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EXHIBIT 10.49
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of the 16th
April, 2001, effective as of May 10, 2001, is entered into between
RAMCO-XXXXXXXXXX PROPERTIES TRUST, a Maryland business trust (the "Trust"), and
XXXXXXX X. XXXX ("Executive").
RECITALS
A. The Trust is a business trust intended to be qualified and to
operate as a real estate investment trust under the Internal Revenue Code of
1986, as amended.
B. Executive has been employed by the Trust since May 10, 1996,
pursuant to an Employment Agreement dated as of May 10, 1996, between the Trust
and Executive ("Prior Agreement").
C. The Trust wishes to continue to employ Executive, and Executive
wishes to continue to be employed by the Trust, on the terms and conditions set
forth below.
THEREFORE, the parties agree as follows:
1. EMPLOYMENT DUTIES. During the Term (as defined in paragraph 2
below), the Trust will employ Executive as its Executive Vice President and
Chief Operating Officer or as such other executive officer as the Trust and
Executive shall mutually agree upon, except that as relates to the title of
Chief Operating Officer, Executive will relinquish this title at the request of
the Trust. Executive will devote up to 600 hours during the first full year of
the Agreement, up to 400 hours during the second full year and up to 200 hours
during the third full year of his business time and attention to the performance
of his duties under this Agreement as specifically requested by the Trust.
During the fourth and fifth years of the Agreement, Executive will not be
required to devote any of his business time and attention to the Trust other
than to serve as a member of the Trust's Advisory Committee (hereinafter
defined). If the Trust shall so request, Executive shall become and shall, at
any time during the term of this Agreement as the Trust shall so request, act as
a trustee of the Trust and/or as an officer and/or director of any of the
Subsidiaries of the Trust as they may now exist or may be established by the
Trust in the future without any compensation other than that provided for in
paragraph 3. During the term of this Agreement, Executive shall provide the
Chief Executive Officer of the Trust with a monthly detailed accounting of work
hours performed for the Trust utilizing time sheets used by the Trust. Xxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxxx and Xxxxxxx
X. Xxxx (the "Ramco Principals") constitute the Trust's Advisory Committee.
Executive shall participate in Advisory Committee meetings as called for by the
Chief Executive Officer, which Advisory Committee meetings shall be held no more
frequently than once per week and no less frequently than once per quarter.
Attendance at such Advisory Committee meetings shall count toward the number of
hours worked for the Trust during the first three years. Time spent by Executive
in preparing therefor or in reviewing information provided by the Trust shall
not be included.
2. TERM. The term of Executive's employment under this Agreement (the
"Term") will begin on the effective date of this Agreement and will continue,
subject to the termination provisions set forth in paragraph 5 below, until the
fifth anniversary of the date hereof.
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3. SALARY AND BONUS.
Salary. During the first year of the Term, Executive will
receive a salary at the annual rate of $100,000; during the second year,
$75,000; during the third year, $50,000; and during each of the fourth and fifth
years, $35,000 (the "Base Salary"). In addition, if during the Term of the
Agreement, the Trust shall request Executive work hours in excess of those
required by paragraph 1 hereof, Executive shall be compensated for such excess
hours at the rate of $300.00 per hour (the "Excess Payment"). Executive shall
provide the Chief Executive Officer of the Trust with a monthly summary of hours
worked, which summary shall be provided within fifteen (15) days after the end
of each month. The Base Salary will be payable to Executive in accordance with
the Trust's standard payroll practices. Any Excess Payment will be paid to
Executive within 30 days after an anniversary date hereof. Although no bonus is
provided for under this Agreement, nothing herein shall limit Executive's rights
to a bonus pursuant to the Prior Agreement.
4. FRINGE BENEFITS. In addition to the other compensation payable
pursuant to this Agreement, during the Term:
a. Standard Benefits. Executive will be entitled to receive
such fringe benefits and perquisites, including medical, dental, and life
insurance, as are generally made available from time to time to management
employees and Executives of the Trust, including the Chief Executive Officer
thereof. So long as medical benefits are provided executives of the Trust, such
benefits shall, to the extent available, be provided for the Term. If the Trust
shall determine that it cannot provide such medical benefits or if such medical
benefits are not extended to Executive after the Term, Executive shall be
compensated for the cost to Executive of otherwise obtaining such medical
benefits for the remainder of his life, such compensation not to exceed Thirty
Thousand Dollars ($30,000.00) per year that Executive is employed by the Trust
pursuant to this Agreement, which amount shall be the maximum amount available
for this purpose for any other Executive of the Trust. Executive shall not have
the right to participate in any pension, profit-sharing, stock option or similar
plan or program established from time to time by the Trust for the benefit of
its employees unless otherwise herein specifically provided. So long as
Executive qualifies therefor, Executive shall have the right to participate in
the Trust's 401K Plan.
b. Business Expenses. The Trust will pay or reimburse
Executive for all business-related expenses incurred by Executive in the course
of his performance of duties under this Agreement as specifically requested by
the Trust, subject to the procedures established by the Trust from time to time
with respect to incurrence, substantiation, reasonableness and approval.
Executive's professional licensing and association fees and dues, professional
journal subscriptions and errors and omissions insurance coverage will be
provided by the Trust. Reimbursement for costs incurred in connection with
attendance at International Council of Shopping Centers events shall be
reimbursed if attendance by the Executive is requested by the Trust. Executive
shall be reimbursed for costs incurred in connection with attendance at meetings
of the Trust's Board of Trustees held outside the metropolitan Detroit area.
c. Stock Options. For the period from the effective date
hereof until May 9, 2002, Executive shall be entitled to receive stock options
if Xxxxxx Xxxxxxxxxx should be granted options by the Trust in an amount equal
to 75% of the number of options granted to
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Xxxxxx Xxxxxxxxxx during such period. Nothing in this Agreement shall affect the
status of any option heretofore granted Executive pursuant to the Prior
Agreement.
d. Office and Secretarial. During the Term, the Trust will
provide Executive with a suitable office and shared executive secretarial help.
So long as the Trust maintains its offices at its current location, Executive
shall be entitled to his existing office. If the Trust shall move its offices,
then Executive shall be provided an office of sufficient size to house his
existing furniture, exclusive of any couch or sofa, all of which furniture is
owned by Executive. The shared executive secretary will be capable of performing
Executive's work in a timely and professional manner. Executive's office will
have, at the Trust's expense, the same telephone and computer equipment
facilities as are contained in comparable executive's offices at the Trust. The
Trust's information systems department shall be available to Executive to
coordinate off-site computer capability.
5. TERMINATION OF EMPLOYMENT.
a. Death and Disability. Executive's employment under this
Agreement will terminate immediately upon his death and upon 30 days' prior
written notice given by the Trust in the event Executive is determined to be
"permanently disabled" (as defined below).
b. For Cause. The Trust may terminate Executive's employment
under this Agreement for "Cause" (as defined below), upon providing Executive 30
days' prior written notice of termination, which notice will describe in detail
the basis of such termination and will become effective on the 30th day after
Executive's receipt thereof unless Executive (i) cures the alleged violation or
(ii) sends, within such 30-day notice period, written notice to the Board of
Trustees of the Trust (the "Board") disputing in good faith the existence of
Cause and requesting arbitration of such dispute pursuant to paragraph 9 below.
During the pendency of the arbitration, Executive will continue to receive all
compensation and benefits to which he is entitled hereunder. If the Trust is not
successful in obtaining a determination by the arbitrators that there was Cause
for termination, the Trust will pay Executive's reasonable expenses, including,
without limitation, reasonable attorneys' fees and disbursements, in connection
with such dispute resolution.
c. For Good Reason. Executive may terminate his employment
under this Agreement for "Good Reason" (as defined below upon providing the
Trust 30 days' prior written notice or termination, which notice will detail the
basis of such termination and will become effective on the 30th day after the
Trust's receipt thereof unless the Trust cures the alleged violation or other
circumstance which was the basis of such termination within such 30-day notice
period.
d. Definitions. For purposes of this Agreement
(i) Executive will be deemed "permanently disabled"
if he becomes unable during the first three years hereof to
discharge his normal duties as contemplated under this
Agreement for more than six consecutive months as a result of
incapacity due to mental or physical illness by a physician
acceptable to Executive and the Trust and paid by the Trust,
whose determination will be final and binding. If Executive
and the Trust are unable to agree on a physician, Executive
and the Trust will each choose one physician who will mutually
choose the third physician, whose determination will be final
and binding.
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(ii) "Cause" means either (A) a material breach by
Executive of any material provision of this Agreement or of
the Noncompetition Agreement, but only if, after notice
provided in paragraph 5b above, Executive fails to cure such
breach or, if such breach is not subject to cure, fails on an
ongoing basis thereafter to comply with the provisions of this
Agreement or of the Noncompetition Agreement, as the case may
be, with respect to which he was in such breach; (B) action by
Executive constituting willful malfeasance or gross
negligence, having a material adverse effect on the Trust; (C)
an act of fraud, misappropriation of funds or embezzlement by
Executive in connection with his employment hereunder; or (D)
Executive is convicted of, pleads guilty to or confesses to
any felony.
(iii) "Good Reason" means the occurrence of any of
the following, without the prior written consent of Executive:
(A) any substantial diminution of status, or other imposition
by the Trust of unreasonable requirements or working
conditions on Executive, which are not withdrawn or corrected
within a 30-day period following notice by Executive to the
Trust of such diminution or imposition; (B) a material breach
by the Trust of any of its material obligations under this
Agreement, but only if (x) after the expiration of the 30-day
notice period provided in paragraph 5c above, the Trust fails
to cure such breach or (y) notwithstanding such cure, the
Trust willfully and repeatedly breaches its obligations under
this Agreement; (C) a relocation of the Trust's principal
executive offices or of Executive's principal place of
employment to a location more than 25 miles from Southfield,
Michigan; (D) if, after any election of Trustees, at least two
of the Ramco Principals is not a member of the Board or the
Ramco Principals would constitute less than 10% of the members
of the Board (provided that at least two of the Ramco
Principals are ready, willing and able to serve on the Board);
or (E) a "change of control" as defined below. Notwithstanding
the foregoing, if at any time after the date of this Agreement
the Ramco Principals own shares or OP Units convertible into
less than 15% of the issued and outstanding Shares of the
Trust, clause (D) shall be inapplicable and shall not be
deemed "good reason" for termination of employment. Executive
will be deemed not to have consented to any proposal resulting
in any of the foregoing changes unless he will have given
written notice of his consent thereto to the Board of Trustees
of the Trust within 15 days after receipt of a written
proposal describing the change. If Executive will not give
such consent, the Trust will have the opportunity to withdraw
such proposed change by written notice to Executive given
within 15 days after expiration of the foregoing 15-day
period.
(iv) A "change in control" shall occur if any person
or group of commonly controlled persons, other than the Ramco
Principals or their affiliates, owns or controls, directly or
indirectly, more than 25% of the voting control or value of
the capital stock of the Trust, or of securities convertible
into or exchangeable for capital stock of the Trust.
6. BENEFITS UPON TERMINATION.
a. Termination upon Death or Permanent Disability. Upon
termination of Executive's employment under this Agreement resulting from his
death or permanent disability, the Trust will remain obligated, in the case of
death, to pay to Executive or his legal
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representatives his Base Salary, as provided in paragraph 3 above, for an
additional period equal to 12 months from the effective date of termination and,
in the case of permanent disability, for the remainder of the Term (such
additional period in each instance being referred to in this Agreement as the
"Severance Period"). In the event of a termination upon Executive's permanent
disability, Executive will also remain entitled to receive, during the Severance
Period, those fringe benefits specified in paragraph 4 above, including coverage
under all insurance programs and plans. The payment of such Base Salary will be
made during the Severance Period at the same times as such amounts would have
been paid pursuant to paragraph 3 above had Executive's employment not have been
terminated and had the Term expired at the end of the Severance Period.
b. Termination with Cause or Resignation. Upon termination of
Executive's employment by the Trust pursuant to paragraph 5b above or a
voluntary resignation by Executive (other than for Good Reason pursuant to
paragraph 5c above, the Trust will remain obligated to pay Executive only the
unpaid portion of his Base Salary and benefits to the extent accrued through the
effective date of termination. Any amount due under this subparagraph will be
payable within 30 days after the date of termination.
c. Termination without Cause or for Good Reason. Upon
termination of Executive's employment (x) by the Trust other than for Cause or
upon Executive's death or permanent disability or (y) by Executive for Good
Reason, Executive will be entitled to the benefits provide below:
(i) the Trust will pay Executive his Base Salary
through the date of termination;
(ii) the Trust will pay as severance pay to
Executive, not later than the 30th day following the date of
termination, a lump sum severance payment (the "Severance
Payment") equal to the greater of (x) the aggregate of all
compensation due to Executive hereunder during the balance of
the Term or (y) 1.99 times the "base amount" within the
meaning of Sections 280G(b)(3) and 280G(d) of the Internal
Revenue Code of 1986, as amended (the "Code"), and any
applicable temporary or final regulations promulgated
thereunder, or its equivalent as provided in any successor
statute or regulation. If Section 280G of the Code (and any
successor provisions thereto) is repealed or otherwise
inapplicable, then the Severance Payment will equal 1.99 times
$185,000 if the date of termination is prior to December 31,
2002, and thereafter 1.99 times $100,000;
(iii) if in the opinion of tax counsel elected by
Executive and reasonably acceptable to the Trust, any portion
of any payment made to Executive, including, without
limitation, the Severance Payment, constitutes an excess
"parachute payment" within the meaning of Section 280G(b)(1)
of the Code, the Trust will pay Executive an additional amount
(the "Additional Amount") equal to the sum of (i) all taxes
payable by Executive under Section 4999 of the Code with
respect to the Severance Payment and the Additional Amount,
plus (ii) all federal, state or local income taxes payable by
Executive with respect to the Additional Amount;
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(iv) Notwithstanding the foregoing, if, during the
first three years of the Term, this Agreement is terminated by
reason of a change of control, other than by virtue of a
transaction commonly referred to as a leveraged buy out or a
management buy out in which Executive has the option to
participate, and if the Severance Payment multiple to Xxxxxx
Xxxxxxxxxx is greater than 1.99, the multiple applicable to
Executive shall be adjusted accordingly; and
(v) Other than a termination by virtue of a
transaction described in paragraph 6c(iv) as one that
Executive has the option to participate in, Executive will be
entitled to the full amount of medical benefits as if
Executive was employed by the Trust for the full Term of this
Agreement.
d. No Mitigation. Executive will not be required to mitigate
the amount of any payment provided for in this paragraph 6 by seeking other
employment or otherwise, nor will the amount of any payment or benefit provided
for in this paragraph 6 be reduced by any compensation earned by him as the
result of employment by another employer or by retirement benefits after the
date of termination, or otherwise.
e. Expiration of this Agreement. In the event the Term of this
Agreement expires without having otherwise been previously terminated pursuant
to paragraph 5 above or by the Trust without cause, Executive will not be
entitled to any severance compensation whatsoever under this paragraph 6.
7. NON-COMPETITION. Anything contained in that certain Noncompetition
Agreement entered into by and between Executive and the Trust as of May 10,
1996, which agreement remains in full force and effect and is hereby ratified
and confirmed, notwithstanding, the Trust and Executive agree as follows:
a. During the first year Executive shall not compete with the
Trust within the Trust's defined trade area, which, for purposes hereof, will
mean the State of Michigan; the Greater Toledo, Ohio, area; and the State of
Florida. Executive may pursue any retail opportunity it desires outside the
defined area, except as otherwise provided in the Noncompetition Agreement, or
any other type of real estate opportunity, such as office, industrial or
multi-family, whether inside or outside the area.
b. During the second and third years of the Term, if the
Executive has a competitive opportunity, to be defined as any retail development
of greater than 75,000 square feet anchored by a supermarket and/or includes a
major retailer of in excess of 50,000 square feet, which Executive has entered
into binding contractual agreements therefor, the Executive must first offer the
opportunity to the Trust and the Trust will have 30 days thereafter to elect
whether or not to pursue the development opportunity. If the Trust turns the
offer down, then the Executive may pursue it, free of any obligation to the
Trust. If the Trust accepts the offer, the opportunity will be transferred to
the Trust and the Trust will, upon the transfer, reimburse Executive for all
third party costs, including option payments and deposits, directly incurred on
the opportunity. In such event, at closing by the Trust on the property,
Executive will receive market fees for his services including a brokerage fee
based on the value of the land and leasing fees for tenants he was instrumental
in bringing to the development at the time the development is offered to the
Trust. Brokerage fees shall be shared with any third party broker.
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c. During the fourth and fifth years, Executive will be free
of the provisions of paragraphs 7a and 7b above and Executive's Noncompetition
Agreement shall thereupon be deemed terminated.
d. All information received during term of employment will
remain confidential and all opportunities obtained by an Executive by virtue of
Executive's employment by the Trust shall be the exclusive property of the
Trust.
e. Any dispute under this paragraph shall be submitted to
arbitration pursuant to paragraph 9 hereof.
8. INDEMNIFICATION. To the full extent permitted by applicable law,
Executive shall be indemnified and held harmless for any action or failure to
act in his capacity as a director, trustee, officer or employee of the Trust. In
furtherance of the foregoing and not by way of limitation, if Executive is a
party or is threatened to be made a party to any suit because he is a director,
trustee, officer or employee of the Trust, he shall be indemnified against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement if he acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interest of the Trust, and with respect to any
criminal action or proceeding, he had no reasonable cause to believe his conduct
was unlawful. Indemnification under this Section shall be in addition to any
other indemnification by the Trust of its officers and trustees. Expenses
incurred by the Executive in defending an action, suit or proceeding for which
he claims the right to be indemnified pursuant to this Section shall be paid by
the trust in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the Executive to repay such
amount in the event that it shall ultimately be determined that he is not
entitled to indemnification by the Trust. Such undertaking shall be accepted
without reference to the financial ability of such Executive to make such
repayment. The Trust shall use commercially reasonable efforts to maintain in
effect for the Term of this Agreement a directors' and officers' liability
insurance policy, with a policy limit of at least $10,000,000 (which may be
spread over a multiple year period), subject to customary exclusions, with
respect to claims made against officers and directors of the Trust; provided,
however, the Trust shall be relieved of this obligation to maintain directors'
and officers' liability insurance if, in the good faith judgment of the Trust,
it cannot be obtained at a reasonable cost.
9. ARBITRATION. The parties hereto will endeavor to resolve in good
faith any controversy, disagreement or claim arising between them, whether as to
the interpretation, performance or operation of this Agreement or any rights or
obligations hereunder. If they are unable to do so, any such controversy,
disagreement or claim will be submitted to binding arbitration, for final
resolution without appeal, by either party giving written notice to the other of
the existence of a dispute which it desires to have arbitrated. The arbitration
will be conducted in Detroit, Michigan, by a panel of three arbitrators and will
be held in accordance with the rules of the American Arbitration Association. Of
the three arbitrators, one will be selected by the Trust, one will be selected
by Executive and the third will be selected by the two arbitrators so selected.
Each party will notify the other party of the arbitrator selected by him or it
within 15 days after the giving of the written notice referred to in this
paragraph 9. The decision and award of the arbitrators must be in writing and
will be final and binding upon the parties hereto, with the same effect as an
arbitration pursuant to Michigan Compiled Laws Annotated ss.600.5001. Judgment
upon the award may be entered in any court having jurisdiction thereof, or
application may be made to such court for a judicial acceptance of the award and
an order of enforcement, as the case may be. The expenses of arbitration will be
borne in accordance with
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the determination of the arbitrators with respect thereto, except as otherwise
specified in paragraph 5b above. Pending a decision by the arbitrators with
respect to the dispute or difference undergoing arbitration, all other
obligations of the parties will continue as stipulated herein, and all monies
not directly involved in such dispute or difference will be paid when due.
10. MISCELLANEOUS.
a. Executive represents and warrants that he is not a party to
any agreement, contract or understanding, whether employment or otherwise, which
would restrict or prohibit him from undertaking or performing employment in
accordance with the terms and conditions of this Agreement.
b. The provisions of this Agreement are severable and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable in any jurisdiction will
remain binding and enforceable.
c. The rights and obligations of the Trust under this
Agreement inure to the benefit of, and will be binding on, the Trust and its
successors and permitted assigns, and the rights and obligations (other than
obligations to perform services) of Executive under this Agreement will inure to
the benefit of, and will be binding upon, Executive and his heirs, personal
representatives and permitted assigns; provided, however, Executive shall not be
entitled to assign or delegate any of his rights and obligations under this
Agreement without the prior written consent of the Trust; provided, further,
that the Trust shall not have the right to assign or delegate any of its rights
or obligations under this Agreement except to a corporation, partnership or
other business entity that is, directly or indirectly, controlled by the Trust.
d. Any notice to be given under this Agreement will be
personally delivered in writing or will have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to the Trust,
will be addressed to its principal place of business, attention: Secretary, and
if mailed to Executive, will be addressed to him at his home address last known
on the records of the trust or at such other address or addresses as either the
Trust or Executive may hereafter designate in writing to the other.
e. The failure of either party to enforce any provision or
provisions of this Agreement will not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor prevent
that party thereafter from enforcing each and every other provision of this
Agreement. The rights granted to the parties herein are cumulative and the
waiver of any single remedy will not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
f. This agreement will be governed by and construed according
to the laws of the State of Michigan.
g. Captions and paragraph headings used herein are for
convenience and are not a part of this Agreement and will not be used in
construing it.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first set forth above.
RAMCO-XXXXXXXXXX PROPERTIES TRUST,
By:
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Xxxxxx Xxxxxxxxxx
Its: CEO
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XXXXXXX X. XXXX
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