EXHIBIT 10.1
[ —
], 200[ —
]
[ —
]
[ —
]
[ —
]
RE: Executive Severance
Dear [ —
],
The Board of Directors of Duke
Realty Corporation (which, together with its subsidiaries,
predecessors and affiliates, is referred to as the
“Company”) is pleased to offer you, as an Executive
Officer, the severance benefits described below in exchange for
your agreement to protect the legitimate business interests of the
Company following your separation from employment.
Benefits
Upon your Separation from Service
(as defined below) by the Company and your compliance with the
obligations set forth below, you will be entitled to receive
certain separation benefits. No payments will be due under this
agreement unless and until you have a Separation from Service. (For
purposes of this agreement, Separation from Service means a
termination of your relationship with the Company that is deemed to
be a “separation from service” for purposes of
Section 409A of the Internal Revenue Code of 1986 (the
“Code”) and applicable regulations, without giving
effect to any elective provisions that may be available under such
definition. For example, it is likely that your termination of
employment from the Company will be deemed to be a
“separation from service” for purposes of Code
Section 409A, unless you continue to perform substantial
services for the Company in any capacity after your technical
employment status ends.) These separation benefits, which differ
depending upon the circumstances of your separation,
are:
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A.
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If you
voluntarily terminate your employment with the Company, you will be
entitled to separation payments totaling an amount equal to your
annual base pay in effect on the last day of the calendar year
immediately preceding the calendar year in which your employment is
terminated (the “Compensation Year”). If you
voluntarily terminate your employment during your first year of
employment with the Company, you will be entitled to separation
payments totaling 75% of the amount equal to your annual base
salary in effect during the calendar year in which your employment
commenced (the “Initial Compensation Year”). The amount
of any cash bonus, performance bonus, or equity-based or long-term
incentive bonus received by you during or with respect to the
Compensation Year or Initial Compensation Year, as applicable, will
not be included as base pay. For example, if on December 31 of
the Compensation Year you were being paid a base salary at the
annual rate of $150,000, and in February of the year your
employment terminated you received a cash bonus of $50,000 for the
Compensation Year, your separation payments would total $150,000.
Subject to paragraph I below, these payments will be made to you in
equal monthly installments over twelve (12) months beginning
on the first day of the month following your Separation from
Service. The Company will withhold from any amounts payable to you
all legally required federal, state, city and local
taxes.
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B.
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If the Company
terminates your employment For Cause, you will be entitled to
separation payments totaling ten thousand dollars ($10,000.00).
“For Cause” means any of the following, as determined
solely in the discretion of the Board of Directors or a committee
designated by the Board of Directors: (i) your willful and
continued failure to perform your required duties as an officer or
employee of the Company, (ii) any action by you which involves
willful misfeasance or gross negligence, (iii) the requirement
of, or direction by, a federal or state regulatory agency which has
jurisdiction over the Company to terminate your employment,
(iv) any conduct, action or inaction by you which causes
embarrassment, diminished good will, or otherwise is deemed
substantially harmful or contrary to the interests of the Company,
(v) your conviction of any criminal offense which involves
dishonesty or breach of trust, or (vi) any intentional breach
or violation by you of a material term, condition, or covenant of
any agreement between you and the Company or condition of your
employment, including the Company’s Code of Conduct. Before
terminating your employment For Cause, the Company must provide to
you written notice of the grounds warranting For Cause termination
and give you at least ten (10) days after such notice to cure
and remedy your conduct to the satisfaction of the Company. Subject
to paragraph I below, these payments will be made to you in equal
monthly installments over two (2) months beginning on the
first day of the month following your Separation from Service. The
Company will withhold from any amounts payable to you all legally
required federal, state, city and local taxes.
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C.
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If the Company
terminates your employment for any reason other than For Cause, and
there has been no Change of Control as defined below, your
termination will be considered a separation for “Other Than
Cause.” You agree that a change in your status or position or
duties with the Company that does not involve either a demotion or
a reduction in base salary or annual incentive bonus targets will
not constitute a termination of your employment by the Company. In
the event the Company terminates your employment for Other Than
Cause, you will be entitled to receive separation payments totaling
an amount equal to two (2) times the sum of (i) your
annual base pay in effect on the last day of the calendar year
immediately preceding the calendar year in which your employment is
terminated (the “Compensation Year”), or 75% of the
amount of your annual base salary in effect during the calendar
year in which your employment commenced if such termination occurs
during your first year of employment with the Company plus
(ii) any annual cash incentive bonus paid or payable to you
with respect to services performed in the Compensation Year or 75%
of your target bonus in effect during the calendar year in which
your employment commenced if such termination occurs during your
first year of employment with the Company. For example, if on
December 31 of the Compensation Year you were being paid a
base salary at the annual rate of $100,000, and in February of the
year your employment terminated you received a $50,000 annual cash
incentive bonus for services performed in the Compensation Year and
if during the Compensation Year you received a long term incentive
bonus valued at $25,000, your separation payments would total
$300,000 (($100,000 + $50,000) x 2). Subject to paragraph I below,
these payments will be made to you in equal monthly installments
over twenty-four (24) months beginning on the first day of the
month following your Separation from Service. The Company will
withhold from any amounts payable to you all legally required
federal, state, city and local taxes.
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D.
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If the Company
terminates your employment within one (1) year of a Change in
Control of the Company, or if you terminate your employment by the
Company voluntarily for Good Reason, you will be entitled to
receive separation payments totaling an amount equal to three
(3) times the sum of (i) your annual base pay in effect
on the last day of the calendar year immediately preceding the
calendar year in which your employment is terminated (the
“Compensation Year”), or 75% of the amount of your
annual base salary in effect during the calendar year in which your
employment commenced if such termination occurs during your first
year of employment with the Company plus (ii) any annual cash
incentive bonus paid or payable to you with respect to services
performed in the Compensation Year or 75% of your target bonus in
effect during the calendar year in which your employment commenced
if such termination occurs during your first year of employment
with the Company. For example, if on December 31 of the
Compensation Year you were being paid a base salary at the annual
rate of $100,000, and in February of the year your employment
terminated you received a $50,000 annual cash incentive bonus for
services performed in the Compensation Year and if during the
Compensation Year you received a long-term in
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