Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of November 6, 2004, by and between
Xxxxxxx Mall Properties, Inc., with its principal place of business at 0000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 (the "Company") and
Xxxxxx X. Xxxxx, residing at the address set forth on the signature page hereof
(the "Executive").
WHEREAS, subject to the terms below, the Company wishes to employ the
Executive, and the Executive wishes to accept such offer, on the terms set forth
below:
Accordingly, the parties hereto agree as follows:
1. Initial Pre-Employment Consultancy.
(a) Notwithstanding any provision of this Agreement to
the contrary, prior to the Initial Date (as defined in Section 1(b)) this
Section 1(a) shall be the only provision of this Agreement applicable to the
Executive's provision of services to the Company. In the event that the Initial
Date does not occur prior to January 31, 2005, or such later time as agreed to
in writing by the parties, this Agreement, other than this Section 1(a), shall
be of no effect and shall be null and void. Beginning September 15, 2004, and
lasting through the Initial Date, the Company shall pay the Executive in
exchange for consulting services provided to the Company an amount of $25,000
per month. The fees for consulting services in 2004 shall be paid no earlier
than January 1 and no later than January 5, 2005 and the fees for consulting
services in 2005 shall be paid no later than the 15th day of the month following
the month in which the services are provided. This amount shall not be reduced
by any withholdings or deductions. In the event that the Company terminates the
Executive's services prior to the Initial Date, or the Initial Date does not
occur prior to January 31, 2005 and the Executive terminates his employment with
the Company after January 31, 2005 and before February 10, 2005, the Company
shall pay the Executive $50,000 in addition to the amount owed to date for
consultant services.
(b) Provided that the Initial Date occurs on or before
January 31, 2005 and provided further that the Executive is still associated
with the Company as a consultant, Section 1(a) shall cease to have any effect,
and the Company hereby agrees to employ the Executive, and the Executive hereby
accepts such employment, for an initial term commencing as of the date of the
initial public offering of the shares of the Company (the "Initial Date"), and
continuing for a three-year period following the Initial Date, unless sooner
terminated in accordance with the provisions of Section 4 or Section 5. Such
employment shall continue for successive one-year periods in accordance with the
terms of this Agreement (subject to termination as aforesaid) unless either
party notifies the other party of non-renewal in writing prior to six months
before the expiration of the initial term and each annual renewal, as applicable
(the period from the Initial Date during which the Executive is employed
hereunder being hereinafter referred to as the "Term").
2. Duties. During the Term, the Executive shall be employed by
the Company as Executive Vice President and Chief Financial Officer of the
Company, reporting to the Chief Executive Officer. The Executive shall
faithfully perform for the Company the duties of said offices and shall perform
such other duties of an executive, managerial or administrative nature as shall
be specified and designated from time to time by the Chief Executive Officer.
The Executive shall devote substantially all of his business time and effort to
the performance of his duties hereunder; provided that in no event shall this
sentence prohibit the Executive from performing personal and charitable
activities, and other business interests approved (not unreasonably withheld) by
the Chairman of the board of directors of the Company (the "Chairman") or the
CEO, and further provided that such other business interests do not violate
Section 6 of this Agreement.
3. Compensation.
3.1 Salary. The Company shall pay the Executive during the Term a
salary at a minimum rate of $225,000 per annum (the "Annual Salary"), in
accordance with the customary payroll practices of the Company applicable to
senior executives. At least annually, the board of directors of the Company (the
"Board") shall review the Executive's Annual Salary and may provide for such
increases therein as it may in its discretion deem appropriate. (Any such
increased salary shall constitute the "Annual Salary" as of the time of the
increase.)
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3.2 Bonus. During the Term, in addition to the Annual Salary, for
each fiscal year of the Company ending during the Term, the Executive shall have
the opportunity to receive an annual bonus pursuant to the Company's bonus plans
and arrangements as in effect from time to time of up to 300% of the Executive's
Annual Salary, but in no event less than 10% of the Executive's Annual Salary,
subject to attainment of performance goals determined prior to the beginning of
such fiscal year by the Board (or as appropriate, a committee of the Board) and
provided to the Executive in writing in a timely manner in accordance with the
Company's ordinary practices. The forgoing shall not limit the Executive's
eligibility to receive any other bonus under any other bonus plan, stock option
or equity-based plan, or other policy or program of the Company.
3.3 Benefits-In General. The Executive shall be permitted during
the Term to participate in any group life, hospitalization or disability
insurance plans, health programs, retirement plans, fringe benefit programs and
other benefits that may be available to other senior executives of the Company
generally, on the same terms as such other executives, in each case to the
extent that the Executive is eligible under the terms of such plans or programs,
and coverage under the Company's health insurance and hospitalization plans
shall include, and the Company shall pay the premiums applicable to such
coverage for, the Executive, the Executive's spouse, minor children and adult
children under age 25 who are full time undergraduate or graduate students, to
the extent elected by the Executive.
3.4 Stock Grant. Effective as of the Initial Date, the Executive
shall be granted a number of restricted shares of common stock of the Company
(the "Initial Restricted Shares"), which shall be subject to forfeiture, as
described below, subject to Sections 4 and 5 and the terms and conditions
described in the provisions of definitive documentation to be provided by the
Company. The number of Initial Restricted Shares so granted shall be equal to
(i) $1,000,000 divided by (ii)the fair market value of a share of common stock
of the Company at the close of business on the Initial Date. The period of
forfeiture with respect to such Initial Restricted Shares shall lapse with
respect to one-fifth of such Initial Restricted Shares on each of the first five
anniversaries of the Initial Date; provided, however that such Initial
Restricted Shares shall vest and become immediately exercisable upon a Change of
Control. Notwithstanding the foregoing, the Company may in its sole discretion
grant to the Executive in lieu of the grant of Initial Restricted Shares
described herein, a profits interest of equivalent value (and subject to the
same forfeiture) in Xxxxxxx Equities of Arizona, LLC (the "Initial Profits
Interest") on such terms as determined by the Company and reasonably approved by
the Executive. The Executive hereby acknowledges that the tax treatment with
respect to the Initial Restricted Shares (or partnership interest, as
applicable) is complex, and the Executive has relied exclusively on his
advisors, and not the Company or its advisors, regarding such matters.
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3.5 Vacation. The Executive shall be entitled to vacation of no
less than 20 business days per year, to be credited in accordance with ordinary
Company policies.
3.6 Expenses-In General. The Company shall pay or reimburse the
Executive for all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of reimbursement, paid) by the Executive during the
Term in the performance of the Executive's services under this Agreement in
accordance with the Company's policies regarding such reimbursements.
3.7 Automobile. During the Term, the Company shall provide the
Executive with an automobile allowance of $500 per month.
3.8 Cellular Telephone. During the Term, the Company shall
provide the Executive with the use of a cellular telephone, or, so long as such
will not increase the Company's expense, reimburse Executive for a cellular
phone and phone plan obtained by the Executive.
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4. Termination upon Death or Disability. If the Executive dies
during the Term, the Term shall terminate as of the date of death, and the
obligations of the Company to or with respect to the Executive shall terminate
in their entirety upon such date except as otherwise provided under this Section
4. If the Executive by virtue of ill health or other disability is unable to
perform substantially and continuously the duties assigned to him for more than
180 consecutive or non-consecutive days out of any consecutive 12-month period,
the Company shall have the right, to the extent permitted by law, to terminate
the employment of the Executive upon notice in writing to the Executive. Upon
termination of employment due to death or disability, (i) the Executive (or the
Executive's estate or beneficiaries in the case of the death of the Executive)
shall be entitled to receive any Annual Salary and other benefits earned and
accrued under this Agreement prior to the date of termination (and reimbursement
under this Agreement for expenses incurred prior to the date of termination);
(ii) for a period of three years after termination of employment, the Executive
(if applicable), and in the event of his death, his spouse and his dependents,
shall receive such continuing coverage under the group health plans they would
have received under this Agreement (but at such costs no higher than as in
effect immediately preceding such termination) as would have applied in the
absence of such termination, provided that, the Company shall in no event be
required to provide any benefits otherwise required by this clause (ii) after
such time as the Executive becomes entitled to receive benefits of the same type
from another employer or recipient of the Executive's services; (iii) without
duplication of any amounts due under clause (i), the Executive shall receive an
amount equal to the annual bonus that, in the absence of such termination, would
have been payable for the fiscal year in which termination occurs, payable at
such time as would have applied in the absence of such termination, with such
amount to be multiplied by a fraction (x) the numerator of which is the number
of days in the fiscal year preceding the termination and (y) the denominator of
which is 365; (iv) all outstanding unvested equity-based awards (including,
without limitation, stock options and restricted stock) held by the Executive
shall fully vest and become immediately exercisable, as applicable, and subject
to the terms of such awards; and (v) the Executive (or the Executive's estate or
beneficiaries in the case of the death of the Executive) shall have no further
rights to any other compensation or benefits hereunder, or any other rights
hereunder (but, for the avoidance of doubt, shall receive such disability and
death benefits as may be provided under the Company's plans and arrangements in
accordance with their terms).
5. Certain Terminations of Employment; Certain Benefits.
5.1 Termination by the Company for Cause; Termination by the
Executive without Good Reason.
(a) For purposes of this Agreement, "Cause" shall mean at
any time from the date of this Agreement, the Executive's:
(i) conviction of (or pleading nolo contendere
to) a felony (but in no event including a
traffic or similar violation);
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(ii) engagement in the performance of his duties
hereunder, in willful misconduct, willful or
gross neglect, fraud, misappropriation or
embezzlement;
(iii) repeated substantial failure to materially
adhere to the reasonable directions of the
Chairman or CEO: or
(iv) material breach of any of the provisions of
Section 6;
provided that the Company shall not be permitted to terminate the Executive for
Cause except on written notice given to the Executive at any time not more than
30 days following the occurrence of any of the events described in clause (i)
through (iv) above (or, if later, the Company's knowledge thereof). No
termination for Cause under clause (i) through (iv) shall be effective unless
the Board makes a determination that Cause exists after notice to the Executive,
and the Executive has been provided with an opportunity (with counsel of his
choice) to contest the determination at a meeting of the Board.
(b) During the term, the Company may terminate this
Agreement and the Executive's employment hereunder for Cause, and the Executive
may terminate his employment on at least 30 days' written notice given to the
Company. If the Company terminates the Executive for Cause, or the Executive
terminates his employment and the termination by the Executive is not for Good
Reason in accordance with Section 5.2, (i) the Executive shall receive Annual
Salary and other benefits (including any bonus for a fiscal year completed
before termination and awarded but not yet paid) earned and accrued under this
Agreement prior to the termination of employment (and reimbursement under this
Agreement for expenses incurred prior to the termination of employment); and
(ii) the Executive shall have no further rights to any other compensation or
benefits under this Agreement on or after the termination of employment.
5.2 Termination by the Company without Cause; Termination by the
Executive for Good Reason.
(a) For purposes of this Agreement, "Good Reason" shall
mean, unless otherwise consented to by the Executive,
(i) the material reduction of the Executive's
authority, duties and responsibilities, or
the assignment to the Executive of duties
materially inconsistent with the Executive's
position or positions with the Company;
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(ii) a reduction in Annual Salary of the
Executive;
(iii) the relocation of the Executive's office to
more than 35 miles from New York, New York,
or the Executive not being provided with an
office, office equipment and access to
secretarial assistance reasonably comparable
to that provided to other similarly situated
officers of the Company;
(iv) the Company's failure to pay the Executive
any amounts otherwise due hereunder or under
any plan, policy, program, agreement,
arrangement or other commitment of the
Company; or
(v) the Company's material and willful breach of
this Agreement.
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof, specifying a termination date
no later than 30 days from the date of such notice and describing the event or
condition purportedly giving rise to the termination for Good Reason, is given
by the Executive to the CEO and the Board within 30 days after such event is
alleged to have occurred; (ii) if there exists (without regard to this clause
(ii)) an event or condition that constitutes Good Reason, the Company shall have
ten days from the date notice of such a termination is given to cure such event
or condition and, if the Company does so, such event or condition shall not
constitute Good Reason hereunder; and (iii) Good Reason shall not be deemed to
exist at any time at which there exists an event or condition which could serve
as the basis of a termination for Cause. In no event shall the Company's notice
of non-renewal, as set forth in Section 1 of this Agreement, be deemed to be a
termination without Cause or constitute Good Reason.
(b) During the Term, the Company may terminate the
Executive's employment and the Executive may terminate the Executive's
employment with the Company at any time for any reason or no reason. If the
Company terminates the Executive's employment (including any termination that
occurs as a result of a Change of Control, as described in Section 5.3) and the
termination is not covered by Section 4 or 5.1, or the Executive terminates his
employment for Good Reason:
(i) the Executive shall receive Annual Salary
and other benefits (including any bonus for
a fiscal year completed before termination)
earned and accrued under this Agreement
prior to the termination of employment (and
reimbursement under this Agreement for
expenses incurred prior to the termination
of employment);
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(ii) the Executive shall receive a single-sum
cash payment equal to 2.99 multiplied by the
sum of (x) the average of the Annual Salary
received by the Executive during the three
previous years, but in no event shall such
average salary be deemed to be less than
$225,000, and (y) the average of the three
previous bonuses received by the Executive
in accordance with Section 3.2 (or, in the
event the Executive has received less than
three bonuses pursuant to Section 3.2 at the
time of such termination, the termination
bonus shall be equal to the average of the
amount of such fewer annual bonuses, if
any), payable no later than ten days after
such termination; and (z) the average value
of the three previous stock grants or
profits interest grants (but in all events,
excluding the Initial Restricted Shares or
Initial Profits Interest) received by the
Executive in accordance with Section 3.2
(or, in the event the Executive has received
less than three grants of additional
restricted shares or additional profits
interests at the time of such termination,
the termination bonus shall be equal to the
average value of such fewer annual grants,
if any), payable no later than ten days
after such termination;
(iii) for a period of three years after
termination of employment, such continuing
coverage under the group health plans the
Executive would have received under this
Agreement as would have applied in the
absence of such termination, provided that
the Company shall in no event be required to
provide any benefits otherwise required by
this clause after such time as the Executive
becomes entitled to receive benefits of the
same type from another employer or recipient
of the Executive's services; and
(iv) all outstanding unvested equity-based awards
(including without limitation stock options
and restricted stock) held by the Executive
shall fully vest and shall become
immediately exercisable, as applicable, in
the case of options, shall continue to be
exercisable for their full terms, and, in
the case of interests granted in Xxxxxxx
Equities Operating Partnership, LP, such
units will become convertible into common
stock of the Company, and all restrictions
on such shares of the Company granted in
connection with the initial public offering
("Lockups") shall expire.
5.3 Change of Control. Without duplication of the foregoing, upon
a "Change of Control" (as defined below) during the Term, all outstanding
unvested equity-based awards (including stock options and restricted stock)
shall fully vest and shall become immediately exercisable, as applicable. In
addition, if, after a Change of Control, the Executive terminates his employment
with the Company as of the three-month anniversary of the Change of Control,
such termination shall be deemed a termination by the Executive for Good Reason
covered by Section 5.2. For purposes of this Agreement, "Change in Control"
shall mean the happening of any of the following during the Term:
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(i) any "person," including a "group" (as such
terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), but excluding
the Company, any entity controlling,
controlled by or under common control with
the Company, any employee benefit plan of
the Company or any such entity, and
Executive and any "group" (as such term is
used in Section 13(d)(3) of the Exchange
Act) of which the Executive is a member) is
or becomes the "beneficial owner" (as
defined in Rule 13(d)(3) under the Exchange
Act), directly or indirectly, of securities
of the Company representing 30% or more of
either (A) the combined voting power of the
Company's then outstanding securities or (B)
the then outstanding common stock of the
Company (in either such case other than as a
result of an acquisition of securities
directly from the Company); provided,
however, that, in no event shall a Change in
Control be deemed to have occurred upon an
initial public offering or a subsequent
public offering of the common stock under
the Securities Act of 1933, as amended; or
(ii) any consolidation or merger of the Company
where the stockholders of the Company,
immediately prior to the consolidation or
merger, would not, immediately after the
consolidation or merger, beneficially own
(as such term is defined in Rule 13d-3 under
the Exchange Act), directly or indirectly,
shares representing in the aggregate 50% or
more of the combined voting power of the
securities of the corporation issuing cash
or securities in the consolidation or merger
(or of its ultimate parent corporation, if
any); or
(iii) there shall occur (A) any sale, lease,
exchange or other transfer (in one
transaction or a series of transactions
contemplated or arranged by any party as a
single plan) of all or substantially all of
the assets of the Company, other than a sale
or disposition by the Company of all or
substantially all of the Company's assets to
an entity, at least 50% of the combined
voting power of the voting securities of
which are owned by "persons" (as defined
above) in substantially the same proportion
as their ownership of the Company
immediately prior to such sale or (B) the
approval by stockholders of the Company of
any plan or proposal for the liquidation or
dissolution of the Company; or
(iv) the members of the Board at the beginning of
any consecutive 24-calendar-month period
(the "Incumbent Directors") cease for any
reason other than due to death to constitute
at least a majority of the members of the
Board; provided that any director whose
election, or nomination for election by the
Company's stockholders, was approved by a
vote of at least a majority of the members
of the Board then still in office who were
members of the Board at the beginning of
such 24-calendar-month period, shall be
deemed to be an Incumbent Director.
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5.4 Parachutes. Notwithstanding any other provision of this
Agreement, in the event that any payments by the Company or an affiliate to the
Executive ("Payments") would be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") on such amounts, then the Executive shall be entitled to receive either
(i) the amount of such payments reduced so that the Executive only shall be
entitled to receive payments, whether or not pursuant to this Agreement, with an
aggregate present value (as determined for purposes of Section 280G of the Code)
of not more than 2.99 times the Executive's applicable "base amount" under
Section 280G of the Code (the "Limited Amount"), or (ii) the aggregate amount of
Payments reduced by the Excise Tax, whichever results in the greatest amount to
the Executive net of any applicable Excise Tax.
6. Covenants of the Executive.
6.1 Covenant Against Competition; Other Covenants. The Executive
acknowledges that (i) the principal business of the Company (which expressly
includes for purposes of this Section 6 (and any related enforcement provisions
hereof), its successors and assigns) is the acquiring, owning and redeveloping
of enclosed shopping malls (such business herein being referred to as the
"Business"); (ii) the Company is one of the limited number of persons who have
developed such a business; (iii) the Company's Business is, in part, national in
scope; (iv) the Executive's work for the Company has given and will continue to
give him access to the confidential affairs and proprietary information of the
Company; (v) the covenants and agreements of the Executive contained in this
Section 6 are essential to the business and goodwill of the Company; and (vi)
the Company would not have entered into this Agreement but for the covenants and
agreements set forth in this Section 6. Accordingly, the Executive covenants and
agrees that:
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(a) By and in consideration of the salary and benefits to
be provided by the Company hereunder, and subject to Executive receiving all
monies due to him under the severance arrangements set forth herein, and further
in consideration of the Executive's exposure to the proprietary information of
the Company, the Executive covenants and agrees that, during the period
commencing on the date hereof and ending one year following the date upon which
the Executive shall cease to be an employee of the Company and its affiliates,
he shall not in the United States, directly or indirectly, except with the prior
approval of the Board, (i) engage in the Business (other than for the Company or
its affiliates), or (ii) render any services to any person, corporation,
partnership or other entity (other than the Company or its affiliates) whose
principal business is to engage in the Business, or (iii) obtain a financial
interest in any corporation, partnership or other entity or arrangement (other
than the Company or its affiliates) principally engaged in the Business, as a
partner, shareholder, principal, agent, employee, consultant or in any other
relationship or capacity; provided, however, that, notwithstanding the
foregoing, the Executive may invest in securities of any entity, solely for
investment purposes and without participating in the business thereof, if (A)
such securities are traded on any national securities exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System, and (B) the
Executive is not a controlling person of, or a member of a group which controls,
such entity. Notwithstanding the foregoing, the restrictions in this Section
6(a) shall not apply upon and after (i) a termination covered by Section 5.2 or
(ii) a termination by the Executive after a Change in Control. In addition, the
restrictions of this Section 6(a) shall not apply to any existing investments or
other activities of the Executive which have been disclosed in writing to the
Board prior to the date hereof.
(b) During and after the period of the Executive's
employment with the Company and its affiliates, the Executive shall keep secret
and retain in strictest confidence, except in connection with the business and
affairs of the Company and its affiliates, all confidential matters relating to
the Company's Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or
hereafter directly or indirectly from the Company or any of its affiliates (the
"Confidential Company Information"); and shall not disclose such Confidential
Company Information to anyone outside of the Company except with the Company's
express written consent and except for Confidential Company Information which is
at the time of receipt or thereafter becomes publicly known through no wrongful
act of the Executive or is received from a third party not under an obligation
to keep such information confidential and without breach of this Agreement.
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(c) During the period commencing on the date hereof and
ending one year following the date upon which the Executive shall cease to be an
employee of the Company and its affiliates, (i) the Executive shall not, without
the Company's prior written consent, directly or indirectly, knowingly (i)
solicit or encourage to leave the employment or other service of the Company, or
any of its affiliates, any employee or independent contractor thereof or (ii)
hire (on behalf of the Executive or any other person or entity) any employee who
has left the employment of the Company or any of its affiliates within the
one-year period which follows the termination of such employee's employment with
the Company and its affiliates, and (ii) the Executive will not, whether for his
own account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the Company's or any of its
affiliates' relationship with, or endeavor to entice away from the Company or
any of its affiliates, any person who during the Term is or was a customer or
client of the Company or any of its affiliates.
6.2 Rights and Remedies upon Breach. The Executive acknowledges
and agrees that any breach by him of any of the provisions of Section 6.1 (the
"Restrictive Covenants") would result in irreparable injury and damage for which
money damages would not provide an adequate remedy. Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the provisions of Section
6.1, the Company and its affiliates, in addition to, and not in lieu of, any
other rights and remedies available to the Company and its affiliates under law
or in equity (including, without limitation, the recovery of damages), shall
have the right and remedy to have the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, including, without limitation,
the right to an entry against the Executive of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants. Any court orders under Section 6.2 shall be limited to preserving the
status quo prior to the act or event giving rise to the dispute pending
arbitration of the dispute under Section 7.3.
7. Other Provisions.
7.1 Severability. The Executive acknowledges and agrees that (i)
he has had an opportunity to seek advice of counsel in connection with this
Agreement and (ii) the Restrictive Covenants are reasonable in geographical and
temporal scope and in all other respects. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
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7.2 Duration and Scope of Covenants. If any court or other
decision-maker of competent jurisdiction determines that any of the Executive's
covenants contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.
7.3 Enforceability; Jurisdiction; Arbitration. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement (other than a controversy or claim arising under Section 6, to the
extent necessary for the Company (or its affiliates, where applicable) to avail
itself of the rights and remedies referred to in Section 6.2) that is not
resolved by the Executive and the Company (or its affiliates, where applicable)
shall be submitted to arbitration in New York, New York in accordance with New
York law and the procedures of the American Arbitration Association. The
determination of the arbitrator(s) shall be conclusive and binding on the
Company (or its affiliates, where applicable) and the Executive and judgment may
be entered on the arbitrator(s)' award in any court having jurisdiction.
7.4 Indemnification and Insurance. The Company agrees to indemnify
(in addition to any other indemnification provided to the Executive under any
separate agreement or the by-laws of the Company) the Executive to the fullest
extent permitted by applicable law, as the same exists and may hereafter be
amended, from and against any and all losses, damages, claims, liabilities and
expenses asserted against, or incurred or suffered by, the Executive (including
the costs and expenses of legal counsel retained by the Company (or if separate
counsel is reasonably required by Executive, the reasonable costs and expenses
of legal counsel retained by the Executive) to defend the Executive and
judgments, fines and amounts paid in settlement actually and reasonably incurred
by or imposed on such indemnified party) with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative in which
the Executive is made a party or threatened to be made a party, either with
regard to his entering into this Agreement or in his capacity as an officer or
director, or former officer or director, of the Company or any affiliate thereof
for which he may serve in such capacity. Such indemnification shall continue
after the Executive is no longer employed by the Company and shall inure to the
benefit of his heirs, executors, and administrators. The Company also agrees to
secure and maintain a minimum of $10,000,000 of officers and directors liability
insurance and a minimum of $10,000,000 of an errors and omissions policy
providing coverage for the Executive, which coverage shall be in an amount that
is the same as applies to other similarly situated executives, and which shall
continue after termination of employment for a reasonable time (but in no event
for a shorter time than is applicable to any other senior executive of the
Company).
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7.5 Legal Fees. The Company shall pay directly or reimburse the
Executive for all reasonable legal fees and expenses incurred by the Executive
in connection with the review, negotiation and execution of this Agreement. The
Company shall pay, at least monthly, all costs and expenses, including
attorneys' fees and disbursements, of the Company and the Executive in
connection with any legal proceeding (including any arbitration), whether or not
instituted by the Company or the Executive, relating to the interpretation or
enforcement of any provision of this Agreement; provided that if the Executive
institutes the proceeding and a court having jurisdiction over such contest
determines that the Executive's claim in such contest is frivolous or maintained
in bad faith, the Executive shall pay his own costs and expenses and promptly
(and in no event more than 60 days after demand therefor by the Company) return
to the Company any amounts previously paid by the Company under this Section
7.5.
7.6 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails as follows:
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(i) If to the Company, to:
Xxxxxxx Mall Properties, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxxxx Chance US LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxxx
(ii) If to the Executive, to the address set
forth on the signature page hereof.
Any such person may by notice given in accordance with this Section 7.6 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
7.7 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
7.8 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such
right, power or privilege.
7.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
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7.10 Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors, heirs (in the case
of the Executive) and assigns. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
rights or obligations may be assigned or transferred, subject to Section 5.3,
pursuant to a merger or consolidation in which the Company is not the continuing
entity, or the sale or liquidation of all or substantially all of the assets of
the Company; provided, however, that the assignee or transferee is the successor
to all or substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law.
7.11 Withholding. The Company shall be entitled to withhold from
any payments or deemed payments any amount of tax withholding it determines to
be required by law.
7.12 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.
7.13 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts together shall constitute one and
the same instrument. Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.
7.14 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 5, 6 and 7.4 and any other
provisions of this Agreement expressly imposing obligations that survive
termination of Executive's employment hereunder, and the other provisions of
this Section 7 to the extent necessary to effectuate the survival of such
provisions, shall survive termination of this Agreement and any termination of
the Executive's employment hereunder.
7.15 Existing Agreements. The Executive represents to the Company
that he is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit him from executing this Agreement or limit his ability to fulfill
his responsibilities hereunder, except that, as previously disclosed to the
Board, the Executive may have certain non-solicitation and non-interference
obligations to a former employer.
7.16 Headings. The headings in this Agreement are for reference
only and shall not affect the interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed their names as of
the day and year first above written.
XXXXXXX MALL PROPERTIES, INC.
By:
------------------------------
Name:
Title:
------------------------------
Xxxxxx X. Xxxxx
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