EXHIBIT 10
SEVERANCE AGREEMENT
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THIS SEVERANCE AGREEMENT ("Severance Agreement"), made and entered into as
of this 7/th/ day of September, 1999 by and between FEDERAL REALTY INVESTMENT
TRUST, a Maryland real estate investment trust ("Employer"), and HOWARD S. BIEL
("Employee").
WHEREAS, Employer hired Employee to serve as its Senior Vice President -
Development; and
WHEREAS, Employee and Employer have agreed upon the terms of a severance
package as set forth in this Severance Agreement; and
NOW THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Termination Without Cause. In the event that Employee's employment
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with Employer is terminated under any of the circumstances in Sections 1(a) or
1(b), Employee will be deemed to have been Terminated Without Cause and shall
receive payments and benefits as described in this Section 1:
(a) by Employer other than with Cause (as "Cause" is defined in
Section 3, hereof);
(b) by Employee within six (6) months following the occurrence of one
or more of the following events:
(i) the nature of Employee's duties or the scope of Employee's
responsibilities as of the date first written above are
materially modified by Employer without Employee's written
consent where such material modification constitutes a
demotion of Employee or a substantial reduction in
Employee's responsibilities; provided, however, that a
change in the position(s) to whom Employee reports shall
not by itself constitute a material modification of
Employee's responsibilities;
(ii) Employer changes the location of its principal office to
outside a fifty (50) mile radius of Washington, D.C.;
(iii) Employer's setting of Employee's base salary for any year
at an amount which is less than the greater of (x)
Employee's base salary for 1998, or (y) ninety percent
(90%) of Employee's highest base salary during the three
(3) then most recent calendar years (including the year of
termination), regardless of whether such salary reduction
occurs in one year or over the course of years; or
(iv) this Severance Agreement is not expressly assumed by any
successor (directly or indirectly, whether by purchase,
merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of Employer.
(c) Decision by Employer to Terminate Without Cause. Employer's
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decision to terminate Employee's employment Without Cause shall
be made by the Board of Trustees.
(d) Severance Payment Upon Termination Without Cause. In the event
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of Termination Without Cause, Employee will receive as severance
pay an amount in cash equal to eighteen (18) months' salary. The
length of the severance term shall be eighteen (18) months
("Severance Term"). For the purpose of calculating amounts
payable pursuant to this Section 3(d), "salary" shall be an
amount equal to (i) the greater of (x) Employee's highest annual
base salary paid during the previous three (3) years or (y)
Employee's annual base salary in the year of termination, plus
(ii) the greatest annual aggregate amount of any cash or stock
bonus, paid to Employee in respect of any of the three (3) fiscal
years immediately preceding such termination (it being understood
and agreed that such amount shall not include compensation paid
pursuant to performance share awards), or if no such bonus has
been paid to Employee during such time, fifty percent (50%) of
his annual base salary in effect on the day prior to Employee's
Termination Without Cause. Payment also will be made for vacation
time that has accrued, but is unused as of the date of
termination.
(e) Benefits. In the event of Termination Without Cause, Employee
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shall receive "Full Benefits" for nine (9) months, subject to
clause (iv) below. Employer shall have satisfied its obligation
to provide
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Full Benefits to Employee if it (i) pays premiums due in
connection with COBRA continuation coverage to continue
Employee's medical and dental insurance coverage at not less than
the levels of coverage immediately prior to termination of
Employee's employment; (ii) maintains at not less than his
highest levels of coverage prior to Termination Without Cause
individual life insurance policies and accidental death and
dismemberment policies for the benefit of Employee and pays the
annual premiums associated therewith; (iii) maintains, at
Employer's expense, the split dollar individual life insurance
policy (or policies) for the benefit of Employee in accordance
with the agreement with respect to such policy (or policies)
entered into by Employee and Employer (the "Split Dollar Life
Insurance Agreement"); and (iv) pays the annual premiums
associated with Employee's continued participation, at not less
than Employee's highest levels of coverage prior to the
Termination Without Cause, under Employer's group long-term
disability policy for a period of one (1) year following
Termination Without Cause, subject to the limitations of the
policy; and (v) to the extent that Employer maintained a long-
term disability policy that provided coverage to Employee in
excess of the coverage provided under the Trust's group long-term
disability policy, maintains at not less than his highest levels
of coverage prior to Termination Without Cause an individual
long-term disability policy for the benefit of Employee and pays
the annual premiums associated therewith. Notwithstanding the
foregoing, Employee shall be required to pay the premiums and any
other costs of such Full Benefits in the same dollar amount that
he was required to pay for such costs immediately prior to
Termination Without Cause.
(f) Stock Options. Notwithstanding any agreement to the contrary, in
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the event of any other Termination Without Cause, (A) if such
termination occurs more than 1 year after the date Employee
commenced employment with Employer, the vesting of options to
purchase shares of Employer's common stock ("Shares") granted to
Employee and outstanding as of the date of Employee's termination
shall be accelerated such that all such options will be vested as
of the date of Employee's termination of employment with
Employer; or (B) if such termination occurs on or before the
first anniversary of the date Employee commenced employment with
Employer, the vesting of options to purchase Shares granted to
Employee and outstanding as of the date of Employee's termination
and scheduled to vest during the Severance Term shall be
accelerated such that all
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such options will be vested as of the date of Employee's
termination of employment with Employer. The terms of the stock
option agreements shall determine the period during which any
vested options may be exercisable.
(g) Outplacement Services. In the event of Termination Without
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Cause, Employer shall make available at Employer's expense to
Employee at Employee's option the services of an employment
search/outplacement agency selected by Employer for a period not
to exceed six (6) months during the Severance Term.
(h) Provision of Telephone/Secretary. In the event of Termination
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Without Cause, Employer shall provide Employee for a period not
to exceed six (6) months from Employee's date of termination with
a telephone number assigned to Employee at Employer's offices,
telephone mail and a secretary to answer the telephone. Such
benefits shall not include an office or physical access to
Employer's offices and will cease upon commencement by Employee
of employment with another employer.
(i) Notice. If Employee terminates his employment pursuant to Section
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1(b) hereof and (i) Employee is not an executive officer of
Employer, Employee shall give sixty (60) days' written notice to
Employer of such termination, or (ii) if Employee is an executive
officer of Employer, Employee shall give ninety (90) days'
written notice to Employer of such termination.
2. Voluntary Resignation of Employee. If Employee is not an executive
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officer of Employer, Employee shall give sixty (60) days' written notice to
Employer of Employee's resignation from employment in all capacities with
Employer; if Employee is an executive officer of Employer, Employee shall give
ninety (90) days' written notice to Employer of Employee's resignation from
employment in all capacities with Employer.
3. Severance Benefits Upon Termination With Cause. Employee shall be
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deemed to have been terminated with Cause in the event that the employment of
Employee is terminated for any of the following reasons:
(a) failure (other than failure due to disability) to substantially
perform his duties with Employer or an affiliate thereof; which
failure remains uncured after written notice thereof and the
expiration of a reasonable period of time thereafter in which Employee
is diligently pursuing cure ("Failure to Perform");
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(b) willful conduct which is demonstrably and materially injurious to
Employer or an affiliate thereof, monetarily or otherwise;
(c) breach of fiduciary duty involving personal profit; or
(d) willful violation in the course of performing his duties for Employer
of any law, rule or regulation (other than traffic violations or
misdemeanor offenses). No act or failure to act shall be considered
willful unless done or omitted to be done in bad faith and without
reasonable belief that the action or omission was in the best interest
of Employer.
(e) Decision by Employer to Terminate With Cause. The decision to
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terminate the employment of Employee with Cause shall be made by the
Board of Trustees.
(f) Severance Payment Upon Termination with Cause. In the event of
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termination for Failure to Perform pursuant to Section 3(a), or
termination for cause pursuant to Section 3(b), (c) or (d) above, the
terms of the stock option agreements between Employer and Employee
thereunder will determine the terms of the vesting of options and the
exercisability of vested options.
(i) For Cause Termination for Failure to Perform. In the event
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that Employee's employment is terminated with Cause pursuant
to Section 3(a) above, Employee shall receive as severance
pay an amount in cash equal to one (1) month's salary for
every year of service to the Trust in excess of five (5)
years of service; such severance payment shall not exceed
six (6) months' pay. The number of months for which such a
payment is due shall determine the length of the for cause
term ("For Cause Term"). For the purposes of this Section
3(f)(i) only, "salary" shall mean Employee's then current
annual base salary and shall not include any bonus or other
compensation. Payment shall also be made for accrued, but
unused, vacation time. Employee shall also receive Full
Benefits (as defined above) for the For Cause Term. In the
event that, following Employee's termination for Failure to
Perform, Employee becomes employed by or affiliated with, as
a partner, consultant, contractor or otherwise, any entity
which is substantially engaged in the business of property
investment or management ("Competitor"), all payments
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specified in this Section 3(f)(i) shall cease upon the date
Employee commences such employment or affiliation; provided,
however, Employee shall continue to receive medical and
dental care benefits from Employer until (i) Employee is
eligible to receive medical and dental care benefits from
the Competitor, or (ii) the date of expiration of Employee's
For Cause Term, whichever comes first.
(ii) Other Cause Termination. In the event that Employee's
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employment is terminated with Cause pursuant to Section
3(b), (c) or (d), Employee shall receive all base salary due
and payable as of the date of Employee's termination of
employment. No payment shall be made for bonus or other
compensation. Payment also will be made for accrued, but
unused, vacation time.
4. Severance Benefits Upon Termination Upon Disability. Employer may
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terminate Employee upon thirty (30) days' prior written notice if (i) Employee's
Disability has disabled Employee from rendering service to Employer for at least
a six (6) month consecutive period during the term of his employment, (ii)
Employee's "Disability" is within the meaning of such defined term in Employer's
group long-term disability policy, and (iii) Employee is covered under such
policy. In the event of Employee's Termination Upon Disability, Employee shall
be entitled to receive as severance pay each month for the year immediately
following the date of termination an amount in cash equal to the difference, if
any, between (i) the sum of (y) the amount of payments Employee receives or will
receive during that month pursuant to the disability insurance policies
maintained by Employer for Employee's benefit and (z) the adjustment described
in the next sentence and (ii) Employee's base monthly salary on the date of
termination due to Disability. The adjustment referred to in clause (z) of the
preceding sentence is the amount by which any tax-exempt payments referred to in
clause (y) would need to be increased if such payments were subject to tax in
order to make the after-tax proceeds of such payments equal to the actual amount
of such tax-exempt payments.
(a) Benefits. Employee shall receive Full Benefits (as defined above) for
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one (1) year following termination due to Disability (subject to the
provisions of the Split Dollar Life Insurance Agreement).
(b) Stock Options. In the event that Employee's employment is terminated
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due to Disability, the terms of the stock option agreements between
Employer and Employee shall determine the vesting of any options held
by Employee as of the date of termination due to Disability and the
exercise period for any vested option.
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5. Severance Benefits Upon Termination Upon Death. If Employee dies,
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Employee's estate shall be entitled to receive an amount in cash equal to his
then-current base salary through the last day of the month in which Employee's
death occurs plus any bonus previously awarded but unpaid and any accrued
vacation pay through the last day of the month in which Employee's death occurs.
The terms of the stock option agreements between Employer and Employee shall
determine the vesting of any options held by Employee as of the date of his
death and the exercise period for any vested option.
6. Confidentiality - Employer's Obligations. Unless Employee and Employer
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mutually agree on appropriate language for such purposes, in the event that
Employee's employment is Terminated Without Cause or With Cause pursuant to
Section 3(a) above, or Employee voluntarily resigns, Employer, except to the
extent required by law, will not make or publish, without the express prior
written consent of Employee, any written or oral statement concerning Employee's
work related performance or the reasons or basis for the severing of Employee's
employment relationship with Employer; provided, however, that the foregoing
restriction is not applicable to information which was or became generally
available to the public other than as a result of a disclosure by Employer.
7. Confidentiality - Employee's Obligations. Employee acknowledges and
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reaffirms that Employee will comply with the terms of the confidentiality letter
executed by Employee upon commencement of Employee's employment with Employer.
A copy of the confidentiality letter is attached as Exhibit A.
8. Payments. Severance payments payable to Employee pursuant to the terms
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of this Severance Agreement may be made either as a lump sum payment or pro rata
on a monthly basis, at Employee's option.
9. Tax Withholding. Employer may withhold from any benefits payable under
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this Severance Agreement, and pay over to the appropriate authority, all
federal, state, county, city or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
10. Arbitration.
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(a) Any controversy, claim or dispute arising out of or relating to
this Severance Agreement or the breach thereof shall be settled
by arbitration in accordance with the then existing Commercial
Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be
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entered in any court having jurisdiction thereof. The parties
irrevocably consent to the jurisdiction of the federal and state
courts located in Maryland for this purpose. Each such
arbitration proceeding shall be located in Maryland.
(b) The arbitrator(s) may, in the course of the proceedings, order
any provisional remedy or conservatory measure (including,
without limitation, attachment, preliminary injunction or the
deposit of specified security) that the arbitrator(s) consider to
be necessary, just and equitable. The failure of a party to
comply with such an interim order may, after due notice and
opportunity to cure with such noncompliance, be treated by the
arbitrator(s) as a default, and some or all of the claims or
defenses of the defaulting party may be stricken and partial or
final award entered against such party, or the arbitrator(s) may
impose such lesser sanctions as the arbitrator(s) may deem
appropriate. A request for interim or provisional relief by a
party to a court shall not be deemed incompatible with the
agreement to arbitrate or a waiver of that agreement.
(c) The parties acknowledge that any remedy at law for breach of this
Severance Agreement may be inadequate, and that, in the event of
a breach by Employee of Section 7, any remedy at law would be
inadequate in that such breach would cause irreparable
competitive harm to Employer. Consequently, in addition to any
other relief that may be available, the arbitrator(s) also may
order permanent injunctive relief, including, without limitation,
specific performance, without the necessity of the prevailing
party proving actual damages and without regard to the adequacy
of any remedy at law.
(d) In the event that Employee is the prevailing party in such
arbitration, then Employee shall be entitled to reimbursement by
Employer for all reasonable legal and other professional fees and
expenses incurred by him in such arbitration or in enforcing the
award, including reasonable attorney's fees.
(e) The parties agree that the results of any such arbitration
proceeding shall be conclusive and binding upon them.
11. Continued Employment. This Severance Agreement shall not confer upon
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the Employee any right with respect to continuance of employment by Employer.
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12. Mitigation. Employee shall not be required to mitigate the amount of
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any payment, benefit or other Trust obligation provided for in this Severance
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to
Employee in any subsequent employment.
13. Grant of January 2, 1998 Options. The parties hereto acknowledge that
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Employee has been granted an option on January 2, 1998 in the amount of one
hundred thousand (100,000) shares of beneficial interest, no par value, of the
Trust, as set forth in Exhibit B hereto. Employee has also been granted options
under the Federal Realty Investment Trust Amended and Restated 1993 Long-Term
Incentive Plan.
14. No Assignment. Neither this Severance Agreement nor any right,
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remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either Employer or Employee without the prior written consent of
the other party.
15. Amendment. This Severance Agreement may be terminated, amended,
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modified or supplemented only by a written instrument executed by Employee and
Employer.
16. Waiver. Either party hereto may by written notice to the other: (i)
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extend the time for performance of any of the obligations or other actions of
the other party under this Severance Agreement; (ii) waive compliance with any
of the conditions or covenants of the other party contained in this Severance
Agreement; (iii) waive or modify performance of any of the obligations of the
other party under this Severance Agreement. Except as provided in the preceding
sentence, no action taken pursuant to this Severance Agreement shall be deemed
to constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Severance
Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach. No failure by either party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights to exercise the same
any subsequent time or times hereunder.
17. Severability. In case any one or more of the provisions of this
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Severance Agreement shall, for any reason, be held or found by determination of
the arbitrator(s) pursuant to an arbitration held in accordance with Section 10
above to be invalid, illegal or unenforceable in any respect (i) such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Severance Agreement, (ii) this Severance Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. Failure to insist upon strict compliance with any provision of this
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Severance Agreement shall not be deemed a waiver of such provision or of any
other provision of this Severance Agreement.
18. Governing Law. This Severance Agreement has been executed and
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delivered in the State of Maryland and its validity, interpretation, performance
and enforcement shall be governed by the laws of said State; provided, however,
that any arbitration under Section 10 hereof shall be conducted in accordance
with the Federal Arbitration Act as then in force.
19. No Attachment. Except as required by law, no right to receive
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payments under this Severance Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or the execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
20. Source of Payments. All payments provided under this Severance
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Agreement shall be paid in cash from the general funds of Employer, and no
special or separate fund shall be established and no other segregation of assets
shall be made to assure payment.
21. Entire Agreement. Except as may otherwise be provided herein, this
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Severance Agreement supersedes any and all prior written agreements existing
between Employer and Employee with regard to the subject matter hereof.
22. Headings. The section and other headings contained in this Severance
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Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Severance Agreement.
23. Notices. Any notice required or permitted to be given under this
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Severance Agreement shall be in writing and shall be deemed to have been given
when delivered in person or when deposited in the U.S. mail, registered or
certified, postage prepaid, and mailed to Employee's addresses set forth herein
and the business address of Employer, unless a party changes its address for
receiving notices by giving notice in accordance with this Section, in which
case, to the address specified in such notice.
24. Counterparts. This Severance Agreement may be executed in multiple
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counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.
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IN WITNESS WHEREOF, the parties have executed and delivered this Severance
Agreement to be effective as of the day and year indicated above.
/s/ Howard S. Biel
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Employee's Signature
Employee's Permanent Address:
5427 Falmouth Road
Bethesda, Maryland 20816
FEDERAL REALTY INVESTMENT TRUST
By: /s/ Walter F. Loeb
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Name: Walter F. Loeb
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Title: Trustee
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Address: 1626 East Jefferson Street
Rockville, MD 20852-4041
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