EXHIBIT 10.26
DATED DECEMBER 30, 1999
SIMON PROPERTY GROUP, INC.
-AND-
HANS. X. XXXXXXX
FIRST AMENDMENT TO EMPLOYMENT
AGREEMENT DATED SEPTEMBER 23, 1998
Xxxxx, Day Xxxxxx & Xxxxx
Bucklersbury House
0 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
11
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (this "First
Amendment") is entered into this 30th day of December, 1999, by and between
SIMON PROPERTY GROUP, INC., a Delaware corporation (the "Company") and
successor to the business of CORPORATE PROPERTY INVESTORS, INC., a Delaware
corporation ("CPII") and successor by merger to CORPORATE PROPERTY INVESTORS,
a Massachusetts business trust, and XXXX X. XXXXXXX (the "Executive").
RECITALS
The Executive is currently employed as Vice Chairman and a member of
the Board of Directors of the Company and the Executive Committee of such
Board pursuant to an employment agreement ("Employment Agreement") dated
September 23, 1998 between the Executive and CPII. The Employment Agreement
was entered into as a consequence of the merger of CPII and Xxxxx XxXxxxxxx
Group, Inc., a Maryland corporation ("Simon"), pursuant to the terms of an
Agreement and Plan of Merger dated as of February 18, 1998 among CPII, Simon
and Corporate Realty Consultants, Inc., a Delaware corporation (the
"Merger"), for the purpose of retaining the Executive as an officer of the
Company following the Merger.
The Company and the Executive wish to amend the terms of the
Employment Agreement to reflect certain agreements between the Executive and
the Company as a consequence of the Executive undertaking certain part-time
duties for Simon Global Limited ("Simon Global"), a company incorporated
under the laws of England and Wales and an affiliate of the Company.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties hereto agree to amend the Employment Agreement as
follows:
1. DEFINITIONS. Capitalised terms under herein and not
otherwise defined shall have the meanings given to them in the Employment
Agreement.
2. POSITION AND DUTIES. During the continuance of the Employment
Agreement the Executive shall not carry out any of his duties for the Company
within the United Kingdom nor shall the Executive have the authority of the
Company to, and the Executive shall not, enter into any legally binding
obligation on behalf of the Company or any of its subsidiaries or affiliate
within the United Kingdom except in the proper performance of his duties to
Simon Global.
3. COMPENSATION AND OTHER BENEFITS.
3.1. BASE COMPENSATION. For purposes of the Employment
Agreement, upon commencement of the Employee's employment with Simon Global,
the Employee's Base Salary for purposes of the Employment Agreement shall be
$362,800 per annum, provided that upon the termination of the Employee's
employment with Simon Global, the Base Salary for purposes of the Employment
Agreement shall be $762,000 per annum, such Base Salary to be subject to
increase from time to time by the Board. The Board shall review the
Executive's annual Base Salary no less frequently than annually to determine
whether any such increase should be made. The Base Salary shall be payable in
accordance with the payroll policies of the Company as from time to time in
effect, less such amounts as shall be required to be deducted or withheld
therefrom by applicable law and regulations.
12
3.2. GENERAL BUSINESS EXPENSES. During the period that the
Executive is employed by Simon Global, the Company shall no longer be
required to provide the Executive with a car and driver as contemplated by
Section 2.5 of the Employment Agreement or to receive executive secretarial
and other administrative assistance as contemplated by Section 2.8 of the
Employment Agreement, provided that upon termination of the Executive's
employment with Simon Global, the amendments to Section 2.5 and Section 2.8
of the Employment Agreement as described in this Section 3.2 shall
immediately cease to have any force and effect and the Company's obligations
to the Executive shall be as set forth in such provisions of the Employment
Agreement without reference to this First Amendment.
3.3. FRINGE BENEFITS. The Executive and the Company
acknowledge that the Company does not have an aircraft for purposes of
Section 2.8 of the Employment Agreement. Therefore all references to the
Executive's entitlement to use of an aircraft in such Section 2.8 shall be
deleted. Should the Company at some subsequent date acquire an aircraft for
use by its executive officers generally, then the Executive shall be afforded
an opportunity to use such aircraft (subject to availability) for the purpose
of carrying out his duties hereunder. During the Term, the Executive shall be
entitled to five (5) weeks of vacation per calendar year which shall be taken
by the Executive concurrently with, but not in addition to, the vacation days
to which the Executive is entitled under his employment arrangement with
Simon Global.
4. COVENANTS. NON-COMPETITION. Section 3.1 of the Employment
Agreement is hereby deleted, and the following clause is hereby inserted in
its place:
4.1. COVENANTS AGAINST COMPETITION. The Executive
acknowledges that (i) the Company and its subsidiaries and affiliates are
engaged in the business of shopping center and other retail project
acquisition, ownership, financing, leasing, operation and development in the
United States, Europe, the Far East and Latin America (the "Business"); (ii)
the Company's Business is conducted by the Company and its subsidiaries and
affiliates in various markets throughout the United States, Europe, the Far
East and Latin America; (iii) his employment with the Company will have given
him access to confidential information concerning the Company and its
subsidiaries and affiliates and the Business; and (iv) the agreements and
covenants contained in this Agreement are essential to protect the business
and goodwill of the Company and its subsidiaries and affiliates. Accordingly,
the Executive covenants and agrees as follows:
(a) NON-COMPETE. Without the prior written
consent of the Board, the Executive shall not directly (except in the
Executive's capacity as an officer of the Company or any of its subsidiaries
or affiliates), during the Restricted Period (as defined below) within any
metropolitan area in which the Company, its parent, subsidiaries or
affiliates is engaged directly or indirectly in the Business: (i) engage or
participate in the Business; (ii) enter the employ of, or render any services
(whether or not for a fee or other compensation) to, any person engaged in
the Business; or (iii) acquire an equity interest in any such person in any
capacity; provided, that the foregoing restrictions shall not apply at any
time if the Executive's employment is terminated during the Term by the
Executive for Good Reason (as defined below) or by the Company without Cause
(as defined below); provided, further, that during the Restricted Period the
Executive may own, directly or indirectly, solely as a passive investment,
securities of any company traded on any national or international securities
exchange, including the National Association of Securities Dealers Automated
Quotation System. As used herein, the "Restricted Period" shall mean the
period commencing on the date of termination of this Agreement and ending on
the first anniversary of such termination date.
13
(b) CONFIDENTIAL INFORMATION; PERSONAL
RELATIONSHIPS. The Executive acknowledges that the Company has a legitimate
and continuing proprietary interest in the protection of its confidential
information and has invested substantial sums and will continue to invest
substantial sums to develop, maintain and protect confidential information.
The Executive agrees that, during and after the Restricted Period, without
the prior written consent of the Board of Directors of the Company the
Executive shall keep secret and retain in strictest confidence, and shall not
knowingly use for the benefit of himself or others all confidential matters
relating to the Company's Business or the Company, its subsidiaries or
affiliates including, without limitation, operational methods, marketing or
development plans or strategies, business acquisition plans, joint venture
proposals or plans, and new personnel acquisition plans, learned by the
Executive heretofore or hereafter (such information shall be referred to
herein collectively as "Confidential Information"); provided, however, that
nothing in this Agreement shall prohibit the Executive from disclosing or
using any Confidential Information (A) in the performance of his duties
hereunder, (B) as required by applicable law, regulatory authority,
recognized subpoena power or any court of competent jurisdiction, (C) in
connection with the enforcement of his rights under this Agreement or any
other agreement with the Company, or (D) in connection with the defense or
settlement of any claim, suit or action brought or threatened against the
Executive by or in the right of the Company. Notwithstanding any provision
contained herein to the contrary, the term "Confidential Information" shall
not be deemed to include any general knowledge, skills or experience acquired
by the Executive or any knowledge or information known or available to the
public in general (other than as a result of a breach of this provision by
the Executive). Moreover, the Executive shall be permitted to retain copies
of, or have access to, all such Confidential Information relating to any
disagreement, dispute or litigation (pending or threatened) involving the
Executive.
(c) EMPLOYEE OF THE COMPANY AND ITS
AFFILIATES. During the Restricted Period, without the prior written consent
of the Board of Directors of the Company, the Executive shall not, directly
or indirectly, hire or solicit, or cause others to hire or solicit, for
employment by any person other than the Company or any subsidiary or
affiliate or successor thereof, any employee of, or person employed within
the two years preceding the Executive's hiring or solicitation of such person
by, the Company and its subsidiaries or affiliates or successors or encourage
any such employee to leave his employment. For this purpose, any person whose
employment has been terminated involuntarily by the Company or any subsidiary
or affiliate or successor thereof (or any predecessor of the Company) shall
be excluded from those persons protected by this Section 3.1(c) for the
benefit of the Company.
(d) BUSINESS RELATIONSHIP. During the
Restricted Period, the Executive shall not, directly or indirectly, request
or advise a person that has a business relationship with the Company or any
subsidiary or affiliate or successor thereof to curtail or cancel such
person's business relationship with such Company.
5. NOTICES. The contact details for purposes of Section 6.1 of
the Employment Agreement shall be as follows:
If to the Company, to:
Simon Property Group, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
14
If to the Executive, to:
Xxxx X. Xxxxxxx
0 Xxxxxxx Xxxxxx
Xxxxxx XX0 Xxxxxxx
6. The following directorship is hereby added to Schedule I of
the Employment Agreement:
Destination Europe, Limited
7. The following directorship is hereby deleted from Schedule I
of the Employment Agreement:
Bank Xxxxxx Xxxx & Co. Ltd. U.S. Advisory Board
8. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York.
9. EFFECT. Other than as explicitly set forth herein, all
provisions of the Employment Agreement shall remain in full force and effect
in accordance with their terms.
10. TERMINATION. Upon the termination of the Executive's employment
with Simon Global, all terms and conditions of the Employment Agreement, save
and except those modifications to Section 2.8 and 3.1 described in this First
Amendment, shall be deemed reinstated and binding upon the Company and the
Executive.
IN WITNESS WHEREOF, the parties have executed this First
Amendment effective for all purposes as of the date first above written.
SIMON PROPERTY GROUP, INC.
By: /s/ Xxxxx Xxxxx
-----------------------
Xxxxx Xxxxx, Chief Executive Officer
/s/ Xxxx X. Xxxxxxx
-------------------
XXXX X. XXXXXXX
15
