EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and
among Macerich Management Company, a California corporation, (the "Company"),
The Macerich Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership") and Xxxxx Xxxxxxx ("Employee"), as of the 11th day
of February, 1997.
I. EMPLOYMENT.
The Company and the Operating Partnership hereby employ Employee and
Employee hereby accepts such employment, upon the terms and conditions
hereinafter set forth.
II. TERM.
The initial term of this Agreement shall commence on February 11,
1997, and end on February 10, 2002. As used herein, the "Renewal Date" shall
mean the date during the initial term, and the date during any extension of
the term as provided below, which is one year prior to the end of the
then-current term. On each successive Renewal Date during the term, this
Agreement shall be automatically extended one additional year unless at least
30 days prior to such Renewal Date, the Company or the Operating Partnership
shall have delivered to Employee or Employee shall have delivered to the
Company or the Operating Partnership written notice that the Agreement shall
not be so extended. FOR EXAMPLE, THE FIRST RENEWAL DATE IS FEBRUARY 11,
2001, AND IF THIS AGREEMENT IS AUTOMATICALLY EXTENDED, THE SECOND RENEWAL
DATE WOULD BE FEBRUARY 10, 2002, AND SO ON. AS A FURTHER EXAMPLE, ON
FEBRUARY 11, 2001, THIS AGREEMENT WILL BE AUTOMATICALLY EXTENDED ONE
ADDITIONAL YEAR (AND THEREFORE THE TERM OF THIS AGREEMENT WOULD END ON
FEBRUARY 10, 2003), UNLESS ON OR BEFORE FEBRUARY 11, 2001, THE COMPANY, THE
OPERATING PARTNERSHIP OR THE EXMPLOYEE SHALL HAVE GIVEN NOTICE THAT THE
AGREEMENT SHALL NOT BE SO EXTENDED.
III. DUTIES.
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A. Employee shall serve during the course of his employment as an
officer of the Company and the Operating Partnership, initially Senior Vice
President -- Development, and shall have such other duties and
responsibilities as the Board of Directors of the Company and the Operating
Partnership, or their respective Chief Executive Officers or Presidents,
shall determine from time to time.
B. Employee agrees to devote substantially all of his time, energy
and ability to the business of the Company and the Operating Partnership.
Nothing herein shall prevent Employee, upon approval of the Board of
Directors of the Company and the Operating Partnership, from serving as a
director or trustee of other corporations or businesses which are not in
competition with the business of the Company or in competition with any
present or future affiliate of the Company. Nothing herein shall prevent
Employee from investing in real estate for his own account or from becoming a
partner or a stockholder in any corporation, partnership or other venture not
in competition with the business of the Company or in competition with any
present or future affiliate of the Company.
Employee will serve as a key employee of the Operating Partnership,
in consideration of the grant of the Restricted Stock Award and the Stock
Option Award described in Section IV. At the request of The Macerich Company
("Macerich") or the Operating Partnership, Employee will serve as an
employee, officer or director of Macerich Property Management Company, a
California corporation, or any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially owned directly
or indirectly by Macerich (any such entity, including Macerich, the Company
and the Operating Partnership, the "Macerich Entities") without additional
compensation. For the term of this Agreement, Employee shall report directly
to the Chief Executive Officer or President of the Company and the Operating
Partnership or, if there is none, the Chairman of the Board of the Company
and the Operating Partnership.
C. Employee hereby acknowledges and agrees that, except as above
contemplated, the engagement of Employee by the Company and the Operating
Partnership under this Agreement is exclusive to the Company and the
Operating Partnership, and he shall not render services to any other entity
for compensation or otherwise without the prior written consent of the
Company and the Operating Partnership.
IV. COMPENSATION.
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A. The Company will pay to Employee a base salary at the rate of
$225,000 per year. Such salary shall be earned monthly and shall be payable
in periodic installments no less frequently than monthly in accordance with
the Company's customary practices. Amounts payable shall be reduced by
standard withholding and other authorized deductions. The Company will
review Employee's salary at least annually. The Company may in its
discretion increase Employee's salary but it may not reduce it during the
term of this Agreement.
B. INITIAL RESTRICTED STOCK GRANT; INITIAL STOCK OPTION GRANT;
ANNUAL BONUS, INCENTIVE, SAVINGS AND RETIREMENT PLANS.
(i) Upon the commencement of employment, Employee shall receive a
Restricted Stock Award for 10,000 shares of restricted Company stock (the
"Restricted Stock Award"), which shares shall vest and shall be on such other
terms and conditions as are set forth in a Restricted Stock Award Agreement
to be executed as of the date of the Employee's commencement of employment
(which agreement shall be in the form attached hereto as Exhibit A) and which
Restricted Stock Award shall be subject to the terms and conditions of The
Macerich Company 1994 Stock Incentive Plan (the "Plan").
(ii) Upon the commencement of employment, Employee shall receive a
Stock Option Award for 60,000 shares of Company stock (the "Stock Option
Award"), which stock options shall be priced as of the date of the Employee's
commencement of employment, and shall vest and shall be on such other terms
and conditions as are set forth in a Stock Option Agreement to be executed as
of the date of the Employee's commencement of employment (which agreement
shall be in the form attached hereto as Exhibit B) and which Stock Option
Award shall be subject to the terms and conditions of the Plan.
(iii) Employee shall be entitled to participate in all annual bonus,
incentive, stock incentive, savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of the Company and
the Operating Partnership.
C. WELFARE BENEFIT PLANS. Employee and/or his family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company and the Operating Partnership (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of the
Company and the Operating Partnership.
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D. EXPENSES. Employee shall be receive an automobile allowance in
the amount of $700 per month. In addition, Employee shall be entitled to
receive prompt reimbursement for all reasonable employment expenses incurred
by him in accordance with the policies, practices and procedures as in effect
generally with respect to other peer executives of the Company and the
Operating Partnership.
E. FRINGE BENEFITS. Employee shall be entitled to fringe benefits
in accordance with the plans, practices, programs and policies as in effect
generally with respect to other peer executives of the Company and the
Operating Partnership.
F. VACATION. Employee shall be entitled to at least 4 weeks of paid
vacation in accordance with the plans, policies, programs and practices as in
effect generally with respect to other peer executives of the Company and the
Operating Partnership.
G. The Company and the Operating Partnership reserve the right to
modify, suspend or discontinue any and all of the above plans, practices,
policies and programs at any time without recourse by Employee so long as
such action is taken generally with respect to other similarly situated peer
executives and does not single out Employee.
V. TERMINATION.
A. DEATH OR DISABILITY. Employee's employment shall terminate
automatically upon Employee's death. If the Company and the Operating
Partnership determine in good faith that the Disability of Employee has
occurred (pursuant to the definition of Disability set forth below), they may
give to Employee written notice in accordance with Section XX of its
intention to terminate Employee's employment. In such event, Employee's
employment with the Company and Operating Partnership shall terminate
effective on the 30th day after receipt of such notice by Employee, provided
that, within the 30 days after such receipt, Employee shall not have returned
to full-time performance of his duties. For purposes of this Agreement,
"Disability" shall mean the absence of Employee from his duties with the
Company and Operating Partnership on a full-time basis for a period of nine
months as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the Company
and the Operating Partnership or their insurers and acceptable to Employee or
his legal representative (such agreement as to acceptability not to be
withheld unreasonably). "Incapacity" as used herein shall be limited only to
a condition that substantially prevents Employee from performing his duties
hereunder.
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B. CAUSE. During the term of this Agreement, the parties agree that
the Company and Operating Partnership may terminate Employee's employment
only for Cause or for breach of the provisions of Section IX
(Antisolicitation) or XII (Confidential Information) or as set forth in
paragraph A above. For purposes of this Agreement, "Cause" shall mean that
the Company and Operating Partnership, acting in good faith based upon the
information then known to the Company and the Operating Partnership,
determine that Employee has: (1) failed to perform in a material respect his
obligations under this Agreement without proper cause, (2) been convicted of
a felony, or (3) committed a material act of fraud, dishonesty or gross
misconduct which is materially injurious to the Company or the Operating
Partnership.
C. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
1. DEATH OR DISABILITY. If Employee's employment is terminated
by reason of Employee's Death or Disability, the term of this
Agreement shall not be subject to any further extension pursuant to
Section II hereof. During the remainder of the term of this
Agreement (as in effect on the date of Employee's termination of
employment), the Company and the Operating Partnership (a) shall
continue to pay to Employee (or, in the case of his death, his
surviving spouse or, if there is no surviving spouse, his estate)
Employee's annual base salary at the same time and in the same manner
as if he had continued to perform services under this Agreement and
(b) shall provide any coverage required by law and shall continue to
provide to Employee (or, in the case of his death, his surviving
spouse) the same level of health insurance provided to other
executives of the Company and the Operating Partnership. Executive
acknowledges and agrees that the Company and the Operating
Partnership may insure themselves for their financial obligations
upon Employee's death. Employee agrees to subject himself to medical
examinations as may be reasonably required for such purposes.
2. CAUSE. If Employee's employment is terminated by the Company
and the Operating Partnership pursuant to Section V-B, this Agreement
shall terminate without further obligations to Employee other than
for (a) payment of the sum of Employee's annual base salary through
the date of termination and any accrued vacation pay to the extent
not theretofore paid, which shall be paid to Employee or his estate
or beneficiary, as applicable, in a lump sum in cash within 30 days
of the date of termination; (b) payment of any compensation
previously deferred by Employee (together with any accrued interest
or earnings thereon), which
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shall be paid to Employee or his estate or beneficiary pursuant to
terms of the plan or agreement under which such compensation was
deferred; and (c) payment to Employee or his estate or beneficiary,
as applicable, any amounts due pursuant to the terms of any
applicable welfare benefit plans. The payments described in clauses
(a) and (b) shall hereinafter be referred to as the "Accrued
Obligations." If it is subsequently determined that the Company and
the Operating Partnership did not have Cause for termination under
this Section V-C-2, then the Company's and the Operating
Partnership's decision to terminate shall be deemed to have been made
under Section V-C-3 and the amounts payable thereunder shall be the
only amounts Employee may receive for his termination.
3. OTHER THAN CAUSE OR DEATH OR DISABILITY. If the Company and
the Operating Partnership breach this Agreement by terminating
Employee's employment other than pursuant to Section V-B, then (a)
the Company shall immediately pay to Employee a lump sum equal to
three times Employee's base salary for one year at the rate in effect
immediately prior to Employee's termination of employment, less
standard withholdings and other authorized deductions, (b) the
Company shall timely pay to Employee the Accrued Obligations, (c) the
restrictions on the shares granted pursuant to the Restricted Stock
Award shall immediately lapse (subject to limitations on acceleration
of exercisability and vesting under the Plan and the Restricted Stock
Award Agreement), and (d) the Stock Option Award shall become
immediately exercisable in full (subject to limitations on
acceleration of exercisability and vesting under the Plan and the
Stock Option Agreement). None of the payments provided in this
Section V-C-3 shall be reduced by any amounts earned or received by
Employee from a third party at any time.
4. EXCLUSIVE REMEDY. Employee agrees that the payments
contemplated by this Agreement shall constitute the exclusive and
sole remedy for any termination of his employment and Employee
covenants not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.
VI. CHANGE IN CONTROL.
A. Notwithstanding anything to the contrary in this Agreement, if a
Change in Control (as defined below) of Macerich occurs during the term of
this Agreement, and if within two years after the Change in Control the
Company and the Operating Partnership terminate Employee's employment for a
reason other than Cause, or if employee terminates his employment for Good
Reason (as defined below), the provisions of Section V.C.3 and V.C.4 shall
apply.
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B. Notwithstanding anything in this Agreement to the contrary, any
"parachute payments" to be made to or for Employee's benefit, whether
pursuant to this Agreement or otherwise, shall be modified to the extent
necessary so that the requirements of one of the two subparagraphs below are
satisfied:
1. The aggregate "present value" of all "parachute payments"
payable to Employee or for Employee's benefit, whether pursuant to
this Agreement or otherwise, shall be less than three (3) times
Employee's "base amount"; or
2. Each "parachute payment" payable to Employee or for
Employee's benefit, whether pursuant to this Agreement or otherwise,
shall be in an amount which does not exceed the "reasonable
compensation" allocable to such "parachute payment."
C. For purposes of this Section VI:
1. A "Change in Control" of Macerich means any of the following:
(1) Approval by the shareholders of Macerich of the dissolution
or liquidation of the Macerich;
(2) Approval by the shareholders of Macerich of an agreement to
merge or consolidate, or otherwise reorganize, with or into one or
more entities that are not subsidiaries or other affiliates, as a
result of which less than 50% of the outstanding voting securities of
the surviving or resulting entity immediately after the
reorganization are, or will be, owned, directly or indirectly, by
shareholders or other affiliates of Macerich immediately before such
reorganization (assuming for purposes of such determination that
there is no change in the record ownership of Macerich's securities
from the record date for such approval until such reorganization but
including in such determination any securities of the other parties
to such reorganization held by affiliates of Macerich);
(3) Approval by the shareholders of Macerich of the sale of
substantially all of Macerich's business and/or assets to a person or
entity which is not a Macerich Entity or an affiliate of a Macerich
Entity; or
(4) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
other than a person described in and satisfying the conditions of
Rule 13d-1(b)(1)
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thereunder) becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
Macerich representing more than 20% of the combined voting power of
Macerich's then outstanding securities entitled to then vote
generally in the election of directors of the Macerich, other than a
person who is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of more than 10% of the outstanding shares of
Common Stock at the time of adoption of this Agreement, or an
affiliate, successor, heir, descendant or related party of or to any
such person.
2. "Good Reason" shall mean (a) an adverse and significant
change in Employee's position, duties, responsibilities, or status
with the Company and the Operating Partnership, (b) a change in
Employee's office location to a point more than 50 miles from
Employee's office immediately prior to a Change in Control, (c) the
taking of any action by the Company and the Operating Partnership to
eliminate benefit plans without providing substitutes therefore, to
reduce benefits thereunder or to substantially diminish the aggregate
value of incentive awards or other fringe benefits, (d) any reduction
in Employee's base salary, or (e) any breach of this Agreement by the
Company or the Operating Partnership.
3. The term "base amount" shall have the meaning ascribed to it
under Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code");
4. 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 but with regard to Section
280G(b)(4)(A);
5. "Present value" shall be determined in accordance with
Section 280G(d)(4) of the Code;
6. 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
of Macerich); and
7. 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. If Employee would be entitled to benefits, payments or coverage
hereunder and under any other plan, program or agreement which would
constitute
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"parachute payments," then notwithstanding any other provision hereof or of
any other existing agreement to the contrary, Employee may by written notice
to the Company and the Operating Partnership designate the order in which
such "parachute payments" shall be reduced or modified so that the Company
and the Operating Partnership or either of them is not denied federal income
tax deductions for any "parachute payments" because of Section 280G of the
Code.
E. All determinations required by this Section VI, including without
limitation the determination of whether any benefit or payment would
constitute a parachute payment, the calculation of the value of any parachute
and whether any benefit or payment constitutes reasonable compensation, shall
be made by an independent accounting firm (other than Macerich's outside
auditing firm) having nationally recognized expertise in such matters
selected by the Compensation Committee of the Board of Directors of Macerich.
Any such determination by such accounting firm shall be binding on the
Company, the Operating Partnership and Employee.
F. Payment of amounts pursuant to this Agreement shall not, unless
directed by Employee, be delayed pending determination of the status of a
payment as a "parachute payment" by the Internal Revenue Service, court or
similar body of competent jurisdiction.
VII. ARBITRATION.
Any controversy or claim arising out of or relating to this
Agreement, its enforcement or interpretation, or because of an alleged
breach, default, or misrepresentation in connection with any of its
provisions, shall be submitted to arbitration, to be held in Los Angeles
County, California in accordance with the Voluntary Labor Arbitration Rules
of the American Arbitration Association. Judgment upon the award rendered by
the arbitration may be entered in any court in the State of California, or in
any other court of competent jurisdiction. In the event either party
institutes arbitration under this Agreement arising prior to a Change in
Control of Macerich, the party prevailing in any such litigation shall be
entitled, in addition to all other relief, to reasonable attorneys' fees
relating to such arbitration, and the nonprevailing party shall be
responsible for all costs of the arbitration, including but not limited to,
the arbitration fees, court reporter fees, etc. In the case of any
arbitration or subsequent judicial proceedings arising after a Change in
Control of Macerich, Employee shall be awarded his costs, including
attorneys' fees.
VIII. INTENTIONALLY OMITTED.
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IX. ANTISOLICITATION.
Employee promises and agrees that during the term of this Agreement
he will not influence or attempt to influence customers of any Macerich
Entity, either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in
competition with the business of any Macerich Entity.
X. JOINING FORMER COMPANY EMPLOYEES.
Employee promises and agrees that for one year following his
termination of employment other than pursuant to Section V-C above or
Disability above or expiration of this Agreement, he will not enter business
or work with any person who was employed with any Macerich Entity, and who
earned annually $25,000 or more as a Macerich Entity employee during the last
six months of his or her own employment, in any business, partnership, firm,
corporation or other entity then in competition with the business of a
Macerich Entity.
XI. SOLICITING EMPLOYEES.
Employee promises and agrees that he will not, for a period of one
year following termination of his employment or the expiration of this
Agreement, directly or indirectly solicit any Macerich Entity employees who
earned annually $25,000 or more as a Macerich Entity employee during the last
six months of his or her own employment to work for any business, individual,
partnership, firm, corporation, or other entity then in competition with the
business of any Macerich Entity.
XII. CONFIDENTIAL INFORMATION.
A. Employee shall hold in a fiduciary capacity for the benefit of
the Macerich Entities all secret or confidential information, knowledge or
data relating to any Macerich Entity, and their respective businesses, which
shall have been obtained by Employee during his employment by the Company and
the Operating Partnership and which shall not be or become public knowledge
(other than by acts by Employee or his representatives in violation of this
Agreement). After termination of Employee's employment with the Company and
the Operating Partnership, he shall not, without the prior written consent of
the Company and the Operating Partnership, or as may otherwise be required by
law or legal process, communicate or divulge any such information, knowledge
or data to anyone other than the Company and the Operating Partnership and
those designated by either of them.
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B. Employee agrees that all lists, materials, books, files, reports,
correspondence, records, and other documents ("Company material") used,
prepared, or made available to Employee, shall be and shall remain the
property of the applicable Macerich Entity. Upon the termination of
employment or the expiration of this Agreement, all Company material shall be
returned immediately to the applicable Macerich Entity, and Employee shall
not make or retain any copies thereof.
XIII. SUCCESSORS.
A. This Agreement is personal to Employee and shall not, without the
prior written consent of the Company and the Operating Partnership, be
assignable by Employee.
B. This Agreement shall inure to the benefit of and be binding upon
the Company and the Operating Partnership and their respective successors and
assigns and any such successor or assignee shall be deemed substituted for
the applicable company under the terms of this Agreement for all purposes. As
used herein, "successor" and "assignee" shall include any person, firm,
corporation or other business entity which at any time, whether by purchase,
merger or otherwise, directly or indirectly acquires the equity of the
Company and/or the Operating Partnership, or to which the Company and/or the
Operating Partnership assigns its interest in this Agreement by operation of
law or otherwise.
XIV. WAIVER.
No waiver of any breach of any term or provision of this Agreement
shall be construed to be, nor shall be, a waiver of any other breach of this
Agreement. No waiver shall be binding unless in writing and signed by the
party waiving the breach.
XV. MODIFICATION.
This Agreement may not be amended or modified other than by a written
agreement executed by the Employee, the Company and the Operating Partnership.
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XVI. SAVINGS CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of
the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to
be severable.
XVII. COMPLETE AGREEMENT.
This instrument constitutes and contains the entire agreement and
understanding concerning Employee's employment and the other subject matters
addressed herein between the parties, and supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters hereof. This is an integrated document.
XVIII. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed
by, by the laws of the State of California without regard to principles of
conflict of laws.
XIX. CONSTRUCTION.
The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
XX. COMMUNICATIONS.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
in person, by telecopy, telex or equivalent form of written telecommunication
or if sent by registered or certified mail, return receipt requested, postage
prepaid, as follows:
To Company The Macerich Company
and Operating 000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx: Xxxxx Xxxxxx, XX 00000
To Employee: Xxxxx Xxxxxxx
0000 Xxxxxxxxxxxx Xx.
Xx. Xxxxx, XX 00000
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Any party may change the address at which notice shall be given by written
notice given in the above manner. All notices required or permitted
hereunder shall be deemed duly given and received on the date of delivery, if
delivered in person or by telex, telecopy or other written telecommunication
on a regular business day and within normal business hours or on the fifth
day next succeeding the date of mailing, if sent by certified or registered
mail.
XXI. EXECUTION.
This Agreement is being executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Photographic copies of such signed counterparts
may be used in lieu of the originals for any purpose.
XXII. LEGAL COUNSEL.
The Employee, the Operating Partnership and the Company recognize
that this is a legally binding contract and acknowledge and agree that they
have had the opportunity to consult with legal counsel of their choice.
XXIII. SURVIVAL.
The provisions of this Agreement shall survive the term of this
Agreement to the extent necessary to accommodate full performance of all such
terms.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
THE COMPANY: MACERICH MANAGEMENT COMPANY
a California corporation
By:
-------------------------------------
Xxxxxx X. Xxxxxxx
President
OPERATING PARTNERSHIP: THE MACERICH PARTNERSHIP, L.P.
a Delaware partnership
By: The Macerich Company
a Maryland corporation
its general partner
By:
--------------------------------
Xxxxxx X. Xxxxxxx
President
EMPLOYEE:
-----------------------------------------
Xxxxx Xxxxxxx
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