EXHIBIT 10.44
SANTA ANITA REALTY ENTERPRISES, INC.
RETENTION AGREEMENT
This Retention Agreement ("Agreement") is dated as of December 16,
1996, and is entered into by and between _____________("Employee") and Santa
Anita Realty Enterprises, Inc., a Delaware corporation ("Company"). Employee
and Company hereby agree to the following terms and conditions:
1. Purpose of Agreement. The purpose of this Agreement is to
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provide that, in the event of a "Change in Control," Employee may become
entitled to receive additional benefits in the event of his or her termination.
It is believed that the existence of these potential benefits will benefit
Company by discouraging turnover among executives with Agreements and causing
such executives to be more able to respond to the possibility of a Change in
Control without being influenced by the potential effect of a Change in Control
on their job security.
2. Change in Control. For the purpose of this Agreement, a "Change
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in Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (1) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company (except that an
acquisition by virtue of the exercise of a
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conversion privilege shall not be considered within this paragraph unless the
converted security was itself acquired directly from the Company), (2) any
acquisition by the Company, (3) any acquisi tion by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (4) any acquisition by any corporation pursuant to
a reorganization, merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in paragraphs (1) and (2) of
subsection (c) of this Section 2 are satisfied; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual who becomes a director subsequent
to the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incum bent Board shall be considered as though such
individual were a member of the Incumbent Board; but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation (a "transaction"), unless, following such transaction in
each case, (1) more than 80% of, respectively, the then outstanding shares of
common stock of the corporation resulting from such transaction 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
Company Common Stock and Outstanding Company Voting
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Securities immediately prior to such transaction and (2) no Person (excluding
the Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such transaction and any Person beneficially owning,
immediately prior to such transaction, directly or indirectly, 20% or more of
the Outstanding Company Common Stock or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such transaction or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors; or
(d) Approval by the shareholders of the Company of (1) a complete
liquidation or dissolution of the Company or (2) the sale or other disposition
of all or substantially all of the assets of the Company, unless such assets are
sold to a corporation and following such sale or other disposition, the
conditions described in paragraphs (1) and (2) of subsec tion (c) of this
section 2 are satisfied.
3. Rights and Obligations Prior to a Change in Control. Prior to a
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Change in Control the rights and obligations of Employee with respect to his or
her employment by Company shall be whatever rights and obligations are negotiat
ed between Company and Employee from time to time. The existence of this
Agreement, which deals only with such rights and obligations subsequent to a
Change in Control, shall not be treated as raising any inference with respect to
what rights and obligations exist prior to a Change in Control.
4. Effect of a Change in Control. In the event of a Change in
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Control, Sections 6 through 7 of this Agreement shall become applicable to
Employee if his or her Qualifying Termination occurs on or after the date of the
Change in Control and on or prior to the first anniversary of the date of the
Change in Control. If a Qualifying Termination has occurred by that date, then,
notwithstanding
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Section 9, this Agreement shall remain in effect until Employee receives the
various benefits to which he or she has become entitled under the terms of this
Agreement; otherwise, upon such date this Agreement shall be of no further force
or effect.
5. Qualifying Termination. If, subsequent to a Change in Control
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and during the period described in Section 4, Employee's employment with the
Company terminates, such termination shall be considered a Qualifying
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Termination if either of the following events occurs:
(a) Employee voluntarily terminates employment with the Company for
Good Reason. For purposes of this Section, "Good Reason" shall mean the
occurrence of one of the following events without Employee's consent:
(1) The assignment to Employee of any duties at Company inconsistent
in any material respect with the Employee's position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as they existed in their most
significant form during the 90 days preceding the Change in
Control or any other action by the Company which results in an
aggregate diminution in any material respect in such position,
author ity, duties or responsibilities, provided that (1) an
isolated and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice
thereof given by the Employee shall not be a violation of this
paragraph and (2) a reduc tion in one element of Employee's
position, authority, duties or responsibilities com pensation
shall not be deemed a violation of this paragraph if a
counterbalancing increase in another element of Employee's
position, authority, duties or responsibilities occurs (the
determination of
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whether the increase is counterbalancing shall be determined by
Employee in good faith);
(2) Any reduction in Employee's total aggregate compensation from
Company not agreed to by Employee, which reduction shall be
deemed to occur if there is a reduction in (1) Employee's
aggregate base salary or annual bonus (which shall be deemed to
be reduced if the annual bonus is less than the average annual
bonus for the three fiscal years preceding the Change in Control)
or (2) Employee's ability to participate in employee benefit
plans, receive expense reimbursements, receive other fringe
benefits, receive office and support staff, or receive paid
vacation, on the same terms as such benefits were applicable
during the 90 days preceding the Change in Control, provided
that, (1) an isolated, insubstantial, and inadvertent failure not
occurring in bad faith and which is promptly remedied after
notice by the Employee shall not be deemed a violation of this
paragraph and (2) a reduc tion in one element of Employee's total
compensation shall not be deemed a violation of this paragraph
if a counterbalancing increase in another element of Employee's
total compensation occurs (the determination of whether the
increase is counterbalancing shall be determined by Employee in
good faith); and
(3) The transfer of Employee's job location to a site which is more
than 30 miles away from his or her place of employment prior to
the Change in Control of the Company.
(b) Employee is involuntarily terminated by Company without "Cause."
For purposes of this Section,
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"Cause" shall mean (1) an act or acts of dishonesty (including but not
limited to conviction of a felony) taken by Employee which materially
injures or damages the Company or (2) Employee's willful failure to
substantially perform Employee's duties where such willful failure results
in demonstrable material injury and damage to the Company.
Unless the following paragraph applies, this paragraph applies if (1)
the Change in Control is described in Section 2(c) and the resulting
corporation ("Successor") is not the Company or (2) the Change in Control
is described in Section 2(d), substantially all of the assets are sold to a
single entity ("Successor") and the Successor assumes all obligations under
this Retention Agreement. If this paragraph applies, then (1) the
termination of Employee's employment with the Company in connection with
the Change in Control will not, in of itself, constitute a Qualifying
Termination if Employee is employed by the Successor in connection with the
Change in Control and (2) the term "Successor" shall be substituted for
"Company" throughout this Agreement.
This paragraph applies if the Change in Control results in a joint
venture entity in which the Company is a partner. If this paragraph
applies, then (1) the reassignment or transfer of Employee from the Company
to the joint venture entity in connection with the Change in Control will
not, in of itself, constitute a Qualifying Termination and (2) whether a
Qualifying Termination occurs shall be determined by considering the
employment of Employee by the Company and the joint venture entity in the
aggregate.
6. Severance Payment. In the event of a Qualify ing Termination,
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Company shall pay Employee within 30 days of the Qualifying Termination a cash
lump sum equal to Employee's "Compensation" as a severance payment (the
"Severance Payment"). For this purpose, "Compensation" shall equal
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the sum of (1) the Employee's current annual base salary rate plus (2) the sum
of all bonuses paid to the Employee during the three consecutive calendar year
period ending on December 31 coinciding with or immediately preceding the Change
in Control divided by three (provided that, if the Employee was not employed for
three full calendar years, the bonus shall be based on the number of full
calendar years during which the Employee was employed). The Severance Payment
hereunder is in lieu of any severance payments that Employee might otherwise be
entitled to from Company under the terms of any other severance pay arrangement.
7. Limitation on Severance Payments.
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(a) Notwithstanding anything in this Agreement to the contrary, any
"parachute payments" to be made to or for the benefit of the Employee,
whether pursuant to this Agreement or otherwise, shall be modified to the
extent necessary so that the requirements of either paragraph (1) or (2)
below are satisfied:
(1) the aggregate "present value" of all "parachute payments"
payable to or for the benefit of the Employee, whether pursuant to
this Agreement or otherwise, shall be less than three times the
Employee's "base amount"; or
(2) each "parachute payment" payable to or for the benefit of the
Employee, whether pursuant to this Agreement or otherwise, shall be in
an amount which does not exceed the "reasonable compensation"
allocable to such "parachute payment."
(b) Notwithstanding anything in this Agreement to the contrary, no
payment described in Section 280G(b)(2)(B) of the Internal Revenue Code of
1986, as amended (the "Code") shall be made to or for the benefit of the
Employee.
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(c) For purposes of this Agreement:
(1) the term "base amount" shall have the meaning ascribed to it
under Section 280G(b)(3) of the Code;
(2) the term "parachute payment" shall have the meaning ascribed
in Section 280G(b)(2)(A) of the Code, without regard to Section
280G(b)(2)(A)(ii) of the Code, excluding any amount not treated as a
parachute payment pursuant to Section 280G(b)(4)(A) or (6) of the
Code;
(3) "present value" shall be determined in accordance with
Section 280G(d)(4) of the Code;
(4) the term "reasonable compensation" shall have the meaning
ascribed to it under Section 280G(b)(4)(B) of the Code (for personal
services actually rendered before the date of the Change in Control);
and
(5) the portion of the "base amount" and the amount of
"reasonable compensation" allocable to any "parachute payment" shall
be determined in accordance with Section 280G(b)(3) of the Code and
Section 280G(b)(4)(B) of the Code, respectively.
(d) In the event the amount of any "parachute payments" which would be
payable to or for the benefit of Employee without regard to this section
must be modified to comply with this section, the first payments to be
modified shall be those owed to the Employee under this Agreement.
(e) Unless the Employee consents in writing, Company cannot delay
payment of any amounts due under this Agreement by claiming that it is
difficult to calculate the precise amount due under this Agreement
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because of the reductions that may be required by subsections (a) through
(d).
(f) In the event that Employee requests independent verification of
Company's calculations hereunder, Company shall provide to Employee within
15 business days after such a request an opinion from a nationally
recognized accounting firm selected by Employee (the "Accounting Firm").
The opinion shall state the Accounting Firm's opinion that any decrease in
payments hereunder is necessary to avoid the limits of Section 280G and
contain supporting calculations. The cost of such opinion shall be paid
for by the Company.
(g) This section shall be interpreted so as to avoid the imposition of
excise taxes on the Employee under Section 4999 of the Code or the
disallowance of a deduction to Company pursuant to Section 280G(a) of the
Code.
8. Waiver of Invalidity; No Offset.
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(a) Inasmuch as the injury caused to Employee in the event his
employment is terminated after a Change in Control is difficult or
incapable of accurate estimation at the date of this Agreement, the amounts
provided to be paid hereunder are intended to be severance compensation and
not a penalty, and therefore constitute a good faith forecast of the harm
which might be expected to be caused to Employee. Accordingly, the Company
waives any right to assert against Employee the invalidity of any payment
hereunder by reason of Employee's failure to seek other employment or
otherwise, nor shall the amount of any payment hereunder be reduced by
reason of any compensation earned or not earned by Employee as the result
of employment by another employer after the date of termina tion or
otherwise.
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(b) The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Employee or others.
The preceding sentence shall not apply to any obligation of Employee if the
Employee agreed in writing that the Employee's obligation may be offset
against payments due hereunder.
9. Term of Agreement. This Agreement shall be effective through
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September 30, 1997 and may not be amended or terminated during such period
except pursuant to an instrument in writing executed by all of the parties
hereto. The Board of Directors of the Company may, in its sole discretion and
for any reason, provide written notice of termination or amendment, effective as
of the then applicable expiration date, to Employee no later than six months
before the expira tion date of this Agreement. If written notice is not so
provided, this Agreement shall be automatically extended for an additional
period of 60 months past the expiration date. This Agreement shall continue to
be automatically extended for an additional 60 months at the end of such 60-
month period and each succeeding 60-month period unless notice is given in the
manner described in this section. Notwithstanding the preceding sentences of
this Agreement, this Agreement shall automatically be extended past an otherwise
applicable expiration date if a Change in Control has occurred prior to that
date. The extension referred to in the preceding sentence shall be for one year
after the Change in Control.
10. Successors. The rights and obligations of Company under this
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Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Company.
11. Governing Law. Except to the extent that federal law is
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applicable, this Agreement is made and entered
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into in the State of California, and the laws of California shall govern its
validity and interpretation in the performance by the parties hereto of their
respective duties and obligations hereunder.
12. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties respecting the benefits due Employee in the event
of a Change in Control followed by a Qualifying Termination, and there are no
representations, warranties or commitments, other than those set forth herein,
which relate to such benefits. This is an integrated agreement.
13. Arbitration. (a) Because it is agreed that time will be of the
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essence in determining whether any payments are due to Employee under this
Agreement, Employee may, if he or she desires, submit any claim for payment
under this Agreement or dispute regarding the interpretation of this Agreement
to arbitration. This right to select arbitration shall be solely that of
Employee; Employee may decide whether or not to arbitrate in his or her
discretion. The "right to select arbitration" is not mandatory on Employee and
Employee may choose in lieu thereof to bring an action in an appro priate civil
court. Once an arbitration is commenced, how ever, it may not be discontinued
without the mutual consent of both parties to the arbitration.
(b) Any claim for arbitration may be submitted as follows: if
Employee disagrees with the Company regarding the interpretation of this
Agreement and the claim is finally denied by the Company in whole or in part,
such claim may be filed in writing with an arbitrator of Employee's choice who
is selected by the method described in the next four sentences. The first step
of the selection shall consist of Employee submitting a list of five potential
arbitrators to Company. Each of the five arbitrators must be either (1) a
member of the National Academy of Arbitrators located in the State of California
or (2) a retired California Superior Court or Appellate Court judge. Within one
week after receipt of the list, Company shall select one of the five
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arbitrators as the arbitrator for the dispute in question. If Company fails to
select an arbitrator in a timely manner, Employee shall then designate one of
the five arbitrators as the arbitrator for the dispute in question.
(c) The arbitration hearing shall be held within seven days (or as
soon thereafter as possible) after the picking of the arbitrator. No
continuance of said hearing shall be allowed without the mutual consent of
Employee and Company. Absence from or nonparticipation at the hearing by either
party shall not prevent the issuance of an award. Hearing procedures which will
expedite the hearing may be ordered at the arbitrator's discretion, and the
arbitrator may close the hearing in his or her sole discretion when he or she
decides he or she has heard sufficient evidence to satisfy issuance of an award.
(d) The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than one week after the close of the hearing. In
the event the arbitrator finds that the Company has breached this Agreement, he
or she shall order the Company to immediately take the necessary steps to remedy
the breach. The award of the arbitrator shall be final and binding upon the
parties. The award may be enforced in any appropriate court as soon as possible
after its rendition. If an action is brought to confirm the award, both the
Company and Employee agree that no appeal shall be taken by either party from
any decision rendered in such action.
(e) Solely for purposes of determining the alloca tion of the costs
described in this subsection, Company will be considered the prevailing party in
a dispute if the arbitrator determines (1) that the Company has not breached
this Agreement and (2) the claim by Employee was frivolous. Otherwise, Employee
will be considered the prevailing party. In the event that the Company is the
prevailing party, the fee of the arbitrator and all necessary expenses of the
hearing (excluding any attorneys' fees incurred by the Company) including
stenographic reporter, if employed, shall
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be paid by the other party. In the event that Employee is the prevailing party,
the fee of the arbitrator and all necessary expenses of the hearing (including
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all attorneys' fees incurred by Employee in pursuing his or her claim),
including the fees of a stenographic reporter if employed, shall be paid by the
Company.
(f) If the arbitrator determines that (1) the Company has breached
this Agreement and (2) the Company was unjustified in failing to make the
payments required under this Agreement to Employee, Company shall pay to
Employee, as liquidated damages and not as a penalty, an additional amount equal
to 10% of the amount involved in the arbitration with respect to this Agreement.
14. Notices. Any notice or communications required or permitted to
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be given to the parties hereto shall be delivered personally or be sent by
United States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or to such other addressees
the party addressed may have substituted by notice pursuant to this section:
(a) If to Company
Santa Anita Realty Enterprises, Inc.
Corporate Secretary
301 West Huntington Drive
Suite 405
Arcadia, CA 91007
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(b) If to Employee:
___________________________________
___________________________________
Street Address
___________________________________
City, State, Zip Code
15. Captions. The captions of this Agreement are inserted for
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convenience and do not constitute a part hereof.
16. Severability. In case any one or more of the provisions
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contained in this Agreement shall for any reason be held to be invalid, illegal
or enforceable in other respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein and there shall be deemed substituted for such other
provision as will most nearly accomplish the intent of the parties to the extent
permitted by the applicable law. In case this Agree ment, or any one or more of
the provisions hereof, shall be held to be invalid, illegal or unenforceable
within any governmental jurisdiction or subdivision thereof, this Agreement or
any such provision thereof shall not as a consequence thereof be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or
subdivision thereof.
17. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in
Arcadia, California.
Company
By ___________________________
Title ________________________
Employee
______________________________
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Schedule of Omitted Documents
and Material Details Regarding
Retention Agreements of Certain Employees
of Santa Anita Realty Enterprises, Inc.
and Santa Anita Operating Company
The persons listed below have entered into substantially identical forms of
Retention Agreements, effective as of the dates listed opposite their names.
The form of Severance Agreement is filed as a part of this exhibit.
Elizabeth P. Haug December 16, 1996
Tom D. Austin December 16, 1996
Roger C. Allen December 16, 1996
Richard L. McNall December 16, 1996
Cecelia Consiglio February 13, 1997