EXHIBIT 10.4
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EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") is made and entered into as of
November 1, 2000 by and between Xxxx X. Xxxxxx ("Xxxxxx") and Banyan
Strategic Realty Trust, a Massachusetts business trust (the "Trust").
WHEREAS, Xxxxxx is the Trust's Vice President and Chief Financial
Officer and is employed by the Trust pursuant to an employment agreement
entered into as of December 31, 1998 (the "Existing Agreement");
WHEREAS, the Trust is reviewing its strategic options and may, among
other things, engage in transactions as a precedent to liquidating and
dissolving the Trust;
WHEREAS, the Existing Agreement expires on December 31, 2000 but is
automatically renewed for an additional one year period unless notice of
non-renewal is given by the Trust to Xxxxxx no later than September 30,
2000;
WHEREAS, the Trust notified Xxxxxx, on or before September 30, 2000,
that the Existing Agreement would not be renewed but that the Trust was
desirous of entering into a new employment agreement with Xxxxxx on the
terms and conditions contained herein;
WHEREAS, Xxxxxx is desirous of entering into a new employment
agreement with the Trust on the terms and conditions contained herein.
NOW THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Trust and
Xxxxxx do hereby agree as follows:
1. RECITALS. The recitals to this Agreement are incorporated by
reference into this Agreement and made a part hereof as though stated
herein.
2. EMPLOYMENT DUTIES. The Trust agrees to employ Xxxxxx initially
as Vice President- Chief Financial Officer and following the first annual
meeting of shareholders to be held after execution and delivery of this
Agreement as the Executive Vice President and Chief Financial Officer of
the Trust to perform such duties as may reasonably be assigned from time to
time consistent with this position by the Trust's board of trustees.
3. PERFORMANCE. Xxxxxx accepts the appointment described in
SECTION 2 of this Agreement and agrees to faithfully and diligently perform
the services described therein or assigned by the board of trustees.
4. EFFECTIVENESS; TERM. The term of this Agreement shall commence
as of November 1, 2000 and shall continue until October 31, 2002, unless
sooner terminated pursuant to SECTION 11 hereunder (the "Term").
5. BASE COMPENSATION. For the services rendered by Xxxxxx
hereunder, the Trust shall pay Xxxxxx a base salary at a rate equal to
$180,120 per annum (the "Base Salary") payable at the same time and in the
same manner in which the payroll of the Trust is paid, subject to the
following increases:
(a) commencing on January 1, 2001, the Base Salary shall be
increased to $200,000 per annum; and
(b) commencing on January 1, 2002, the Base Salary shall be
increased to $210,000.
6. OTHER COMPENSATION. On execution and delivery of this
Agreement, the Trust shall pay Xxxxxx $204,765 in full settlement of any
obligations under the Existing Agreement (the "Retention Payment"). In
addition, provided that this Agreement is not terminated under
SECTION 11(A) or (D), the Trust shall pay Xxxxxx, in a lump sum, an amount
equal to fifty percent (50%) of the aggregate amount of Base Salary paid to
Xxxxxx during the period commencing on November 1, 2000 and ending on the
date this Agreement expires or is terminated ("Bonus Compensation"). The
Bonus Compensation due under this SECTION 6 shall be paid within five (5)
business days of expiration or termination of this Agreement.
7. ADDITIONAL BENEFITS. During the term of this Agreement, Xxxxxx
shall also participate in any benefit or deferred compensation plan
sponsored by the Trust, including, but not limited to, profit sharing
plans, dental and medical plans and disability insurance, if any. Xxxxxx
shall also be entitled to four (4) weeks paid vacation each year and shall
be reimbursed by the Trust for all reasonable out-of-pocket business
expenses incurred by Xxxxxx in connection with performing his duties under
this Agreement; provided, however, that Xxxxxx shall provide the Trust with
an accounting conforming to Internal Revenue Service or other requirements
substantiating the nature of all reimbursable expenses. All reimbursements
shall be paid to Xxxxxx within a reasonable time after receipt by the Trust
of the appropriate documentation.
8. WITHHOLDING. All compensation and benefits paid to Xxxxxx
hereunder shall be reduced by all federal, state, local and other
withholding and similar taxes and payments required by applicable law.
9. CONFIDENTIALITY. Xxxxxx agrees that as a result of his
employment with the Trust, he has acquired, or will acquire, information of
a special and unique nature and value that is not generally known to the
public or to the Trust's industry regarding the Trust, including but not
limited to, business, financial and other records of the Trust and its
affiliates, including its and their joint venture partners, software
programs, employee records, mailing lists, tenant lists and profiles,
prospective tenant lists, accounts receivable and payable ledgers, plans
and projections, budgets, marketing data and other similar matters (all
such information being hereinafter referred to as "Confidential
Information"). Accordingly, Xxxxxx:
(A) will not, except as otherwise authorized by the Trust,
divulge to any person, firm, corporation, limited liability company, or
organization (hereinafter referred to as "Third Parties"), or use or cause
or authorize any Third Parties to use, the Confidential Information, except
as required by law or court order; and
(B) upon termination of this Agreement, will deliver, destroy
or delete or cause to be delivered, destroyed or deleted, as the Trust may
request, any and all Confidential Information, including drawings,
notebooks, keys, data and other documents and materials belonging to the
Trust or its affiliates which is in his possession or under his control
relating to the Trust or its affiliates, or the business of the Trust,
regardless of the medium upon which it is stored, and will deliver to the
Trust any other property of the Trust or its affiliates which is in his
possession or under his control within five (5) business days of the
termination of this Agreement.
For purposes of this SECTION 9, the term "Confidential Information"
shall not include information which: (i) was in the public domain at the
time of execution of this Agreement; (ii) hereafter becomes part of the
public domain by publication or otherwise through no unauthorized action of
Xxxxxx; or (iii) was received by Xxxxxx through a source other than the
Trust which is not under an obligation of confidentiality to the Trust.
Xxxxxx further acknowledges and agrees that the Confidential Information is
of great value to the Trust and its affiliates and that the restrictions
and agreements contained in this Agreement are reasonably necessary to
protect the Confidential Information and the goodwill of the Trust's
business.
Xxxxxx acknowledges that a violation of the provisions of this
SECTION 9 will cause irreparable damage to the Trust, the amount of which
may be impossible to quantify, and Xxxxxx therefore agrees and understands
that if this SECTION 9 is violated, the Trust shall be entitled to
injunctive relief in addition to any other remedies available to the Trust
at law or in equity.
10. EMPLOYMENT AGREEMENT; RELEASE OF CLAIMS. This Agreement shall
supersede the Existing Agreement which shall be void and of no further
effect upon the execution and delivery of this Agreement by each party.
(A) In consideration of the promises contained herein, and as
a natural inducement to the Trust to enter into this Agreement, Xxxxxx
hereby releases and forever discharges the Trust and its officers,
trustees, employees, investors, shareholders, affiliates and agents from,
and agrees not to xxx any of these parties concerning any and all actions,
liabilities, and other claims for relief and remuneration whatsoever,
arising out of, or in any way connected with Xxxxxx'x employment by the
Trust prior to the date of this Agreement, including all matters in equity,
contract, tort or pursuant to statute, whether presently known or unknown,
suspected or unsuspected that Xxxxxx may possess arising from any
omissions, acts or facts existing as of, or prior to, the date of this
Agreement; provided nothing herein shall be deemed to waive or release any
claim: (a) for indemnification that Xxxxxx may have under the Trust's Third
Amended and Restated Declaration of Trust; or (b) to enforce this
Agreement.
(B) In consideration of the promises contained herein, and as
a natural inducement to Xxxxxx to enter into this Agreement, the Trust
hereby releases and forever discharges Xxxxxx and his heirs, executors and
administrators from any and all actions, liabilities and other claims for
relief or remuneration whatsoever, arising out of, or in any way connected
with, Xxxxxx'x employment by the Trust prior to the date of this Agreement,
including all matters in equity, contract, tort or pursuant to statute
except for actions or claims alleging fraud or wilful misconduct by Xxxxxx.
11. TERMINATION. This Agreement and Xxxxxx'x employment may be
terminated as follows:
(A) TERMINATION FOR CAUSE. The Trust may terminate this
Agreement for "Cause." For purposes of this Agreement, "Cause" shall mean:
i. conduct of Xxxxxx which constitutes fraud,
misappropriation, embezzlement, gross negligence, or wilful or illegal
misconduct in connection with performing Xxxxxx'x duties under this
Agreement;
ii. any material act of dishonesty by Xxxxxx in
connection with performing Xxxxxx'x duties under this Agreement that is not
covered in (i) above;
iii. the indictment or conviction of Xxxxxx by a court
of proper jurisdiction of (or his written, voluntary and freely given
confession to) a crime which constitutes a felony or which results in
material injury to the Trust's property, assets or reputation; or
iv. any material breach by Xxxxxx of this Agreement,
which continues for a period of five (5) business days after written notice
detailing the breach from the Trust to Xxxxxx; provided that no cure period
shall be required after the first breach.
If the Trust terminates this Agreement for Cause, the Trust
shall have no further obligation to pay Xxxxxx any of the compensation or
benefits described in this Agreement, except for any Base Salary and
amounts or benefits due Xxxxxx under SECTION 7 earned but unpaid through
the date of termination.
(B) TERMINATION BY REASON OF DISABILITY. The Trust may
terminate this Agreement if Xxxxxx, in the reasonable judgment of the
Trust's board of trustees, is unable to perform his duties, with or without
reasonable accommodation, on account of illness or physical or mental
incapacity for a period of more than two (2) months in any twelve (12)
consecutive month period. To terminate, the Trust must notify Xxxxxx in
writing and pay Xxxxxx all Base Salary and Bonus Compensation to the extent
earned and unpaid and any amounts or benefits due Xxxxxx under SECTION 7,
all to the date of termination, with the exception of medical benefits
which shall continue through the end of the Term. Amounts due under this
paragraph shall be paid within five (5) business days of termination.
Following termination under this paragraph, Xxxxxx shall not have the right
to, and the Trust shall have no further obligation to pay, other
compensation or reimbursement of any other kind.
(C) TERMINATION BY REASON OF DEATH. The Trust may terminate
this Agreement if Xxxxxx dies in which case Xxxxxx'x employment shall be
deemed to have terminated as of the last day of the month during which his
death occurs. Upon termination, the Trust shall pay Xxxxxx'x estate or
beneficiaries as he may from time to time designate, all Base Salary and
Bonus Compensation to the extent earned and unpaid, and any benefits or
amounts due Xxxxxx under SECTION 7 above, all to the date of termination.
Amounts due under this paragraph shall be paid within five (5) business
days of termination. Following termination under this paragraph, the Trust
shall not have any other liability or obligation to Xxxxxx'x estate or
beneficiaries for other compensation or reimbursement of any other kind
including, without limitation, incentive compensation.
(D) VOLUNTARY TERMINATION BY XXXXXX. Xxxxxx may terminate
this Agreement at any time by notifying the Trust in writing at least
thirty (30) business days prior to the date of termination. Within five
(5) business days of the date of termination, the Trust shall pay Xxxxxx
all benefits and other amounts due under SECTION 7 hereof plus all Base
Salary earned but unpaid through the date of termination; provided that
following termination under this paragraph, the Trust shall have no further
obligation to pay Xxxxxx any Bonus Compensation. If Xxxxxx fails to notify
the Trust in the manner and time provided herein, the Trust will have no
obligation to Xxxxxx for compensation or reimbursement of any other kind.
(E) TERMINATION OF THE TRUST. The Trust may terminate this
Agreement for any reason: (i) by notifying Xxxxxx in writing at least sixty
(60) days prior to the date of termination; or (ii) upon the final
liquidation and dissolution of the Trust; provided that in either event the
Trust shall pay Xxxxxx all Base Salary and Bonus Compensation to the extent
earned and unpaid and any amounts due Xxxxxx under SECTION 7, all to the
date of termination. Amounts due under this paragraph shall be paid within
five (5) business days of termination. Following termination under this
paragraph, Xxxxxx shall not have the right to, and the Trust shall have no
further obligation to pay, other compensation or reimbursement of any kind,
including, without limitation, incentive or other severance compensation.
(F) CHANGE OF CONTROL. Xxxxxx may terminate this Agreement
by written notice given to the Trust upon a "Change of Control." For
purposes of this SECTION 11(F), "Change of Control" shall mean: (i) that
the members of the Trust's board of directors as of the date of this
Agreement fail to constitute a majority of the members of the board
provided that any individual becoming a member of the board who is
nominated by the board shall be treated as if he or she were a member of
the board as of the date of this Agreement; (ii) the shareholders of the
Trust adopt a plan of liquidation or take other action having the effect of
a plan of liquidation without the recommendation or approval of the board;
(iii) all of the real estate properties or business of the Trust are
disposed of pursuant to a merger, consolidation or other transaction
whereby the shareholders of the Trust immediately prior to such merger,
consolidation or other transaction retain 50% or less of the voting shares
or other ownership/beneficial interests of the entity or entities, if any,
that succeed to or obtain the business or properties of the Trust; (iv) the
Trust combines with another company and immediately after the combination,
the shareholders of the Trust immediately prior to the combination hold 50%
or less of the voting shares of the surviving entity; (v) any "person," as
such term is used in Sections 3(a)(9) and 13(d) of the Securities Exchange
Act of 1934, becomes a "beneficial owner," as such term is used in Rule
13d-3 promulgated under that Act, of 50% or more of the voting shares of
the Trust; (vi) the relocation of the Trust's executive offices to a
location in excess of 100 miles outside of the Chicago Loop area; (vii) a
material breach of this Agreement by the Trust which continues for a period
of five (5) business days after written notice detailing the breach from
Xxxxxx to the Trust; and (viii) a material diminution of Xxxxxx'x duties,
responsibilities or authority, or the assignment to him of duties that are
inconsistent in any substantial respect with the position, authority or
responsibilities associated with the positions set forth in SECTION 2
herein. Upon termination, the Trust shall pay Xxxxxx: (i) all Base Salary
and Bonus Compensation to the extent earned and unpaid through the date of
termination, and (ii) any amounts due Executive under SECTION 7 to the date
of termination. Amounts due under this paragraph shall be paid within
thirty (30) business days of termination.
12. OTHER ACTIVITIES OF XXXXXX. Xxxxxx shall devote such working
time and attention as is reasonably necessary to fulfill his
responsibilities hereunder. Xxxxxx shall not engage in any activity which
may be adverse to the Trust's business, appropriate or usurp business
opportunities or engage or invest in businesses or assets which compete
directly or indirectly with the Trust. Nothing contained herein shall
prohibit Xxxxxx from investing in publicly-traded entities which are
engaged in lines of businesses similar to the Trust or from continuing to
serve as a director on the boards on which Xxxxxx serves as of the date of
this Agreement.
13. [RESERVED]
14. NOTICE. Any notice required or permitted hereunder shall be
made in writing: (i) either by actual delivery of the notice into the hands
of the party entitled; or (ii) by depositing the notice in the United
States mail certified or registered, return receipt requested, all postage
prepaid and addressed to the party to whom notice is to be given at the
party's respective address set forth below, or such other address as the
party may from time to time designate by written notice to the other party.
If to the Trust:
Banyan Strategic Realty Trust
Suite 2900
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
with copies to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to Xxxxxx:
Xx. Xxxx X. Xxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxxxxx and Schanfield, P.C.
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
The notice shall be deemed to be received on the earlier of (i) the date of
its actual receipt by the party entitled thereto and (ii) the third
business day following the date of mailing.
15. AMENDMENT AND WAIVER. No amendment or modification to this
Agreement shall be valid or binding on the Trust unless made in writing and
signed by an officer of the Trust duly authorized by the board or upon
Xxxxxx unless made in writing and signed by Xxxxxx. The waiver by the Trust
or Xxxxxx of the breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to Xxxxxx'x duties, compensation
and severance as an employee of the Trust. There are no representations,
warranties, agreements or commitments between the parties hereto with
respect to Xxxxxx'x employment except as set forth herein.
17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the State of Illinois. The parties agree that any suit,
action or proceeding with respect to this Agreement shall be brought in the
courts of Xxxx County in the State of Illinois or in the U.S. District
Court for the Northern District of Illinois. The parties hereto accept the
exclusive jurisdiction of those courts for the purpose of any such suit,
action or proceeding. Venue for any such action, in addition to any other
venue permitted by statute, will be Xxxx County, Illinois.
18. SEVERABILITY. If any provision of this Agreement shall, for
any reason, be held unenforceable, the provision shall be severed from this
Agreement unless, as a result of severance, the Agreement fails to reflect
the basic intent of the parties on the date hereof
19. ASSIGNMENT. Except as provided herein, Xxxxxx may not, under
any circumstances delegate any of his rights and obligations hereunder
without the prior written consent of the Trust. This Agreement and all of
the Trust's rights and obligations hereunder may be assigned or transferred
by it, in whole or in part, to be binding upon and inure to the benefit of
any subsidiary or successor of the Trust.
20. COST OF ENFORCEMENT. In any suit or proceeding seeking to
enforce the terms, covenants or conditions of this Agreement, the
prevailing party shall, in addition to all of the remedies and relief that
may be available under this Agreement or applicable law, recover his or its
reasonable attorneys' fees and costs as shall be determined and awarded by
the court.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
IN WITNESS WHEREOF, this Agreement is entered into on the day and
year first written above.
BANYAN STRATEGIC REALTY TRUST
By:
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Name: X.X. Xxxxxxxx
Title: Interim President and
Chief Executive Officer
XXXX XXXXXX
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Xxxx X. Xxxxxx
