EMPLOYMENT
AGREEMENT
As Amended and Restated Effective January 1,
2009
THIS
EMPLOYMENT AGREEMENT (“Employment Agreement”) is
entered into as of the 14th day of May, 1999, among Sovran Self
Storage, Inc., a Maryland corporation and Sovran Acquisition
Limited Partnership, a Delaware limited partnership (the
“Corporation” or the “Partnership”,
respectively and collectively the “Company”), and
Robert J. Attea (the “Executive”). The Agreement
is amended and restated effective January 1, 2009.
WHEREAS,
the Executive is a valuable employee of the Company, an integral
part of its management team and a key participant in the decision
making process relative to short-term and long-term planning and
policy for the Company;
WHEREAS,
the Company wishes to attract and retain well-qualified executive
and key personnel and to assure continuity of management, which
will be essential to its ability to evaluate and respond to any
actual or threatened Change in Control (as defined below) in the
best interests of shareholders;
WHEREAS,
the Company understands that any actual or threatened Change in
Control will present significant concerns for the Executive with
respect to his financial and job security;
WHEREAS,
the Company wishes to encourage the Executive to continue his
career and services with the Company for the period during and
after an actual or threatened Change in Control and to assure to
the Company the Executive’s services during the period in
which such a Change in Control is threatened, and to provide the
Executive certain financial assurances to enable the Executive to
perform the responsibilities of his position without undue
distraction and to exercise his judgment without bias due to his
personal circumstances; and
WHEREAS,
the Board of Directors of the Corporation (the “Board”)
and the Partnership have determined that it would be in the best
interests of the Company and its shareholders and partners to
assure continuity in the management of the Company in the event of
a Change in Control by entering into an employment continuation and
noncompete agreement with Executive;
WHEREAS,
this Agreement has been amended and restated effective
January 1, 2009 to include provisions intended to comply with
final regulations promulgated under Internal Revenue Code
(“Code”) Section 409A and shall be construed to
the extent practicable so as to avoid causing any amounts payable
to the
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 2
Executive
hereunder to be includable in his gross income under Code
Section 409A(a)(1).
NOW,
THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
(a) The
Company hereby employs the Executive as Chairman of the Board and
Chief Executive Officer of the Company and the Executive hereby
accepts such employment, on the terms and subject to the conditions
hereinafter set forth.
(b) During
the term of this Employment Agreement and any renewal hereof (all
references herein to the term of this Employment Agreement shall
include references to the period of renewal hereof, if any), the
Executive shall be and have the title of Chairman of the Board and
Chief Executive Officer of the Company and shall devote his entire
business time and all reasonable efforts to his employment in that
capacity with such other duties as may be reasonably requested from
time to time by the Board, which duties shall be consistent with
his position and with those previously performed by Executive
during the one year period prior to the date hereof. Except as
hereafter expressly agreed in writing by the Executive, the
Executive shall not be required to report to any single individual
and shall report only to the Board as an entire body. For service
as a director, officer and employee of the Company, the Company
agrees that the executive shall be entitled to the full protection
of the applicable indemnification provisions of the Articles of
Incorporation and By-laws of the Company (including the provisions
for advances), as the same may be amended from time to
time.
The Company will
pay Executive the salary and bonus and provide the benefits set
forth in Exhibit A to this Employment Agreement.
This Employment
Agreement shall have a continuous term until terminated as provided
in Paragraph 4.
(a) Death
or Retirement . This Employment Agreement will terminate upon
Executive’s death or retirement.
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 3
(b)
Disability . The Company may terminate this Employment
Agreement upon at least thirty (30) days’ written notice
in the event of Executive’s “disability.” For
purposes of this Employment Agreement, the Executive’s
“disability” shall be deemed to have occurred only
after one hundred fifty (150) days in the aggregate during any
consecutive twelve (12) month period, or after one hundred
twenty (120) consecutive days, during which one hundred fifty
(150) or one hundred twenty (120) days, as the case may
be, the Executive, by reason of his physical or mental disability
or illness, shall have been unable to substantially discharge his
duties under this Employment Agreement. The date of disability
shall be such one hundred fiftieth (150 th )
or one hundred twentieth (120 th )
day, as the case may be. In the event either the Company or the
Executive, after receipt of notice of the Executive’s
disability from the other, disputes whether the Executive’s
disability shall have occurred, the Executive shall promptly submit
to a physical examination by the chief of medicine of any major
accredited hospital in the Buffalo, New York area and, unless such
physician shall issue his written statement to the effect that in
his opinion, based on his diagnosis, the Executive is capable of
resuming his employment and devoting his full time and energy to
discharging his duties within thirty (30) days after the date
of such statement, such permanent disability shall be deemed to
have occurred.
(c)
Cause . The Company may terminate this Employment Agreement
for “cause.” For purposes of this Employment Agreement,
“cause” shall mean
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(i)
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The
Executive’s fraud, commission of a felony, commission of an
act or series of acts of dishonesty which are materially inimical
to the best interests of the Company, or the Executive’s
willful and substantial failure to perform his duties under this
Employment Agreement, which failure has not been cured within a
reasonable time (which shall not be less than thirty
(30) days) after the Company gives notice thereof to the
Executive; or
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(ii)
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The
Executive’s material breach of any material provision of this
Employment Agreement, which breach, if capable of being cured, has
not been cured in all substantial respects within thirty
(30) days) after the Company gives notice thereof to the
Executive.
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(iii)
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The
Executive’s commission of an act of moral turpitude,
dishonesty or fraud which, in the good faith determination of the
Board, would render his continued employment materially damaging or
detrimental to the Company.
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(d) Termination
Without Cause . The Company may terminate this Employment
Agreement without cause by notifying Executive in writing of its
election to terminate at least thirty (30) days before the
effective date of termination. Executive
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 4
may, on written
notice to the Company, accelerate the effective date of termination
to any other date of his choosing up to the date of notice of
acceleration.
(e)
Termination for Good Reason . Executive may terminate this
Employment Agreement for “Good Reason” which shall mean
the occurrence of one or more of the following events provided
that, in the case of events described in (i), (ii), (iii) or
(iv), the Executive shall give the Company a written notice, within
90 days following the initial occurrence of the event,
describing the event that the Executive claims to be Good Reason
and stating the Executive’s intention to terminate employment
unless the Company takes appropriate corrective action:
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“Good reason” shall
exist if:
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(i)
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the
Company materially changes the Executive’s duties and
responsibilities as set forth in this Employment Agreement or
changes his title or position without his consent;
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(ii)
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there arises a requirement that, in
the Executive’s reasonable judgment, the services required to
be performed by the Executive would necessitate the Executive
moving his residence at least 50 miles from the Buffalo, New York
area;
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(iii)
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the
Company materially diminishes the salary, fringe benefits or other
compensation being paid to the Executive;
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(iv)
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there occurs a material breach by
the Company of any of its obligations under this Employment
Agreement;
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(v)
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the
Executive is not elected to the Board at any annual meeting of the
Corporation’s shareholders;
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(vi)
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the
failure of any successor of the Company to furnish the assurances
provided for in Section 7(c).
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In the case of
events described in (i), (ii), (iii) or (iv), the Company
shall have 30 days from the date of receipt of the written
notice from the Executive stating his claim of Good Reason in which
to take appropriate corrective action. If the Company does not cure
the Good Reason, the Good Reason will be deemed to have occurred at
the end of the 30-day period.
(f)
Termination By Mutual Agreement . This Employment Agreement
may be terminated by mutual agreement of the Company and the
Executive.
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 5
(g)
Resignation . Executive may terminate this Employment
Agreement at any time with sixty (60) days’ written
notice to the Company, and the Company may accelerate the effective
date of termination to any other date up to the date of notice of
acceleration.
(h)
Payment of Compensation Due . The Company will pay Executive
on the effective date of termination all unpaid compensation
accrued at the rate set forth on Exhibit A through the
effective date of termination.
(a)
Termination Without Cause or for Good Reason . The Company
will make the severance payments specified in Section 5(b) or
(c) below if this Employment Agreement is terminated pursuant
to Sections 4(d) (Without Cause) or (e) (for Good Reason)
hereof. In the event of such termination any outstanding stock
options held by Executive shall be deemed to have vested
immediately prior to such termination and shall be exercisable at
any time during the balance of their original terms. In addition,
the employee welfare benefits referred to in Exhibit A,
Section 1(c) shall be continued for a period of thirty-six
(36) months after termination of employment provided, however,
the Executive and not the Company shall pay the premiums for any
such benefits, where the payment of the premiums by the Company
would constitute gross income to the Executive, during the 6-month
period following the Executive’s Separation from
Service.
(b)
Severance Payments Without Change in Control . As severance
payments under this Section 5(b), the Company will pay
Executive thirty-six (36) monthly payments each in an amount
equal to 1/12th of the sum of the highest (i) salary payments
made by the Company to Executive in any calendar year,
(ii) bonus and other incentive compensation earned by
Executive (whether or not deferred) with respect to services
rendered to the Company during any calendar year and (iii) the
value of any restricted stock awards during any calendar year. The
36 monthly payments described in the preceding sentence shall
be deemed a series of separate payments within the meaning of
Treas. Reg. §1.409A-2(b)(2)(iii). The first six monthly
payments shall be paid to the Executive in a lump sum within
30 days following his Separation from Service. The remaining
thirty monthly payments shall be paid to the Executive in 30
separate payments on the first day of 30 successive calendar months
with the first payment occurring on the first day of the seventh
calendar month beginning after the date of the Executive’s
Separation from Service. The parties affirm that it is their intent
that the first six monthly payments be excluded from the
application of Code Section 409A by reason of the
“short-term deferral” rule set forth at Regulation
§1.409A-1(b)(4).
(c)
Severance Payments With Change in Control .
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 6
(i)
Section 409A Change in Control . If this Employment
Agreement is terminated pursuant to Section 4(d) (Without
Cause) or Section 4(e) (for Good Reason) within two years
after a Section 409A Change in Control of the Company has
occurred, or if a Section 409A Change in Control of the
Company occurs while the Company is making severance payments to
the Executive pursuant to Section 5(b), Executive shall
receive the severance payments specified in Section 5(b) (or
the remaining balance thereof) in a lump sum. The lump sum shall be
paid within 30 days after the effective date of the
Executive’s Separation from Service or, if the
Section 409A Change in Control occurs after the
Executive’s Separation from Service, within 30 days
after such Section 409A Change in Control.
Notwithstanding
the foregoing, the severance payments specified in Section 5(b)
shall not be paid to the Executive (except for the lump sum equal
to six monthly payments provided in the third sentence of
Section 5(b)) before the day following the 6-month anniversary
of the Executive’s Separation from Service unless Executive
shall have received an opinion of counsel satisfactory to the
Executive that payment before that date will not be a violation of
Code Section 409A(a)(2)(B)(i) (concerning the 6-month delay
rule). In the event that the Executive shall fail to obtain such an
opinion of counsel, the Company or its successor shall, within
30 days after the later of the Executive’s Separation
from Service or the Section 409A Change in Control, transfer
the remaining balance of the monthly payments due the Executive to
a rabbi trust (similar to the trust described in Revenue Procedure
92-64) under a trust agreement that requires payment of such
remaining balance to the Executive in a lump sum on the day
following the 6-month anniversary of the Executive’s
Separation from Service.
(ii)
Non-Section 409A Change in Control . If this Employment
Agreement is terminated pursuant to Section 4(d) (Without
Cause) or Section 4(e) (for Good Reason) within two years
after a Non-Section 409A Change in Control of the Company has
occurred, or if a Non-Section 409A Change in Control of the
Company occurs while the Company is making severance payments to
the Executive pursuant to Section 5(b), the Company or its
successor shall, within 30 days after the
Non-Section 409A Change in Control, transfer the remaining
balance of the monthly payments due the Executive to a rabbi trust
(similar to the trust described in Revenue Procedure 92-64) under a
trust agreement that requires payment of such remaining balance to
the Executive from the trust in accordance with the original
payment schedule under Section 5(b).
(d)
Reimbursement of Legal Fees and Expenses . The Company shall
also reimburse the Executive (promptly upon documented request),
the amount of all legal fees and expenses reasonably incurred by
the Executive in connection with any good faith claim for severance
compensation hereunder, including all such fees and expenses
incurred in contesting or disputing, by arbitration or otherwise,
any such
Sovran Self Storage, Inc.
Restated Employment Agreement with Robert J. Attea
Page 7
termination or
in seeking to obtain or enforce any right or benefit provided by
this Empl
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