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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "Agreement") made as of the 10th day of
January, 2003 (the "Effective Date") by and between Bryce Blair
("Executive")
and AvalonBay Communities, Inc., a Maryland corporation (the
"Company").
WHEREAS, Executive
and the Company have previously entered into an
employment agreement dated as of March 9, 1998 (as amended, the
"Prior
Agreement"); and
WHEREAS, Executive
and the Company desire to enter into a new
employment agreement, effective as of the Effective Date indicated
above, to
replace the Prior Agreement.
NOW, THEREFORE,
the parties hereto do hereby agree as follows.
1. Term. The
Company hereby agrees to employ Executive, and Executive
hereby agrees to remain in the employ of the Company subject to the
terms and
conditions of this Agreement for the period commencing on the
Effective Date and
terminating on November 30, 2006 (the "Original Term"), unless
earlier
terminated as provided in Section 7. The Original Term shall be
extended
automatically for additional two year periods measured from
December 1, 2006
(each a "Renewal Term"), unless notice that this Agreement will not
be extended
is given by either party to the other at least 180 days prior to,
but not more
than 270 days prior to, the expiration of the Original Term or any
Renewal Term.
Notwithstanding the foregoing, upon a Change in Control, the
Employment Period
shall be extended automatically to three years from the date of
such Change in
Control (but only if such date is later than the then current
expiration date).
(The period of Executive's employment hereunder within the Original
Term and any
Renewal Terms is herein referred to as the "Employment
Period.")
2. Employment
Duties.
(a) During the Employment Period, Executive shall serve as the
Chief
Executive Officer and President of the Company. In this capacity,
Executive
shall have such duties, authorities and responsibilities
commensurate with the
duties, authorities and responsibilities of persons in similar
capacities in
similarly sized companies, and such other duties and
responsibilities as the
Board of Directors of the Company (the "Board") shall designate
that are
consistent with Executive's position as Chief Executive Officer and
President of
the Company. Executive shall report exclusively to the Board. In
addition to
Chief Executive Officer and President, Executive currently serves
as Chairman of
the Board. The appointment by the Board of Directors, from among
the independent
directors, of a "lead director" with certain defined duties or
oversight
responsibilities that are of a type that may traditionally be
performed by a
"chairman of the board" and that overlap with current duties or
oversight
responsibilities of Executive in his role as Chairman of the Board,
shall not be
a violation of this Agreement provided the role of such lead
director is
consistent with the proviso in Section 7(b)(4)(ix) (definition of
"Constructive
Termination without Cause").
(b) Executive agrees to his employment as described in this
Section
2 and agrees to devote substantially all of his working time and
efforts to the
performance of his duties under this Agreement; provided that
nothing in this
Section 2(b) shall be interpreted to preclude Executive from (i)
participating
with the prior written consent of the Board as an officer or
director of, or
advisor to, any other entity or organization that is not a customer
or material
service provider to the Company or a Competing Enterprise, as
defined in Section
8, so long as such participation does not interfere with the
performance of
Executive's duties hereunder, whether or not such entity or
organization is
engaged in religious, charitable or other community or non-profit
activities,
(ii) investing in any entity or organization which is not a
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customer or material service provider to the Company or a Competing
Enterprise,
so long as such investment does not interfere with the performance
of
Executive's duties hereunder, or (iii) delivering lectures or
fulfilling
speaking engagements so long as such lectures or engagements do not
interfere
with the performance of Executive's duties hereunder. The Company
consents to
Executive's status as a "former partner" with a current financial
interest in
certain projects of Trammell Crow Residential ("TCR"), and such
activity shall
not be treated as a Competing Enterprise.
(c) In performing his duties hereunder, Executive shall be
available
for reasonable travel as the needs of the business require.
Executive shall be
based in Alexandria, Virginia (or, if such headquarters office
shall move, to a
headquarters office of the Company that is within 50 miles of
Alexandria,
Virginia). The Company acknowledges that Executive's principal
residence is
currently in Massachusetts, and it shall not be a violation of this
agreement
for Executive to maintain a principal residence in Massachusetts
and to utilize
on a regular basis the Company's current Quincy, Massachusetts
office (or a
successor Massachusetts office within 50 miles of Quincy,
Massachusetts or other
office facilities provided by the Company in or near Quincy,
Massachusetts). The
Company agrees to reimburse Executive for travel to and from the
Alexandria
office from Massachusetts and for reasonable related lodging,
including, at the
Company's option, at a nearby community owned by the Company.
(d) Breach by either party of any of his or its respective
obligations under this Section 2 shall be deemed a material breach
of that
party's obligations hereunder.
3.
Compensation/Benefits. In consideration of Executive's services
hereunder, the Company shall provide Executive the following:
(a) Base Salary. During the Employment Period, the Executive
shall
receive an annual rate of base salary ("Base Salary") in an amount
not less than
$543,490. Executive's Base Salary will be reviewed by the Company
annually and
may be adjusted upward (but not downward) at such time. Base Salary
shall be
payable in accordance with the Company's normal business practices,
but in no
event less frequently than monthly.
(b) Bonuses. Commencing at the close of each fiscal year during
the
Employment Period, the Company shall review the performance of the
Company and
of Executive during the prior fiscal year, and the Company may
provide Executive
with additional compensation in the form of a cash bonus ("Cash
Bonus") and in
the form of long term equity incentives such as stock options and
restricted
stock grants ("LT Equity Bonus") if the Board, or any compensation
committee
thereof, in its discretion, determines that the performance of the
Company and
Executive's contribution to the Company warrants such additional
payment and the
Company's anticipated financial performance of the present period
permits such
payment. Any Cash Bonuses hereunder shall be paid as a lump sum not
later than
75 days after the end of the Company's preceding fiscal year.
(c) Medical and Disability Insurance/Physical. During the
Employment
Period, the Company shall provide (i) to Executive and Executive's
immediate
family a comprehensive policy of health insurance in accordance
with the
Company's general practice applicable to officers (including
payment of all or a
portion of the premiums due thereon) and (ii) to Executive a
disability policy
in accordance with the Company's general practice applicable to
officers
(including payment of all or a portion of the premiums due thereon)
(the "Base
Disability Policy") and a supplemental disability policy (the
"Supplemental
Policy") providing for coverage mutually reasonably acceptable to
the Company
and Executive. During the Employment Period, Executive shall be
entitled to a
comprehensive annual physical performed, at the expense of the
Company (but not
including any related travel expense), by the physician or medical
group of
Executive's choosing.
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(d) Split Dollar Life Insurance. Subject to Section 12(b),
during
the Employment Period, the Company shall keep in force and pay the
premiums on
the split-dollar life insurance policy referenced in the Split
Dollar Insurance
Agreement between the Company (or Avalon Properties, Inc., a
predecessor) and
Executive, subject to reimbursement by Executive as provided in
such Split
Dollar Insurance Agreement. Executive agrees to submit to such
medical
examinations as may be required in order to maintain such policy of
insurance.
(e) Vacations. Executive shall be entitled to reasonable paid
vacations during the Employment Period in accordance with the then
regular
procedures of the Company governing officers.
(f)
Office/Secretary, etc. During the Employment Period, Executive
shall be entitled to secretarial services and a private office in
each of the
Alexandria, Virginia and Quincy, Massachusetts offices (or in
successor offices
or office facilities as permitted hereunder) commensurate with his
title and
duties.
(g) Annual Allowance. The Company will provide the Executive with
an
annual allowance of up to $10,000 per year (the "Allowance"). The
Executive may
draw on the Allowance for expenses incurred in his discretion for
items such as
country club membership, financial counseling or tax preparation.
Payment of the
Allowance shall be subject to substantiation of expenses in
accordance with the
Company's policies in effect from time to time for executive
officers of the
Company. Unused portions of the Allowance shall be forfeited (i.e.,
not carried
over from year to year or paid out in cash). For purposes of this
Section 3(g),
a new year shall be deemed to commence on each January 1. Payments
under this
annual allowance will not be grossed up to reflect any income taxes
that may be
due thereon. Executive shall be entitled to a full Allowance for
2002.
(h) Automobile. The Company shall provide Executive with a
monthly
car allowance during the Employment Period in accordance with the
Company's
current practices but in no event less than Executive's current
monthly car
allowance.
(i) Other Benefits. During the Employment Period, the Company
shall
provide to Executive such other benefits, excluding severance
benefits, but
including the right to participate in such retirement or pension
plans, as are
made generally available to officers of the Company from time to
time. Executive
shall be given credit for purposes of eligibility and vesting of
employee
benefits and benefit accrual for service prior to the Effective
Date with Avalon
Properties, Inc. and its affiliates ("Avalon"), and Trammell Crow
Residential
("TCR") under each benefit plan of the Company and its subsidiaries
to the
extent such service had been credited under employee benefit plans
of Avalon or
TCR, provided that no such crediting of service results in
duplication of
benefits.
(j) Total Compensation. The Company acknowledges that the
Executive's Cash Bonus and LT Equity Bonus awarded to the Executive
by the Board
or Compensation Committee of the Board in its discretion from time
to time, are
a material part of total compensation for the Executive. The
Company will
endeavor to provide Executive with a reasonable bonus program
(which program
will provide for a reasonable Cash Bonus and/or reasonable LT
Equity Bonus on an
annual basis to compensate Executive for the achievement by the
Company and/or
Executive of reasonable goals and objectives) such that the
Executive's total
compensation, in light of the Company's performance and his
performance and
service as CEO and President and Chairman of the Board, is
reasonable under the
circumstances and reasonable relative to the Cash Bonuses and LT
Equity Bonuses
awarded other officers of the Company. The Company shall not be in
breach of
this provision unless it can be demonstrated that the Company acted
in bad faith
in determining whether to award (or the size of an award of) a Cash
Bonus or LT
Equity Bonus, which determination of bad faith shall specifically
be made with
reference to the target awards set for other officers and the
actual awards paid
other officers.
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4.
Expenses/Indemnification.
(a)
During the Employment Period, the Company shall reimburse
Executive for the reasonable business expenses incurred by
Executive in the
course of performing his duties for the Company hereunder, upon
submission of
invoices, vouchers or other appropriate documentation, as may be
required in
accordance with the policies in effect from time to time for
executive employees
of the Company.
(b) To the fullest extent permitted by law, the Company shall
indemnify Executive with respect to any actions commenced against
Executive in
his capacity as an officer or director or former officer or
director of the
Company, or any affiliate thereof for which he may render service
in such
capacity, whether by or on behalf of the Company, its shareholders
or third
parties, and the Company shall advance to Executive on a timely
basis an amount
equal to the reasonable fees and expenses incurred in defending
such actions,
after receipt of an itemized request for such advance, and an
undertaking from
Executive to repay the amount of such advance, with interest at a
reasonable
rate from the date of the request, as determined by the Company, if
it shall
ultimately be determined that he is not entitled to be indemnified
against such
expenses. The Company agrees that it shall use reasonable best
efforts to secure
and maintain officers' and directors' liability insurance that
shall include
coverage with respect to Executive.
5. Employer's
Authority/Policies.
(a) General. Executive agrees to observe and comply with the
rules
and regulations of the Company as adopted by its Board respecting
the
performance of his duties and to carry out and perform orders,
directions and
policies communicated to him from time to time by the Board.
(b) Ethics Policies. Executive agrees to comply with and be bound
by
the Ethics Policies of the Company, as reflected in the attachment
at Annex A
hereto and made a part hereof. Executive agrees to comply with and
be bound by
the Company's insider trading policies and procedures that are
generally
applicable to employees and/or senior officers.
(c) SEC Certifications. Executive's duties shall include taking
such
actions as are necessary so that Executive is in a position to
give, and does
give, all certifications that a Chief Executive Officer, under
federal law or
regulations, is required to give with the submission by the Company
of reports
or other filings to the Securities and Exchange Commission ("SEC
filings"),
provided, however, that Executive shall not have violated this
Agreement if
Executive is not in a position to give or does not give any such
certification
because (i) Executive determines that he cannot make such
certification
truthfully or with sufficient certainty due to the existence of
conditions or
information, or the inability to confirm such conditions or
information, and
(ii) the existence of such conditions or information or the
inability to confirm
such conditions or information, or the failure to have properly
reported in an
SEC filing in a timely and appropriate fashion such conditions or
information,
was in each case not due to the gross negligence or willful
misconduct of
Executive while serving in his capacity as Chief Executive
Officer.
6.
Records/Nondisclosure/Company Policies.
(a) General. All records, manuals, financial statements and
similar
documents obtained, reviewed or compiled by Executive in the course
of the
performance by him of services for the Company, whether or not
confidential
information or trade secrets, shall be the exclusive property of
the Company.
Executive shall have no rights in such documents upon any
termination of this
Agreement.
(b) Nondisclosure Agreement. Without limitation of the
Company's
rights under Section 6(a), Executive agrees to abide by and be
bound by the
Nondisclosure Agreement of the Company executed by Executive and
the Company as
reflected in the attachment at Annex B and made a part hereof.
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7. Termination;
Severance and Related Matters.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and, therefore, may be terminated at any time, with or
without Cause, at
the option of the Company, subject only to the severance
obligations under this
Section 7. Upon any termination hereunder, the Employment Period
shall expire.
(b) Definitions. For purposes of this Section 7, the following
terms
shall have the indicated definitions:
(1) Cause. "Cause" shall mean:
(i) Executive is convicted of or enters a plea of nolo
contendere to an act which is defined as a felony under any
federal,
state or local law, not based upon a traffic violation, which
conviction or plea has or can be expected to have, in the good
faith
opinion of the Board, a material adverse impact on the business
or
reputation of the Company;
(ii) any one or more acts of theft, larceny, embezzlement,
fraud or material intentional misappropriation from or with
respect
to the Company;
(iii) a breach by Executive of his fiduciary duties under
Maryland law as an officer; or material breach by Executive of
any
rule, regulation, policy or procedure, the Company (including,
without limitation, as described in Section 5 hereof);
(iv) Executive's commission of any one or more acts of gross
negligence or willful misconduct which in the good faith opinion
of
the Board has resulted in material harm to the business or
reputation of the Company; or
(v) default by Executive in the performance of his material
duties under this Agreement, without correction of such action
within 15 days of written notice thereof.
Notwithstanding
the foregoing, no termination of Executive's employment
by the Company shall be treated as for Cause or be effective until
and unless
all of the steps described in subparagraphs (A) through (C) below
have been
complied with:
(A) Notice of intention to terminate for Cause has been
given by the Company within 120 days after the Board learns of
the act, failure or event (or latest in a series of acts,
failures or events) constituting "Cause";
(B) The Board has voted (at a meeting of the Board duly
called and held as to which termination of Executive is an
agenda item) to terminate Executive for Cause after Executive
has been given notice of the particular acts or circumstances
which are the basis for the termination for Cause and has been
afforded at least 20 days notice of the meeting and an
opportunity to present his position in writing; and
(C) The Board has given a Notice of Termination to
Executive within 20 days after such Board meeting.
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The Company may
suspend Executive with pay at any time during the
period commencing with the giving of notice to Executive under
clause (A) above
until final Notice of Termination is given under clause (C) above.
Upon the
giving of notice as provided in clause (C) above, no further
payments shall be
due Executive except as provided in Section 7(c)(vi).
(2) Change in Control. A
"Change in Control" shall mean the
occurrence of any one or more of the following
events following the
Effective Date:
(i) Any individual, entity or group (a "Person") within the
meaning of
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the
"Act") (other than the Company, any corporation,
partnership,
trust or other entity controlled by the Company (a
"Subsidiary"), or any trustee, fiduciary or other person or
entity
holding
securities under any employee benefit plan or trust of the
Company or
any of its Subsidiaries), together with all "affiliates"
and
"associates" (as such terms are defined in Rule 12b-2 under the
Act) of such
Person, shall become the "beneficial owner" (as such term
is defined
in Rule 13d-3 under the Act) of securities of the Company
representing
30% or more of the combined voting power of the Company's
then
outstanding securities having the right to vote generally in an
election of
the Company's Board of Directors ("Voting Securities"),
other than
as a result of (A) an acquisition of securities directly
from the
Company or any Subsidiary or (B) an acquisition by any
corporation
pursuant to a reorganization, consolidation or merger if,
following
such reorganization, consolidation or merger the conditions
described in
clauses (A), (B) and (C) of subparagraph (iii) of this
Section
7(b)(2) are satisfied; or
(ii) Individuals who, as of the Effective Date, constitute
the
Company's Board (the "Incumbent Directors") cease for any
reason
to
constitute at least a majority of the Board, provided, however,
that any
individual becoming a director of the Company subsequent to
the date
hereof (excluding, for this purpose, (A) any such individual
whose
initial assumption of office is in connection with an actual or
threatened
election contest relating to the election of members of the
Board or
other actual or threatened solicitation of proxies or
consents by
or on behalf of a Person other than the Board, including
by reason of
agreement intended to avoid or settle any such actual or
threatened
contest or solicitation, and (B) any individual whose
initial
assumption of office is in connection with a reorganization,
merger or
consolidation, involving an unrelated entity and occurring
during the
Employment Period), whose election or nomination for
election by
the Company's shareholders was approved by a vote of at
least a
majority of the persons then comprising Incumbent Directors
shall for
purposes of this Agreement be considered an Incumbent
Director;
or
(iii) Consummation of a reorganization, merger or
consolidation of the Company, unless, following such
reorganization,
merger or
consolidation, (A) more than 50% of, respectively, the then
outstanding
shares of common stock of the corporation resulting from
such
reorganization, merger or consolidation and the combined voting
power of the
then outstanding voting securities of such corporation
entitled to
vote generally in the election of directors is then
beneficially
owned, directly or indirectly, by all or substantially
all of the
individuals and entities who were the beneficial owners,
respectively, of the outstanding Voting Securities immediately
prior
to such
reorganization, merger or consolidation, (B) no Person
(excluding
the Company, any employee benefit plan (or related trust)
of the
Company, a Subsidiary or the corporation resulting from such
reorganization, merger or consolidation or any subsidiary thereof,
and
any Person
beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
30%
or more of
the outstanding Voting Securities), beneficially owns,
directly or
indirectly, 30% or more of, respectively, the then
outstanding
shares of
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common stock
of the corporation resulting from such reorganization,
merger or
consolidation or the combined voting power of the then
outstanding
voting securities of such corporation entitled to vote
generally in
the election of directors, and (C) at least a majority of
the members
of the board of directors of the corporation resulting
from such
reorganization, merger or consolidation were members of the
Incumbent
Board at the time of the execution of the initial agreement
providing
for such reorganization, merger or consolidation;
(iv) Approval by the shareholders of the Company of a
complete
liquidation or dissolution of the Company; or
(v) The sale, lease, exchange or other disposition of all or
substantially all of the assets of the Company, other than to a
corporation,
with respect to which following such sale, lease,
exchange or
other disposition (A) more than 50% of, respectively, the
then
outstanding shares of common stock of such corporation and the
combined
voting power of the then outstanding voting securities of
such
corporation entitled to vote generally in the election of
directors is
then beneficially owned, directly or indirectly, by all
or
substantially all of the individuals and entities who were the
beneficial
owners of the outstanding Voting Securities immediately
prior to
such sale, lease, exchange or other disposition, (B) no
Person
(excluding the Company and any employee benefit plan (or
related
trust) of the Company or a Subsidiary or such corporation or a
subsidiary
thereof and any Person beneficially owning, immediately
prior to
such sale, lease, exchange or other disposition, directly or
indirectly,
30% or more of the outstanding Voting Securities),
beneficially
owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of
such
corporation
and the combined voting power of the then outstanding
voting
securities of such corporation entitled to vote generally in
the election
of directors and (C) at least a majority of the members
of the board
of directors of such corporation were members of the
Incumbent
Board at the time of the execution of the initial agreement
or action of
the Board of Directors providing for such sale, lease,
exchange or
other disposition of assets of the Company.
Notwithstanding the foregoing, a "Change in Control" shall not
be
deemed to
have occurred for purposes of this Agreement solely as the
result of an
acquisition of securities by the Company which, by
reducing the
number of shares of Voting Securities outstanding,
increases
the proportionate voting power represented by the Voting
Securities
beneficially owned by any Person to 30% or more of the
combined
voting power of all then outstanding Voting Securities;
provided,
however, that if any Person referred to in this sentence
shall
thereafter become the beneficial owner of any additional shares
of Stock or
other Voting Securities (other than pursuant to a stock
split, stock
dividend, or similar transaction), then a "Change in
Control"
shall be deemed to have occurred for purposes of this
Agreement.
(3) Complete Change in Control. A "Complete Change in Control"
shall mean that a Change in Control has
occurred, after modifying the
definition of "Change in Control" by deleting
clause (i) from Section
7(b)(2) of this Agreement.
(4) Constructive Termination Without Cause. "Constructive
Termination Without Cause" shall mean a
termination of Executive's
employment initiated by Executive not later than
12 months following the
occurrence (not including any time during which
an arbitration proceeding
referenced below is pending), without
Executive's prior written consent, of
one or more of the following events (or the
latest to occur in a series of
events), and effected after giving the Company
not less than 10 working
days' written notice of the specific act or acts
relied upon and right to
cure:
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(i)
a material adverse change in the functions, duties or
responsibilities of Executive's position which would reduce the
level,
importance
or scope of such position, except in connection with the
termination
of Executive's employment for Disability, Cause, as a
result of
Executive's death or by Executive other than for a
Constructive
Termination Without Cause;
(ii) any material breach by the Company of this Agreement;
(iii)
any purported termination of Executive's employment
for Cause by
the Company which does not comply with the terms of
Section
7(b)(1) of this Agreement;
(iv) the failure of the Company to obtain an agreement,
satisfactory
to the Executive, from any successor or assign of the
Company, to
assume and agree to perform this Agreement, as
contemplated
in Section 10 of this Agreement;
(v) the failure by the Company to continue in effect any
compensation
plan in which Executive participates immediately prior to
a Change in
Control which is material to Executive's total
compensation, unless comparable alternative arrangements (embodied
in
ongoing
substitute or alternative plans) have been implemented with
respect to
such plans, or the failure by the Company to continue
Executive's
participation therein (or in such substitute or
alternative
plans) on a basis not materially less favorable, in terms
of the
amount of benefits provided and the level of Executive's
participation relative to other participants, as existed during
the
last
completed fiscal year of the Company prior to the Change in
Control;
(vi) (a) the relocation of the Company's Alexandria,
Virginia
headquarters to a new location more than 50 miles away from
Alexandria,
Virginia or the failure to locate Executive's own office
at the
Alexandria office or at a successor office which is not more
than 50
miles away from Alexandria, Virginia or (b) the relocation of
the
Company's Quincy, Massachusetts offices to a new location more
than 50
miles away from Quincy, Massachusetts unless other office
facilities,
which need not be a formal office of the Company, in or
near the
Quincy, Massachusetts area are made available by the Company
for
Executive's use;
(vii) any voluntary termination of employment by the
Executive
for any reason during the 12-month period immediately
following a
Complete Change in Control of the Company if such Complete
Change in
Control occurs during the Employment Period;
(viii) the failure of the Board to take action as may be
necessary to
re-elect Executive to the Board, provided, however, that
it will not
be a Constructive Termination Without Cause if Executive
shall fail
to be re-elected by the stockholders, or if the Board's
failure to
take action is in connection with the termination of
Executive's
employment for Disability, Cause, as a result of
Executive's
death or by Executive other than for a Constructive
Termination
Without Cause; or
(ix) the failure of the Board of Directors, following each
annual
meeting of stockholders, to re-appoint Executive as Chairman of
the Board or
to maintain such appointment, provided, however, that it
shall not be
a Constructive Termination without Cause if the Board
fails to
appoint Executive as Chairman of the Board (or removes such
title) and
instead appoints a non-executive Chairman of the Board if
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(a) there is a law, rule or regulation, or a listing
requirement of the New York Stock Exchange, that
provides that the Chairman and CEO shall not be the
same person, or
(b) the Board, in its good faith judgment following a
shareholder vote, or in its
good faith judgment in
light of then evolving and well-publicized standards
of good corporate governance, determines that it is
in the best interest of the Company that Executive
not serve as Chairman and that a non-executive
Chairman be appointed,
provided further, however, that in such event,
(x) the non-executive Chairman shall not
serve in a
full time or executive capacity, and
(y) Executive shall continue to report directly and
exclusively to the full Board and not to the
non-executive Chairman, and (without limiting the
Board's or any Board committee's right to meet or
confer with any individual officer and to take
actions
as are customary for a Board of Directors and
consistent with its fiduciary duties) all other
officers shall continue to report directly or
indirectly to Executive.
In addition, under no circumstances will a Constructive
Termination without Cause be deemed to occur solely on account
of the appointment by the Board of Directors, and public
announcement thereof, of a
"lead independent director" so long
as the same limitations as apply immediately above in the case
of a non-executive Chairman apply to such lead independent
director.
Notwithstanding the foregoing, a Constructive Termination
Without Cause
shall not be treated as having occurred unless Executive
has given a final
Notice of Termination delivered after expiration of
the Company's cure
period. Executive or the Company may, at any time
after the
expiration of the Company's cure period and either prior to
