EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made this 10th day of January,
2000, by and between AGREE REALTY CORPORATION, a Maryland corporation (the
"Company"), and XXXXX XXXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to make certain contributions
to the financial strength of the Company
WHEREAS, the Company desires to assure itself of the continuity of
management and desires to establish certain compensation rights of certain of
its key senior executive officers, including the Executive; and
WHEREAS, the Company desires to employ the Executive and the
Executive desires to accept such employment on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto hereby agree as follows:
1. Employment; Term. The Company hereby employs the Executive as
Vice President of the Company and the Executive agrees to serve the
Company in such capacity for the period commencing the date
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hereof (the "Effective Date") and ending on the fifth anniversary of the
Effective Date (the "Initial Term").
2. Termination. Subject to the terms and conditions set forth
herein, the Executive's employment may be terminated by either party hereto
upon thirty (30) days' written notice to the other party hereto.
3. Duties. The Executive shall be responsible for the supervision,
control and conduct of the development and leasing affairs business of the
Company and shall have such additional duties and any additional
responsibilities as are normally assigned to a Vice President which may from
time to time be reasonably designated by the Board of Directors of the
Company (the "Board"), provided that in no event shall the scope of his
duties and the extent of his responsibilities be substantially different from
the duties and responsibilities usually associated with those positions in a
corporation similar in size and function to the Company. At all times, the
Executive shall be subject to the direction of the Board. During the period
the Executive is employed by the Company (the "Employment Period"), the
Executive shall devote his full business time and best efforts to the
business and affairs of the Company and its subsidiaries.
4. Compensation. The Company shall pay the Executive a salary at
the rate of one hundred forty thousand dollars ($140,000.00) per annum during
the first year of this contract. The annual salary for the balance of the
contract is as follows: year two - $150,000; year
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three - $160,000; years four and five - $160,000 minimum. Such compensation
shall be shall be payable in accordance with the usual payroll practices of
the Company, as compensation to the Executive for the services rendered by
the Executive hereunder, including, but not limited to, all services rendered
by the Executive as an officer of the Company and its subsidiaries.
5. Benefits.
(a) The Company agrees to reimburse the Executive for all
reasonable and necessary travel, business entertainment and other business
expenses incurred by the Executive in connection with the performance of his
duties under this Employment Agreement. Such reimbursements shall be made by
the Company on a timely basis upon submission by the Executive of vouchers,
in accordance with the Company's standard procedures. All such reimbursements
shall be subject to limitations, which may from time to time be prescribed by
the Board.
(b) The Executive shall be entitled to participate in any and
all life insurance , medical insurance group health, disability insurance,
and other benefit plans which are made generally available during the
Employment Period by the Company to executives of the Company, including, but
not limited to, the Company's Stock Incentive Plan, Profit Sharing Plan and
performance Bonus Plan (to the extent that the Executive qualifies under the
eligibility provisions of such plan or plans).
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Additionally, the Executive shall be entitled to receive annual paid vacation
and paid holidays made available pursuant to Company policy to all of the
senior executives of the Company.
(c) In the event of the death or disability of the Executive, the
Executive's employment hereunder shall terminate and in addition to any
amounts payable at such time and in accordance with the terms of Paragraph 4
hereof (appropriately pro-rated), the Company shall, for the longer of (i)
the remainder of the calendar year in which the Executive dies or becomes
disabled or (ii) six (6) months, but in no event longer than the remainder of
the Initial Term, pay to the Executive or the Executive's personal
representative, as the case may be, the Executive's salary at the date of
such death or disability. For the purposes hereof, the term "disability"
shall mean the absence of the Executive, due to physical or mental illness,
on a full time basis for one hundred twenty (120) consecutive business days
or for shorter periods which aggregate more than four months during any
consecutive twelve (12) month period.
(d) In the event the employment of the Executive is terminated by
the Company for any reason other than for cause (as defined below), the
Executive shall be entitled to all amounts payable during the Initial Term
(including, but not limited to, salary at the then applicable rate) within
ten (10) days of such termination and the Executive shall have the right to
continue to participate in all benefits plans made generally available by the
Company to its executives during the Initial Term. For
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purposes of this Section 5(d) the term "cause" shall mean: (i) the
Executive's willful failure or refusal to perform specific reasonable written
directives of the Board, which directives are consistent with the scope and
nature of the Executive's duties and responsibilities under this Employment
Agreement, and which are not remedied by the Executive within sixty (60) days
after being notified, in writing, of his failure by the Board; (ii) the
Executive's conviction of a felony; (iii) any act of dishonesty involving the
Company which results in an unjust gain or enrichment to the Executive at the
expense of the Company; (iv) any act involving moral turpitude of the
Executive which adversely affects the business of the Company; or (v) a
material breach by the Executive of his obligations under Section 7 hereof.
(e) In the event this Employment Agreement is terminated by the
Company for "cause," the Executive shall forfeit his right to any and all
benefits (other than any previously vested benefits, including, without
limitation, the Executive's salary through the date of termination) which the
Executive would otherwise have been entitled to receive pursuant to the terms
of this Employment Agreement.
6. Change in Control of the Company
If a Change in Control (as hereinafter defined) of the Company occurs prior
to the scheduled expiration of the Term and within three years after the
Change in Control of the Company, Executive is terminated by the Company for
reasons other than Death, Disability, or Cause, the
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Company or any successor thereto, within 30 days of Executive's termination
of employment, will pay to Executive, an amount equal to the greater of (i) 3
times Executive's compensation, or (ii) the Executive's compensation due over
the Initial Term of this agreement which, for purposes of this Section,
Executive Compensation shall mean an amount equal to the highest annualized
rate of Executive's Salary prior to the date of termination. For purposes of
this Agreement, a "Change in Control" shall have occurred if at any time
during the Term any of the following events occurs:
(a) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders
of Voting Stock (as hereinafter defined) of the Company immediately prior to
such transaction;
(b) The Company sells all or substantially all of its assets to
any other corporation or other legal person, less than a majority of the
combined voting power of the then-outstanding voting securities of which are
held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale;
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(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 25%
or more of the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors of the
Company ("Voting Stock").
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(e) If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of
each director of the Company first elected during such period was approved by
a vote of at least two-thirds of the directors of the
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Company then still in office who were directors of the Company at the
beginning of any such period.
Notwithstanding the foregoing provision of Section 6(c) or 6(d) hereof, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Agreement solely because the Company, an entity in which the Company directly
or indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of voting securities of the Company, whether in
excess of 25% or otherwise, or because the Company, reports that a change in
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.
7. Non-Competition. The Executive agrees that (a) at all times
during the Initial Term, if the Executive is terminated for "cause" or
voluntarily terminates his employment hereunder and (b) at all times during
the Employment Period, the Executive shall not engage in any business which
is competitive with the then current business of the Company or any of its
subsidiaries. For the purposes of this Paragraph
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7, a business shall be deemed competitive if it consists of or includes any
type or line of business engaged in by the Company or any of its subsidiaries
at the time of such terminations and which is conducted in whole or in part,
within those states where the Company then conducts business. The executive
shall be deemed, directly or indirectly, to engage in a business if he
participates in such business as a director, officer, stockholder, employee,
salesman, partner or individual proprietor, or if he participates in such
business as an investor who has made advances on loan, contributions to
capital or expenditures for the purchase of stock, permits his name to be
used by, acts as a paid consultant or paid advisor to, or if the Executive
exerts a controlling influence over such business, provided that nothing
herein contained shall be deemed to preclude the purchase of securities of
publicly owned companies which securities are listed on a national securities
exchange, but the total holding of any such securities so listed shall be
limited to five percent (5%) of the amount of such securities outstanding.
8. Confidentiality. The Executive shall not at any time use or
divulge, furnish or make accessible to anyone (other then in the regular
course of the business of the Company or any of its subsidiaries) any
knowledge or information of trade secrets and proprietary information which
has not otherwise become publicly available (including, but not limited to,
any information concerning customers or accounts) with respect to the
business affairs of the Company or any of its subsidiaries.
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9. Notices. All notices relating to this Employment Agreement
shall be in writing and shall be deemed to have been given at the time when
delivered personally or sent in the United States by registered or certified
mail, return receipt requested, in a postpaid envelope, addressed to the
other party at the address set forth below, or to such changed address as the
other party may have fixed by notice; provided, however, that any notice of
change of address shall be effective only upon receipt:
To the Company Agree Realty Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
To the Executive 00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
10. Assignability, Binding Effect and Survival. This Employment
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, including without limitation any corporation which
may acquire all or substantially all of the Company's assets and business or
with or into which the Company may be consolidated or merged, and shall inure
to the benefit of and be binding upon the Executive, his heirs, executors,
administrators and legal representatives, provided that the obligations of
the Executive hereunder may not be delegated.
11. Complete Understanding; Amendment; Waiver. This Employment
Agreement constitutes the complete understanding between the parties with
respect to the employment of the Executive hereunder,
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and no statement, representation, warranty or covenant has been made by
either party with respect thereto except as expressly set forth herein. This
Employment Agreement shall not be altered, modified, amended or terminated
except by written instrument signed by each of the parties hereto. Waiver by
either party hereto of any breach hereunder by the other party shall not
operate as a waiver of any other breach, whether similar to or different from
the breach waived. No delay on the part of the Company or the Executive in
the exercise of any of their respective rights or remedies shall operate as a
waiver thereof, and no single or partial exercise by the Company or the
Executive of any such right or remedy shall preclude other or further
exercise thereof.
12. Severability. If any provision of this Employment Agreement
or the application of any such provision to any party or circumstances shall
be determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Employment Agreement or
the application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be enforced to the
fullest extent permitted by law.
13. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan
without regard to conflict of laws provisions.
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14. Indemnification. The Company shall indemnify the Executive
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred, in any action or
proceeding to which the Executive is made a party by reason of the fact that
he is or was an officer or director of the Company, to the fullest extent
permitted by law, the By-laws of the Company and the Articles of
Incorporation of the Company.
15. Counterparts. This Employment Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
16. Titles and Captions. All paragraph, article or section titles
or captions in this Employment Agreement are for convenience only and in no
way define, limit, extend or describe the scope or intent of any provisions
hereof.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Employment Agreement as of the date first above written.
AGREE REALTY CORPORATION
By: /s/ XXXXXXX AGREE
--------------------
Name: Xxxxxxx Agree
Title: President
/s/ XXXXX XXXXXXX
--------------------
Xxxxx Xxxxxxx
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ADDENDUM TO EMPLOYMENT AGREEMENT DATED
JANUARY 10, 2000
Xxxxx Xxxxxxx (Executive) to receive the following compensation in addition
to that which is in the above referenced Employment Agreement.
1. $50,000.00 moving allowance
2. Reimbursement or payment for car lease and insurance expense.
3. 2,500 shares of Agree Realty Corporation stock as an annual bonus per
the attached Restricted Stock Agreement
4. 2,500 shares of Agree Realty Corporation stock for each deal (anchor
type tenant) developed due to his efforts per the attached Restricted
Stock Agreement. These shares are deemed to be earned at the time of
lease commencement.
5. At the expiration of the Employment Agreement, the Company shall have
the right to either 1) have all Restricted Shares immediately vest
and the restrictions shall lapse entirely or 2) purchase those
Restricted Shares which have not vested from the Executive at the
fair market value of said shares. The fair market value shall be
based on the average stock price for the thirty (30) days preceding
the expiration of the Employment Agreement.
6. In the event the employment of the Executive is terminated by the
Company for any reason other than cause (as defined in the Employment
Agreement) all restricted shares of the Executive, as defined in the
Restricted Stock Agreement, shall immediately vest and the
restrictions shall lapse.
Page 2 -
Addendum to Employment Agreement
7. The restrictions set forth in Section 2.1 of the Restricted Stock
Agreement shall lapse entirely in the event of the death or
disability of the Executive as defined in 5(C) of the Employment
Agreement.
AGREE REALTY CORPORATION
By: /s/ XXXXXXX AGREE
--------------------
Xxxxxxx Agree
Its: President
/S/ XXXXX XXXXXXX
-----------------
Xxxxx Xxxxxxx
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT (the "Agreement") dated January 1, 2000
between AGREE REALTY CORPORATION, a Maryland Corporation (the "Company"), and
Xxxxx Xxxxxxx, an employee of the Company (the "Grantee").
The Company's Board of Directors has determined that the Company's
objectives will be furthered by the grant to the Grantee of ______ shares
(the "Restricted Shares") of Common Stock of the Company, par value $.0001
per share, subject to the restrictions set out in this agreement,
consideration for the issuance of which is based on services heretofore
rendered to the Corporation by the Grantee, the Board of Directors having
determined that such services represent at least $_______ per share.
The Grantee delivers herewith a stock power duly endorsed in
blank. The stock power will be returned to the Grantee when all restrictions
on the Restricted Shares have expired as provided in Section 2.
In consideration of the foregoing and of the mutual undertakings
set forth in this Agreement, the Company and the Grantee hereby agree as
follows:
SECTION 1. Issuance of Restricted Shares. As soon as practicable
after receipt from the Grantee of this executed Agreement, the
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Company shall issue in the name of the Grantee five stock certificates each
representing one-fifth of the total number of Restricted Shares, each of
which certificates shall remain in the possession of the Company until the
Restricted Shares represented thereby are free of the restrictions set forth
in Section 2. Upon the issuance of such certificates, the Grantee shall have
all the rights of a stockholder with respect to the Restricted Shares,
subject to the restrictions set forth in Section 2.
SECTION 2. Restrictions.
2.1 Restricted Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of prior to the applicable
Expiration Date as provided in Section 2.2. These restrictions shall apply as
well to any shares of common stock or other securities of the Company which
may be acquired by the Grantee in respect of the Restricted Shares as a
result of any stock split, stock divided, combination of shares or other
change, or any exchange, reclassification or conversion of securities.
2.2 Unless terminated sooner pursuant to Section 2.3, the
restrictions set forth in Section 2.1 shall expire with respect to one-fifth
of the total number of Restricted Shares on each of the first, second, third,
fourth and fifth anniversaries of the date of this Agreement (the "Expiration
Dates"). As soon as practicable after each Expiration Date, the Company shall
deliver to the Grantee, subject to the provisions of
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Sections 4 and 5, the stock certificate representing the shares which became
free of restrictions on such Expiration Date.
2.3 The restrictions set forth in Section 2.1 shall lapse
entirely in the event that the stockholders of the Company approve an
agreement to merge, consolidate, liquidate or sell all or substantially all
of the assets of the Company, and the date of such approval shall be deemed
an Expiration Date for purposes of Section 2.2.
SECTION 3. Termination. During the 120 days following termination
of the Grantee's employment with the Company for any reason, the Company
shall have the right to cancel the stock certificate(s) representing any
restricted Shares on which the restrictions have not expired as of the date
of such termination. For purposes of this Agreement, an individual's
"employment" shall include any and all periods during which such individual
is an employee of the Company or serves as an officer or director of or
consultant to the Company, but is not otherwise an employee. If the Board of
Directors determines that the termination of the Grantee's employment is a
dismissal for cause, it may in its discretion retroactively deem the
Grantee's date of termination to be the date of the action that is the cause
for dismissal. The Board of Directors may in its discretion determine whether
any leave of absence constitutes a termination of employment within the
meaning of this Agreement.
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SECTION 4. Consents.
4.1 Notwithstanding anything to the contrary contained herein, if
the Company shall at any time determine that any Consent (as hereinafter
defined) is necessary or desirable as a condition to, or in connection with,
the issuance or transfer of shares of Common Stock or the taking of any other
action in connection with this Agreement, then such action shall not be
taken, in whole or in part, unless and until such Consent shall have been
effected or obtained to the full satisfaction of the Company, or the Company
may require that such action be taken only in such manner as to make such
Consent unnecessary.
For purposes of Section 4.1, the term "Consent" means (a) any and all
listings, registrations or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by the
Grantee with respect to the acquisition or disposition of shares of Common
Stock, or with respect to any other matter, which the Company shall deem
necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the requirement
that any such listing, qualification or registration be made and (c) any and
all consents, clearances and approvals by any governmental or other
regulatory bodies.
SECTION 5. Investment Representation. The Grantee understands that the shares
of Common Stock which he is
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acquiring are not registered under the Securities Act of 1933, as amended, or
under state securities laws and will not necessarily become registered in the
future, and that, consequently, even after expiration of the restrictions set
forth in Section 2 he may be unable to sell such shares without either
registration under such Act and compliance with applicable state securities
laws or the availability of an exemption therefrom. The Grantee represents
and warrants the Company that all shares of Common Stock which he is
acquiring are acquired for his own account for investment and the Grantee
agrees that he will not sell or otherwise dispose of any such shares except
in compliance with all applicable federal and state securities laws. The
Grantee agrees that the Company may place a legend upon each certificate
representing shares acquired by him under the Plan, which legend will refer
to the restrictions on transferability contained, or referred to, herein.
SECTION 6. Right of Discharge Reserved. Nothing in the Plan or in
this Agreement shall confer upon the Grantee the right to continue in the
employ or service of the Company or affect any right, which the Company may
have to terminate the employment or service of the Grantee.
SECTION 7. Section Headings. The Section headings contained herein
are for purposes of convenience only and are not intended to define or limit
the contents of said Sections.
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SECTION 8. Notices. Any notice to be given to the Company
hereunder shall be in writing and shall be addressed to the Company at 00000
Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxxxx, XX 00000, attention: President, or at
such other address as the Company may hereafter designate to the Grantee by
notice as provided herein. Any notice to be given to the Grantee hereunder
shall be addressed to the Grantee at the address set forth beneath his
signature hereto, or at such other address as he may hereafter designate to
the Company by notice as provided herein. Notices hereunder shall be deemed
to have been duly given when personally delivered or three (3) days after
having been mailed by registered or certified mail to the party entitled to
receive the same.
SECTION 9. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and the successors and
assigns of the Company and the Grantee's heirs and representatives of his
estate.
SECTION 10. Other Payments or Awards. Nothing contained in this
Agreement shall be deemed in any way to limit or restrict the Company from
making any award or payment to the Grantee under any other plan, arrangement
or understanding, whether now existing or hereafter in effect.
SECTION 11. Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State of New
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York and for all purposes shall be governed by, construed and enforced in
accordance with the internal laws of said State, without reference to
principles of conflict of laws
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first above written.
AGREE REALTY CORPORATION
By:______________________________
ATTEST:__________________ Title____________________________
GRANTEE__________________________
_________________________________
_________________________________
