Exhibit 99.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into as of the 27th day of October, 1993 is by
and between CHATEAU PROPERTIES, INC., (hereinafter referred to as the
"Company"), a Maryland corporation with principal offices located at 00000
Xxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxx 00000, and X.X. XXXXXXX, an individual
residing at 00000 Xxxxxx Xxxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as the "Executive").
WITNESSETH:
WHEREAS, the Executive has been previously employed in various capacities
by Chateau Estates, a predecessor to the Company; and
WHEREAS, the Company is in the process of making an initial public
offering of its common stock ("Public Offering") and, in connection therewith
desires to hire the Executive as President and Chief Executive Officer upon
the terms and conditions contained herein and the Executive is willing and
agrees to accept such employment upon such terms and conditions;
NOW, THEREFORE, in consideration of the premises and covenants set forth
herein, the parties hereto agree as follows:
1. EMPLOYMENT
A. The Company shall employ the Executive, and the Executive hereby
accepts such employment upon the terms and conditions hereinafter set forth.
B. The Executive will be employed by the Company in the capacity of
President and Chief Executive Officer and will have such responsibilities as
shall be assigned to him by the Board of Directors of the Company from time to
time. As used herein, the term "Company" shall mean Chateau Properties, Inc.,
CP Limited Partnership, a Maryland limited partnership of which the Company is
the general partner, and any other entity over which the Company has direct or
indirect control.
C. While employed by the Company, the Executive shall devote his full
time and exert his best efforts to perform his duties, and shall faithfully,
diligently and to the utmost of his ability and to the reasonable satisfaction
of the Company, perform all such management duties consistent with his
positions at the Company.
II. TERM
A. The employment of the Executive pursuant to the provisions of this
Agreement shall commence as of the date of the Public Offering and shall
continue for a period of three (3) years thereafter ("Initial Period").
Thereafter this Agreement shall automatically be renewed for successive one
(1) year periods ("Renewal Periods") unless terminated by either party by
delivering written notice to the other party at least 120 days prior to the
end of the Initial Period or any Renewal Period, or as otherwise provided in
paragraph E1 hereof. The Initial Period and each Renewal Period shall
collectively be referred to as the "Employment Period."
B. Any termination of this Agreement shall not, however, effect the
provisions of paragraphs IV and V which shall survive such termination in
accordance with their terms.
III. COMPENSATION
A. Salary. In consideration of services rendered by the Executive
hereunder, the Company shall pay the Executive a xxxxx during the
Employment Period at the rate of One Hundred Fifty Thousand ($150,000)
Dollars per year, payable in accordance with the Company's existing
payroll practices.
B. Bonus. The Executive shall receive an annual bonus in such
amount as shall be determined by the Board of Directors of the Company
in its sole discretion.
C. Other Benefits.
1. The Company shall provide the Executive during the
Employment Period with such other fringe benefits as the Company may
from time to time provide its executives, including life insurance,
health insurance, disability insurance, participation in any pension
or profit sharing plan then in effect, and vacation benefits. In
addition, the Company shall provide the Executive an automobile which
is commensurate with his position in the Company.
2. In addition, the Company will reimburse the Executive for
any and all travel and out-of-pocket expenses reasonably incurred by
the Executive for the purpose of performing his services hereunder,
such reimbursement to be made upon presentation to and approval by the
Company of receipts, vouchers and other evidence satisfactory in
itemizing such expenses in reasonable detail in accordance with the
Company's regular practice.
IV. COVENANT NOT TO COMPETE
A. The Executive hereby acknowledges and recognizes the highly
competitive nature of the business of the Company and accordingly agrees
for the consideration stated above that, during and for the period
commencing with the date hereof and ending on the later of the date of the
termination of the Employment Period hereunder, or the date on which the
Executive shall no longer be a director of the Company, ("Primary Non-
Compete Period") he will not other than on behalf of the Company, directly
or indirectly, in any state where the Company is then conducting business:
1. Conduct, engage in or have an interest in any person or entity
engaging in (whether as an owner, principal, agent, representative,
lender, stockholder, partner, employer, consultant, officer, director or
otherwise) any business, operation and/or service in any manner similar
to or related to the business of owing, acquiring, developing and/or
operating manufactured housing communities (except as a passive investor
in less than one (1%) percent of the outstanding capital stock of a
publicly traded corporation);
2. Directly or indirectly solicit, divert, take away, accept or
interfere with any business, customer (including former customers of
the Company) trade or patronage of the
2.
Company; or
3. Directly or indirectly employ, attempt to employ or solicit
for employment any employee of the Company;
B. It is expressly understood and agreed that although the Executive
and the Company consider the restrictions contained above reasonable for the
purpose of preserving for the Company its good will and other proprietary
rights, if the aforesaid restrictive covenant is found by any court having
jurisdiction to be unreasonable because it is too broad in any extent, then
the restrictions herein contained shall nevertheless remain effective, but
shall be deemed amended as may be considered to be reasonable by such court,
and as so amended shall be enforced. If the Executive violates the provisions
hereof, the Company shall not, as a result of the time involved in obtaining
relief, be deprived of the benefit of the full period of the restrictive
covenant. Accordingly, in the event of such a violation, the term of this
covenant not to compete shall toll until the date relief is granted.
C. The Company shall have the right to elect to extend the term of
the non-compete for a period of one (1) year ("Extension Period") following
the end of the Primary Non-Compete Period, by giving written notice to the
Executive on or prior to the end of the Primary Non-Compete Period and by
paying the Executive an amount equal to the base salary earned by the
Executive during the last 12 months of the Employment Period, such amount
to be paid in 12 equal consecutive monthly payments, with the first payment
due at the end of the first month of the Extension Period. In the event the
Company so elects to extend the period of the non-compete, the Executive
agrees to be bound by the provisions of that paragraph IV A hereof for
such additional 12-month period.
V. CONFIDENTIALITY OF INFORMATION
The Executive acknowledges that the Company may have trade secrets and
confidential information concerning the operation of their real estate and
acquisition strategy which are valuable, special and unique assets of the
Company, access to and knowledge of which may be essential to the performance
of the Executive's duties hereunder ("Confidential Information"). In
recognition of this fact, the Executive agrees that he will not, during or
after the Employment Period, disclose any Confidential Information to any
person, firm, corporation, association or other entity for any reason or
purpose whatsoever, except as necessary in the performance of his duties as an
employee of the Company and then only under a written confidentiality
agreement in such form and content as requested by the Company from time to
time, nor shall the Executive make use of any Confidential Information (other
than information in the public domain) for his own purposes or for the benefit
of any person, firm, corporation or other entity (except the Company) under
any circumstances during or after the Employment Period.
VI. REMEDIES
In the event of a breach or threatened breach by the Executive of the
provisions of Paragraphs IV or V hereof, the Executive agrees that money
damages would be inadequate and that the Company shall be entitled to an
injunction restraining him from such breach and, at the election of the
Company, upon the failure of the Executive, to cure or correct such breach
within thirty days
3.
after written notice thereof has been given to the Executive all rights of
the Executive under Paragraph III shall thereupon terminate. Nothing herein
contained shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach.
VII. MISCELLANEOUS
A. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested,
to his residence in the case of the Executive, or, in the case of the Company,
to the principal office of the Company, to the attention of its Chairman of
the Board, with a copy to Timmis and Xxxxx, 000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 or to any subsequent address as the parties may hereafter
provide.
B. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.
C. Assignment. This Agreement is personal in its nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except that the Company
may assign or transfer this Agreement to a successor corporation in the event
of merger, consolidation or transfer or sale of all or substantially all of
the business and assets of the Company; provided that, in the case of any such
assignment or transfer, this Agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of such successor corporation
and such successor corporation shall discharge and perform all the obligations
of the Company hereunder.
D. Entire Agreement. This Agreement supersedes any and all prior
understandings, oral or written, between the parties as to services to be
performed by the Executive for the Company, constitutes the entire agreement
between the parties and cannot be amended, supplemented, or modified except in
writing signed by both parties. Notwithstanding the foregoing, the parties
acknowledge that the Deferred Compensation Agreement shall continue in full
force and effect with respect to the compensation earned thereunder.
E. Termination of Employment.
1. The Executive's employment hereunder may be terminated at
any time during the Employment Period, for cause (as hereinafter
defined) by action of the Board of Directors of the Company upon
giving the Executive notice of such termination, which termination may
be effective immediately. As used herein, the term "Cause" shall mean
any of the following events:
(a) The Executive's conviction of or plea of guilty or nolo
contendere to a crime involving moral turpitude or a crime
providing for a term of imprisonment of one year or more;
(b) The Executive's (A) willful gross misconduct, or (B)
neglect of or inattention to duties which is not cured within
thirty (30) days after written notice thereof by the Company to
the Executive; or
4.
(c) The violation by the Executive of any covenant or
provisions set forth in this Agreement.
2. If the Executive dies, his employment under Paragraph I
hereof shall be deemed to cease as of the date of his death.
3. Notwithstanding the provisions of cause (1) above, if the
Executive is incapacitated by accident, sickness or otherwise so as to
render him mentally or physically incapable of performing the services
required of him under Paragraph I for a period of one hundred eighty
(180) days during any twelve month period ("Total Disability"), upon
the expiration of such period or at any time thereafter, by action of
the Board of Directors of the Company, the Executive's employment
under Paragraph I may be terminated immediately upon giving him notice
to that effect, without any obligation to pay any severance pay as
otherwise provided in Paragraph VII E hereof, other than disability
payments made pursuant to any disability insurance policy maintained
by the Company.
F. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan, the principal place
of business of the Company.
G. Headings. The headings of the Paragraphs hereof are for convenience
only and shall not control or affect the meaning or construction or limit the
scope or intent of any of the provisions of this Agreement.
H. Public Offering. In the event the Public Offering is not consummated
on or before December 31, 1993, this Agreement shall be null and void and
neither party shall have any liability to the other hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
CHATEAU PROPERTIES, INC.
/s/ Xxxx X. Xxxx
-------------------------
By: Xxxx X. Xxxx
Its: Chairman of the Board
EXECUTIVE:
/s/ X.X. Xxxxxxx
-------------------------
By: X.X. Xxxxxxx
5.
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated this 17th day of September, 1996 between Chateau
Properties, Inc. (the "Company"), a Maryland Corporation and X.X. Xxxxxxx
(the "Executive").
WITNESSETH
WHEREAS, on October 27, 1993 the parties entered into an Employment Agreement
(the "Agreement") under which the Executive was employed by the Company; and
WHEREAS, the parties desire to amend the Agreement as hereinbelow set forth.
Section VII of the Agreement is hereby amended by adding the following
paragraph I, to read in full as follows:
I. Payments Pursuant to Severance Agreements.
In the event that there is a change in control (as defined in the
Severance Protection Agreement between the Executive and the Company of
September 17, 1996), and Section 3 of the Severance Protection Agreement
becomes applicable, this Agreement shall terminate and no longer be in full
force or effect.
Except as herein modified, the Agreement remains in full force and
effect, unmodified and unamended.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment Agreement
on the day and date first above written.
/s/ X.X. Xxxxxxx
---------------------------
X.X. XXXXXXX
CHATEAU PROPERTIES, INC.
By: /s/ Xxxx X. Xxxx
----------------
Name: Xxxx X. Xxxx
Title: Chairman of the Board
