Back to top

EMPLOYMENT AGREEMENT - R. SCOT SELLERS

Employee Retention Agreement

EMPLOYMENT AGREEMENT - R. SCOT SELLERS | Document Parties: ARCHSTONE | ARCHSTONE-SMITH COMMUNITIES LLC | Archstone-Smith Operating Trust | River Acquisition (MD), LP | River Holding, LP | River Trust Acquisition (MD), LLC You are currently viewing:
This Employee Retention Agreement involves

ARCHSTONE | ARCHSTONE-SMITH COMMUNITIES LLC | Archstone-Smith Operating Trust | River Acquisition (MD), LP | River Holding, LP | River Trust Acquisition (MD), LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: EMPLOYMENT AGREEMENT - R. SCOT SELLERS
Governing Law: Delaware     Date: 4/1/2008
Industry: Real Estate Operations     Law Firm: Wachtell Lipton     Sector: Services

50 of the Top 250 law firms use our Products every day
 
Exhibit 10.18
EXECUTION COPY
      EMPLOYMENT AGREEMENT (this “ Agreement ”) dated as of October 5, 2007, among ARCHSTONE-SMITH COMMUNITIES L.L.C. , a limited liability company formed under the laws of the State of Delaware (the “ Employer ”), R. SCOTT SELLERS (“ Executive ”), and Archstone-Smith Operating Trust , a real estate investment trust formed under the laws of the State of Maryland (the “Company” or “ASOT”), as Guarantor.
      WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 28th day of May, 2007, as amended by that certain Amendment No. 1 entered into as of the 5 th day of August, 2007, by and among Archstone-Smith Trust, a real estate investment trust formed under the laws of the State of Maryland (“ AST ”), ASOT (together with AST, the “ Seller Parties ”), River Holding, LP, a Delaware limited partnership (“ River Holding ”), River Acquisition (MD), LP, a real estate investment trust formed under the laws of the State of Maryland (the “ Merger REIT ”) and River Trust Acquisition (MD), LLC, a Maryland limited liability company (the “ Operating Trust Merger Sub ”) (the “ Merger Agreement ”), (i) at the Operating Trust Merger Effective Time (as defined in the Merger Agreement), the Operating Trust Merger Sub shall be merged with and into ASOT and ASOT will be the surviving entity in the Operating Trust Merger (as defined in the Merger Agreement) and (ii) at the Company Merger Effective Time (as defined in the Merger Agreement), being the date hereof and hereafter referred to herein as the “Effective Date”, AST will be merged with and into an assignee of Merger REIT and such assignee of Merger REIT will be the surviving entity in the Company Merger (as defined in the Merger Agreement) (the Operating Trust Merger and the Company Merger collectively, the “ Transaction ”);
      WHEREAS , concurrently with the execution of the Merger Agreement, as a condition and inducement to the River Holding’s willingness to enter into the Merger Agreement, River Holding and Executive entered into a definitive term sheet with respect to Executive’s employment by the Employer upon the closing of the Transaction (the “ Term Sheet ”); and
      WHEREAS, the Seller Parties and Executive are parties to that change in control agreement dated as of August 12, 2002, as such change in control agreement has been amended or supplemented through the Effective Date (the “ Prior Agreement ”); and
      WHEREAS , this Agreement, when executed, replaces the Term Sheet and the Prior Agreement effective as of the Effective Date; and
      WHEREAS, in connection with the Transaction, the Employer desires to employ Executive and Executive desires to be employed by the Employer; and
      WHEREAS, the Company has agreed to provide certain benefits directly under this Agreement and to guarantee payment of the compensation obligations hereunder of the Employer;

 


 
      NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
     Section 1. Employment Period .
     The initial term of this Agreement shall commence on the Effective Date and end on December 31, 2010 (the “ Initial Period ”), unless terminated earlier pursuant to Section 3; provided , however , that as of the expiration date of each of (i) the Initial Period and (ii) if applicable, any Renewal Period (as defined below), the term of this Agreement will automatically be extended for a one-year period (each, a “ Renewal Period ”), unless either party gives at least ninety (90) days written notice prior to such expiration date of its intention not to extend the term of this Agreement (the Initial Period and each subsequent Renewal Period shall constitute the “ Employment Period ”). Executive’s termination of employment at the end of the Employment Period following a notice of nonrenewal by the Company or the Employer shall be treated as termination by the Employer without “Cause” (as defined below) as of the end of the Employment Period. Upon Executive’s termination of employment for any reason with the Employer and all other affiliates of the Employer, he shall immediately resign all positions with the Employer, the Company and any of their respective subsidiaries or affiliates.
     Section 2. Terms of Employment .
          (a) Position . During the Employment Period, Executive shall serve as Chief Executive Officer of the Company and the Employer, and as a member of the board of directors or other applicable governing body of Tishman Speyer Real Estate Venture VII (Governance), L.P., and at all times as the senior executive officer of the Company and the Employer and each of their respective controlled subsidiaries. During the Employment Period, Executive shall have such duties and responsibilities as are commensurate with the normal responsibilities of a chief executive officer of an enterprise similar to the Company, of like size and controlled by private-equity investors, including responsibility for the day-to-day management of the Company, subject to the direction of the Board of Directors of Tishman Speyer Archstone-Smith Multifamily Series I Trust which Board of Directors are to be appointed, directly or indirectly, by Tishman Speyer Real Estate Venture VII (Governance), L.P. and Tishman Speyer Real Estate Venture VII Parallel (Governance), L.P. (collectively, the “ Governance GP ”) or an authorized representative of the Governance GP (the “ Designee ”); provided , that the Designee shall be a senior executive of the Governance GP or one of its affiliates. In performing his duties hereunder, Executive shall report directly to the Governance GP or the Designee. At the request of the Governance GP, Executive shall also serve as Chief Executive Officer, without additional compensation, of any of the Company’s (i) subsidiaries or (ii) affiliates, a substantial portion of the activities of which involve the acquisition, disposition, operation, development, management or financing of multifamily residential apartment buildings or communities.
          (b) Duties . During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and the Employer and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees, (ii) with the

-2-


 
consent of the Governance GP, which consent will not be unreasonably withheld, serving on the board of directors of no more than one public company which does not engage in the acquisition, disposition, operation, development, management or financing of multifamily residential apartment buildings or communities or office buildings and (iii) managing personal investments, so long as, individually or in the aggregate, such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.
          (c) Compensation .
               (i)  Base Salary . During the Initial Period, Executive shall receive from the Employer an annual base salary of $750,000.00, which shall be paid in accordance with the customary payroll practices of the Employer (the “ Annual Base Salary ”). During the Employment Period following the Initial Period, Annual Base Salary shall be adjusted by not less than the increase in the US Department of Labor Consumer Price Index CPI-U, US City Average, All Items, from the Effective Date until the first day of the Renewal Period, and annually thereafter on the same basis.
               (ii)  Bonuses .
               (1)  Guaranteed Annual Bonus . Subject to the following sentence, Executive shall earn from the Employer a guaranteed annual bonus of $4.0 million in respect of the fiscal year of the Employer (the “ Fiscal Year ”) ending on December 31, 2008 (the “ 2008 Guaranteed Annual Bonus ”) and shall earn a guaranteed annual bonus of $2.0 million in respect of each of the Fiscal Years during the Employment Period ending on a subsequent December 31 (together with the 2008 Guaranteed Annual Bonus, the “ Guaranteed Annual Bonus ”). Other than as set forth in Section 4 below or with respect to any portion of a Guaranteed Annual Bonus deferred in accordance with Section 2(c)(vii) below, the Guaranteed Annual Bonus in respect of any Fiscal Year shall be paid not later than the March 15 following the end of such Fiscal Year, and only if Executive is employed by the Employer or the Company on the last day of the Fiscal Year to which such Guaranteed Annual Bonus relates.
               (2)  Incremental Annual Bonus . Subject to Section 2(c)(ii)(2)D. below, in addition to the Guaranteed Annual Bonus, Executive shall be eligible to earn from the Employer an annual incremental bonus (the “ Incremental Annual Bonus ”), which shall be based on the dollar amount of direct and indirect equity interests in Tishman Speyer Archstone-Smith Multifamily JV, L.P. (“ Fund ”), Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P. (“Parallel Fund”), Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P. (“Parallel Fund I”), Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P. (“Parallel Fund II”) and any entity similar to Parallel Fund I created after the Effective Date (each a “ Post-Effective Date Parallel Fund ”), and any of their direct or indirect controlled subsidiaries owned on or following the Effective Date by parties other than Lehman Brothers Holdings Inc. (“ Lehman ”), Tishman Speyer Real Estate Venture VII, L.P. (“ Tishman Speyer ”), Banc of America Strategic Ventures, Inc., a Delaware corporation, Archstone LB Syndication Partner LLC, a Delaware limited liability company, BIH ASN, LLC, a Delaware limited liability company, Executive or any of their respective affiliates (including but not limited to any investment funds sponsored and managed by any of them or any of their respective affiliates) (collectively, the “ Equity Parties ”) in connection with the bridge equity syndication presently

-3-


 
contemplated by the Equity Parties (the “ New Equity ”); provided, however , that (i) equity which is owned on or following the Effective Date by any of the Bridge Equity Providers (as defined in the Syndication Agreement and Modification Agreement, dated as of the date hereof, among affiliates of Tishman Speyer, affiliates of Lehman and the Bridge Equity Providers (the “ Syndication Agreement ”)) shall be treated as New Equity only if and to the extent that such equity is retained as a result of a Bridge Equity Provider having made a voluntary election in writing prior to a Failed Syndication (as such term is defined in the Syndication Agreement) to retain such equity pursuant to the terms of the Syndication Agreement and not syndicate it to third parties; and (ii) Syndication Equity (as defined in the Syndication Agreement) which has been sold to any of the Equity Parties (other than the Bridge Equity Providers) subsequent to the Effective Date shall be treated as New Equity if and only if Administration Fees and GP Promote (as such terms are defined in the Syndication Agreement) are paid on such equity, whether or not paid at the highest rate.
                    A.  2008 Incremental Annual Bonus . With respect to the Fiscal Year ending on December 31, 2008, (1) if the amount of New Equity on December 31, 2008 is at least $4.6 billion, the Incremental Annual Bonus will be $3,125,000 and (2) if the amount of such New Equity is greater than $2.3 billion, but less than $4.6 billion, the Incremental Annual Bonus will be equal to the sum of (a) $1,562,500 plus (b) the product of (i) $1,562,500 multiplied by (ii) a fraction, the numerator of which is the amount of such New Equity in excess of $2.3 billion and the denominator of which is $2.3 billion (the “ Partial Incremental Annual Bonus ”).
                    B.  2009 and 2010 Incremental Annual Bonuses . With respect to the Fiscal Years ending December 31, 2009 and 2010, if the amount of New Equity on the last day of each such Fiscal Year is greater than $2.3 billion, the Incremental Annual Bonus in respect of such Fiscal Year will be (1) $3,125,000, if the amount of such New Equity is at least $4.6 billion, and (2) the Partial Incremental Annual Bonus (as determined pursuant to Section 2(c)(ii)A above, but using the amount of New Equity on the last day of the applicable Fiscal Year), if the amount of such New Equity is greater than $2.3 billion but less than $4.6 billion.
                    C.  Incremental Bonuses for 2011 and Thereafter . With respect to Fiscal Years ending December 31, 2011 and later, if the amount of New Equity on the first anniversary of the Effective Date (the “ Syndication End Date ”) is greater than $2.3 billion, the Incremental Annual Bonus in respect of such Fiscal Year will be (1) $3,125,000, if the amount of such New Equity is at least $4.6 billion, and (2) if the amount of such New Equity is greater than $2.3 billion but less than $4.6 billion, the Incremental Annual Bonus shall be equal to $3,125,000 multiplied by a fraction (not greater than one) (the “Fraction”), (i) the numerator of which is the aggregate annual Administration Fees (as such term is defined in the Syndication Agreement), which GP and Parallel GP, or either of them, is entitled to receive in respect of such Fiscal Year pursuant to the Syndication Agreement, or are otherwise permitted to and in fact receive pursuant to such Syndication Agreement and any side letter referenced therein (collectively, “ Fees ”) and (ii) the denominator of which is the aggregate annual Fees which GP and Parallel GP would have been entitled to receive in respect of such Fiscal Year pursuant to the Syndication Agreement and any side letter referenced therein, had the amount of such New Equity been $4.6 billion assuming that Administration Fees would have been paid at a rate of .45% (the denominator being referred to herein as “ Full Syndication Fees ”). Executive shall be entitled to all relevant information pertinent to the calculation of Fees.

-4-


 
                    D.  General . Subject to Section 4, the Incremental Annual Bonus, if any, in respect of any Fiscal Year shall be paid not later than the March 15 following the end of such Fiscal Year, but only if Executive is employed on the last day of the Fiscal Year to which such Incremental Annual Bonus relates. No Incremental Annual Bonus will be paid pursuant to Section 2(c)(ii)(2)A. or B. above in respect of any Fiscal Year for which, on the last day of such Fiscal Year, the amount of New Equity is not greater than $2.3 billion; and no Incremental Annual Bonus will be paid pursuant to Section 2(c)(ii)(2)C. above in respect of any Fiscal Year unless there is at least $2.3 billion of New Equity on and as of the Syndication End Date.
               (iii)  Benefits . During the Employment Period, Executive shall be entitled to participate in all savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and the Employer and shall be eligible for participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company and the Employer to the extent applicable generally to other senior executives of the Company or the Employer (the plans, practices, policies and programs referred to in the paragraph, collectively, “ Benefit Plans ”).
               (iv)  Vacation . During the Employment Period, Executive shall be entitled to six (6) weeks per annum of paid vacation.
               (v)  Expenses . During the Employment Period, Executive shall be entitled to receive reimbursement from the Employer for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with applicable Company or Employer policy.
               (vi)  Profits Interests . As of the Effective Date, Executive has been granted by Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C. 4,800 Class C Units (out of 8,000 total available Class C Units) (the “ Profits Interests ”) pursuant to the terms of the Award Agreement attached hereto as Appendix A.
               (vii)  Phantom LP Interests . Notwithstanding Section 2(c)(ii)(1) above, subject to the next following sentence, Executive may elect in lieu of receiving up to 50% of each Guaranteed Annual Bonus to receive fully vested ”Class A Units” of Tishman Speyer Archstone-Smith Multifamily Junior Mezz Borrower, L.P. (“ Junior Mezz Borrower ”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor, L.L.C. (“ Parallel Guarantor ”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor I, L.L.C. (“ Parallel Guarantor I ”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor II, L.L.C. (“ Parallel Guarantor II ”) and any entity similar to Parallel Guarantor created after the Effective Date (each a “ Post-Effective Date Parallel Guarantor ”) (collectively, “ Phantom Units ”), provided, however, that (A) the amount covered by such election shall be allocated to Junior Mezz Borrower, Parallel Guarantor, Parallel Guarantor I, Parallel Guarantor II and each Post-Effective Date Parallel Guarantor (if any) in the same proportion as the aggregate equity invested in such entities (measured at cost) is allocated between them, and (B) the number of Phantom Units of each such

-5-


 
entity received in respect of any such election shall be equal to the quotient of (x) the dollar amount of Guaranteed Annual Bonus as to which such election is made and which is allocated to the applicable entity, divided by (y) the Fiscal Year-end value of one ”Class A Unit” of the applicable entity, as determined by Governance GP, reported to investors in respect of the Fiscal Year in which such Guaranteed Annual Bonus was earned. Any such election as to the Guaranteed Annual Bonus to be earned in respect of a particular Fiscal Year must be made no later than the day prior to the first day of such Fiscal Year, or by such other date which the Company or Employer and Executive agree will not result in tax penalties to Executive under Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and shall specify one or more permissible date or dates for settlement and distribution as are consistent with such Section 409A, as provided in paragraph (2) below (the “Settlement Date”). The Phantom Units, if any, will otherwise be subject to the terms and conditions of a Phantom Unit Agreement prepared by the Company or the Employer and reasonably acceptable to the Company or the Employer and Executive; provided that Phantom Units will have the following features, and any Phantom Unit Agreement will be consistent therewith:
               (1) Phantom Units are intended to provide Executive with cash payments on the Settlement Date equal to the cumulative cash distributions (and, if applicable, the fair market value of non-cash distributions) to which he would have been entitled had he owned a number of ”Class A Units” in the issuing entity equal to the number of Phantom Units. Executive acknowledges that all payments in respect of Phantom Units will be taxable as ordinary income, irrespective of the tax character of distributions in respect of “Class A Units”.
               (2) The Company or the Employer shall cause all Phantom Units to be redeemed by the issuing entity as soon as practicable following the occurrence of, but in any event during the calendar year in which occurs, the earliest of (i) Executive’s death, (ii) the date the Executive becomes “disabled” (within the meaning of Section 409A(a)(2)(C) of the Code), (iii) a specified time (which for the avoidance of doubt may include his separation from service) elected by Executive in accordance with Section 409A of the Code and (iv) a change in the ownership or effective control of the entity which issued such Phantom Units, or in the ownership of a substantial portion of such issuing entity’s assets, in a manner which constitutes an allowable payment event under Section 409A of the Code. Such redemption will be for cash, except that in the case of a redemption event described in clause (iv) of the preceding sentence in which the holders of ”Class A Units” of the applicable entity receive distributions wholly or partially in a form other than cash, such redemption will be, at the election of the issuing entity, either in cash (with any non-cash assets distributed to holders of “Class A Units” valued at their fair market value, as reasonably determined by the general partner or managing member of such entity, as the case may be), or in the same form (including the same proportion) as the distributions made to holders of the applicable ”Class A Units”. The amount for which each Phantom Unit will be redeemed pursuant to this paragraph shall be the per-unit value of the ”Class A Units” of the applicable entity at the time of the applicable redemption event, which shall be deemed to be (A) in the case of a redemption event described in clause (iv) of the preceding sentence, the value established with reference to the applicable transaction, and (B) in the case of any other redemption event, the Fiscal Year-end value of one ”Class A Unit”, as applicable, as determined by Governance GP, in the applicable entity in respect of the Fiscal Year ending immediately prior to the applicable redemption event.

-6-


 
               (3) Any payments to Executive in respect of Phantom Units caused by the sale or other disposition of the related “Class A Units” shall proportionately reduce the number of Phantom Units held by Executive.
               (viii)  Effective Date Equity Grant . As of the Effective Date, Executive has been granted (x) 100 restricted Class B Units in Junior Mezz Borrower, with an aggregate value of $10,530,988 as of the Effective Date, (y) 100 restricted Class B Units in Parallel Guarantor I with an aggregate value of $711,470 as of the Effective Date and (z) 100 restricted Class B Units in Parallel Guarantor II with an aggregate value of $7,542 as of the Effective Date, for a total aggregate value equal to $11.25 million as of the Effective Date (the “ Effective Date Equity Grant ”); provided , however , that, to the extent requested by Executive, as soon as practicable after the Effective Date, the Company (or one of its affiliates) shall provide Executive with supporting calculations necessary to establish that the “Class B Units” granted to him pursuant to the Effective Date Equity Grant, and the direct or indirect economic interests in the assets acquired in the Transaction, were purchased at a price per “unit” that was not less favorable to Executive than the price per “unit” paid by Lehman or Tishman Speyer for their “units”, and the Company (or its applicable affiliate) shall promptly make all such adjustments (whether by amendment or otherwise) as are necessary to ensure the foregoing. The Effective Date Equity Grant will be subject to the terms and conditions of the Unit Award Agreements attached hereto as Appendices B, C and D, which shall in any event provide for withholding of units by the issuer in an amount having a fair market value equal to the taxes due in connection with the vesting of such units, regardless of whether withholding of taxes by such issuer is otherwise required by law; provided, however, that such withholding in excess of the minimum withholding required by law shall be required only to the extent not resulting in accounting charges to the issuer or any affiliate thereof in excess of those charges which would apply in the absence of such withholding.
               (ix)  Effective Date Equity Purchase . As of the Effective Date, Executive has purchased 21.75 Non-voting Class A Units of Junior Mezz Borrower for an aggregate purchase price of $2,290,444 (the “ Effective Date Equity Purchase ”) subject to the terms and conditions of the Unit Purchase Agreement attached hereto as Appendix E; provided , however , that, to the extent requested by Executive, as soon as practicable after the Effective Date, the Company (or one of its affiliates) shall provide Executive with supporting calculations necessary to establish that the “Non-voting Class A Units” purchased by him pursuant to the Effective Date Equity Purchase, and the direct or indirect economic interests in the assets acquired in the Transaction, were purchased at a price per “unit” that was not less favorable to Executive than the price per “unit” paid by Lehman or Tishman Speyer for their “units”, and the Company (or its applicable affiliate) shall promptly make all such adjustments (whether by amendment or otherwise) as are necessary to ensure the foregoing.
               (x)  Equity Documents . The agreements reflecting the Effective Date Equity Grant, the Effective Date Equity Purchase, the Profits Interests, any Phantom Units and any other equity interest or equity interest-based award agreement entered into by and between the Company or any of its affiliates and Executive on or after the date hereof, are collectively referred to herein as the “ Equity Documents ”.

-7-


 
               (xi)  GP Interests . As of the Effective Date, Executive has invested $4.1 million pursuant to which he has purchased certain interests in Tishman Speyer Archstone-Smith Multifamily (GP) (“ Fund GP ”), L.P., Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P. (“ Parallel Fund GP ”) (collectively, the “ GP Interests ”) and Fund pursuant to the limited partnership agreements of each of such entities. At any time following the cessation of the Executive’s employment for any reason or no reason, the issuer of a GP Interest, or any affiliate thereof shall have the right, but not the obligation, to repurchase such GP Interest at its fair market value. For purposes of the preceding sentence, fair market value shall be determined by an independent third party appraiser selected by the issuer of the applicable GP Interest from among a list of five independent nationally known appraisal firms supplied by the issuer to Executive (the “ Approved Appraiser List ”). The Company shall pay for the first appraisal. If Executive disagrees with such appraisal, he may select one of the remaining four appraisers on the Approved Appraiser List to perform a second appraisal. If such second appraisal is no greater than 105% of the first appraisal, the first appraisal shall be deemed fair market value and Executive shall pay for the second appraisal. If the second appraisal is greater than 105% of the first appraisal, fair market value shall be deemed to be the average of the first appraisal and the second appraisal, and the Company shall pay for the second appraisal.
          (d) Guarantee of Payment . The Company agrees and hereby guarantees to Executive that all compensation and benefits required to be paid or provided to Executive under this Agreement by any entity other than the Company, other than compensation required to be provided pursuant to Sections 2(c)(viii), (ix) and (xi) hereof will, to the extent not timely paid by the Employer or one of it affiliates, instead be timely paid by the Company. This is a guaranty of payment and performance and not merely of collection. If Employer fails to make any payment when due with respect to Executive or to perform any duties, obligations or covenants with respect to Employer’s obligations with respect to Executive, the Company will as soon as practicable and unconditionally pay to Executive such amounts and perform such duties, obligations and covenants.
     Section 3. Termination of Employment .
          (a) Death or Disability . The Employment Period, and Executive’s employment hereunder, shall terminate upon Executive’s death. If Executive becomes subject to a “Disability” (as defined below) during the Employment Period, the Company or the Employer may give Executive written notice in accordance with Sections 3(e) and 11(j) of the termination of Executive’s employment. For purposes of this Agreement, “ Disability ” means (i) Executive’s inability to substantially perform his duties hereunder by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months, as determined by a physician chosen by the Governance GP and reasonably acceptable to Executive or his representative, or (ii) Executive is, by reason of any medically determinable physical or mental impairment, receiving income replacement benefits under the applicable long-term disability plan covering employees of the Employer.
          (b) Cause . The Employment Period, and Executive’s employment hereunder, may be terminated at any time by the Company or the Employer for Cause. For purposes of this Agreement, “ Cause ” shall mean, in the reasonable judgment of the Governance GP (subject to any contrary determination by an arbitrator in accordance with Section 11(g) hereof) (i) the

-8-


 
willful and continued failure by Executive to substantially perform his duties with the Company, after written notification by the Company or the Governance GP (or the Designee) of such failure, (ii) the willful engaging by Executive in conduct which is demonstrably injurious to the Company or the Governance GP or any of their affiliates, monetarily or otherwise, (iii) the engaging by Executive in egregious misconduct involving serious moral turpitude or (iv) Executive’s failure to follow the reasonable, lawful directions of the Governance GP or the Designee (provided that directions from the Governance GP or the Designee, as the case may be, shall be considered unlawful if Executive obtains a written opinion from his counsel to that effect); provided , however , that an event described in this clause (iv) shall not constitute Cause unless the Governance GP has notified Executive in writing describing the failure which constitutes Cause and then only if Executive fails to either cure such failure or to provide a written opinion of counsel that such direction would involve a violation of the Company’s or the Employer’s Code of Business Conduct and Ethics in effect at the time of the opinion (provided that if such Code of Business Conduct and Ethics is less stringent than that in effect at the Effective Date in respect of the matter to which the opinion relates, than as to that matter the Company’s Code of Business Conduct and Ethics in effect at the Effective Date shall be deemed to apply), within fourteen (14) days after Executive’s receipt of such written notice.
For purposes of this provision, (i) no act or failure to act on Executive’s part shall be deemed “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that such action was in the best interest of the Company and (ii) no failure of Executive or the Company or any of its affiliates to achieve performance goals shall be treated as a basis for termination of Executive’s employment for Cause. The cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the Governance GP (after Execut

SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Close this window