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Exhibit 10.7
Form of Agreement
W.P. CAREY & CO. LLC
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 28th day of June, 2000 between
W.P.
Carey & Co. LLC (the "Company"), a New York corporation at 50
Rockefeller Plaza,
New York, NY 10020, and Edward V. La Puma ("Partner").
WITNESSETH:
WHEREAS, Partner has been a key employee of W.P. Carey & Co.,
Inc.
("Old Carey");
WHEREAS, the Company has acquired a substantial portion of the
business of Old Carey pursuant to the terms of a merger of even
date herewith;
WHEREAS, Partner contributed materially to the successful operation
of
the business of Old Carey acquired by the Company;
WHEREAS, the Company wishes to assure itself of the continued
availability of Partner's services, and Partner is willing to give
such
assurance in return for the benefits described herein;
NOW, THEREFORE, intending to be legally bound hereby, the
Company
hereby agrees to employ Partner, and Partner hereby agrees to be
employed by the
Company upon the following terms and conditions:
1. Office and Duties. Partner shall service the Company as an
Executive Director and in such position shall have such duties and
power with
the Company and its subsidiaries and affiliates consistent with
such position
and Partner's experience and abilities as may from time to time be
determined by
the board of directors of the Company (the "Board"), the Chairman
of the Board,
the Chief Executive Officer or President of the Company. Except to
the extent
that Partner shall otherwise be performing services for one or more
entities
that are affiliated with the Company, whether through equity
ownership,
contractual arrangements or otherwise, Partner will use his
reasonable best
energies and abilities and will devote his full business time,
except for
vacation time and reasonable periods of absence due to sickness,
personal injury
or other disability, to the duties assigned to him and shall use
his best
efforts, judgment, skill and energy to perform such services
faithfully and
diligently to further the business interests of the Company, to
improve and
advance the business and interests of the Company, to increase
shareholder value
and otherwise promote the best interests of the Company's
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shareholders. Notwithstanding the immediately preceding sentence,
this Paragraph
1 shall not be construed to preclude Partner from (i) serving on
the board of
directors of any business corporation with the consent of the
Board, which
consent shall not be unreasonably withheld, (ii) serving on the
board of, or
working for, any charitable or community organization or (iii)
pursuing his
personal, financial and legal affairs, so long any and all such
activities
described in clauses (i) through (iii), individually or
collectively, do not
interfere with the performance of Partner's duties hereunder.
2. Term. This Agreement shall be for a term commencing as of the
date
hereof (the "Commencement Date") and ending on June 30, 2004,
unless sooner
terminated as hereinafter provided. Unless either party elects to
terminate this
Agreement at the end of the original or any renewal term by giving
the other
party notice of such election at least 180 days before the
expiration of the
then current term, this Agreement shall be deemed to have been
renewed for an
additional one year period commencing on the day after the
expiration of the
then current term. The period during which Partner is employed
pursuant to this
Agreement, including any extension thereof in accordance with the
preceding
sentence, shall be referred to as the "Service Period." Upon the
expiration of
this Agreement at the end of its term (after taking into account
all extensions
thereof), Partner shall be an at-will employee of the Company and
neither party
shall have any continuing liability or obligation to the other
hereunder.
3. Compensation. During the Service Period, Partner shall receive
cash
compensation in the form of an annual base salary at the rate of
$200,000, of
which $100,000 shall be treated as a draw and offset against any
Incentive
Compensation payable to Partner as hereinafter provided (such base
salary as it
may hereafter be increased from time to time shall be referred to
as the "Base
Salary"). During the Service Period, Partner shall receive
incentive
compensation (including, without limitation, bonuses and other
forms of
compensation related to the achievement of specific performance)
under the
Company's incentive compensation programs (as the same may be
amended by the
Company from time to time) at a level determined by, and at the
discretion of,
the Company's Executive Committee ("Incentive Compensation"). Such
Base Salary
and Incentive Compensation (such items hereafter collectively
referred to as
"Total Annual Compensation") shall be payable in accordance with
the Company's
generally applicable practices and policies. The Executive
Committee shall
periodically review Partner's Total Annual Compensation in light of
the
compensation paid to other officers of the Company and the
Partner's performance
(including such performance relative to other partners and
officers), and may
increase such compensation by an amount it determines to be
appropriate. While
it is understood that the Company may at any time and from time to
time change
the criteria upon which Incentive Compensation is payable and that
any payment
of Incentive Compensation is contingent upon Partner's
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satisfactory performance of his duties hereunder, the Company shall
not take any
action that adversely affects Partner's opportunity to earn,
subject to
appropriate performance criteria, Total Annual Compensation in an
amount
substantially comparable to the amount that Partner could have
earned
immediately prior to the date hereof. (The immediately preceding
sentence shall
not apply, however, if Partner accepts a position with the Company
that has a
different compensation structure from the position currently held
by Partner).
The parties agree and understand that the amount of Total Annual
Compensation
may increase or decrease from period to period based on
performance.
4. Equity Option Grant. Subject to the execution hereof, Partner
has
been granted an option (the "Commencement Option") in respect of
25,000
membership interests in the Company (the "Common Interests"). Such
options shall
vest and become exercisable in three approximately equal annual
installments on
each of April 1, 2001, April 1, 2002, and April 1, 2003, or at such
earlier time
or times as may otherwise be provided in this Agreement or the
corresponding
award agreement. Partner agrees and acknowledges that his rights
and obligations
in respect of such option shall be governed by the terms and
conditions of the
related option agreement; provided that in the event of an
inconsistency between
that agreement and the express terms of this Agreement, this
Agreement shall
control. Without limiting the generality of the foregoing, the
Board of
Directors, in its sole discretion, may grant Partner options to
purchase
additional Common Interests on such terms and conditions and in
such number as
it shall determine (so long as Common Interests are available for
this purpose).
5. Equity Grant. Subject to the execution hereof, Partner has
been
granted an award (the "Commencement Grant") with respect to 50,000
Common
Interests. Unless and until they become vested as provided in the
next
succeeding sentence or as may otherwise be provided in this
Agreement or the
corresponding award agreement, such Common Interests shall be
subject to
forfeiture upon the Partner's termination of service. Such Common
Interests will
vest in four equal installments on April 1, in each of calendar
years 2001,
2002, 2003 and 2004, if Partner is still providing services to the
Company
and/or its subsidiaries on such date. Partner agrees and
acknowledges that his
rights and obligations in respect of such award shall be governed
by the terms
and conditions of an award agreement relating to such Common
Interests; provided
that in the event of an inconsistency between that agreement and
the express
terms of this Agreement, this Agreement shall control. Partner
shall also be
entitled to receive up to a maximum of 25,000 additional Common
Interests, in
the aggregate, over a four-year performance period, if and only if
(and at the
same times and in the same proportion to the total payments
available) as
amounts are payable to Old Carey under the performance criteria
applicable in
respect of the earn-out related to the merger transaction with Old
Carey.
Without limiting the generality of the foregoing, the Board of
Directors
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may, in its sole discretion, award Partner additional Common
Interests on such
terms and conditions and in such number as it shall determine (so
long as Common
Interests are available for this purpose).
6. Benefits, Perquisites and Expenses.
(a) Benefits. During the Service Period, Partner shall be eligible
to
participate in each employee benefit plan sponsored or maintained
by the
Company, subject to the generally applicable provisions thereof and
shall be
entitled to receive such perquisites as are generally made
available to
similarly situated partners in accordance with the Company's
applicable policies
and practices as in effect from time to time Nothing in this
Agreement shall in
any way limit the Company's right to amend, modify, terminate or
add to any such
plan, policy or arrangement, in its discretion, so long as any such
amendment
does not impair the rights of Partner without treating similarly
situated
partners in a similar fashion. In addition, during the Service
Period, the
Company shall make available for Partner's use an automobile with a
cost not in
excess of $40,000, and shall pay the expenses associated with the
general
maintenance and operation thereof, including parking up to $400 per
month and
insurance (but excluding gasoline and other costs associated with
the personal
use of the vehicle).
(b) Additional Insurance Coverage. During the term hereof, the
Company
shall pay the annual costs of individual life insurance coverage
and individual
disability coverage for the Partner up to a maximum annual amount
of $15,000.
Pursuant to and subject to the preceding sentence, unless Partner
otherwise
requests to obtain different coverage, as soon as reasonably
practicable after
the execution hereof, the Company shall put in place individual
life insurance
coverage on Partner's life in the face amount of $4,000,000 and
shall continue
such coverage in place during the Service Period (subject to
Partner's being
insurable). The Company shall pay all of the costs associated with
such coverage
and Partner shall have the right to designate the beneficiary or
beneficiaries
thereof, except that, Partner may request that the coverage to be
provided be in
the form of a whole life or similar policy, so long as the Partner
agrees to pay
the additional cost of such policy over the cost of a comparable
term insurance
policy. At Partner's request, any life insurance policy paid for,
in whole or in
part, pursuant to this Paragraph 6(b) shall be owned by a trust
established by
Partner for the benefit of his beneficiaries. Subject to, and
pursuant to, the
first sentence of this Paragraph 6(b), unless Partner otherwise
requests, as
soon as reasonably practicable after the execution hereof, the
Company shall
assist Partner to obtain an individual disability benefits policy
providing
replacement income upon disability (in addition to any coverage
otherwise
available under the Company's generally applicable group coverage)
of up to, but
not exceeding, $10,000 per month. The parties agree and understand
that the
value of the life insurance
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coverage and the cash payment in respect of the disability coverage
shall be
included in Partner's income for Federal income tax purposes. The
Company's
obligations with respect to the additional life insurance and
disability
insurance coverage described herein are contingent upon Partner's
cooperation in
obtaining such coverage (including completing such forms and
undergoing such
physical examinations as may be required by the issuer of such
policy). Any such
coverage shall be provided subject to such conditions and
limitations as the
issuer of such policy may impose.
(c) Business Expenses. During the Service Period, the Company
shall
pay or reimburse Partner for all reasonable expenses incurred or
paid by Partner
in the performance of Partner's duties hereunder, upon presentation
of expense
statements or vouchers and such other information as the Company
may require and
in accordance with the generally applicable policies and procedures
of the
Company.
(d) Indemnification. The Company shall indemnify Partner and
hold
Partner harmless from and against any claim, loss or cause of
action arising
from or out of Partner's performance of services as an officer,
director or
Partner of the Company or any of its subsidiaries or in any other
capacity in
which Partner serves at the request of the Company on the same
basis as it
indemnifies its Chief Executive Officer. If, at any time, the
Company has in
effect any insurance policy providing any indemnity to the Company
or third
parties with respect to the errors and omissions or other actions
of officers or
directors, the Company shall cause Partner's errors, omissions or
other actions
to be covered under such policy on the same terms and conditions as
apply to the
Company's Chief Executive Officer.
7. Termination of Employment.
(a) Early Termination of the Service Period. Notwithstanding
Paragraph
2, the Service Period shall end upon the earliest to occur of (i) a
termination
of Partner's employment on account of Partner's death, (ii) a
Termination due to
Disability, (iii) a Termination for Cause, (iv) a Termination
Without Cause, (v)
a Termination for Good Reason, (vi) a Termination Without Good
Reason or (vii) a
Termination due to a Change of Control.
(b) Benefits Payable Upon Termination. Following the end of the
Service Period pursuant to Paragraph 7(a), Partner (or, in the
event of his
death, his surviving spouse, if any, or his estate) shall be paid
the type or
types of compensation determined to be payable in accordance with
the following
Termination Matrix, at the times established pursuant to Paragraph
7(c):
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TERMINATION MATRIX
<TABLE>
<CAPTION>
Accrued
Earned Total Employee Severance Equity
Compensation Benefits Benefits Acceleration
------------ -------- --------- ---------------------
<S> <C> <C> <C> <C>
Termination due to Payable Payable Not Payable
Death Payable
Termination due to Payable Payable Not Payable
Disability Payable
Termination for Payable Payable Not Not Payable
Cause Payable
Termination Payable Payable Payable Payable if No Waiver
Without Cause of Noncompetiton
Provisions Pursuant
to Paragraph 8(a)
Termination With Payable Payable Payable Payable if No Waiver
Good Reason of Noncompetiton
Provisions Pursuant
to Paragraph 8(a)
Termination Payable Payable Not Payable if
Without Good Payable Noncompetiton
Reason Provisions to Extend
for 12 Months
Pursuant to Paragraph
8(a)
Termination due to Payable Payable Payable Payable
a Change of
Control
</TABLE>
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(c) Timing of Payments. Earned Total Compensation shall be paid in
a
single lump sum as soon as practicable, but in no event more than
30 days
following the end of the Service Period except that, if the Company
exercises
its discretion to pay Partner any additional Incentive Compensation
in respect
of his service for the period prior to the Partner's termination of
services,
such amount shall be payable at the same time as such amounts would
otherwise be
payable under the Company's usual practices. Accrued Employee
Benefits shall be
payable in accordance with the terms of the plan, policy, practice,
program,
contract or agreement under which such benefits have accrued.
Severance
Benefits, if applicable, shall be paid at the same time as Partner
would have
received his Base Salary had he continued to be employed and for
the period
commencing on the first day after the end of the Service Period and
ending on
the first to occur of (i) the first anniversary of Partner's
termination of
employment and (ii) the date on which Partner breaches any of the
provisions of
Paragraph 8. Notwithstanding the foregoing, the Company may elect,
at any time
and in its discretion, to pay Partner the remaining Severance
Benefits payable
hereunder in a single lump sum amount.
(d) Definitions. For purposes of Paragraphs 7 and 8, capitalized
terms
have the following meanings:
"Accrued Employee Benefits" means amounts which are vested or
which
Partner is otherwise entitled to receive under the terms of or in
accordance
with any plan, policy, practice or program of, or any contract or
agreement
with, the Company or any of its subsidiaries, at or subsequent to
the date of
his termination without regard to the performance by Partner of
further services
or the resolution of a contingency, including, without limitation,
in the event
of a termination due to death or a Termination due to Disability,
the insurance
proceeds payable under the policies described in Paragraph
6(b).
"Change of Control" shall have the meaning ascribed thereto on
the
date hereof under the 1997 Listed Share Incentive Plan pursuant to
which the
Commencement Option and Commencement Grant are made.
"Earned Total Compen
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