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EXHIBIT 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made and
entered into as of August 14, 2000, by and between PAN PACIFIC RETAIL
PROPERTIES, INC., a Maryland corporation (the "Company"), and XXXXXXX X.
XXXXXXXX ("Executive").
RECITALS
A. The Company and Executive entered into that certain Employment
Agreement (the "Original Agreement") dated as of August 13, 1997
("Date of Initial Employment").
B. The Company and Executive entered into that certain First Amendment to
Employment Agreement dated as of September 23, 1998 (the "First
Amendment") in connection with certain matters described therein.
C. The term of the Original Agreement expires on August 13, 2000.
D. The Company and Executive wish to amend and restate the Employment
Agreement to incorporate the First Amendment and to reflect certain
matters described herein.
AGREEMENT
1. EMPLOYMENT
The Company hereby employs Executive and Executive hereby accepts
employment upon the terms and conditions set forth below.
2. TERM AND RENEWAL
2.1 Term. The term of this Agreement shall commence on August 14, 2000 (the
"Effective Date"), and shall continue for two years from the Effective Date (the
"Original Employment Term"), on the terms and conditions set forth below, unless
sooner terminated as provided in Section 5.
2.2 Extension. Following the expiration of the Original Employment Term and
provided that this Agreement has not been terminated pursuant to Section 5, and
every year thereafter, the Agreement shall be automatically renewed for an
additional 12 month period, effective on each anniversary date of the Effective
Date.
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3. COMPENSATION
3.1 Base Compensation. For the services to be rendered by Executive under
this Agreement, Executive shall be entitled to receive an initial annual base
compensation ("Base Compensation") of $175,000, payable in substantially equal
semi-monthly installments. Thereafter, the Base Compensation shall be reviewed
and adjusted annually as determined by the Compensation Committee (the
"Compensation Committee") of the Board of Directors (the "Board") of the
Company.
3.2 Bonus Compensation. The Compensation Committee shall review Executive's
performance at least annually during each year of the Original Employment Term
and during any periods of automatic extension of this Agreement pursuant to
Section 2.2 and cause the Company to award Executive a cash bonus which the
Compensation Committee shall reasonably determine as fairly compensating and
rewarding Executive for services rendered to the Company and/or as an incentive
for continued service to the Company. The amount of such cash bonus shall be
determined in the sole and absolute discretion of the Compensation Committee and
shall be dependent on, among other things, the achievement of certain
performance levels by the Company, including, without limitation, growth in
funds from operations, and Executive's performance and contribution to
increasing the funds from operations.
3.3 Benefits.
(a) Medical Insurance. The Company shall provide to Executive,
Executive's spouse and children, at its sole cost, such health, dental and
optical insurance as the Company may from time to time make available to its
other executive employees.
(b) Life and Disability Insurance. The Company shall provide Executive
such disability and life insurance as the Company in its sole discretion may
from time to time make available to its other executive employees.
(c) Pension Plans, Etc. Executive shall be entitled to participate in
all pension, 401(k) and other employee plans and benefits established by the
Company on at least the same terms as the Company's other executive employees.
3.4 Automobile Allowance. The Company shall provide Executive with an
automobile allowance of $750.00 per month during the term of Executive's
employment with the Company.
3.5 Vacation. Executive shall be entitled to four vacation weeks (20
business days) in each calendar year, subject to and on a basis consistent with
Company policy. In addition, Executive shall be entitled to all Company
holidays.
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4. POSITION AND DUTIES
4.1 Position. Executive shall serve as Executive Vice President and Chief
Operating Officer. The Company agrees that the duties that may be assigned
Executive shall be the usual and customary duties of the offices of Executive
Vice President and Chief Operating Officer. Executive shall have such executive
power and authority as shall reasonably be required to enable Executive to
discharge the duties of such offices. At the Company's request, Executive may,
at Executive's discretion, serve the Company and its respective subsidiaries in
other offices and capacities in addition to the foregoing, but shall not be
required to do so. In the event the Company and Executive mutually agree that
Executive shall terminate Executive's service in any one or more of the
aforementioned capacities, or Executive's service in one or more of the
aforementioned capacities is terminated, Executive's compensation, as specified
in this Agreement, shall not be diminished or reduced in any manner.
4.2 Devotion of Time and Effort. Executive shall use Executive's good faith
best efforts and judgment in performing Executive's duties as required hereunder
and to act in the best interests of the Company. Executive shall devote
substantially all of his business time and attention to the performance of
services of the Company in his capacity as an officer thereof and as may
reasonably be requested by the Board.
4.3 Other Activities. Executive may engage in other activities for
Executive's own account while employed hereunder, including, without limitation,
charitable, community and other business activities, provided that such other
activities do not materially interfere with the performance of Executive's
duties hereunder and provided that Executive shall not become an employee,
officer or director of Revenue Properties Company Limited, a corporation
organized under the laws of Ontario, Canada, or Revenue Properties (U.S.), Inc.,
a Delaware corporation ("RPUS").
4.4 Business Expenses. The Company shall promptly, but in no event later
than ten days after submission of a claim of expenditure, reimburse Executive
for all reasonable business expenses including, without limitation, business
seminar fees, professional association dues, bar dues, country club membership
fees and other reasonable entertainment expenses incurred by Executive in
connection with the business of the Company, upon presentation to the Company of
written receipts for such expenses. Such reimbursement shall also include, but
not be limited to, reimbursement for all reasonable travel expenses, including
all airfare, hotel and rental car expenses incurred by Executive in travelling
in connection with the business of the Company.
4.5 Company's Obligations. The Company shall provide Executive with any and
all necessary or appropriate current financial information and access to current
information and records regarding all material transactions involving the
Company, including but not limited to acquisition of assets, personnel
contracts, dispositions of assets, service agreements and registration
statements or other state or federal filings or disclosures, reasonably
necessary for Executive to carry out Executive's duties and responsibilities
hereunder. In addition, the Company agrees to provide Executive, as a condition
to Executive's services hereunder, such staff, equipment and office space as is
reasonably necessary for Executive to perform Executive's duties hereunder.
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5. TERMINATION
5.1 By Company Without Cause. The Company may terminate this Agreement
without "cause" (as hereinafter defined) at any time following the Effective
Date, provided that the Company first deliver to Executive the Company's written
election to terminate this Agreement at least 90 days prior to the effective
date of termination.
5.2 Severance Payment.
(a) Amount. In the event the Company terminates Executive's services
hereunder pursuant to Section 5.1 or by Executive pursuant to Section 5.4 or
5.6, Executive shall continue to render services to the Company pursuant to this
Agreement until the date of termination and shall continue to receive
compensation, as provided hereunder, through the termination date. In addition
to other compensation payable to Executive for services rendered through the
termination date, the Company shall pay Executive no later than the date of such
termination, as a single severance payment, an amount equal to (i) Executive's
highest monthly Base Compensation paid hereunder during the preceding 12 month
period, multiplied by 24, plus (ii) two times the average annual bonus
(excluding any bonus payment deemed by the Compensation Committee in its sole
discretion to be a "Special Bonus") received by the Executive during the
preceding twenty-four month period (the "Severance Amount").
(b) Benefits. In the event Executive's employment hereunder is
terminated by the Company without cause pursuant to Section 5.1 or by Executive
pursuant to Section 5.4 or 5.6, then in addition to paying Executive the
Severance Amount, the Company shall continue to provide to Executive and
Executive's spouse and children, as applicable, all of the benefits described in
Section 3.4 for a period of two years commencing on the date of such termination
(the "Severance Benefits").
(c) Acceleration of Vesting. In the event Executive's employment
hereunder is terminated by the Company without cause pursuant to Section 5.1 or
by Executive pursuant to Section 5.4 or 5.6, then in addition to paying
Executive the Severance Amount and the Severance Benefits, the vesting of (i)
the unvested portion of any stock option to purchase Company common stock
granted to Executive ("Stock Options") and (ii) any shares of Company common
stock granted to Executive which is subject to forfeiture ("Restricted Stock"),
shall be accelerated and shall become fully vested and, with respect to
Restricted Stock, shall cease to be subject to forfeiture and, with respect to
Stock Options, shall be exercisable.
(d) Limitation. The foregoing notwithstanding, the total of such
severance payments shall be reduced to the extent that the payment of such
amount would cause Executive's total termination benefits (as determined by
Executive's tax advisor) to constitute an "excess" parachute payment under
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
by reason of such excess parachute payment Executive would be subject to an
excise tax under Section 4999(a) of the Code, but only if Executive determines
that
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the after-tax value of the termination benefits calculated with the foregoing
restriction exceed those calculated without the foregoing restriction.
5.3 By the Company For Cause. The Company may terminate Executive for cause
at any time, upon written notice to Executive. For purposes of this Agreement,
"cause" shall mean:
(a) Executive's conviction for commission of a felony or a crime
involving moral turpitude;
(b) Executive's willful commission of any act of theft, embezzlement or
misappropriation against the Company;
(c) Executive's willful and continued failure to substantially perform
Executive's duties hereunder (other than such failure resulting from Executive's
incapacity due to physical or mental illness), which failure is not remedied
within a reasonable time after demand for substantial performance is delivered
by the Company which specifically identifies the manner in which the Company
believes that Executive has not substantially performed Executive's duties; or
(d) Executive's death or Disability (as hereinafter defined).
In the event Executive is terminated for cause pursuant to this Section
5.3, Executive shall have the right to receive Executive's compensation as
otherwise provided under this Agreement through the effective date of
termination. Executive shall have no further right to receive compensation or
other consideration from the Company or have any other remedy whatsoever against
the Company as a result of this Agreement or the termination of Executive
pursuant to this Section 5.3, except as set forth below with respect to a
termination due to Executive's Disability.
In the event Executive is terminated by reason of Executive's Disability
(but not death), the Company shall immediately pay Executive a single severance
payment equal to the Severance Amount. Said payment shall be in addition to any
disability insurance payments to which Executive is otherwise entitled and any
other compensation earned by Executive hereunder. For purposes of this
Agreement, the term "Disability" shall mean a physical or mental incapacity as a
result of which Executive becomes unable to continue the proper performance of
Executive's duties hereunder for six consecutive calendar months or for shorter
periods aggregating 180 business days in any 12 month period, but only to the
extent that such definition does not violate the Americans with Disabilities Act
of 1990.
5.4 By Executive For Good Reason. Executive may terminate this Agreement
for good reason upon at least 10 days' prior written notice to the Company. For
purposes of this Agreement, "good reason" shall mean:
(a) the Company's material breach of any of its respective obligations
hereunder and either such breach is incurable or, if curable, has not been cured
within 15
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business days following receipt by the Company of written notice from Executive
to the Company of such breach by the Company;
(b) any material decrease in Executive's authority or responsibilities
as Executive Vice President and Chief Operating Officer of the Company without
Executive's prior consent; or
(c) any material decrease in the overall compensation and benefits
payable to Executive by the Company (including, without limitation, Base
Compensation, bonus compensation and any other compensation or benefits payable
to Executive under this Agreement) without Executive's prior consent; or
(d) following a change in control (as defined in Section 5.6, below) of
the Company, the relocation of Executive's principal place of employment to a
location more than 50 miles from Vista, California without Executive's prior
consent.
In the event that Executive terminates this Agreement for good reason
pursuant to this Section 5.4, Executive shall have the right to receive
Executive's compensation as provided hereunder through the effective date of
termination and shall also have the same rights and remedies against the Company
as Executive would have had if the Company had terminated Executive's employment
without cause pursuant to Section 5.1 (including the right to receive the
Severance Amount payable and the Severance Benefits to be provided under Section
5.2).
5.5 Executive's Voluntary Termination. Executive may, at any time,
terminate this Agreement without good reason upon written notice delivered to
the Company at least 90 days prior to the effective date of termination. In the
event of such voluntary termination of this Agreement by Executive: (i)
Executive shall have the right to receive Executive's compensation as provided
hereunder through the effective date of termination; and (ii) the Company on the
one hand, and Executive, on the other hand, shall not have any further right or
remedy against one another except as provided in Sections 6, 7 and 8 hereof
which shall remain in full force and effect.
5.6 Change of Control. Executive may terminate this Agreement, upon at
least 10 days' prior written notice to the Company at any time within one year
after a "change in control" (as hereinafter defined) of the Company. In the
event Executive terminates this Agreement for good reason within one year after
a change in control pursuant to this Section 5.6, (i) Executive shall continue
to render services pursuant hereto and shall continue to receive compensation,
as provided hereunder, through the termination date, (ii) the Company shall pay
Executive no later than the date of such termination, as a single severance
payment, an amount equal to the Severance Amount and (iii) following such
termination, the Company shall provide the Severance Benefits as required by
Section 5.2(b). For purposes of this Agreement, a "change in control" shall mean
the occurrence of any of the following events:
(a) the individuals constituting the Board as of the date of the
initial public offering of common stock of the Company (the "Incumbent Board")
cease for any reason to
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constitute at least a majority of the Board; provided, however, that if the
election, or nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least a majority of the Incumbent Board,
such new director shall be considered a member of the Incumbent Board;
(b) provided that the number of shares of common stock of the Company
directly held by RPUS and its subsidiaries (other than the Company and the
Company's subsidiaries) represents 50% or less of the total outstanding shares
of common stock of the Company, an acquisition of any voting securities of the
Company (the "Voting Securities") by any "person" (as the term "person" is used
for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) (other than RPUS and its subsidiaries)
immediately after which such person has "beneficial ownership" (within the
meaning of Rule 13d-3 promulgated under the 0000 Xxx) of 20% or more of the
combined voting power of the Company's then outstanding Voting Securities; or
(c) approval by the stockholders of the Company of:
(i) a merger, consolidation, share exchange or reorganization of
the Company, unless the stockholders of the Company, immediately before such
merger, consolidation, share exchange or reorganization, own, directly or
indirectly immediately following such merger, consolidation, share exchange or
reorganization, at least 80% of the combined voting power of the outstanding
voting securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization (the "Surviving Company") in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, share exchange or reorganization;
provided, however, that a merger, consolidation, share exchange or
reorganization of the Company shall not constitute a "change in control" if such
merger, consolidation, share exchange or reorganization of the Company is
approved by the Board and is recommended by the Chief Executive Officer of the
Company to the Board for its approval; or
(ii) a complete liquidation or dissolution of the Company; or
(iii) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.
6. CONFIDENTIALITY
During the term of Executive's employment under this Agreement, Executive
will have access to and become acquainted with various information relating to
the Company's business operations, marketing data, business plans, strategies,
employees, contracts, financial records and accounts, projections and budgets,
and similar information. Executive agrees that to the extent such information is
not generally available to the public and gives the Company an advantage over
competitors who do not know of or use such information, such information and
documents constitute "trade secrets" of the Company. Executive further agrees
that all such information and documents relating to the business of the Company
whether they are prepared by Executive or
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come into Executive's possession in any other way, are owned by the Company and
shall remain the exclusive property of the Company. Executive shall not misuse,
misappropriate or disclose any trade secrets of the Company directly or
indirectly, or use them for Executive's own benefit, either during the term of
this Agreement or at any time thereafter, except as may be necessary or
appropriate in the course of Executive's employment with the Company unless such
action is either previously agreed to in writing by the Company or required by
law.
7. NON-SOLICITATION
For a period of one year following the date Executive's employment
hereunder is terminated, Executive shall not solicit or induce any of the
Company's employees, agents or independent contractors to end their relationship
with the Company, or recruit, hire or otherwise induce any such person to
perform services for Executive, or any other person, firm or company. The
restrictions set forth in this Section 7 shall not apply if Executive's
employment is terminated pursuant to Section 5.1, 5.4 or 5.6.
8. NON-COMPETITION AFTER TERMINATION
For a period of one (1) year following the date Executive's employment
hereunder is terminated, Executive shall not engage in the ownership,
development, acquisition, renovation, management or leasing of any shopping
center properties in the Butte, Marin, Sacramento, San Mateo, Santa Xxxxx and
Sonoma counties of Northern California, the Orange, Riverside, San Bernardino
and San Diego counties of Southern California, the Las Vegas metropolitan area
in Nevada, the Maysville seven-county area in Kentucky, the Seattle metropolitan
area in Washington, the Portland metropolitan area in Oregon, the Orlando
metropolitan area in Florida, the Memphis metropolitan area in Tennessee, the
Albuquerque metropolitan area in New Mexico and any other county in which the
Company acquires shopping center property during the term of Executive's
employment hereunder (collectively, the "Restricted Area"). In addition,
Executive shall not engage in any active or passive investment in or reasonably
relating to the ownership, development, acquisition, renovation, management or
leasing of shopping center properties in the Restricted Area for a period of one
year following the date of termination, with the exception of the ownership of
up to one percent of the securities of any publicly-traded companies involved in
such activities. Nothing herein shall relieve or limit Executive's obligation to
comply with Sections 6 and 7. The restrictions set forth in this Section 8 shall
not apply if Executive's employment is terminated pursuant to Section 5.1, 5.4
or 5.6.
9. INDEMNIFICATION
To the fullest extent permitted under applicable law, the Company shall
indemnify, defend and hold Executive harmless from and against any and all
causes of action, claims, demands, liabilities, damages, costs and expenses of
any nature whatsoever (collectively, "Damages") directly or indirectly arising
out of or relating to Executive discharging Executive's duties hereunder on
behalf of the Company, so long as Executive acted in good faith within the
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course and scope of Executive's duties with respect to the matter giving rise to
the claim or Damages for which Executive seeks indemnification.
10. GENERAL PROVISIONS
10.1 Assignment; Binding Effect. Neither the Company nor Executive may
assign, delegate or otherwise transfer this Agreement or any of their respective
rights or obligations hereunder without the prior written consent of the other
party. Any attempted prohibited assignment or delegation shall be void. This
Agreement shall be binding upon and inure to the benefit of any permitted
successors or assigns of the parties and the heirs, executors, administrators
and/or personal representatives of Executive.
10.2 Notices. All notices, requests, demands and other communications that
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given where received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method with electronic confirmation of receipt; the day after it is sent, if
sent for next-day delivery to a domestic address by recognized overnight
delivery service (e.g., FEDEX); and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case notice shall be sent to:
If to the Company: Pan Pacific Retail Properties, Inc.
0000-X Xxxxx Xxxxxxx Xxxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000/1534
If to Executive: Xxxxxxx X. Xxxxxxxx
Pan Pacific Retail Properties, Inc.
0000-X Xxxxx Xxxxxxx Xxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000/1534
Any party may change its address for the purpose of this Section 10.2 by giving
the other party written notice of its new address in the manner set forth above.
10.3 Entire Agreement. This Agreement constitutes the entire agreement of
the parties, and supersedes all prior agreements, understandings and
negotiations, whether written or oral, between the Company and Executive with
respect to the employment of Executive by the Company.
10.4 Amendments; Waivers. This Agreement may be amended or modified, and
any of the terms and covenants may be waived, only by a written instrument
executed by the parties hereto, or, in the case of a waiver, by the party
waiving compliance. Any waiver by any party in
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any one or more instances of any term or covenant contained in this Agreement
shall neither be deemed to be nor construed as a further or continuing waiver of
any such term or covenant of this Agreement.
10.5 Provision; Severable. In case any one or more provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby. If any provision
hereof is determined by any court of competent jurisdiction to be invalid or
unenforceable by reason of such provision extending the covenants and agreements
contained herein for too great a period of time or over too great a geographical
area, or being too extensive in any other respect, such provision shall be
interpreted to extend only over the maximum period of time and geographical
area, and to the maximum extent in all other respects, as to which it is valid
and enforceable, all as determined by such court in such action.
10.6 Attorneys' Fees. If any legal action, arbitration or other proceeding,
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach or default in connection with any of the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, including
any appeal of such action or proceeding, in addition to any other relief to
which that party may be entitled.
10.7 Governing Law. This Agreement shall be construed, performed and
enforced in accordance with, and governed by the laws of the State of California
without giving effect to the principles of conflict of laws thereof.
10.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
THE COMPANY
PAN PACIFIC RETAIL PROPERTIES, INC.
a Maryland corporation
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx,
Chief Executive Officer and President
EXECUTIVE
/s/ XXXXXXX XXXXXXXX
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Xxxxxxx Xxxxxxxx
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