may engage in other activities
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for the Executive's own account while employed hereunder, including without
limitation charitable, community and other business activities, provided that
such other activities (i) do not compete with the business and activities of the
Company or any of its direct and indirect subsidiaries and (ii) do not
materially interfere with the performance of the Executive's duties hereunder.
Notwithstanding the foregoing, during the term of this Agreement, the Executive
shall not serve as a member of the board of directors of any noncharitable
entity, other than the Company, its direct and indirect subsidiaries, and any of
their affiliates, without the Company's prior written consent.
4. COMPENSATION AND RELATED MATTERS
4.1 Salary. During the Employment Period, the Company shall pay the
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Executive an annual salary of $200,000 during the first full 12-month period and
at such annual salary as determined by the Executive Compensation Committee of
the Board (the "Executive Compensation Committee") during the second and
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subsequent 12-month periods of the Executive's employment with the Company, but
not less than $200,000. All salary is to be paid consistent with the standard
payroll practices of the Company (e.g., timing of payments and standard employee
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deductions, such as income tax withholdings, social security, etc.). The
Executive's performance and salary shall be subject to review at the end of each
fiscal year and an increase in annual salary, if one is so determined by the
Executive Compensation Committee, shall be made on a basis consistent with the
standard practices of the Company.
4.2 Bonus.
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(a) The Executive Compensation Committee shall review the
Executive's performance at least annually during each year of the Employment
Period and cause the Company to award the Executive a cash bonus in an amount
from 0% to 100% of the annual salary, as provided in Section 4.1 above, which
the Executive Compensation Committee shall reasonably determine as fairly
compensating and rewarding the Executive for services rendered to the Company
and/or as an incentive for continued service to the Company. The amount of such
cash bonus shall be determined in the sole and absolute discretion of the
Executive Compensation Committee and shall be dependent on, among other things,
the achievement of certain performance levels by the Company, including, without
limitation, growth in funds from operations, and the Executive's performance and
contribution to increasing the funds from operations.
(b) In the event that the Company consummates an initial public
offering (an "IPO") of its common stock, $.01 par value per share (the "Common
Stock") on or before June 30, 1997, and provided that the Executive is employed
by the Company on the date such IPO is consummated, then the Executive shall be
entitled to receive, and the Company
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shall award and pay to the Executive within 30 days following consummation of
the IPO, a cash bonus of $200,000. Any bonus paid to the Executive pursuant to
this Section 4.2(b) shall be excluded from the determination of the bonus
payable to the Executive, if any, in respect of the year during which the IPO is
consummated pursuant to Section 4.2(a) of this Agreement. In addition, the
payment made to the Executive pursuant to this Section 4.2(b) shall be reduced
by the amount paid to the Executive, if any, pursuant to Section 4.2(b) of the
Employment Agreement, dated as of December 9, 1996, by and among the Executive,
the Company, and ▇▇▇▇▇▇ Industries, a California corporation (the "Original
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Employment Agreement").
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4.3 Restricted Stock. Promptly after consummation of the IPO by the
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Company, the Company shall authorize and grant to the Executive and the
Executive shall receive, upon payment to the Company of $.01 per share therefor,
60,000 shares of Restricted Stock (as defined below). The Restricted Stock
shall vest in three (3) equal installments upon each of the first three (3)
anniversaries of the date of grant at a rate of 331/3% per each 12-month period.
For purposes of this Agreement, "Restricted Stock" shall mean all shares of
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Common Stock granted by the Company to the Executive pursuant to this Section
4.3 and from time to time by the Company's Executive Compensation Committee.
Upon the grant of such Restricted Stock, the Company and the Executive shall
enter into a written Restricted Stock Agreement (the "Restricted Stock
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Agreement") which shall contain such terms and conditions as the Board or
Executive Compensation Committee shall determine, consistent with the Company's
1997 Stock Incentive Plan (the "Stock Incentive Plan"), in addition to the
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following:
(a) Rights as Stockholder. Upon delivery of the shares of
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Restricted Stock to the escrow holder pursuant to Section 4.3(d) hereof, the
Executive shall have all the rights of a stockholder with respect to said
shares, subject to the restrictions set forth below and in the Restricted Stock
Agreement, including the right to vote the shares and to receive all dividends
and other distributions paid or made with respect to the shares.
(b) Restrictions. All shares of Restricted Stock (including any
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shares received by the Executive with respect to the shares of Restricted Stock
as a result of stock dividends, stock splits or any other form of
recapitalization) shall be subject to (i) customary restrictions on ownership
and transfer set forth in the Restricted Stock Agreement, including, without
limitation, such restrictions as are set forth in the Company's Charter and
Bylaws, and (ii) the vesting requirements set forth in this Section 4.3,
provided, however, that such vesting requirements shall terminate upon (1) a
resolution adopted by and at the discretion of the Board or Executive
Compensation Committee, after the Restricted Stock is issued, on such terms and
conditions as it considers appropriate, and (2) upon termination of the
Executive's employment pursuant to Section 5.1, 5.2, 5.4, 5.5 or 5.7 of this
Agreement and in such other circumstances as shall be set forth in the
Restricted Stock Agreement and the Stock Incentive Plan. Notwithstanding the
foregoing, none of the restrictions to be determined pursuant to this Section
4.3(b) shall result in restrictions more burdensome on, or less favorable to,
the Executive than the terms and conditions contemplated herein, provided,
however, that the restrictions on ownership set forth in the Company's Charter
and Bylaws shall apply to all shares of Restricted Stock unless such provisions
are otherwise amended with respect to such restrictions on ownership pursuant to
and in accordance with applicable law. Upon the vesting of shares of
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Restricted Stock pursuant to this Section 4.3, or the termination of such
vesting requirements pursuant to this Section 4.3(b), the restrictions pursuant
to this Section 4.3(b) with respect to such shares of Restricted Stock shall
terminate.
(c) Repurchase of Restricted Stock. The Company shall have the
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right to repurchase from the Executive the Restricted Stock then subject to
restrictions hereunder and under the Restricted Stock Agreement immediately upon
the termination of the Executive's employment for any reason at a cash price per
share equal to the price paid by the Executive for such Restricted Stock;
provided, however, that no such right of repurchase shall exist in the event of
a termination of employment pursuant to Sections 5.1, 5.2, 5.4, 5.5 or 5.7
hereof.
(d) Escrow. The Board or Executive Compensation Committee shall
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appoint an executive officer of the REIT, other than the Executive, or such
other escrow holder who shall retain physical custody of each certificate
representing Restricted Stock until all the restrictions imposed hereunder and
under the Restricted Stock Agreement have been removed, provided, however, that
in no event shall the Executive retain physical custody of any certificates
representing Restricted Stock issued to such Executive.
(e) Legends. In order to enforce the restrictions imposed upon
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the Restricted Stock, the Board or Executive Compensation Committee shall cause
a legend or legends to be placed on certificates representing all shares of
Restricted Stock that are still subject to restrictions hereunder and under the
Restricted Stock Agreement, which legend or legends shall make appropriate
reference to the conditions imposed hereby and thereby.
(f) Section 83(b). The Executive may not make an election under
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Section 83(b) of the Code (as defined below) with respect to the receipt of any
share of Restricted Stock.
The grant of Restricted Stock to the Executive pursuant to this Section 4.3
shall be reduced by the number of shares of Restricted Stock granted to the
Executive, if any, pursuant to Section 4.3 of the Original Employment Agreement.
4.4 Stock Options.
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(a) Promptly after consummation of the IPO of the Company, the
Company shall grant to the Executive options to purchase 150,000 shares of
Common Stock at a price per share equal to the initial price per share of Common
Stock sold to the public in the IPO. Such options shall be "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, to the maximum extent permitted by the Code. Additional future
awards may be made at the discretion of the Company's Executive Compensation
Committee. For purposes of this Agreement, "Stock Options" shall mean all
incentive stock options granted to the employee pursuant to this Section 4.4 and
from time to time by the Company's Executive Compensation Committee.
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(b) The Stock Options granted pursuant to Section 4.4(a) of this
Agreement and the Stock Incentive Plan, shall vest in three (3) equal
installments upon the first three (3) anniversaries of the date of the grant at
a rate of 331/3% per each 12-month period and shall remain exercisable for a
period of ten (10) years following the date of the grant. Notwithstanding the
foregoing, the Stock Options shall become exercisable in full immediately upon
(1) a resolution adopted by and at the discretion of the Board or Executive
Compensation Committee, after the Stock Options have been granted, on such terms
and conditions as it considers appropriate, and (2) termination of the
Executive's employment pursuant to Section 5.1, 5.2, 5.4, 5.5 or 5.7 of this
Agreement and in such other circumstances as shall be set forth in the Stock
Incentive Plan. In addition, the grant of Stock Options to the Executive
pursuant to this Section 4.4 shall be reduced by the number of shares of
Restricted Stock granted to the Executive, if any, pursuant to Section 4.4 of
the Original Employment Agreement.
4.5 "Gross-Up" of Compensation. The amount of the salary and any
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bonus payable to the Executive pursuant to Sections 4.1 and 4.2 above, shall be
"grossed up" as necessary (on an after-tax basis) to compensate for any
additional withholding taxes or other expenses due to the implementation of the
Compensation Split (as defined in Section 8 below) with respect to the financial
obligations of the Company and the Operating Partnership, respectively.
4.6 Business Expenses. The Company shall promptly, in accordance
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with Company policy, reimburse the Executive for all reasonable business
expenses incurred in accordance with and subject to the limits set forth in the
Company's written policies with respect to business expenses, including, without
limitation, business seminar fees, professional association dues, reasonable
entertainment expenses incurred by the Executive in connection with the business
of the Company and/or its respective subsidiaries and affiliates, and reasonable
travel expenses, including all airfare, hotel and rental car expenses, incurred
by the Executive in traveling in connection with the business of the Company,
upon presentation to the Company of written receipts for such expenses.
4.7 Other Benefits.
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(a) Medical Insurance. During the Employment Period, the
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Company, at its sole cost, shall provide to the Executive, the Executive's
spouse and children such health, dental and optical insurance as the Company may
from time to time make available to its other executive employees of the same
level of employment, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans or arrangements. For the
purposes of this Section 4, the Executive is deemed to be of the same level of
employment as each of the Company's other Executive Vice Presidents.
(b) Life and Disability Insurance. During the Employment Period,
the Company shall provide to the Executive such disability and/or life insurance
as the Company in its sole discretion may from time to time make available to
its other executive employees of the same level of employment, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans or arrangements.
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(c) Pension Plans, Etc. During the Employment Period, the
Executive shall be entitled to participate in all pension, 401(k) and other
employee plans and benefits established by the Company on at least the same
terms as the Company's other executive employees of the same level of
employment, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans or arrangements.
4.8 Automobile Allowance. The Company shall provide the Executive
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with a reasonable automobile allowance during the term of the Executive's
employment with the Company as the Company in its sole discretion may from time
to time make available to its other executive employees of the same level of
employment, subject to and on a basis consistent with Company policy.
4.9 Vacation. The Executive shall be entitled to four (4) weeks (20
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business days) in each calendar year or such greater amount the Company from
time to time shall determine and make available to its other executive employees
at the same level of employment, subject to and on a basis consistent with
Company policy. In addition, the Executive will be entitled to all Company
holidays.
4.10 Office, Staff, and Equipment. The Company agrees to provide the
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Executive, as a condition to the Executive's services hereunder, such staff,
equipment and office space as is reasonably necessary for the Executive to
perform the Executive's duties hereunder, subject to and on a basis consistent
with Company policy.
5. TERMINATION
5.1 Death. The Executive's employment hereunder shall terminate upon
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his death.
5.2 Disability. The Executive's employment hereunder shall terminate
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on the Executive's physical or mental disability or infirmity which, in the
opinion of a competent physician selected by the Board, renders the Executive
unable to perform properly his duties under this Agreement for six (6)
consecutive calendar months or for shorter periods aggregating one hundred and
eighty (180) business days in any twelve (12) month period, but only to the
extent that such definition does not violate the Americans with Disabilities
Act.
5.3 Cause. The Company may terminate the Executive for Cause at any
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time, upon written notice to Executive. For purposes of this Agreement, "Cause"
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shall mean:
(a) the Executive's conviction for commission of a felony or a
crime involving moral turpitude;
(b) the Executive's willful commission of any act of theft,
embezzlement or misappropriation against the Company; or
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(c) the Executive's willful and continued failure to
substantially perform the Executive's duties hereunder (other than
such failure resulting from the Executive's incapacity due to physical
or mental illness), which failure is not remedied within a reasonable
time after written demand for substantial performance is delivered by
the Company which specifically identifies the manner in which the
Company believes that the Executive has not substantially performed
the Executive's duties.
5.4 Termination Without Cause. The Company may terminate this
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Agreement without Cause at any time, provided that the Company first delivers to
the Executive the Company's written election to terminate this Agreement at
least ninety (90) days prior to the effective date of termination.
5.5 Executive's Termination for Good Reason. The Executive may
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terminate this Agreement for Good Reason upon at least ten (10) days prior
written notice to the Company. For purposes of this Agreement, "Good Reason"
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shall mean:
(a) the Company's material breach of any of its obligations
hereunder and either such breach is incurable or, if curable, has not
been cured within fifteen (15) days following receipt of written
notice by the Executive to the Company of such breach by the Company;
or
(b) any material alteration or diminution in the Executive's
authority, duties or responsibilities herein without Cause and without
the Executive's prior written consent.
Notwithstanding anything in this Agreement to the contrary, "Good Reason"
shall not include the reassignment of the Executive, at the Company's sole
discretion, to any other position of Executive Vice President or higher position
with the Company, any of its direct or indirect subsidiaries or any of their
respective affiliates.
5.6 Executive's Voluntary Termination. The Executive may, at any
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time, terminate this Agreement without Good Reason, provided that the Executive
delivers written notice to the Company at least ninety (90) days prior to the
effective date of termination.
5.7 Change of Control. The Executive may terminate this Agreement,
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upon at least ten (10) days' prior written notice to the Company at any time
within two (2) years after a "Change in Control" (as hereinafter defined) of the
Company. For purposes of this Agreement, a "Change in Control" shall mean the
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occurrence of any of the following events:
(a) the individuals constituting the Board as of the date of the
Company's IPO of common stock (the "Incumbent Board") cease for any reason
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to constitute at least a majority of the Board; provided, however, that if
the election, or nomination for election by the Company's stockholders, of
any new director was
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approved by a vote of at least a majority of the Incumbent Board, such new
director shall be considered a member of the Incumbent Board;
(b) an acquisition of any voting securities of the Company (the
"Voting Securities") by any "person" (as the term "person" is used for
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purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) immediately after which such person
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has "beneficial ownership" (within the meaning of Rule 13d-3 promulgated
under the ▇▇▇▇ ▇▇▇) of 20% or more of the combined voting power of the
Company's then outstanding Voting Securities unless such acquisition was
approved by a vote of at least one more than a majority of the Incumbent
Board; or
(c) approval by the stockholders of the Company of:
(i) a merger, consolidation, share exchange or
reorganization involving the Company, unless the stockholders of the
Company, immediately before such merger, consolidation, share exchange or
reorganization, own, directly or indirectly immediately following such
merger, consolidation, share exchange or reorganization, at least 80% of
the combined voting power of the outstanding Voting Securities of the
corporation that is the successor in such merger, consolidation, share
exchange or reorganization (the "Surviving Company") in substantially the
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same proportion as their ownership of the Voting Securities immediately
before such merger, consolidation, share exchange or reorganization;
(ii) a complete liquidation or dissolution of the Company;
or
(iii) an agreement for the sale or other disposition of all
or substantially all of the assets of the Company.
5.8 Nonrenewal. The Company may terminate this Agreement upon the
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expiration of any Employment Period, provided that the Company gives written
notice of such nonrenewal to the Executive at least ninety (90) days prior to
the expiration of such Employment Period.
5.9 Retirement. The Executive's employment shall terminate upon his
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retirement upon or immediately following his sixty-fifth birthday. In the case
of the Executive's retirement, the Company shall pay to the Executive promptly
after Executive's termination (i) the unpaid annual salary pursuant to Section
4.1 hereof to which such Executive is entitled pursuant to Section 6 hereof,
through the date of the termination of such Executive's employment, and (ii) as
soon as practicable after the close of the Company's fiscal year in which the
Executive's termination occurs, a prorated portion of any unpaid bonus
determined by the Board pursuant to Section 4.2 hereof. This Section 5.8 shall
not limit the entitlement of the Executive to any retirement benefit then
available to the Executive under any benefit plan or policy which is maintained
by the Company for the Executive's benefit.
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5.10 Notice. Any termination of the Executive's employment by the
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Company or the Executive shall be communicated by written Notice of Termination
to the other party. For purposes of this Agreement, a "Notice of Termination"
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shall mean a notice that 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 the Executive's
employment under the provision so indicated.
5.11 Date of Termination. The effective date of the Executive's
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termination depends on the type of termination applied. "Date of Termination"
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shall mean the following:
(a) if the Executive's employment is terminated by his death,
the date of his death;
(b) if the Executive's employment is terminated by reason of his
disability, the date of the opinion of the physician referred to in
Section 5.2 hereof;
(c) if the Executive's employment is terminated by the Company
for Cause pursuant to Section 5.3 hereof, or without Cause by the
Company pursuant to Section 5.4 hereof, the date specified in the
Notice of Termination;
(d) if the Executive resigns for Good Reason (pursuant to
Section 5.5 hereof), or voluntarily resigns (pursuant to Section 5.6
hereof) or resigns pursuant to Change of Control (pursuant to Section
5.7 hereof), the date of the Notice of Termination;
(e) if the Executive's employment is terminated pursuant to
Section 5.8 hereof, the date this Agreement terminates by its terms;
and
(f) if the Executive's employment is terminated pursuant to
Section 5.9 hereof, the date of such Executive's retirement.
5.12 Termination Obligations.
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(a) The Executive hereby acknowledges and agrees that all
Personal Property and equipment furnished to or prepared by the Executive in the
course of or incident to his employment, belongs to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
"Personal Property" includes, without limitation, all electronic devices of the
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Company used by the Executive, including, without limitation, personal
computers, facsimile machines, cellular telephones, pagers and tape recorders
and all books, manuals, records, reports, notes, contracts, lists, blueprints,
maps and other documents, or materials, or copies thereof (including computer
files), and all other proprietary information relating to the business of the
Company. Following termination, the Executive will not retain any written or
other tangible material containing any proprietary information of the Company.
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(b) Upon termination of the Employment Period, the Executive
shall be deemed to have resigned from all offices and directorships then held
with the Company or any affiliate.
(c) The representations and warranties contained herein and the
Executive's obligations under this Section 5.12 and Sections 7 and 9 hereof
shall survive termination of the Employment Period and the expiration of this
Agreement.
6. COMPENSATION UPON TERMINATION
6.1 Death.
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(a) Severance Payment. If the Executive's employment shall be
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terminated pursuant to Section 5.1 hereof, the Company shall pay monthly to the
Executive's estate his annual salary payable pursuant to Section 4.1 hereof and
one-twelfth of any bonus payable pursuant to Section 4.2(a) hereof at the most
recent annual amount received, or entitled to be received, by the Executive for
a period equal to the lesser of one (1) year following the Date of Termination
or the remainder of the Employment Period as set forth in Section 2 hereof. In
addition, all theretofore unvested Stock Options, Restricted Stock and other
awards issued pursuant to the Stock Incentive Plan shall immediately vest.
(b) Severance Benefits. At the Executive's estate's expense, the
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Executive's spouse and children shall also be entitled to any continuation of
health insurance coverage rights under any applicable law.
6.2 Disability.
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(a) Severance Payment. If the Executive's employment shall be
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terminated by reason of disability pursuant to Section 5.2 hereof, the Company
shall pay to the Executive and the Executive shall receive a single severance
payment in an amount equal to the sum of: (i) two times the Executive's average
annual salary paid hereunder pursuant to Section 4.1 hereof for the preceding
thirty-six month period (or, if the Executive has been employed less than
thirty-six months, the average annual salary for the period employed) plus (ii)
an amount equal to two times the highest annual bonus received by the Executive
during the preceding thirty-six month period (or during the period the Executive
has been employed hereunder if shorter than thirty-six months)(collectively, the
"Severance Payment"). Such payment shall be in addition to any disability
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insurance payments to which the Executive is otherwise entitled and any other
compensation earned by Executive hereunder.
(b) Severance Benefits. At the Executive's own expense, the
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Executive and the Executive's spouse and children shall also be entitled to any
continuation of health insurance coverage rights under any applicable law.
6.3 Cause.
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(a) Salary and Bonus. If the Executive's employment shall be
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terminated for Cause pursuant to Section 5.3 hereof, the Company shall pay the
Executive his salary and any bonus then payable pursuant to Sections 4.1 and 4.2
hereof through the Date of Termination.
(b) Benefits. At the Executive's own expense, the Executive and
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the Executive's spouse and children shall also be entitled to any continuation
of health insurance coverage rights under any applicable law.
6.4 Termination Without Cause.
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(a) Severance Payment. If the Company shall terminate the
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Executive's employment without Cause pursuant to Section 5.4 hereof, the
Company shall pay the Executive the Severance Payment, as described in Section
6.2(a) hereof.
(b) Severance Benefits. In addition to paying the Executive's
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Severance Payment, the Company, at the Company's expense, shall continue to
provide to the Executive and the Executive's spouse and children all benefits
described in Section 4.7 hereof for a period of two (2) years commencing on the
Date of Termination.
6.5 Executive's Termination for Good Reason.
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(a) Severance Payment. If the Executive terminates his
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employment with the Company pursuant to Section 5.5 hereof for Good Reason, the
Company shall pay the Executive the Severance Payment, as described in Section
6.2(a) hereof.
(b) Severance Benefits. In addition to paying the Executive's
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Severance Payment, the Company, at the Company's expense, shall continue to
provide to the Executive and the Executive's spouse and children all benefits
described in Section 4.7 hereof for a period of two (2) years commencing on the
date of such termination.
6.6 Executive's Voluntary Termination. In the event of the voluntary
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termination of this Agreement by the Executive, pursuant to Section 5.6 hereof,
the Executive shall have the right to receive the Executive's compensation as
provided in Section 4 hereof through the Date of Termination.
6.7 Change of Control.
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(a) Severance Payment. If the Executive terminates this
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Agreement within two (2) years after a Change in Control pursuant to Section 5.7
hereof, the Company shall pay the Executive the Severance Payment.
(b) Severance Benefits. Following such termination, and in
addition to paying the Executive's Severance Payment, the Company, at the
Company's expense, shall continue to provide to the Executive and the
Executive's spouse and children all benefits
12
described in Section 4.7 hereof for a period of two years commencing on the Date
of Termination.
6.8 Manner of Payment. Any Severance Payment made pursuant to this
-----------------
Section 6 shall be payable in a one-time payment by the Company.
6.9 Limitation. The foregoing notwithstanding, the Severance
----------
Payment, pursuant to Sections 6.1, 6.2, 6.4, 6.5 and 6.7 hereof, shall be
reduced to the extent that the payment of such amount would cause the
Executive's total termination benefits (as determined by the Executive's tax
advisor) to constitute an "excess" parachute payment under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and by reason of such
----
excess parachute payment the Executive would be subject to an excise tax under
Section 4999(a) of the Code, but only if the Executive determines that the
after-tax value of the termination benefits calculated with the foregoing
restriction exceed those calculated without the foregoing restriction.
7. CONFIDENTIALITY AND NON-SOLICITATION COVENANTS
7.1 Confidentiality. In addition to the agreements set forth in
---------------
Section 5.12(a) hereof, the Executive hereby agrees that the Executive will not,
during the Employment Period or at any time thereafter directly or indirectly
disclose or make available to any person, firm, corporation, association or
other entity for any reason or purpose whatsoever, any Confidential Information
(as defined below). The Executive agrees that, upon termination of his
employment with the Company, all Confidential Information in his possession that
is in written or other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company and shall
not be retained by the Executive or furnished to any third party, in any form
except as provided herein; provided, however, that the Executive shall not be
obligated to treat as confidential, or return to the Company copies of any
Confidential Information that (i) was publicly known at the time of disclosure
to the Executive, (ii) becomes publicly known or available thereafter other than
by any means in violation of this Agreement or any other duty owed to the
Company by the Executive, or (iii) is lawfully disclosed to the Executive by a
third party. As used in this Agreement the term "Confidential Information"
------------------------
means information disclosed to the Executive or known by the Executive as a
consequence of or through his relationship with the Company, about the owners,
tenants, employees, business methods, public relations methods, organization,
procedures, property acquisition and development, or finances, including,
without limitation, information of or relating to owner or tenant lists of the
Company and its affiliates.
7.2 Non-Solicitation. For a period of one (1) year following the
----------------
date on which the Executive's employment hereunder is terminated, the Executive
shall not solicit or induce any of the Company's employees, agents or
independent contractors to end their relationship with the Company, or recruit,
hire or otherwise induce any such person to perform services for the Executive,
or any other person, firm or company. The restrictions set forth in this
Section 7.2 hereof shall not apply if the Executive's employment is terminated
pursuant to Section 5.4 or 5.5 hereof.
13
8. PAYMENT OF FINANCIAL OBLIGATIONS
The payment or provision to the Executive by the Company of any
remuneration, benefits or other financial obligations pursuant to this
Agreement, including, without limitation, the payment of Executive's salary,
bonus and other benefits set forth in Section 4 hereof, the payment (if
applicable) of the Severance Payment and provision of the severance benefits (if
applicable) set forth in Section 6 hereof and any indemnification obligations,
shall be allocated (the "Compensation Split") ___ to the Company and ___ to the
------------------
Operating Partnership initially, subject to adjustment from time to time by the
Executive Compensation Committee.
9. GENERAL PROVISIONS
9.1 Injunctive Relief and Enforcement. The Executive acknowledges
---------------------------------
that the remedies at law for any breach by him of the provisions of Sections
5.12(a) or 7 hereof may be inadequate and that, therefore, in the event of
breach by the Executive of the terms of Sections 5.12(a) or 7 hereof, the
Company shall be entitled to institute legal proceedings to enforce the specific
performance of this Agreement by the Executive and to enjoin the Executive from
any further violation of Sections 5.12(a) or 7 hereof and to exercise such
remedies cumulatively or in conjunction with all other rights and remedies
provided by law and not otherwise limited by this Agreement.
9.2 Notice. For the purposes of this Agreement, notices, demands and
------
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when addressed as follows and (i) when
personally delivered, (ii) when transmitted by telecopy, electronic or digital
transmission with receipt confirmed, (iii) one day after delivery to an
overnight air courier guaranteeing next day delivery, or (iv) upon receipt if
sent by certified or registered mail. In each case notice shall be sent to:
If to Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
9 Skyline
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company: ▇▇▇▇▇▇ Realty Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
9.3 Severability. The invalidity or unenforceability of any
------------
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect. In addition, in the event any provision in this
Agreement shall be determined by any court of competent jurisdiction to be
14
unenforceable by reason of extending for too great a period of time or over too
great a geographical area or by reason of being too extensive in any other
respect, each such agreement shall be interpreted to extend over the maximum
period of time for which it may be enforceable and to the maximum extent in all
other respects as to which it may be enforceable, and enforced as so
interpreted, all as determined by such court in such action.
9.4 Assignment. This Agreement may not be assigned by the Executive,
----------
but may be assigned by the Company to any successor to its business and will
inure to the benefit and be binding upon any such successor.
9.5 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
9.6 Headings. The headings contained herein are for reference
--------
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.7 Choice of Law. This Agreement shall be construed, interpreted
-------------
and enforced in accordance with the laws of the State of California without
giving effect to the principles of conflict of laws thereof.
9.8 Indemnification. To the fullest extent permitted under
---------------
applicable law, the Company shall indemnify, defend and hold the Executive
harmless from and against any and all causes of action, claims, demands,
liabilities, damages, costs and expenses of any nature whatsoever (collectively,
"Damages") directly or indirectly arising out of or relating to the Executive
-------
discharging the Executive's duties hereunder on behalf of the Company and/or its
respective subsidiaries and affiliates, so long as the Executive acted in good
faith within the course and scope of the Executive's duties with respect to the
matter giving rise to the claim or Damages for which the Executive seeks
indemnification.
9.9 LIMITATION ON LIABILITIES. IF EITHER THE EXECUTIVE OR THE
-------------------------
COMPANY IS AWARDED ANY DAMAGES AS COMPENSATION FOR ANY BREACH OR ACTION RELATED
TO THIS AGREEMENT, A BREACH OF ANY COVENANT CONTAINED IN THIS AGREEMENT (WHETHER
EXPRESS OR IMPLIED BY EITHER LAW OR FACT), OR ANY OTHER CAUSE OF ACTION BASED IN
WHOLE OR IN PART ON ANY BREACH OF ANY PROVISION OF THIS AGREEMENT, SUCH DAMAGES
SHALL BE LIMITED TO CONTRACTUAL DAMAGES AND SHALL EXCLUDE (I) PUNITIVE DAMAGES,
AND (II) CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES (E.G., LOST PROFITS AND OTHER
----
INDIRECT OR SPECULATIVE DAMAGES). THE MAXIMUM AMOUNT OF DAMAGES THAT THE
EXECUTIVE MAY RECOVER FOR ANY REASON SHALL BE THE AMOUNT EQUAL TO ALL AMOUNTS
OWED (BUT NOT YET PAID) TO THE EXECUTIVE PURSUANT TO THIS AGREEMENT THROUGH ITS
NATURAL TERM AND THROUGH ANY APPLICABLE SEVERANCE PERIOD, PLUS INTEREST ON ANY
DELAYED PAYMENT
15
AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND AFTER THE
DATE(S) THAT SUCH PAYMENTS WERE DUE.
9.10 WAIVER OF JURY TRIAL. TO THE EXTENT APPLICABLE, EACH OF THE
--------------------
PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT.
9.11 Attorneys' Fees. If any legal action, arbitration or other
---------------
proceeding, is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, including
any appeal of such action or proceeding, in addition to any other relief to
which that party may be entitled.
9.12 Entire Agreement. This Agreement contains the entire agreement
----------------
and understanding between the Company and the Executive with respect to the
employment of the Executive by the Company as contemplated hereby, and no
representations, promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. This Agreement shall not be
changed unless in writing and signed by both the Executive and the Board.
9.13 The Executive's Acknowledgment. The Executive acknowledges (a)
------------------------------
that he has had the opportunity to consult with independent counsel of his own
choice concerning this Agreement, and (b) that he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it freely
based on his own judgment.
(Signature Page Follows)
16
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date and year first above written.
▇▇▇▇▇▇ REALTY CORPORATION
___________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
▇▇▇▇▇▇ REALTY, L.P.
By ▇▇▇▇▇▇ Realty Corporation, its general
partner
By:________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
EXECUTIVE
___________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.