EMPLOYMENT AGREEMENT
EXHIBIT
10.4
This
EMPLOYMENT AGREEMENT (“Agreement”)
is
made effective as of November 6, 2006 (“Effective
Date”)
by and
between Equity One, Inc, a Maryland corporation (the “Company”),
and
Xxxxxxx X. Xxxxxxxx (“Executive”).
W
I T N E S S E T H:
The
Company desires to employ Executive as of the Effective Date, on the terms
and
conditions set forth in this Agreement, and Executive desires to be so
employed.
IN
CONSIDERATION
of the
premises and the mutual covenants set forth below, the parties hereby agree
as
follows:
Section
1. Employment.
The
Company hereby agrees to employ Executive and Executive hereby agrees to
such
employment, on the terms and conditions hereinafter set forth.
Section
2. Term.
The
period of employment of Executive by the Company hereunder (the “Employment
Period”)
shall
commence on the Effective Date and shall continue through December 31, 2010.
This Agreement and the Employment Period automatically shall be renewed for
successive one-year periods thereafter, unless either party gives the other
party prior written notice at least six months before the expiration of the
Employment Period of that party’s intent to allow the Employment Period and this
Agreement to expire.
Section
3. Position
and Duties.
From
and after the Effective Date during the Employment Period, Executive shall
serve
as Executive Vice President and Chief Operating Officer of the Company and
shall
report to the Chief Executive Officer. Executive shall have those powers
and
duties normally associated with the position of a Executive Vice President
and
Chief Operating Officer and such other powers and duties as the Chief Executive
Officer may properly prescribe, provided that such other powers and duties
are
consistent with Executive’s position as Executive Vice President and Chief
Operating Officer. Executive shall devote his full business time, attention
and
energies to Company affairs as are necessary to fully perform his duties
for the
Company (other than absences due to illness or vacation).
Section
4. Place
of Performance.
The
principal place of employment of Executive shall be at the Company’s corporate
offices in North Miami Beach, Florida, and the Executive shall perform his
duties, as required by Section 3, at the corporate offices in North Miami
Beach,
Florida, with such reasonable business-related travel as is necessary to
perform
those duties.
Section
5. Compensation
and Related Matters.
(a) Salary.
During
the Employment Period, the Company shall pay Executive an annual base salary
of
not less than $350,000 (“Base
Salary”).
Executive’s Base Salary shall be paid in approximately equal installments in
accordance with the Company’s customary payroll practices. If the Company
increases Executive’s Base Salary, such increased Base Salary shall then
constitute the Base Salary for all purposes of this Agreement. The Company
may
not decrease Executive’s Base Salary during the Employment Period.
(b) Annual
Bonus.
The
compensation committee (the “Compensation
Committee”)
of the
Board of Directors of the Company (the “Board”)
shall
review with the Chief Executive Officer the Executive’s performance at least
annually during each calendar year of the Employment Period and cause the
Company to award Executive such cash bonus (“Bonus”)
as 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 Executive’s Bonus shall be
determined in the discretion of the Compensation Committee in consultation
with
the Chief Executive Officer and shall depend on, among other things, the
Company’s achievement of certain performance levels established by the
Compensation Committee, which may include, among others, such performance
measures as growth of earnings, funds from operations per share of Company
common stock, earnings per share of Company common stock and Executive’s
performance and contribution to increasing the funds from operations; provided,
however, that in no event shall the amount of Executive’s Bonus be less than
half of the then Base Salary for each year of this Agreement ($26,849 for
the
year containing the Effective Date). The Company shall pay any Bonus to
Executive on or before March 15th
of the
calendar year following the calendar year to which the bonus
relates.
(c) Restricted
Stock and Stock Options.
(i) On
the
Effective Date, the Company shall grant to Executive, either under the equity
compensation plans of the Company or otherwise, 40,000 shares of the Company’s
restricted stock. Such shares of restricted stock shall vest in equal
installments on each of December 31, 2007, December 31, 2008, December 31,
2009
and December 31, 2010. Dividends on restricted stock shall be paid to Executive
at such times as dividends are paid to shareholders of the Company’s common
stock.
(ii) On
the
Effective Date, the Company shall grant to Executive, either under the equity
compensation plans of the Company or otherwise options to purchase 400,000
shares of the Company’s common stock. Such stock options shall vest in equal
installments on each of December 31, 2007, December 31, 2008, December 31,
2009
and December 31, 2010.
(iii) During
each year of the Employment Period after the first year of the Employment
Period, the Compensation Committee shall review with the Chief Executive
Officer
the Executive’s performance at least annually and may, in its sole discretion,
cause the Company to grant to Executive stock options and/or shares of
restricted stock (in addition to those granted in clauses (i) and (ii) above)
in
an amount, if any, 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. Stock options
or
shares of restricted stock so granted or issued, if any, shall vest in equal
installments on each of the first, second, third and fourth anniversaries
of the
date of grant thereof, provided however that in the event the Company issues
Executive a notice of non-renewal, all unvested restricted stock and options
shall vest as of the last day of the Employment Period.
(iv) Any
stock
options granted to the Executive in accordance with this Agreement shall
have an
exercise price equal to the average closing price of a share of the Company’s
common stock on the principal stock exchange on which the Company’s common stock
is listed and traded during the ten (10) trading days immediately preceding
the
date of grant thereof. In addition, Executive shall have the right to exercise
all vested options within the six (6) month period immediately following
Executive’s termination of employment, provided, however, that in the event
Executive voluntarily terminates Executive’s employment (for other than Good
Reason), or the Company terminates Executive’s employment for Cause, Executive
shall only have ninety (90) days following termination of employment to exercise
Executive’s options. The grant of options and/or restricted stock to Executive
shall be evidenced by a separate written agreement(s) to be provided to
Executive. In the event of any conflict between the terms of such stock option
or restricted stock agreement or the plan relating thereto and the terms
of this
Agreement, the terms of this Agreement shall control.
(v) If
any
shares or options provided for above are not issued under the equity
compensation plans of the Company, the Company hereby agrees to use commercially
reasonable efforts to prepare and file with the Securities and Exchange
Commission a registration statement and such other documents as may be necessary
in order to comply with the provisions of the Securities Act of 1933, as
amended, so as to permit the registered resale of the shares of restricted
stock
granted hereunder and to permit the registered issuance of any shares of
common
stock pursuant to the stock options granted hereunder to the extent not covered
by an existing, effective registration statement of the Company.
(d) Long
Term Cash Incentive Compensation.
Executive shall be entitled to the long-term cash incentive compensation,
if
any, determined in accordance with Exhibit
A
attached
hereto.
(e) Expenses.
The
Company shall reimburse Executive for all reasonable expenses incurred by
him in
the discharge of his duties hereunder, including travel expenses, upon the
presentation of reasonably itemized statements of such expenses in accordance
with the Company’s policies and procedures now in force or as such policies and
procedures may be modified with respect to all senior executive officers
of the
Company.
(f) Vacation;
Illness.
Executive shall be entitled to the number of weeks of vacation per year provided
to the Company’s senior executive officers, but in no event less than three (3)
weeks annually. Executive shall be entitled to take up to 30 days of sick
leave
per year; provided, however, that any prolonged illness resulting in absenteeism
greater than the sick leave permitted herein or disability shall not constitute
“Cause” for termination under the terms of this Agreement.
(g) Welfare,
Pension and Incentive Benefit Plans.
During
the Employment Period, Executive (and his wife and dependents to the extent
provided therein) shall be entitled to participate in and be covered under
all
the welfare benefit plans or programs maintained by the Company from time
to
time on terms no less favorable than provided for any of its senior executives
including, without limitation, all medical, hospitalization, dental, disability,
accidental death and dismemberment and travel accident insurance plans and
programs. In addition, during the Employment Period, Executive shall be eligible
to participate in and be covered under all pension, retirement, savings and
other employee benefit, perquisite, change in control and executive compensation
plans and any annual incentive or long-term performance plans and programs
maintained from time to time by the Company on terms no less favorable than
provided for any of its senior executives.
(h) Automobile.
During
the Employment Term, the Company shall provide Executive with an automobile
allowance equal to $800 per month.
(i) Relocation.
Executive shall relocate his primary residence to Miami-Dade, Broward or
Palm
Beach County, Florida, prior to March 31, 2007. The Company shall reimburse
Executive for reasonable moving costs and expenses associated with such
relocation of his immediate family and his relocation to Miami-Dade, Broward
or
Palm Beach County, in each case, upon the presentation of reasonably itemized
statements of such costs and expenses in accordance with the Company’s policies
and procedures now in force or as such policies and procedures may be modified
with respect to all senior executive officers of the Company. In no event
shall
the aggregate amount of any such reimbursement exceed $40,000.
Section
6. Termination.
Executive’s employment hereunder may be terminated during the Employment Period
under the following circumstances:
(a) Death.
Executive’s employment hereunder shall terminate upon his death.
(b) Disability.
If, as
a result of Executive’s incapacity due to physical or mental illness, Executive
shall have been substantially unable to perform his duties hereunder for
an
entire period in excess of one hundred twenty (120) days in any 12-month
period
despite
any reasonable accommodation available from the Company, the Company shall
have
the right to terminate Executive’s employment hereunder for “Disability”, and
such termination in and of itself shall not be, nor shall it be deemed to
be, a
breach of this Agreement.
(c) Without
Cause.
The
Company shall have the right to terminate Executive’s employment for any reason
or for no reason, which termination shall be deemed to be without Cause,
and
such termination in and of itself shall not be, nor shall it be deemed to
be, a
breach of this Agreement.
(d) Cause.
The
Company shall have the right to terminate Executive’s employment for Cause, and
such termination in and of itself shall not be, nor shall it be deemed to
be, a
breach of this Agreement. For purposes of this Agreement, the Company shall
have
“Cause” to terminate Executive’s employment upon Executive’s:
(i) Breach
of
any material provisions of this Agreement, including, without limitation,
the
failure of the Executive to perform the duties in the manner required by
Section
3 and 4 hereunder;
(ii) Conviction
of a felony, capital crime or any crime involving moral turpitude, including
but
not limited to crimes involving illegal drugs; or
(iii) Willful
misconduct that is materially economically injurious to the Company or to
any
Company Affiliate.
For
purposes of this Section 6(d), no act, or failure to act, by Executive shall
be
considered “willful” unless committed in bad faith and without a reasonable
belief that the act or omission was in the best interests of the Company
or
Company Affiliate; provided, however, that the willful requirement outlined
in
paragraph (iii) above shall be deemed to have occurred if Executive’s action or
non-action continues for more than ten (10) days after Executive has received
written notice of the inappropriate action or non-action. Failure to achieve
performance goals, in and of itself, shall not be grounds for a termination
for
Cause. For purposes of this Agreement, “Company Affiliate” means any entity in
control of, controlled by or under common control with the Company or in
which
the Company owns any common or preferred stock or interest or any entity
in
control of, controlled by or under common control with such entity
thereof.
Cause
shall not exist under paragraph (i) or (iii) above unless and until the Company
has delivered to Executive written notice of its determination that Executive
was guilty of the conduct set forth in paragraph (i) or (iii) and specifying
the
particulars thereof in detail. However, in the case of conduct described
in
paragraph (i), Cause will not be considered to exist unless Executive is
given
30 days from the date of such notice to cure such breach, or if the breach
cannot be reasonably cured within such 30 day period, to commence to cure
such
breach, to the satisfaction of the Company, within such 30 day period. If
Executive has not cured such breach to the satisfaction of the Company within
90
days after the date of such notice, the Company shall give a Notice of
Termination to Executive. In the event a final determination is made by a
court
of competent jurisdiction that the Company’s termination of Executive under this
Section 6(d) does not meet the definition of Cause, Executive will be deemed
to
have been terminated by the Company without Cause.
(e) Following
Change in Control.
Within
twelve (12) months after a Change in Control occurs, Executive may resign
his
employment or his employment may be terminated for any reason, including,
without limitation, death or Disability. For purposes of this Agreement,
such a
termination of employment (including, without limitation, as a result of
such a
resignation) is referred to as “Termination Following Change in Control.” For
this purpose, a “Change in Control” means:
(i) Consummation
by the Company of (A) a reorganization, merger, consolidation or other form
of
corporate transaction or series of transactions, in each case, other than
a
reorganization, merger or consolidation or other transaction that would result
in the holders of the voting securities of the Company outstanding immediately
prior thereto holding securities that represent immediately after such
transaction more than 50% of the combined voting power of the voting securities
of the Company or the surviving company or the parent of the surviving company,
or (B) a liquidation or dissolution of the Company or (C) the sale of all
or
substantially all of the assets of the Company;
(ii) Individuals
who, as of the Effective Date, constitute the Board (the “Incumbent
Board”)
cease
for any reason to constitute at least a majority of the Board, provided (A)
that
any person becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Company’s stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company, as such terms are
used
in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange
Act
of 1934) or (B) any individual appointed to the Board by the Incumbent Board
shall be, for purposes of this Agreement, considered as though such person
were
a member of the Incumbent Board; or
(iii) The
acquisition (other than from the Company) by any person, entity or “group,”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, of more than 26% of either the then outstanding shares of the
Company’s common stock or the combined voting power of the Company’s then
outstanding voting securities entitled to vote generally in the election
of
directors (hereinafter referred to as the ownership of a “Controlling
Interest”)
excluding, for this purpose, any acquisitions by (A) the Company or its
subsidiaries, or (B) any person, entity or “group” that as of the Effective Date
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) a Controlling Interest of the Company or
any
affiliate of such person, entity or “group.”
Executive
acknowledges and agrees that, notwithstanding anything in this Agreement
to the
contrary, a Change in Control shall not be deemed to have occurred for purposes
of this Agreement if, after the consummation of any of the events described
in
the definition of a Change in Control, Xxxxx Xxxxxxx remains Chairman of
the
Board of the Successor Employer (as hereinafter defined) and if Gazit, Inc.
and
its affiliates own in the aggregate 33% or more of the outstanding voting
securities of the Successor Employer. For purposes of this Agreement, the
term
“Successor Employer” shall mean the Company, the reorganized, merged or
consolidated Company (or the successor thereto), or the acquiror (through
merger
or otherwise) of all or substantially all of the assets of the Company, as
the
case may be. If an event described in Section 6(e)(i), (e)(ii), or (e)(iii)
above occurs, but the event does not constitute a Change in Control pursuant
to
the provisions of this paragraph, the Performance Period (as defined in Exhibit
A which is attached hereto and made part hereof) shall be deemed to end on
the
business day immediately preceding the applicable event.
(f) Resignation
Other Than Termination Following Change in Control.
Executive shall have the right to resign his employment by providing the
Company
with a Notice of Termination, as provided in Section 7. If such resignation
occurs other than within twelve (12) months after a Change in Control occurs,
Executive’s resulting termination of employment shall be considered as other
than Termination Following Change in Control. Any termination pursuant to
this
paragraph shall not in and of itself be, nor shall it be deemed to be, a
breach
of this Agreement.
(g) Resignation
For Good Reason.
Executive
shall have the right to resign his employment for Good Reason. For purposes
of
this Agreement, Executive shall have Good Reason to terminate Executive’
employment upon:
(i) the
material breach by the Company of any of its agreements set forth herein
and the
failure of the Company to correct such breach within thirty (30) days after
the
receipt by the Company of written notice from Executive specifying in reasonable
detail the nature of such breach; or
(ii) any
substantial or material diminution of Executive’s responsibilities including
without limitation reporting responsibilities and/or title.
Section
7. Termination
Procedure.
(a) Notice
of Termination.
Any
termination of Executive’s employment by the Company or by Executive (whether by
resignation or otherwise) during the Employment Period, except termination
due
to Executive’s death pursuant to Section 6(a), shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section
15.
For purposes of this Agreement, a “Notice of Termination” shall mean a notice
that states the specific termination provision in this Agreement relied upon
and
shall set forth in reasonable detail the facts and circumstances claimed
to
provide a basis for termination of Executive’s employment under the provision so
stated.
(b) Date
of Termination.
The
effective date of any termination of Executive’s employment by the Company or by
Executive (whether by resignation or otherwise) (the “Date
of Termination”)
shall
be (i) if Executive’s employment is terminated by his death, the date of his
death, and (ii) if Executive’s employment is terminated for any other reason by
the Company or by Executive (whether by resignation or otherwise), the date
on
which a Notice of Termination is given or any later date (within thirty (30)
days after the giving of such notice) set forth in such Notice of
Termination.
Section
8. Compensation
Upon Termination or During Disability.
If
Executive experiences a Disability or his employment terminates during the
Employment Period, the Company shall provide Executive with the payments
and
benefits set forth below; provided, however, as a specific condition to being
entitled to any payments or benefits under this Section 8, Executive must
have
resigned as a director, trustee and officer of the Company and all of its
subsidiaries and as a member of any committee of the board of directors of
the
Company and its subsidiaries of which he is a member and must have joined
the
Company in having executed a mutual release of both the Company and its
Affiliates as well as Executive, in the form attached hereto as Exhibit
B.
Executive acknowledges and agrees that the payments set forth in this Section
8
constitute liquidated damages for termination of his employment during the
Employment Period, which the parties hereto have agreed to as being reasonable,
and Executive acknowledges and agrees that he shall have no other remedies
in
connection with or as a result of any such termination.
(a) Disability;
Death.
During
any period that Executive fails to perform his duties hereunder as a result
of
Disability, Executive shall continue to receive his full Base Salary set
forth
in Section 5(a) and his full Bonus as set forth in Section 5(b) until his
employment is terminated pursuant to Section 6(b). In addition, if Executive’s
employment is terminated for Disability pursuant to Section 6(b), or due
to
Executive’s death pursuant to Section 6(a), in each case other than a
Termination Following Change in Control:
(i) the
Company shall pay to Executive or his estate, as the case may be, a lump
sum
payment as soon as practicable following the Date of Termination equal to
(A)
his Base Salary, Accrued Bonus (as defined in Section 8(d) below) and accrued
vacation pay through the Date of Termination, plus
(B) one
of the following two amounts, as applicable, (1) if there is one year or
more
remaining in the Employment Period, the sum of Executive’s then current Base
Salary for one year plus his Average Bonus (as defined in Section 8(d) below),
or (2) if there is less than one year remaining in the Employment Period,
the
amount of Base Salary (as provided for in Section 5(a)) Employee would have
received through the end of the Employment Period plus his Average Bonus
pro
rated for the portion of the fiscal year following the date of termination
through the end of the Employment Period and plus
(C) the
amount not yet paid to Executive under Section 5(d);
(ii) stock
options and restricted stock granted to Executive prior to the Date of
Termination that were to vest based on the passage of time shall fully vest
as
of the Date of Termination;
(iii) the
Company shall reimburse Executive, or his estate, as the case may be, pursuant
to Section 5(e) for reasonable expenses incurred, but not paid prior to such
termination of employment; and
(iv) Executive
or his estate or named beneficiaries shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive or his estate or
named
beneficiaries in accordance with the terms and provisions of any agreements,
plans or programs of the Company.
(b) Termination
By Company Without Cause, Termination by Executive for Good Reason or
Termination Following Change in Control.
If (x)
Executive’s employment is terminated by the Company without Cause, (y) Executive
terminates his employment with the Company for Good Reason, or (z) Executive
resigns and such resignation is a Termination Following a Change of Control
or
is terminated by reason of death or Disability and such termination is a
Termination Following Change in Control:
(i) the
Company shall pay to Executive his Base Salary, Accrued Bonus and accrued
vacation pay through the Date of Termination, as soon as practicable following
the Date of Termination;
(ii) in
the
case of (x) or (y) above, the Company shall pay to Executive as soon as
practicable following the Date of Termination a lump-sum payment equal to
two
(2) times the sum of Executive’s then current Base Salary plus his Average
Bonus;
(iii) in
the
case of (z) above, the Company shall pay to Executive as soon as practicable
following the Date of Termination a lump-sum payment equal to three (3) times
the sum of Executive’s then current Base Salary plus his Average
Bonus;
(iv) the
Company shall pay to Executive as soon as practicable following the Date
of
Termination a lump-sum payment equal to the amount not yet paid to Executive
under Section 5(d);
(v) in
the
case of (x) or (y) above, stock options and restricted stock granted to
Executive prior to the Date of Termination that were to vest based on the
passage of time shall fully vest as of the Date of Termination;
(vi) in
the
case of (z) above, (A) stock options and restricted stock granted to Executive
prior to the Date of Termination that were to vest based on the passage of
time
shall fully vest as of the Date of Termination; and (B) if Executive’s Date of
Termination precedes the otherwise applicable end-date for a performance
period
for stock options or restricted stock granted to Executive pursuant to Section
5(c), or granted to Executive under any equity-based award program sponsored
by
the Company, a percentage of such stock options or restricted stock shall
vest
as of the Date of Termination equal to the period of time that has elapsed
since
the date of award of such stock options or restricted stock compared to the
total time during the performance period stated in the award of such stock
options or restricted stock;
(vii) the
Company shall reimburse Executive pursuant to Section 5(e) for reasonable
expenses incurred, but not paid prior to such termination of employment;
and
(viii) Executive
shall be entitled to any other rights, compensation and/or benefits as may
be
due to Executive in accordance with the terms and provisions of any agreements,
plans or programs of the Company.
(c) Termination
by the Company for Cause or Resignation By Executive Other Than Termination
For
Good Reason and other than Termination Following Change in
Control.
If
Executive’s employment is terminated by the Company for Cause, or if Executive’s
resignation is other than for Good Reason or other than a Termination Following
Change in Control:
(i) the
Company shall pay Executive his Base Salary and, to the extent required by
law
or the Company’s vacation policy, his accrued vacation pay through the Date of
Termination, as soon as practicable following the Date of
Termination;
(ii) the
Company shall reimburse Executive pursuant to Section 5(e) for reasonable
expenses incurred, but not paid prior to such termination of employment,
unless
such termination resulted from a misappropriation of Company funds;
(iii) Executive
shall be entitled to any other rights, compensation and/or benefits as may
be
due to Executive in accordance with the terms and provisions of any agreements,
plans or programs of the Company; and
(iv) All
unvested stock options and unvested restricted stock granted to Executive
shall
be forfeited.
(d) Bonus.
If
Executive’s termination of employment occurs after the end of any fiscal year of
the Company for which a Bonus would be payable to Executive pursuant to Section
5(b) above and Executive’s termination is not for Cause and Executive’s
termination occurs prior to the date bonuses for senior executives are paid
for
the fiscal year (including, without limitation, the Bonus), Executive (or
his
estate, as the case may be) shall be entitled to payment of any Bonus that
is
earned for such fiscal year without regard to whether Executive’s termination of
employment precedes the Bonus payment date. If Executive’s termination of
employment occurs prior to the end of any fiscal year of the Company for
which a
Bonus would be payable to Executive pursuant to Section 5(b) above and
Executive’s termination is not for Cause or a voluntary termination by Executive
(other than for Good Reason or a Termination Following a Change of Control),
Executive (or his estate, as the case may be) shall be entitled to payment
of a
pro rated portion of the Bonus calculated as follows: Executive’s Average Bonus
shall be multiplied by a fraction the numerator of which shall be the number
of
days in the fiscal year that elapsed prior to Executive’s termination of
employment and the denominator of which shall be 365. The amount Executive
is
entitled to under either of the two preceding sentences shall be referred
to in
this Agreement as the “Accrued
Bonus”.
For
purposes of this Agreement, the “Average
Bonus”
shall
mean the average annual Bonus (not including any Bonus payable for the calendar
year including the Effective Date), if any, for the three (3) most recently
completed fiscal years. In addition, if Executive’s termination occurs before
Executive has worked and been eligible to receive a Bonus for three fiscal
years, any references in this Section 8 to Executive’s Average Bonus will be
interpreted to mean such lesser number of fiscal years during which Executive
was employed before termination and eligible to receive a Bonus. If Executive’s
employment is terminated during the first fiscal year following the year
including the Effective Date, then the Average Bonus shall be deemed to mean
the
an amount equal to 100% percent of the then Base Salary.
(e) Tax
Payment by the Company.
(i) If
any
amount or benefit paid or distributed to Executive pursuant to this Agreement,
taken together with any amounts or benefits otherwise paid or distributed
to
Executive by the Company or any affiliated company (collectively, the
“Covered
Payments”),
are
or become subject to the tax (the “Excise
Tax”)
imposed
under Section 4999 of the Code, or any similar tax that may hereafter be
imposed, the Company shall pay to Executive at the time specified below an
additional amount (the “Tax
Reimbursement Payment”)
such
that the net amount retained by Executive with respect to such Covered Payments,
after deduction of any Excise Tax on the Covered Payments and any Federal,
state
and local income or employment tax and Excise Tax on the Tax Reimbursement
Payment provided for by this Section 8(e), but before deduction for any Federal,
state or local income or employment tax withholding on such Covered Payments,
shall be equal to the amount of the Covered Payments.
(ii) For
purposes of determining whether any of the Covered Payments will be subject
to
the Excise Tax and the amount of such Excise Tax: (A) such Covered Payments
will
be treated as “parachute payments” within the meaning of Section 280G of the
Code, and all “parachute payments” in excess of the “base amount” (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject to the
Excise
Tax, unless, and except to the extent that, in the good faith judgment of
the
Company’s independent certified public accountants appointed prior to the date
of the Change in Control or tax counsel selected by such accountants (the
“Accountants”),
the
Company has a reasonable basis to conclude that such Covered Payments (in
whole
or in part) either do not constitute “parachute payments” or represent
reasonable compensation for personal services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in excess of the allocable
“base
amount,” or such “parachute payments” are otherwise not subject to such Excise
Tax, and (B) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.
(iii) For
purposes of determining the amount of the Tax Reimbursement Payment, Executive
shall be deemed to pay: (A) Federal income, social security, Medicare and
other
employment taxes at the highest applicable marginal rate of Federal income
taxation for the calendar year in which the Tax Reimbursement Payment is
to be
made, and (B) any applicable state and local income or other employment taxes
at
the highest applicable marginal rate of taxation for the calendar year in
which
the Tax Reimbursement Payment is to be made, net of the maximum reduction
in
Federal income taxes that could be obtained by Executive from the deduction
of
such state or local taxes if paid in such year.
(iv) The
Tax
Reimbursement Payment (or portion thereof) provided for above shall be paid
to
Executive not later than 10 business days following the payment of the Covered
Payments.
(v) If
the
Excise Tax is subsequently determined by the Accountants or pursuant to any
proceeding or negotiations with the Internal Revenue Service to be less than
the
amount taken into account hereunder in calculating the Tax Reimbursement
Payment
made, Executive shall repay to the Company, at the time of such determination,
the portion of the prior Tax Reimbursement Payment that would not have been
paid
if the reduced Excise Tax had been taken into account in initially calculating
the Tax Reimbursement Payment, plus interest on the amount of such repayment
at
the rate provided in Section 1274(b)(2)(b) of the Code. Notwithstanding the
foregoing, if any portion of the Tax Reimbursement Payment to be refunded
to the
Company has been paid to any Federal, state or local tax authority, repayment
thereof shall not be required until actual refund or credit of such portion
has
been made to Executive, and interest payable to the Company shall not exceed
interest received or credited to Executive by such tax authority for the
period
it held such portion. Executive and the Company shall mutually agree upon
the
course of action to be pursued (and the method of allocating the expenses
thereof) if Executive’s good faith claim for refund or credit is
denied.
(vi) If
the
Excise Tax is later determined by the Accountants or pursuant to any proceeding
or negotiations with the Internal Revenue Service to exceed the amount taken
into account hereunder at the time the Tax Reimbursement Payment is made
(including, but not limited to, by reason of any payment the existence or
amount
of which cannot be determined at the time of the Tax Reimbursement Payment),
the
Company shall make an additional Tax Reimbursement Payment in respect of
such
excess (plus any interest or penalty payable with respect to such excess)
at the
time that the amount of such excess is finally determined.
(f) Tax
Compliance Delay in Payment.
If the
Company reasonably determines that any payment or benefit due under this
Section
8, or any other amount that may become due to Executive after termination
of
employment, is subject to Section 409A of the Internal Revenue Code of 1986
(“Code”),
as
amended, and that Executive is a “specified employee,” as defined in Code
Section 409A, upon termination of Executive’s employment for any reason other
than death (whether by resignation or otherwise), no amount may be paid to
Executive earlier than six months after the date of termination of Executive’s
employment if such payment would violate the provisions of Code Section 409A
and
the regulations issued thereunder, and payment shall be made, or commence
to be
made, as the case may be, on the date that is six months and one day after
the
termination of Executive’s employment, together with interest at the rate of
five percent (5%) per annum beginning with the date one day after the
termination of Executive’s employment until the date of payment.
Section
9. Repayment
By Executive. Executive
acknowledges and agrees that the bonuses and other incentive-based or
equity-based compensation received by him from the Company, and any profits
realized from the sale of securities of the Company, are subject to the
forfeiture requirements set forth in the Xxxxxxxx-Xxxxx Act of 2002 and other
applicable laws, rules and regulations, under the circumstances set forth
therein. If any such forfeiture is required pursuant to the Xxxxxxxx-Xxxxx
Act
of 2002 or other applicable law, rule or regulation, within thirty (30) days
after notice thereof from the Company, Executive shall pay to the Company
the
amount required to be forfeited.
Section
10. Confidential
Information; Ownership of Documents and Other Property.
(a) Confidential
Information.
Without
the prior written consent of the Company, except as may be required by law,
Executive will not, at any time, either during or after his employment by
the
Company, directly or indirectly divulge or disclose to any person, entity,
firm
or association, including, without limitation, any future employer, or use
for
his own or others benefit or gain, any financial information, prospects,
customers, tenants, suppliers, clients, sources of leads, methods of doing
business, intellectual property, plans, products, data, results of tests
or any
other trade secrets or confidential materials or like information of the
Company, including (but not by way of limitation) any and all information
and
instructions, technical or otherwise, prepared or issued for the use of the
Company (collectively, the “Confidential
Information”),
it
being the intent of the Company, with which intent Executive hereby agrees,
to
restrict him from disseminating or using any like information that is not
readily available to the general public.
(b) Information
is Property of Company.
All
books, records, accounts, tenant, customer, client and other lists, tenant,
customer and client street and e-mail addresses and information (whether
in
written form or stored in any computer medium) relating in any manner to
the
business, operations, or prospects of the Company, whether prepared by Executive
or otherwise coming into Executive’s possession, shall be the exclusive property
of the Company and shall be returned immediately to the Company upon the
expiration or termination of Executive’s employment or at the Company’s request
at any time. Upon the expiration or termination of his employment, Executive
will immediately deliver to the Company all lists, books, records, schedules,
data, and other information (including all copies) of every kind relating
to or
connected with the Company and its activities, business, and
customers.
Section
11. Restrictive
Covenant; Notice of Activities.
(a) Restricted
Activities.
During
the Employment Period and for a period of one (1) year after the expiration
or
termination of Executive’s employment, whether by resignation or otherwise,
(except if Executive’s employment is terminated by the Company without Cause or
by Executive for Good Reason, or if Executive’s termination of employment
constitutes a Termination Following Change in Control or results due to
non-renewal of this Agreement), Executive shall not, without the prior written
consent of the Company, directly or indirectly, (i) enter into the employment
of, render any services to, invest in, lend money to, engage, manage, operate,
own, or otherwise offer other assistance to or participate in, as an officer,
director, manager, employee, principal, proprietor, representative, stockholder,
member, partner, associate, consultant or otherwise, any person or entity
that
competes, plans to compete or is considering competing with the Company in
any
business of the Company existing or proposed at the time Executive shall
cease
to perform services hereunder (a “Competing
Entity”)
in any
state in which the Company conducts material operations (defined as accounting
for 10% or more of the Company’s revenue), or owns assets the value of which
totals 10% or more of the total value of the Company’s assets, at any time
during the term of this Agreement (collectively, the “Territory”);
(ii)
interfere with or disrupt or diminish or attempt to disrupt or diminish,
or take
any action that could reasonably be expected to disrupt or diminish, any
past or
present or prospective relationship, contractual or otherwise, between the
Company and any tenant, customer, supplier, sales representative, consultant
or
employee of the Company; (iii) directly or indirectly solicit for employment
or
attempt to employ, or assist any other person or entity in employing or
soliciting for employment, either on a full-time or part-time or consulting
basis, any employee (whether salaried or otherwise, union or non-union) of
the
Company who within one year of the time Executive ceased to perform services
hereunder had been employed by the Company, or (iv) communicate with, solicit,
accept business or enter into any business relationship with any person or
entity who was a tenant or customer of the Company or any present or future
tenant or customer of the Company (including without limitation tenants or
customers previously or in the future generated or produced by Executive),
in
any manner that interferes with or disrupts or diminishes or might interfere
with or might disrupt or diminish such tenant’s or customer’s relationship with
the Company, or in an effort to obtain such tenant or customer as a tenant
or
customer of any person in the Territory. Notwithstanding the foregoing,
Executive shall be permitted to own up to a five percent equity interest
in a
publicly traded Competing Entity.
(b) Notice
and Procedure.
Executive
shall inform in writing any person or entity that seeks to employ or engage
him
in any capacity, of his noncompetition obligations under this Agreement,
prior
to accepting such employment or engagement. Executive shall also inform the
Company in writing of such prospective employment or engagement prior to
accepting such employment or engagement. If the Company or the Executive
has any
concerns that any of Executive’s proposed or actual post-employment activities
may be restricted by, or otherwise in violation of, this Section 11, such
party
shall notify the other party of such concerns and, prior to the Company
commencing any action to enforce its rights under this Section 11 or Executive
seeking a declaratory judgment with respect to his obligations under this
Section 11, the Company and Executive shall meet and confer to discuss the
prospective employment or engagement, and shall provide the other party with
an
opportunity to explain why such prospective employment or engagement either
does
or does not violate this Section 11; provided, however, that Company’s
obligations to give notice under this clause and to meet with Executive before
commencing any action shall not apply if Executive has not provided notice
before engaging in activities that Company reasonably believes violate this
Section 11. Any such meeting shall occur within three business days of notice
and may be held in person or by telephonic, video conferencing or similar
electronic means.
Section
12. Violations
of Covenants.
(a) Injunctive
Relief.
Executive agrees and acknowledges that (i) the services to be rendered by
him
hereunder are of a special and original character that gives them unique
value,
(ii) that the provisions of Sections 10 and 11, are, in view of the nature
of
the business of the Company, reasonable and necessary to protect the legitimate
interests of the Company, (iii) that his violation of any of the covenants
or
agreements contained in this Agreement would cause irreparable injury to
the
Company, (iv) that the remedy at law for any violation or threatened violation
thereof would be inadequate, and (v) that the Company shall be entitled to
temporary and permanent injunctive or other equitable relief as it may deem
appropriate without the accounting of all earnings, profits, and other benefits
arising from any such violation, which rights shall be cumulative and in
addition to any other rights or remedies available to the Company. Executive
hereby agrees that in the event of any such violation, the Company shall
be
entitled to commence an action, suit or proceeding in any court of appropriate
jurisdiction for any such preliminary and permanent injunctive relief and
other
equitable relief.
(b) Enforcement.
The
Company and Executive recognize that the laws and public policies of the
various
states of the United States and the District of Columbia may differ as to
the
validity and enforceability of certain of the provisions contained herein.
Accordingly, if any provision of this Agreement shall be deemed to be invalid
or
unenforceable, as may be determined by a court of competent jurisdiction,
this
Agreement shall be deemed to delete or modify, as necessary, the offending
provision and to alter the balance of this Agreement in order to render the
same
valid and enforceable to the fullest extent permissible as
aforesaid.
Section
13. “Key
Man” Insurance. Executive
agrees to facilitate the Company to purchase and maintain “Key Man Insurance” in
an amount desired by the Company for the benefit of the Company and to
reasonably cooperate with the Company and its designated insurance agent
to
facilitate the purchase and maintenance of such insurance.
Section
14. Successors;
Binding Agreement.
(a) Company’s
Successors.
No
rights or obligations of the Company under this Agreement may be assigned
or
transferred except that the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company as
herein before defined and any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the
business and/or assets of the Company that executes and delivers the agreement
contemplated by this Section 14 or that otherwise becomes bound by all the
terms
and provisions of this Agreement by operation of law.
(b) Executive’s
Successors.
No
rights or obligations of Executive under this Agreement may be assigned or
transferred other than his rights to payments or benefits hereunder, which
may
be transferred only by will or the laws of descent and distribution. Upon
Executive’s death, this Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive’s beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent
any
such person succeeds to Executive’s interests under this Agreement. Executive
shall be entitled to select and change a beneficiary or beneficiaries to
receive
any benefit or compensation payable hereunder following Executive’s death by
giving the Company written notice thereof. In the event of Executive’s death or
a judicial determination of his incompetence, references in this Agreement
to
Executive shall be deemed, where appropriate, to refer to his beneficiary(ies),
estate or other legal representative(s). If Executive should die following
his
Date of Termination while any amounts would still be payable to him hereunder
if
he had continued to live, all such amounts unless otherwise provided herein
shall be paid in accordance with the terms of this Agreement to such person
or
persons so appointed in writing by Executive, or otherwise to his legal
representatives or estate.
Section
15. Notice.
All
notices or other communications that are required or permitted hereunder
shall
be in writing and sufficient if delivered personally, or sent by
nationally-recognized, overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
|
To
the Employer:
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0000
XX Xxxxx Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attention:
General Counsel
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To
Executive:
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Xxxxxxx
X. Xxxxxxxx
0000
XX Xxxxx Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
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or
to
such other address as any party may have furnished to the others in writing
in
accordance herewith. All such notices and other communications shall be deemed
to have been received (a) in the case of personal delivery, on the date of
such
delivery, (b) in the case of delivery by nationally-recognized, overnight
courier, on the business day following dispatch and (c) in the case of mailing,
on the third business day following such mailing.
Section
16. Attorneys’
Fees.
The
Company shall reimburse Executive for the reasonable attorneys’ fees and costs
incurred by Executive in connection with the review, negotiation and execution
of this Agreement. If either party is required to seek legal counsel to
interpret or enforce the terms and provisions of this Agreement, the prevailing
party in any action, suit or proceeding shall be entitled to recover reasonable
attorneys’ fees and costs (including on appeal).
Section
17. Miscellaneous.
No
provisions of this Agreement may be amended, modified, or waived unless such
amendment or modification is agreed to in writing signed by Executive and
by a
duly authorized officer of the Company, and such waiver is set forth in writing
and signed by the party to be charged. No waiver by either party hereto at
any
time of any breach by the other party hereto of any condition or provision
of
this Agreement to be performed by such other party shall be deemed a waiver
of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. No agreements or representations, oral or otherwise, express
or
implied, with respect to the subject matter hereof have been made by either
party that are not set forth expressly in this Agreement. The respective
rights
and obligations of the parties hereunder of this Agreement shall survive
the
expiration or termination of Executive’s employment (whether by resignation or
otherwise) and the expiration or termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations. The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of Florida without regard to its conflicts
of law principles. Each party unconditionally and irrevocably agrees that
the
exclusive forum and venue for any action, suit or proceeding shall be in
Miami-Dade County, Florida, and consents to submit to the exclusive
jurisdiction, including, without limitation, personal jurisdiction, and forum
and venue of the Circuit Courts of the State of Florida or the United States
District Court for the Southern District of Florida, in each case, located
in
Miami-Dade County, Florida.
Section
18. Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of
this
Agreement, which shall remain in full force and effect. In the event that
any
provision or provisions contained in this Agreement shall be deemed illegal
or
unenforceable, the remaining provisions contained in this Agreement shall
remain
in full force and effect, and this Agreement shall be interpreted as if such
illegal or unenforceable provision or provisions were not contained in this
Agreement.
Section
19. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
Section
20. Entire
Agreement.
This
Agreement sets forth the entire agreement of the parties hereto in respect
of
the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, director, employee or
representative of any party hereto in respect of such subject matter. Any
prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled.
Section
21. Withholding.
All
payments hereunder shall be subject to any required withholding of Federal,
state and local taxes pursuant to any applicable law or regulation.
Section
22. Insurance;
Indemnity.
Executive shall be covered by the Company’s directors’ and officers’ liability
insurance policy, and errors and omissions coverage, to the extent such coverage
is generally provided by the Company to its directors and officers and to
the
fullest extent permitted by such insurance policies. Nothing herein is or
shall
be deemed to be a representation by the Company that it provides, or a promise
by the Company to obtain, maintain or continue any liability insurance coverage
whatsoever for its executives. In addition, the Company shall enter into
its
standard indemnity agreement by which Company commits to indemnify a Company
officer in connection with claims, suits or proceedings arising as a result
of
Executive’ service to the Company.
Section
23. Section
Headings.
The
section headings in this Agreement are for convenience of reference only,
and
they form no part of this Agreement and shall not affect its
interpretation.
[Remainder
of this Page Intentionally left Blank]
The
parties hereto have executed this Agreement effective as provided
above.
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By:
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/s/
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XXXXXXX
XXXXX
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Name:
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Xxxxxxx
Xxxxx
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Title:
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President
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Date:
November 6, 2006
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/s/
Xxxxxxx X. Xxxxxxxx
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Xxxxxxx
X. Xxxxxxxx
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Date:
November 4, 2006
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Exhibit
A
- Long Term Cash Incentive Compensation
Exhibit
B
- Form of Release
#480824.8
