EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of November 4,
1999 by and between The Taubman Company Limited Partnership, a Delaware limited
partnership (the "Company"), and Xxxxxxxx Xxxx ("Lord").
RECITALS
WHEREAS, the Company wishes to employ Lord as Senior Vice President,
and Lord desires to work for the Company in such capacity upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties agree as follows:
1. Employment.
The Company shall employ Lord on a full-time basis as a Senior
Vice President. Effective January 1, 2000, Lord's employment title shall change
to Senior Vice President-Managing Director of Leasing. Lord shall also perform
such other leasing management and/or administrative duties consistent with the
office of Senior Vice President as from time to time may be assigned to him by
the President of the Company. Lord shall devote his full time and attention to,
and exert his best efforts in, the performance of his duties hereunder, so as to
promote the business of the Company.
2. Term of Employment.
Lord's term of employment shall commence as of a date mutually
acceptable to the Company and Lord, which shall not be later than November 5,
1999, and continue through January 1, 2005, unless terminated earlier pursuant
to paragraph 5 below (the "Term of Employment").
3. Compensation.
(a) Base Salary. The Company shall pay or cause to be paid to
Lord during the Term of Employment a base salary of not less than $270,000 per
annum, payable in accordance with the Company's payroll practices. The base
salary shall be reviewed each year and subject to normal increases (2% - 3%)
commencing with the March 2001 salary review.
(b) SSTI Bonus. Lord shall participate in the Company's Senior
Short-Term Incentive Plan ("SSTI") and shall have a guaranteed bonus equal to
$195,000 for the years beginning January 1, 2000 and January 1, 2001. Other than
the bonus amount specified in the preceding statement, the SSTI payment shall be
determined in accordance with the terms and conditions of the SSTI.
(c) Long-Term Incentive Compensation. Effective January 1,
2000, Lord shall receive a Participation Grant equal to 10,000 Notional Shares
under The Taubman
Company Long-Term Performance Compensation Plan (the "LTPC") and a Performance
Grant under the LTPC in an amount, which amount may be zero, determined by the
Company in its discretion. Grants are subject to all of the terms and conditions
(including the vesting schedule) of the LTPC.
(d) Other Benefits. During the Term of Employment, Lord shall
be entitled to participate in any retirement plan or other benefit program of
the Company now existing or established hereafter by the Company, to the extent
that he is eligible under the general provisions thereof. Lord shall also be
entitled to participate in any group insurance, hospitalization, medical, health
and accident, disability, or similar plan or program of the Company now existing
or established hereafter to the extent that he is eligible under the general
provisions thereof.
4. Relocation Expenses.
Lord and the Company agree that Lord shall relocate his
primary family residence to the Detroit metropolitan area no later than
September 1, 2000. The Company shall pay the following expenses in connection
with Lord's relocation:
(a) $50,000 lump sum payment within 30 days of Lord's
employment commencement date.
(b) Monthly rental of $2,550 for Lord's rental apartment
from November 1, 1999 through March 31, 2000.
(c) Roundtrip airfare between Detroit and Aspen for Lord for
three weekends per month from November 1, 1999, until Lord's family relocates to
Detroit, but no later than July 1, 2000.
(d) Roundtrip airfare between Detroit and Aspen for Lord's
family for four separate visits between Lord's employment commencement date and
July 1, 2000.
(e) Cost of moving van to move Lord's household goods from
Aspen to Detroit.
All eligible relocation expenses shall either be paid directly by the
Company, or the Company shall reimburse Lord upon Lord's furnishing the Company
with receipts or such other documentation as the Company requests.
5. Termination of Employment.
(a) Voluntary Termination of Employment by Lord. In the event
Lord terminates his employment with the Company for reasons other than his
death, Disability or a Termination with Good Reason (as such terms are defined
below), such termination shall be deemed a Voluntary Termination. In the event
of a Voluntary Termination by Lord prior to January 1, 2005, the Company shall
have no further obligation to Lord other than the Company's obligation to pay
any amounts that have accrued through the employment termination date. Upon a
Voluntary Termination, the Company shall have the right to
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purchase any Additional Units (as defined below) and an equal number of Series B
Preferred Stock (as defined below) issued to Lord and the capital account
allocated to the Additional Units for a cash lump sum payment of $50,000. The
Taubman Realty Group Limited Partnership ("TRG") acknowledges that the Company
has the right to purchase the Additional Units and the capital account allocated
to the Additional Units. Additional Units means Units of Partnership Interest in
TRG which have no right to receive distributions (except upon liquidation of
TRG) or allocation of partnership income or loss (or items thereto). The number
of Additional Units which the Company has the right to purchase pursuant to
paragraph 5(a), (c), or (e) corresponds to the number of Additional Units on
Lord's employment termination date as listed on the schedule attached hereto as
Exhibit A. Series B Preferred Stock means the Series B Non-Participating
Convertible Preferred Stock of Taubman Centers, Inc.
For purposes of this Agreement, a Termination with Good Reason
shall mean a termination of employment by Lord because of any of the following:
(i) a material reduction in base salary and SSTI bonus
(other than for Cause), or
(ii) a substantial diminution of duties or
responsibilities.
(b) Death or Disability of Lord. In the event Lord's
employment is terminated by reason of his death or disability (as that term is
defined in the LTPC), he shall receive accrued but unpaid base salary through
the employment termination date. Lord shall also receive any benefits otherwise
provided under the Company's plans or programs in accordance with the terms of
such plans or such programs.
(c) Termination by the Company Without Cause on or Prior to
January 31, 2001. If Lord's employment is terminated by the Company without
Cause (as defined below) on or prior to January 31, 2001, Lord shall be entitled
to receive, and the Company shall be obligated to pay 50% of the amounts that
would have been payable to Lord as Base Salary and SSTI Bonus had Lord remained
employed for the duration of the Term of Employment. The Company also shall have
the right to purchase 50% of Lord's Additional Units, an equal number of Series
B Preferred Stock and the capital account allocated to the Additional Units for
a cash lump sum payment of $50,000. TRG acknowledges that the Company has the
right to purchase the Additional Units and the capital account allocated to the
Additional Units. The Base Salary and SSTI Bonus amounts shall be payable as
follows: The Company shall pay Lord 100% of his Base Salary and SSTI Bonus in
accordance with the Company's normal payroll practice during the first twelve
months after Lord's employment termination date. Thereafter, the balance due
(i.e. 50% of Base Salary and SSTI Bonus from employment termination date through
January 1, 2005 minus Base Salary and SSTI already paid pursuant to preceding
sentence) will be payable in a lump sum payment within 30 days after the first
anniversary of Lord's employment termination date.
(d) Termination by the Company Without Cause After January 31,
2001. If Lord's employment is terminated by the Company for any reason other
than cause after January 31, 2001 but prior to January 1, 2005, Lord shall be
entitled to receive and the
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Company shall be obligated to pay the balance of the amounts that would have
been payable to Lord as Base Salary and SSTI Bonus had Lord remained employed
for the duration of the Term of Employment.
(e) Termination by the Company for Cause. The Company may
terminate Lord's employment and this Agreement effective immediately for Cause
(as defined below). If the Company terminates Lord's employment for Cause prior
to January 1, 2005, the Company shall have no further obligation to Lord other
than its obligation to pay any amounts that have accrued through the employment
termination date. In the event Lord's employment is terminated for Cause, the
Company shall have the right to purchase Lord's Additional Units, an equal
number of Series B Preferred Stock and the capital account allocated to the
Additional Units for a cash lump sum payment of $50,000. TRG acknowledges that
the Company has the right to purchase the Additional Units and the capital
account allocated to the Additional Units.
(f) Definitions. For purposes of this Agreement, "Cause" means
the willful and continual failure to perform Lord's duties with the Company and
to perform such duties on a full-time basis or Lord's engagement in conduct
(including but not limited to fraud or theft) which has a material adverse
effect on the business affairs of the Company, monetarily or otherwise;
provided, that cause shall have occurred only if it shall have been preceded by
a notice specifying the facts and circumstances claimed to provide a basis for
Cause and Lord shall have been given 30 days from the date of such notice to
cure. For purposes of this Agreement, no act or failure to act on Lord's part
shall be considered "willful" unless done, or omitted to be done, by Lord not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Company.
6. Covenant Not to Compete.
Lord agrees that during the Employment Term he will apply all
of his skill and experience to the business and affairs of the Company. Lord
further agrees that during the Employment Term and for a period of (a) one (1)
year after his employment termination date if he is terminated by the Company
without Cause on or prior to January 31, 2001; (b) two (2) years after his
employment termination date if he is terminated for any reason after January 31,
2001, but prior to January 1, 2005 (provided, however, if the employment
termination date is after January 1, 2004, but before January 1, 2005, Lord's
agreement not to compete will expire on January 31, 2005); and (c) one (1) year
after his employment termination date if his employment is terminated for any
reason on or after January 1, 2005, he shall not, without the prior written
approval of the Company, directly or indirectly hold or acquire an ownership
interest in, or perform any services as a shareholder, director, partner,
member, employee, agent, adviser or consultant or otherwise for any person or
entity, or any affiliate or subsidiary thereof, wherever located, that is
engaged in the business of consulting, brokering or in any manner leasing or
negotiating occupancy, whether by sale, lease or otherwise, in connection with
any traditional regional mall or value regional mall. Such restriction includes,
but is not limited to, employment by a developer and/or owner acting
independently. Lord further agrees that during the Employment Term and for a
period of two (2) years after the later of (a) the date his employment with the
Company terminates for any reason, or (b) the last date
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Lord receives any payment under this Agreement, he shall not, without the prior
written consent of the Company, directly or indirectly contact or solicit
employees of the Company other than on behalf of the Company.
7. Confidentiality Covenant.
During the Term of Employment and at all times thereafter,
Lord shall keep secret and retain in strictest confidence, and shall not use for
his own benefit or the benefit of others except in connection with the business
and affairs of the Company, all Confidential Information and all other
confidential matter relating to the business of the Company learned by him, and
shall not disclose such Confidential Information and other confidential matter
to anyone outside of the Company, either during or after employment, nor may
Lord exploit for his own benefit or the benefit of others any personal
relationships with tenants, employees or contacts of the Company formed
heretofore or hereafter.
For purposes of this Agreement "Confidential Information"
shall mean all information that would normally be deemed to be proprietary
including trade secrets and all information relating to the Company's (or its
affiliate's) research, development, accounting, tenants and tenant lists,
business connections, consultants, advisors and employees, programming and
formatting information, operational methods, marketing plans or strategies,
business acquisition plans, new personnel acquisition plans, designs and design
projects, and all other information of any kind or nature whatsoever, which may
pertain to or be derived from the business operations and affairs of the
Company, now or hereafter existing. Notwithstanding anything herein to the
contrary, the obligations under this paragraph do not apply to any portion of
the Confidential Information which (1) is or becomes public knowledge through no
fault of Lord, (2) is in lawful possession of Lord prior to engagement by
Company, or (3) is disclosed pursuant to the lawful requirement or formal
request of a government agency.
8. Company's Remedies Upon Breach.
In the event Lord breaches the non-compete or confidentiality
covenants, Lord acknowledges that he shall forfeit all rights to any amounts
payable under this Agreement, and that the Company shall have the right to
purchase his Additional Units and capital account allocated to the Additional
Units for $50,000. Lord further acknowledges that the Company shall be entitled
to injunctive relief in addition to any other remedy it may have. Lord further
acknowledges that the Company's remedies upon breach by him of the provisions of
paragraph 6 and 7 hereof will be inadequate. Accordingly, in the event of the
breach or threatened breach by Lord of paragraphs 6 or 7 hereof, the Company
shall be entitled to injunctive relief in addition to any other remedy it may
have.
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9. Notices.
All notices required or contemplated under this Agreement
shall be delivered (a) personally, (b) by next day courier service, or (c) by
certified or registered mail, return receipt requested, addressed as follows (or
to such other address as any party may provide in writing to the other):
If to the Company:
The Taubman Company Limited Partnership
000 Xxxx Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
with a copy to:
Xxxx Xxxxxx & Xxxxxx, P.C.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to Lord:
Xxxxxxxx Xxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
with a copy to:
Shulman, Rogers, Gandal,
Pordy & Xxxxx, P.A.
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
All notices under this Agreement shall be deemed received when
personally delivered, on the first business day after depositing with a next day
courier service, or on the third day after mailing, as the case may be.
10. Prior Agreements.
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This Agreement supersedes and replaces all prior agreements
between the parties and may not be modified orally.
11. Waiver.
The waiver by the Company of a breach by Lord of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by Lord. The waiver by Lord of a breach by the Company of any
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by the Company.
12. Assigns and Successors.
The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
13. Construction and Governing Law.
This Agreement shall be construed under the laws of the State
of Michigan (excluding the choice of law rules thereof). Paragraph headings are
for convenience only and shall not be considered a part of the terms and
provisions of the Agreement.
14. Severability.
If any provision of this Agreement as applied to either party
or to any circumstance shall be adjudged by a court of competent jurisdiction to
be void or unenforceable, the same shall in no way affect any other provision of
this Agreement or the validity or enforceability of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Lord has hereunto set his hand, all
as of the day and year first above written.
WITNESS: THE TAUBMAN COMPANY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ Xxxxxx Xxxxxxx
-------------------
/s/ Xxxxxxxxxxx X. Xxxxx
------------------------
Its: Authorized Signatory
/s/ Xxxxxx X. Xxxxxx
---------------------
/s/ Xxxxxxxxxxx X. Xxxxx /s/ Xxxxxxxx Xxxx
------------------------ --------------------
Xxxxxxxx Xxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------
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With respect to paragraphs 5(a), (c) and (e) only:
WITNESS: THE TAUBMAN COMPANY REALTY GROUP
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ Xxxxxx Xxxxxxx
/s/ Xxxxxxxxxxx X. Xxxxx --------------------
------------------------ Its: Authorized Signatory
/s/ Xxxxxx X. Xxxxxx
-----------------------
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EXHIBIT A
ADDITIONAL UNITS SCHEDULE
ADDITIONAL
EMPLOYMENT TERMINATION DATE OUTSTANDING UNITS
Prior to January 1, 2000 435,148
After January 1, 2000 but prior to January 1, 2001 348,118
After January 1, 2001 but prior to January 1, 2002 261,088
After January 1, 2002 but prior to January 1, 2003 174,058
After January 1, 2003 but prior to January 1, 2004 87,028
After January 1, 2004 but prior to January 1, 2005 43,514
After January 1, 2005 -0-
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