EMPLOYMENT AGREEMENT
FOR
▇▇▇▇ ▇▇▇▇▇▇▇
TABLE OF CONTENTS
Page
1 Employment....................................................... 1
2 Employment Period................................................ 1
3 Services/Place of Employment..................................... 2
4 Compensation and Benefits ....................................... 3
5 Termination of Employment and Change in Control.................. 5
6 Compensation Upon Termination of Employment By the
Trust for Cause or By Executive without Good Reason.............. 8
7 Compensation Upon Termination of Employment Upon Death
or Disability.................................................... 8
8 Compensation Upon Termination of Employment By the
Trust Without Cause or By Executive for Good Reason.............. 10
9 Change in Control................................................ 11
10 Mitigation/Effect on Employee Benefit Plans and Programs......... 13
11 Confidential Information......................................... 13
12 Return of Documents.............................................. 14
13 Non-compete...................................................... 14
14 Remedies......................................................... 15
15 Indemnification/Legal Fees....................................... 15
16 Successors and Assigns........................................... 16
17 Timing of and No Duplication of Payments......................... 17
18 Modification or Waiver........................................... 17
19 Notices.......................................................... 18
20 Governing Law.................................................... 18
21 Severability..................................................... 18
22 Legal Representation............................................. 18
23 Counterparts..................................................... 18
24 Headings......................................................... 19
25 Entire Agreement................................................. 19
26 Survival of Agreements........................................... 19
27 Prior Agreements................................................. 19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as
of October 23, 1998, by and between ▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing in the
State of New York ("Executive"), and Acadia Realty Trust, a Maryland real
estate investment trust with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (the "Trust").
RECITALS
WHEREAS, Executive previously held the positions of President and Chief
Executive Officer ("CEO") of RD Capital, Inc. ("RDC") and, through such
service, acquired special and unique knowledge, abilities and expertise;
WHEREAS, in connection with RDC's acquisition of control of the Trust
(the "RDC Acquisition") the Trust desires to employ Executive as Chairman and
CEO and to have Executive serve as a member of the Board of Trustees of the
Trust (the "Board") , and Executive desires to be employed by the Trust as
Chairman and CEO and serve as a member of the Board pursuant to the terms of
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
1. Employment.
The Trust hereby agrees to employ Executive, and Executive hereby
agrees to accept such employment during the period and upon the terms and
conditions set forth in this Agreement.
2. Employment Period.
(a) Except as otherwise provided in this Agreement to the
contrary, the terms and conditions of this Agreement shall be and remain in
effect during the period of employment (the "Employment Period") established
under this Paragraph 2. The Employment Period shall be for a minimum term
commencing on the date of this Agreement and ending on the third anniversary of
the date of this Agreement (the "Initial Employment Term"). Following the
expiration of the Initial Employment Term, the Employment Period shall
automatically be renewed and extended from day to day until either (i)
terminated by the Trust pursuant to a written notice given to the Executive in
accordance with Paragraph 19 at least six (6) months prior to the effective date
of such termination (the "Six Month Notice of Non-Renewal"), or (ii) the
Executive's employment otherwise terminates hereunder; it being understood,
however, that in no event shall any Six Month Notice of Non-Renewal be effective
prior to the final day of the Initial Employment Term.
(b) Notwithstanding anything contained herein to the contrary:
(i) Executive's employment with the Trust may be terminated by the Trust or
Executive at any time during the Employment Period other than as provided in
subparagraph 2(a) hereof, subject to the terms and conditions of this
Agreement; and (ii) nothing in this Agreement shall mandate or prohibit a
continuation of Executive's employment following the expiration of the
Employment Period upon such terms and conditions as the Board and Executive may
mutually agree.
(c) If Executive's employment with the Trust is terminated,
for purposes of this Agreement the term "Unexpired Employment Period" shall
mean the period commencing on the date of such termination and ending, (i) in
the case of termination pursuant to a Six Month Notice of Non-Renewal given and
made effective in accordance with subparagraph 2(a) hereof, on the effective
date of termination set forth therein, or (ii) in all other circumstances of
termination, the later of (A) the final day of the Initial Employment Term or
(B) six (6) months after the giving of notice by the terminating party or the
occurrence of such other event that automatically results in termination.
3. Services/Place of Employment.
(a) Services. During the Employment Period, Executive shall
hold the position of Chairman and CEO of the Trust and shall serve as a member
of the Board. Executive shall devote his best efforts and such business time,
skill and attention to the business of the Trust(other than absences due to
vacation, illness, disability or approved leave of absence) as in the
reasonable business judgment of the Executive is necessary to perform such
duties as are customarily performed by similar executive officers and as may be
more specifically enumerated from time to time by the Board or Executive
Committee of the Board; provided, however, that the foregoing is not intended
to (x) preclude Executive from (i) owning and managing personal investments,
including real estate investments, subject to the restrictions set forth in
Paragraph 13 hereof or (ii) engaging in charitable activities and community
affairs, or (y) restrict or otherwise limit Executive from conducting real
estate development, acquisition or management activities with respect to those
properties described in Schedule A, attached hereto (the "Excluded
Properties"), provided that the performance of the activities referred to in
the preceding clauses (x) and (y) does not, in the reasonable business judgment
of the Executive, prevent Executive from devoting sufficient business time to
the Trust to carry out Executive's duties as Chairman and CEO.
(b) Place of Employment. The principal place of employment of
Executive shall be at the Trust's executive offices in New York, New York and
Port Washington, New York.
4. Compensation and Benefits.
(a) Salary. During the Employment Period, the Trust shall pay
Executive a minimum annual base salary in the amount of $287,000 (the "Annual
Base Salary") payable in accordance with the Trust's regular payroll practices.
Executive's Annual Base Salary shall be reviewed annually in accordance with the
policy of the Trust from time to time and may be subject to upward adjustment
based upon, among other things, Executive's performance, as determined in the
sole discretion of the Compensation Committee of the Board (the "Compensation
Committee"). In no event shall Executive's Annual Base Salary in effect at a
particular time be reduced without his prior written consent.
(b) Incentive Compensation/Bonuses. Following the end of each
calendar year during the Employment Period commencing with the calendar ending
December 31, 1999 (each such calendar year being referred to herein as an
"Incentive Bonus Period"), Executive shall be considered for an incentive bonus
(the "Cash Incentive Bonus") based upon Executive's performance and the
financial and operating results of the Trust for such Incentive Bonus Period,
which bonus shall be payable in such amount and at such time as the Compensation
Committee shall determine, it being understood, however, that the Compensation
Committee shall be guided by, and make commercially reasonable efforts to use,
the following formula in determining the amount, if any, of such Cash Incentive
Bonus:
(i) 5% of the Executive's Annual Base Salary for each 1%
increase (or portion of each 1% increase if increase
is in excess of 1%) in funds from operations ("FFO")
per share of beneficial interest, par value $0.01 per
share, of the Trust (the "Common Shares") during the
Incentive Bonus Period (the "Comparative FFO") over
the FFO per Common Share for the calendar year
immediately preceding such Incentive Bonus Period
(the "Base FFO", except that for purposes of
determining the amount of the Cash Incentive Bonus
for the Incentive Bonus Period ending December 31,
1999, the Base FFO shall be the FFO for the fourth
quarter of calendar year 1998, annualized ) up to a
10% increase in the Comparative FFO over the Base
FFO, and, thereafter,
(ii) 10% of the Executive's Annual Base Salary for each
additional 1% increase (or portion of each 1%
increase if such increase is in excess of 1%) in the
Comparative FFO over the Base FFO up to a maximum
incentive compensation equal to 100% of the
Executive's Annual Base Salary.
Executive shall also be eligible, from time to time during the Employment
Period, to receive such bonuses and options to purchase Common Shares as the
Board, the Share Option Plan Committee or the Compensation Committee, as the
case may be, shall approve, in its sole discretion, including, without
limitation, options and bonuses contingent upon Executive's performance and the
achievement of specified financial and operating objectives for FFO per Common
Share. Any such options shall be issued at the then fair market value of the
Common Shares and on such other terms as the Compensation Committee shall
determine.
(c) Taxes and withholding. The Trust shall have the right to
deduct and withhold from all compensation all social security and other federal,
state and local taxes and charges which currently are or which hereafter may be
required by law to be so deducted and withheld.
(d) Additional Benefits. In addition to the compensation
specified above and other benefits provided pursuant to this Paragraph 4,
Executive shall be entitled to the following benefits:
(i) participation in the Option Plan, the Trust 401(k)
Savings and Retirement Plan (subject to statutory
rules and maximum contributions and
non-discrimination requirements applicable to 401(k)
plans) and such other benefit plans and programs,
including but not limited to restricted stock,
phantom stock and/or unit awards, loan programs and
any other incentive compensation plans or programs
(whether or not employee benefit plans or programs) ,
as maintained by the Trust from time to time and made
generally available to executives of the Trust with
such participation to be consistent with reasonable
Trust guidelines;
(ii) participation in any health insurance, disability
insurance, paid vacation, group life insurance or
other welfare benefit program made generally
available to executives of the Trust;
(iii) reimbursement for reasonable business expenses
incurred by Executive in furtherance of the interests
of the Trust;
(iv) an annual car allowance of $12,000 plus insurance
costs;
(v) as further consideration for Executive agreeing to
serve as an officer and entering into this Agreement
upon the terms set forth herein, including, without
limitation, the terms relating. to non-competition
set forth in Paragraph 13 below, the Trust is issuing
to Executive on the date hereof options to purchase
an aggregate of 1,000,000 Common Shares at a purchase
price equal to $7.50 per Common Share ("Options") .
Executive's Options shall be evidenced by the Option
Agreement dated ________ __, 1998 which shall
include, but not be limited to, the following
provision: vesting over a three year period with one
third (1/3) of the Options vesting on each of the
first, second and third anniversaries of the closing
date of the RDC Acquisition, to wit, August 12, 1998.
5. Termination of Employment and Change in Control.
(a) Executive's employment hereunder may be terminated during
the Employment Period under the following circumstances:
(i) Cause. The Trust shall have the right to terminate
Executive's employment for Cause upon Executive's:
(A) willful and continued failure to use best efforts
to substantially perform his duties hereunder (other
than any such failure resulting from Executive's
incapacity due to physical or mental illness) which
failure continues for a period of thirty (30) days
after written demand for substantial performance is
delivered by the Trust specifically identifying the
manner in which the Trust believes Executive has not
substantially performed his duties; (B) willful
misconduct and/or willful violation of Paragraph 11
hereof, which is materially economically injurious to
the Trust and the Partnership taken as a whole; (C)
the willful violation of the provisions of Paragraph
13 hereof; or (D) conviction of, or plea of guilty to
a felony. For purposes of this subparagraph 5(a), no
act, or failure to act, on Executive's part shall be
considered "willful" unless done, or omitted to be
done, by him (i) not in good faith and (ii) without
reasonable belief that his action or omission was in
furtherance of the interests of the Trust.
(ii) Death. Executive's employment hereunder shall
terminate upon his death.
(iii) Disability. The Trust shall have the right to
terminate Executive's employment due to "Disability"
in the event that there is a determination by the
Trust, upon the advice of an independent qualified
physician, reasonably acceptable to Executive, that
Executive has become physically or mentally incapable
of performing his duties under this Agreement and
such disability has disabled Executive for a
cumulative period of one hundred eighty (180) days
within a twelve (12) month period.
(iv) Good Reason. Executive shall have the right to
terminate his employment for "Good Reason": (A) upon
the occurrence of any material breach of this
Agreement by the Trust which shall include but not be
limited to: an assignment to Executive of duties
materially and adversely inconsistent with
Executive's status as CEO or a member of the Board or
a material or adverse alteration in the nature of or
diminution in Executive's duties and/or
responsibilities, reporting obligations, titles or
authority; (B) upon a reduction in Executive's Annual
Base Salary or a material reduction in other benefits
(except for bonuses or similar discretionary
payments) as in effect at the time in question, a
failure to pay such amounts when due or any other
failure by the Trust to comply with Paragraph 4
hereof which is not cured by the Trust within ten
(10) days written notice of such default by the
Executive; (C)on or within three (3) months following
a Change in Control (as hereinafter defined) in
accordance with the provisions set forth in
subparagraph 5(a)(vii) hereof; (D) any purported
termination of Executive's employment for Cause which
is not effected pursuant to the procedures of
sub-paragraph 5(a)(1) (and for purposes of this
Agreement, in the event of such failure to comply, no
such purported termination shall be effective); (E)
upon the relocation of the Trust's principal
executive offices or Executive's own office location
to a location more than thirty (30) miles away from
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
without Executive's consent; or (F) failure to be
appointed or reappointed as a member of the Board.
(v) Without Cause The Trust shall have the right to
terminate the Executive's employment hereunder
without Cause subject to the terms and conditions of
this Agreement.
(vi) Without Good Reason. The Executive shall have the
right to terminate his employment hereunder without
Good Reason subject to the terms and conditions of
this Agreement.
(vii) Change in Control. Executive shall have the right to
terminate his employment hereunder on or within three
(3) months following a Change in Control. Such
termination shall be deemed a termination for Good
Reason hereunder. For purposes of this Agreement
"Change in Control" shall mean that any of the
following events has occurred: (A) any "person" or
"group" of persons, as such terms are used in
Sections 13 and 14 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than any
employee benefit plan sponsored by the Trust, becomes
the "beneficial owner", as such term is used in
Section 13 of the Exchange Act (irrespective of any
vesting or waiting periods) of (i) Common Shares or
any class of stock convertible into Common Shares
and/or (ii) Common OP Units or preferred units or any
other class of units convertible into Common OP
Units, in an amount equal to thirty (30%) percent or
more of the sum total of the Common Shares and the
Common OP Units (treating all classes of outstanding
Common Shares, units or other securities convertible
into Common Shares as if they were converted into
Common Shares or Common OP Units, as the case may be,
and then treating Common Shares and Common OP Units
as if they were a single class) issued and
outstanding immediately prior to such acquisition as
if they were a single class and disregarding any
equity raise in connection with the financing of such
transaction; (B) the dissolution or liquidation of
the Trust or the consummation of any merger or
consolidation of the Trust or any sale or other
disposition of all or substantially all of its
assets, if the shareholders of the Trust and
unitholders of the Partnership taken as a whole and
considered as one class immediately before such
transaction own, immediately after consummation of
such transaction, equity securities and partnership
units possessing less than fifty (50%) percent of the
surviving or acquiring Trust and partnership taken as
a whole; or (C) a turnover, during any two (2) year
period, of the majority of the members of the Board,
without the consent of the remaining members of the
Board as to the appointment of the new Board members.
(b) Notice of Termination Any termination of Executive's
employment by the Trust or any such termination by Executive (other than on
account of death) shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated. In the event of the termination of
Executive's employment on account of death, written Notice of Termination shall
be deemed to have been provided on the date of death.
6. Compensation Upon Termination of Employment By the Trust for Cause
or By Executive without Good Reason.
In the event the Trust terminates Executive's employment for Cause or
pursuant to a Six Month Notice of Non-Renewal given and made effective in
accordance with subparagraph 2(a) hereof, or Executive terminates his
employment without Good Reason, the Trust shall pay Executive any unpaid Annual
Base Salary at the rate then in effect accrued through and including the date
of termination ("Unpaid Accrued Salary"). In addition, in such event, Executive
shall be entitled to exercise any options which, as of the date of termination,
have vested and are exercisable in accordance with the terms of the applicable
option grant agreement or plan.
Except for any rights which Executive may have to Unpaid Accrued Salary
through and including the date of termination, and vested options, the Trust
shall have no further obligations hereunder following such termination. The
aforesaid amounts shall be payable in full immediately upon such termination.
7. Compensation Upon Termination of Employment Upon Death or
Disability.
In the event of termination of Executive's employment as a result of
either Executive's death or Disability, the Trust shall pay to Executive, his
estate or his personal representative the following:
(i) any Unpaid Accrued Salary through and including the date of
termination; plus
(ii) an amount computed at an annualized rate equal to the Executive's
Annual Base Salary at the rate then in effect pro-rated for the period
commencing on the day following the date of termination and ending on the later
of (A) one year from the date of termination or (B) the final day of the
Unexpired Employment Period (the "Severance Salary"); plus
(iii) an additional amount computed at an annualized rate equal to the
average of the Cash Incentive Bonuses awarded to the Executive for each of the
last two (2) calendar years immediately preceding the year in which the
Executive's employment is terminated, pro-rated for the period beginning on the
first day of the calendar year in which the Executive is terminated and ending
on the date of termination ("Unpaid Accrued Bonus"); plus
(iv) a further amount computed at an annualized rate equal to the
average of the Cash Incentive Bonuses awarded to the Executive for each of the
last two (2) calendar years immediately preceding the year in which the
Executive's employment is terminated, pro-rated for the period commencing on
the day following the date of termination and ending on the later of (A) one
year from the date of termination or (B) the final day of the Unexpired
Employment Period ("Severance Bonus"); plus
(v) reimbursement of expenses incurred prior to date of termination
("Expense Reimbursement").
The aforesaid amounts shall be payable in cash without discount for early
payment, at the option of Executive, his estate or his personal representative,
either in full immediately upon such termination or monthly over the Unexpired
Employment Period (the "Payment Election"). Throughout the Employment Period,
the Trust shall maintain insurance which shall insure, and be payable to the
Trust upon, the Executive's death or Disability in amounts sufficient to pay the
Trust's obligation to satisfy the amounts set forth above in clauses (i) through
(v) of this Paragraph 7. In the event of termination of employment due to
Disability, Executive shall also receive continuation of health coverage through
the end of the Unexpired Employment Period on the same basis as health coverage
is provided by the Trust for active employees and as may be amended from time to
time ("Medical Continuation").
In addition, all (A) incentive compensation payments or programs of any
nature whether stock based or otherwise that are subject to a vesting schedule
including without limitation restricted stock, phantom stock, units and any
loan forgiveness arrangements granted to Executive ("Incentive Compensation")
shall immediately vest as of the date of such termination ("Vested Incentive
Compensation") and (B) options granted to Executive shall immediately vest as
of the date of such termination (the "Vested Options") and Executive shall be
entitled at the option of Executive, his estate or his personal representative,
within one (1) year of the date of such termination, to exercise any options
which have vested (including, without limitation, by acceleration in accordance
with the terms of this Agreement, the applicable option grant agreement or
plan) and are exercisable in accordance with the terms of the applicable option
grant agreement or plan and/or any other methods or procedures for exercise
applicable to optionees or to require the Trust (upon written notice delivered
within one hundred eighty (180) days following the date of Executive's
termination) to repurchase all or any portion of Executive's vested options to
purchase shares of Common Shares at a price equal to the difference between the
Repurchase Fair Market Value (as hereinafter defined) of the Common Shares for
which the options to be repurchased are exercisable and the exercise price of
such options as of the date of Executive's termination of employment (the
"Vested Option Exercise Election"). In the event of a conflict between any
option grant agreement or plan and this Agreement, the terms of this Agreement
shall control.
Except for any rights which Executive may have to all of the above
including Unpaid Accrued Salary and Bonus, Severance Salary and Bonus, , Vested
Incentive Compensation, Vested Options, Expense Reimbursement, and in the event
of a termination of employment due to Disability, Medical Continuation, the
Trust shall have no further obligations hereunder following such termination.
For purposes of this Agreement, "Repurchase Fair Market Value" shall
mean the average of the closing price on the New York Stock Exchange (or such
other exchange on which the Common Shares are primarily traded) of the Common
Shares on each of the trading days within the thirty (30) days immediately
preceding the date of termination of Executive's employment.
8. Compensation Upon Termination of Employment By the Trust Without
Cause or By Executive for Good Reason.
In the event the Trust terminates Executive's employment for any reason
other than Cause or pursuant to a Six Month Notice of Non-Renewal given and
made effective in accordance with subparagraph 2(a) hereof, or Executive
terminates his employment for Good Reason, the Trust shall pay to Executive and
Executive shall be entitled to receive the sum total of (A) Unpaid Accrued
Salary and Bonus and (B) Severance Salary and Bonus, each determined in
accordance with Paragraph 7 of this Agreement. The aforesaid amounts shall be
payable in cash without discount for early payment, at the option of Executive,
either in full immediately upon such termination or monthly over the Unexpired
Employment Period.
In addition, the Executive shall be entitled to receive Vested
Incentive Compensation, Vested Options exercisable pursuant to the Vested
Option Exercise Election, Medical Continuation for the Unexpired Employment
Period, and Expense Reimbursement. Executive understands that any options
exercised more than ninety (90) days following the date of his termination of
employment which were granted as incentive stock options shall automatically be
converted into non-qualified options.
Except for Unpaid Accrued Salary and Bonus, Severance Salary and Bonus,
any rights which Executive may have to Vested Incentive Compensation, Vested
Options, Medical Continuation and Expense Reimbursement and the Excess Tax
Gross Up (as defined below in sub-paragraph 9(d)), the Trust shall have no
further obligations hereunder following such termination. The parties both
agree that the agreement to make these payments was consideration and an
inducement to obtain Executive's consent to enter into this Agreement. The
payments are not a penalty and neither party will claim them to be a penalty.
Rather, the payments represent a fair approximation of reasonable amounts due
to Executive for the Employment Period.
9. Change in Control.
(a) Options. Any Incentive Compensation and options granted to
Executive that have not vested as of the date of a Change in Control shall
immediately vest upon the date of the Change in Control. Neither the occurrence
of a Change in Control, nor the vesting in any options as a result thereof shall
require Executive to exercise any options. In the event of a conflict between
any Incentive Compensation grant agreement or program or any option grant
agreement or plan and this Agreement, the terms of this Agreement shall control.
(b) Upon Termination. In the event Executive terminates his
employment on or following a Change in Control as set forth in sub-paragraph
5(a)(vii), the Trust shall pay to Executive, and Executive shall be entitled to,
all the payments and rights Executive would have had if Executive had terminated
his employment with Good Reason as set forth in Paragraph 8. The aforesaid
amounts shall be payable in accordance with Executive's Payment Election.
Except for Unpaid Accrued Salary and Bonus, Severance Salary and Bonus,
any rights which Executive may have to Vested Incentive Compensation Vested
Options (including, without limitation, by acceleration in accordance with
sub-paragraph 9 (a)), Medical Continuation, Expense Reimbursement and the Excise
Tax Gross Up (as defined below in sub-paragraph 9(d))the Trust shall have no
further obligations hereunder following such termination.
(c) Excise Tax Gross Up. In addition, if it is determined by
the Trust's tax preparer that as a result of any payment in the nature of
compensation made by the Trust to (or for the benefit of) Executive pursuant to
this Agreement or otherwise, an excise tax may be imposed on Executive pursuant
to Section 4999 of the Code (or any successor provisions) , the Trust shall pay
Executive in cash an amount equal to "X" determined under the following formula:
(the "Excise Tax Gross Up")
E x P
X = __________________________________
1 - [(Fix (1-SLI) + E+M]
where
E = the rate at which the excise tax is assessed under
Section 4999 of the Code (or any successor
(provisions)
P = the amount with respect to which such excise tax
is assessed, determined without regard to the
Excise Tax Gross Up;
FI = the highest effective marginal rate of income tax
applicable to Executive under the Code for the
taxable year in question (taking into account any
phase-out or loss of deductions, personal exemptions
or other similar adjustments); SLI = the sum of the
highest effective marginal rates of income tax
applicable to Executive under all applicable state
and local laws for the taxable year in question
(taking into account any phase- out or loss of
deductions, personal exemptions and other similar
adjustments); and
M = the highest marginal rate of Medicare tax
applicable to Executive under the Code for the
taxable year in question.
With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under Section 4999 of the Code (or any successor
provisions) may be assessed, the payment determined under this sub-paragraph
9(d) shall be paid to Executive at the time of the Change in Control but prior
to the consummation of the transaction with any successor. It is the intention
of the parties that the Trust provide Executive with a full tax gross-up under
the provisions of this Paragraph, so that on a net after-tax basis, the result
to Executive shall be the same as if the excise tax under Section 4999 of the
Code (or any successor provisions) had not been imposed. The Excise Tax Gross Up
may be adjusted if alternative minimum tax rules are applicable to Executive.
10. Mitigation/Effect on Employee Benefit Plans and Programs.
(a) Mitigation. Executive shall not be required to mitigate
amounts payable under this Agreement by seeking other employment or otherwise,
and there shall be no offset against amounts due Executive under this Agreement
on account of subsequent employment. Amounts owed to Executive under this
Agreement shall not be offset by any claims the Trust may have against Executive
and such payment shall not be affected by any other circumstances, including,
without limitation, any counterclaim, recoupment, defense, or other right which
the Trust may have against Executive or others.
(b) Effect on Employee Benefit Programs. The termination of
Executive's employment hereunder, whether by the Trust or Executive, shall have
no effect on the rights and obligations of the parties hereto under the Trust's
(i) welfare benefit plans including, without limitation, Medical Continuation as
provided for herein and health coverage thereafter but only to the extent
required by law, and on the same basis applicable to other employees and (ii)
401(k)Plan but only to the extent required by law and pursuant to the terms of
the 401(k)Plan.
11. Confidential Information.
(a) Executive understands and acknowledges that during his
employment with the Trust, he will be exposed to Confidential Information (as
defined below), all of which is proprietary and which will rightfully belong to
the Trust. Executive shall hold in a fiduciary capacity for the benefit of the
Trust such Confidential Information obtained by Executive during his employment
with the Trust and shall not, directly or indirectly, at any time, either during
or after his employment with the Trust, without the Trust's prior written
consent, use any of such Confidential Information or disclose any of such
Confidential Information to any individual or entity other than the Trust or its
employees, attorneys, accountants, financial advisors, consultants, or
investment bankers except as required in the performance of his duties for the
Trust or as otherwise required by law. Executive shall take all reasonable steps
to safeguard such Confidential Information and to protect such Confidential
Information against disclosure, misuse, loss or theft.
(b) The term "Confidential Information" shall mean any
information not generally known in the relevant trade or industry or otherwise
not generally available to the public, which was obtained from the Trust or its
predecessors or which was learned, discovered, developed, conceived, originated
or prepared during or as a result of the performance of any services by
Executive on behalf of the Trust or its predecessors. For purposes of this
Paragraph 11, the Trust shall be deemed to include any entity which is
controlled, directly or indirectly, by the Trust and any entity of which a
majority of the economic interest is owned, directly or indirectly, by the
Trust.
12. Return of Documents.
Except for such items, which are of a personal nature to Executive
(e.g., daily business planner), all writings, records, and other documents and
things containing any Confidential Information shall be the exclusive property
of the Trust, shall not be copied, summarized, extracted from, or removed from
the premises of the Trust, except in pursuit of the business of the Trust and at
the direction of the Trust, and shall be delivered to the Trust, without
retaining any copies, upon the termination of Executive's employment or at any
time as requested by the Trust.
13. Non-compete.
(a) Executive agrees that without the prior written consent of
a majority of the disinterested trustees of the Trust, obtained in accordance
with the terms and procedures of the Declaration of Trust and Bylaws of the
Trust and the Agreement of Limited Partnership of the Partnership and in
accordance with applicable law, and except as provided in subparagraph 13 (b),
Executive shall not at any time during the Noncompetition Period (as hereinafter
defined) engage in any way, directly or indirectly, in the Competitive Real
Estate Business (as hereinafter defined) , except in his capacity as an
employee, trustee or director, officer or shareholder of the Trust or the
Partnership. For purposes of this Paragraph 13, the term Competitive Real Estate
Business shall mean the acquisition, ownership, development, operation,
management or leasing of shopping centers and residential multi-dwelling
properties within the continental United States. The "Noncompetition Period"
shall be the period commencing on August 12, 1998 and ending on the later to
occur of (i) the date on which Executive is no longer an officer or trustee of
the Company or the Partnership; and (ii) the date Executive beneficially owns
less than ten percent (10%) of the Trust's Common Shares, calculated in
accordance with Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended, or any successor rule or regulation thereof.
(b) Nothing contained in this Paragraph 13 shall preclude
Executive from:
(i) acquiring, whether by gift or otherwise, any
property in the Competitive Real Estate Business or
any interest therein from another member of
Executive's family or from any entity controlled
thereby, provided, that if the acquisition of such
property or interest would violate the foregoing
limitations of this Paragraph 13, Executive shall
offer to sell such property or interest to the
Trust at its fair market value (to be mutually
agreed upon by the Trust, as approved by the
disinterested trustees, and Executive); or
(ii) engaging in business activities in the Competitive
Real Estate Business, or otherwise, of a passive
nature (i.e., with no participation in a capacity
as a general partner, or as a control person of a
general partner, or the functional equivalent
thereof); or
(iii) continuing to engage in those activities in which
Executive currently is engaged with respect to the
assets described in Schedule A attached hereto.
14. Remedies.
(a) The parties hereto agree that the Trust would suffer
irreparable harm from a breach by Executive of any of the covenants or
agreements contained in Paragraph 11, 12 or 13 of this Agreement. Therefore, in
the event of the actual or threatened breach by Executive of any of the
provisions of Paragraph 11, 12 or 13 of this Agreement, the Trust may, in
addition and supplementary to other rights and remedies existing in its favor,
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any
violation of the provisions thereof.
(b) If the period of time, the area specified or the scope of
activity restricted in Paragraph 13 above should be adjudged unreasonable in any
proceeding, then the period of time shall be reduced by such number of months or
the area shall be reduced by the elimination of such portion thereof or the
scope of restricted activity shall be modified, or any or all of the foregoing
so that such restrictions may be enforced in such area and for such time as is
adjudged to be reasonable.
15. Indemnification/Legal Fees.
(a) Indemnification. In the event the Executive is made party
or threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
Executive's employment with or serving as an officer or trustee of the Trust,
whether or not the basis of such Proceeding is alleged action in an official
capacity, the Trust shall indemnify, hold harmless and defend Executive to the
fullest extent authorized by Maryland law, as the same exists and may hereafter
be amended, against any and all claims, demands, suits, judgments, assessments
and settlements including all expenses incurred or suffered by Executive in
connection therewith (including, without limitation, all legal fees incurred
using counsel reasonably acceptable to Executive) and such indemnification shall
continue as to Executive even after Executive is no longer employed by the Trust
and shall inure to the benefit of his heirs, executors, and administrators.
Expenses incurred by Executive in connection with any Proceeding shall be paid
by the Trust in advance upon request of Executive that the Trust pay such
expenses; but only in the event that Executive shall have delivered in writing
to the Trust an undertaking to reimburse the Trust for expenses with respect to
which Executive is not entitled to indemnification. The provisions of this
Paragraph shall remain in effect after this Agreement is terminated irrespective
of the reasons for termination. The indemnification provisions of this Paragraph
shall not supersede or reduce any indemnification provided to Executive under
any separate agreement, or the by-laws of the Trust since it is intended that
this Agreement shall expand and extend the Executive's rights to receive
indemnity.
(b) Legal Fees. If any contest or dispute shall arise between
the Trust and Executive regarding or as a result of any provision of this
Agreement, the Trust shall reimburse Executive for all legal fees and expenses
reasonably incurred by Executive in connection with such contest or dispute, but
only if Executive is successful in respect of substantially all of Executive's
claims pursued or defended in connection with such contest or dispute. Such
reimbursement shall be made as soon as practicable following the resolution of
such contest or dispute (whether or not appealed).
16. Successors and Assigns.
(a) The Trust shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Trust, by agreement in
form and substance satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Trust would be required to perform it if no such succession had taken place.
Failure of the Trust to obtain any such agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the Trust in the same amount and on the same
terms as he would be entitled to hereunder if Executive terminated his
employment hereunder within three (3) months of a Change in Control as set
forth in Paragraph 9, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the
date of termination. In the event of such a breach of this Agreement, the
Notice of Termination shall specify such date as the date of termination. As
used in this Agreement, "Trust" shall mean the Trust as hereinbefore defined
and any successor to all or substantially all of its business and/or its
assets as aforesaid which executes and delivers the agreement provided for in
this Paragraph 16 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law. Any cash payments owed to
Executive pursuant to this Paragraph 16 shall be paid to Executive in a single
sum without discount for early payment immediately prior to the consummation
of the transaction with such successor. Nothing in this Paragraph 16(a) shall
be construed to interfere with the Trust's right to implement or pursue such
succession.
(b) This Agreement and all rights of Executive hereunder may
be transferred only by will or the laws of descent and distribution. Upon
Executive's death, this Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent any
such person succeeds to Executive's interests under this Agreement. Executive
shall be entitled to select and change a beneficiary or beneficiaries to receive
any benefit or compensation payable hereunder following Executive's death by
giving Trust written notice thereof. If Executive should die following the date
of termination while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to such person or persons
so appointed in writing by Executive, including, without limitation, under any
applicable plan, or otherwise to his legal representatives or estate.
17. Timing of and No Duplication of Payments.
All payments payable to Executive pursuant to this Agreement shall be
paid as soon as practicable after such amounts have become fully vested and
determinable. In addition, Executive shall not be entitled to receive duplicate
payments under any of the provisions of this Agreement.
18. Modification or Waiver.
No amendment, modification, waiver, termination or cancellation of this
Agreement shall be binding or effective for any purpose unless it is made in a
writing signed by the party against whom enforcement of such amendment,
modification, waiver, termination or cancellation is sought. No course of
dealing between or among the parties to this Agreement shall be deemed to affect
or to modify, amend or discharge any provision or term of this Agreement. No
delay on the part of the Trust or Executive in the exercise of any of their
respective rights or remedies shall operate as a waiver thereof, and no single
or partial exercise by the Trust or Executive of any such right or remedy shall
preclude other or further exercise thereof. A waiver of right or remedy on any
one occasion shall not be construed as a bar to or waiver of any such right or
remedy on any other occasion.
The respective rights and obligations of the parties hereunder shall
survive the Executive's termination of employment and termination of this
Agreement to the extent necessary for the intended preservation of such rights
and obligations.
19. Notices.
All notices or other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered by hand or delivered by a recognized delivery service or mailed,
postage prepaid, by express, certified or registered mail, return receipt
requested, and addressed to the Trust at the address set forth above or
Executive at his address as set forth in the Trust records (or to such other
address as shall have been previously provided in accordance with this Paragraph
19).
20. Governing Law.
This agreement will be governed by and construed in accordance with the
laws of the State of [New York] except as to Paragraph 15(a), without regard to
principles of conflicts of laws thereunder.
21. Severability.
Whenever possible, each provision and term of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement shall be held to be prohibited by
or invalid under such applicable law, then, subject to the provisions of
sub-paragraph 13(b) above, such provision or term shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provisions or term or the
remaining provisions or terms of this Agreement.
22. Legal Representation.
Each of the Trust and Executive have been represented by counsel with
respect to this Agreement.
23. Counterparts.
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and both of which taken together shall constitute
one and the same agreement.
24. Headings.
The headings of the Paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof and shall
not affect the construction or interpretation of this Agreement.
25. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and undertakings, both written and oral, among the parties with respect to the
subject matter hereof.
26. Survival of Agreements.
The covenants made in Paragraphs 5 through 15 and 21 each shall survive
the termination of this Agreement.
27. Prior Agreements.
Executive represents to the Trust and the Partnership that (a) there
are no restrictions, agreements or understandings whatsoever to which Executive
is a party which would prevent or make unlawful his execution of this Agreement,
and (b) his execution of this Agreement shall not constitute a breach of any
contract, agreement or understanding, oral or written, to which he is a party or
by which he is bound.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ACADIA REALTY TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE A
Properties in which Executive has an interest as of the date of this Agreement.