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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), entered
into this 8th day of December, 1998, between UNITED DOMINION REALTY
TRUST, INC., a Virginia corporation (the "Company") and RICHARD A.
GIANNOTTI (the "Executive"), recites and provides as follows:
RECITALS:
On September 24, 1997, the Company and the
Executive entered into an employment agreement (the "Employment
Agreement"). On December 8, 1998, the Company and the
Executive terminated the Employment Agreement and replaced it with
this Agreement. On December 22, 2008, the Company and the
Executive amend the Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing,
and the mutual promises and undertakings hereinafter set forth, and
the payments to be made to the Executive hereunder, the parties
hereto agree as follows:
1. Position and Duties .
(a) The Company hereby agrees to and hereby
does continue to employ the Executive as an executive officer of
the Company, subject to the supervision of the Chief Executive
Officer of the Company, or such other senior officer of the Company
as may be prescribed by the Chief Executive Officer or the Board of
Directors of the Company (the "Board"). Currently, the Executive
reports to the Chief Executive Officer and is responsible for
Development for the Northern and Southern Regions of the Company.
The parties agree that the Employment Agreement is hereby
terminated and this Agreement is replaced in its stead.
The Executive agrees that the description of the
executive position above shall not limit the Company from assigning
to the Executive such other duties and functions in addition to or
in substitution of those described above.
(b) The Executive agrees to serve the Company
as a full time executive officer with duties and authority as set
forth in the Company’s by-laws or as otherwise prescribed by
the Board, the Chief Executive Officer, or such other senior
officer prescribed by the Chief Executive Officer or the Board. The
Executive shall devote such time, attention, skill, and efforts to
the performance of his duties as a Company executive as shall be
required therefore, all under the supervision and direction of the
Board, the Chief Executive Officer, or such other senior officer
prescribed by the Board. The Executive agrees that during the
period of his employment he will not, without the approval of a
majority of the independent directors of the Board, have any
other
(i) real estate investment trust or business
affiliations, or (ii) corporate affiliations that conflict
with the business of the Company or interfere with the ability of
the Executive to perform his duties for the Company or comply with
the covenants under this Agreement.
2. Term of Agreement .
This Agreement will take effect as of the date of
this Agreement and will end on December 31, 1998. After
December 31, 1998, this Agreement will automatically renew for
successive one (1) year periods, ending as of December 31
of each year, unless sooner terminated in accordance with Section
4.
3. Compensation and Benefits .
(a) Base Salary . The
Executive’s pay will not be less than $175,000 per year,
payable in accordance with the Company’s regular payroll
practices, unless the Executive consents to a lesser base salary in
writing.
(b) Annual Incentive Compensation .
The Executive’s annual compensation shall also include an
annual incentive where the Executive has an opportunity to earn a
bonus of at least forty five percent (45%) of base salary based
upon the Executive and the Company meeting certain performance
goals and objectives as determined by the Compensation Committee of
the Board (the "Compensation Committee"). The Executive
acknowledges that the Board or the Compensation Committee, as
appropriate, may elect to modify or terminate annual incentive
compensation for all executives at any time.
(c) Long Term Incentive Compensation .
The Executive’s compensation shall also include participation
(i) in the Company’s 1982 Stock Option Plan;
(ii) in the Company’s 1991 Officers Stock Purchase and
Loan Plan; and (iii) any "shareholder value plan" or other
long-term compensation plan for senior officers of the Company
adopted by the Compensation Committee or the Board, on the same
basis as similarly situated executive officers of the Company. The
Executive acknowledges that the Board, or the Compensation
Committee, as appropriate, may elect to terminate or modify any or
all long-term incentive compensation at any time.
(d) Associate Benefit Plans . The
Executive will be eligible to participate in any and all employee
benefit plans, medical insurance plans, retirement plans, and other
benefit plans in effect for employees in similar positions at the
Company (the "Company Plans") or any other plans applicable for
other officers or executive officers of the Company. Such
participation shall be subject to the terms of the applicable plan
documents and the Company’s generally applied policies. In
addition, the Executive acknowledges that the Company may elect to
terminate or modify any or all Company Plans at any time.
(e) Travel . It is contemplated that
the Executive will be required to incur travel and entertainment
expense in the interests and on behalf of the Company and in
furtherance of its business. The Executive agrees to comply with
the travel and entertainment guidelines of the Company, which may
be modified from time to time (the "T&E Guidelines"). The
Company at the end of each month during the period of this
Agreement will, upon submission of appropriate bills or vouchers,
reimburse expenses incurred by the Executive during such month in
compliance with the T&E Guidelines. The Executive agrees to
maintain adequate records, in such detail as the Company may
reasonably request, of all expenses to be reimbursed by the Company
hereunder and to make such records available for inspection as and
when reasonably requested by the Company.
4. Employment Termination Outside of
Change of Control .
(a) Incapacity; Death . This Agreement
may be terminated by the Company, by delivery of a "Notice of
Termination" (defined in Section 8) to the Executive or his
personal representative given at least thirty (30) days prior
to the effective date specified therein, in the event that the
Executive shall be unable to perform his duties hereunder for a
period of more than three consecutive months as a result of illness
or incapacity. This Agreement shall terminate on the death of the
Executive.
(b) Without Cause . This Agreement may
be terminated by the Company, without cause, by delivery of a
"Notice of Termination" (defined in Section 8) given to the
Executive ten (10) days prior to the effective date of such
termination.
(c) Severance Compensation . Upon
termination of this Agreement pursuant to Section 4
(a) or 4 (b), the Company shall pay to the Executive or his
legal representative certain compensation (the "Severance
Compensation") as follows:
(i) Base Salary . The Executive shall
be paid fifty-two (52) weeks of base salary, and the Company
shall continue in effect for a period of fifty-two (52) weeks
after the effective date of the Executive’s termination, all
health/life/disability insurance coverage provided to the Executive
and his immediate family on the day immediately prior to the date
of notice of termination or, if the Executive shall so elect, the
Company shall reimburse the Executive in an amount equal to the
portion of the premium allocable to the Executive for providing
such coverage, provided, however, if such coverage cannot be
continued by the Company, the Company shall reimburse the Executive
in an amount sufficient for the Executive to obtain substantially
similar coverage for a period of fifty-two (52) weeks after
the effective date of termination.
(ii) Incentive Compensation . The
Executive shall also be entitled to annual incentive compensation
(i) actually earned by the Executive, if any, pursuant to
Section 3(b) of this Agreement for the Company’s current
fiscal year prorated through the effective date of termination,
which compensation shall be paid no later than forty-five
(45) days after the end of the Company’s fiscal year and
(ii) an amount equal to the sum of the annual incentive
compensation earned by the Executive over the two calendar years
prior to the effective date of termination, divided by two
("Average Annual Incentive Compensation"). Compensation pursuant to
paragraph 3(c) (long term incentive compensation) shall be governed
by the terms of the subject plans.
(iii) Severance Compensation Reduction
. In the event termination is pursuant to Section 4
(a) of this Agreement, the portion of Severance Compensation
to be paid pursuant to Section 4(i) and (ii) shall be reduced
by the amount of any life insurance proceeds paid by or through the
Company or disability insurance payments for one (1) year, as
appropriate, payable to the Executive or his personal
representative or other beneficiary.
(iv) Timing . The Company shall pay to
the Executive or his legal representative the sums payable to such
Executive or his legal representative on account of the portion of
Severance Compensation consisting of (y) base salary; and
(z) the Average Annual Incentive Compensation in a lump sum,
in each case within thirty (30) days after the effective date
of termination.
(v) Life Insurance . The Executive
shall also be entitled to direct the Company to change the
beneficiary of any non-group life insurance policy to another
person or group.
(vi) 409A . Any amounts or benefits
payable under this Section 4(c) shall be delayed to the extent
necessary to comply with Code Section 409A(a)(2)(B)(i)
(relating to payments made to certain "specified employees" of
certain publicly-traded companies) and in such event, any such
amount to which the Executive would otherwise be entitled during
the six (6) month period immediately following the
Executive’s separation from service will be paid on the first
business day following the expiration of such six (6) month
period.
(d) By the Executive . This Agreement
may be terminated by the Executive, upon delivery of a "Notice of
Termination" (defined in Section 8) given at least ninety
(90) days before the effective date of termination or for
"Good Reason," which, for the purposes of this subsection, shall
mean for the reasons set forth in subsections 5(d)(i) to (vi). In
such event, the Executive shall not be entitled to any compensation
under this Agreement for any period not worked after the
termination date, other than compensation to which the Executive is
entitled pursuant to Section 5.
(e) For Cause . The Company may
terminate this Agreement for cause by providing a "Notice of
Termination" (defined in Section 8). In such event, the
Executive shall not be entitled to any compensation under this
Agreement for the period after the termination date, and any
compensation paid to the Executive shall be net of any sums owed by
the Executive to the Company as a result of the act for which the
employment of the Executive was terminated. The circumstances under
which the Company will be deemed to have cause to terminate this
Agreement will be a breach of this Agreement or a serious offense
inconsistent with his duties as an Executive which shall include
but not be limited to the following:
(i) The Executive is convicted of or pleads
nolo contendere to any crime, other than a traffic offense or
misdemeanor;
(ii) The Executive shall commit, with respect
to the Company, an act of fraud or embezzlement or shall have been
grossly negligent in the performance of his duties hereunder;
(iii) The Executive engages in gross
dereliction of duties, refusal to perform assigned duties
consistent with his position, or repeated violation of the
Company’s policies after written warning; or,
(iv) The Executive engages in drug abuse.
(f) Consulting Services . Upon
termination of this Agreement, the Executive shall, for a period of
up to one year following the effective date of termination, render
such advisory or consulting services to the Company as it may
reasonably request, taking into account the Executive’s
health, business commitments, geographical location and other
relevant circumstances. The intent of this paragraph is not to
obligate the Executive to perform any day-to-day duties for the
Company following termination of his employment but only to assist
management in effecting a smooth transition of the functions or
projects for which the Executive was responsible while an employee
of the Company. Should the Executive fail to render such advisory
or consulting services, after 30 days’ prior written
notice to the Executive and the Executive’s failure to
commence the rendering of such service, the Company’s sole
remedy shall be to terminate payment of any remaining severance
compensation. If this Agreement is terminated pursuant to
Section 4(d)(except where the termination is for "Good
Reason") or 4(e) and no Severance Compensation is paid to the
Executive, the Executive shall be paid on an hourly basis to the
extent requested by the Company to perform advisory or consulting
services, based upon his base salary prior to termination for the
actual time spent for advisory or consulting services for the
Company.
(g) Return of Company Property . The
parties acknowledge and agree that records, files, reports,
manuals, handbooks, computer diskettes, computer software, customer
files and information, documents, equipment and the like, relating
to the Company’s business or which are developed for or by
the Company, or which Executive shall develop, create, use, prepare
or come into possession of during his employment with the Company,
shall remain t
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