EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made this 1st day of July, 1999,
by and between AGREE REALTY CORPORATION, a Maryland corporation (the
"Company"), and XXXXXXX AGREE (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to make certain
contributions to the financial strength of the Company;
WHEREAS, the Company desires to assure itself of the
continuity of management and desires to establish certain compensation rights
of certain of its key senior executive officers, including the Executive; and
WHEREAS, the Company desires to employ the Executive and the
Executive desires to accept such employment on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto hereby agree as follows:
1. Employment; Term. The Company hereby employs the Executive
as Chairman of the Board of Directors and President of the Company and the
Executive agrees to serve the Company in such capacity for the period
commencing the date hereof (the "Effective Date") and ending on the fifth
anniversary of the Effective Date (the "Initial Term").
2. Termination. Subject to the terms and conditions set forth
herein, the Executive's employment may be terminated by either party hereto
upon thirty (30) days' written notice to the other party hereto.
3. Duties. The Executive shall be responsible for the
supervision, control and conduct of all the business and affairs of the
Company and shall have such additional duties and any additional
responsibilities as are normally assigned to a Chief Executive Officer and
President which may from time to time be reasonably designated by the Board
of Directors of the Company (the "Board"), provided that in no event shall
the scope of his duties and the extent of his responsibilities be
substantially different from the duties and responsibilities usually
associated with those positions in a corporation similar in size and function
to the Company. At all times, the Executive shall be subject to the direction
of the Board. During the period the Executive is employed by the Company (the
"Employment Period"), the Executive shall devote his full business time and
best efforts to the business and affairs of the Company and its subsidiaries,
except for any business activities rendered by the Executive in connection
with the partnerships listed on Schedule A.
4. Compensation. The Company shall pay the Executive a salary
at the rate of one hundred fifty thousand dollars ($150,000.00) per annum
during the Employment Period, subject to the last sentence of this Section 4.
Such compensation shall be shall be payable in accordance with the usual
payroll practices of the Company, as compensation to the Executive for the
services rendered by the Executive hereunder, including, but not limited to,
all services rendered by the Executive as an officer or director of the
Company and its subsidiaries. the Board shall review the Executive's salary
immediately prior to the end of each fiscal year during the Employment Period
to determine whether the Executive's salary shall be increased based on such
criteria as the Board or any committee thereof shall from time to time
establish (for purposes of this Employment Agreement, the term "salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 4).
5. Benefits.
The Company agrees to reimburse the Executive for all reasonable and
necessary travel, business entertainment and other business expenses incurred
by the Executive in connection with the performance of his duties under this
Employment Agreement. Such reimbursements shall be made by the Company on a
timely basis upon submission by the Executive of vouchers, in accordance with
the Company's standard procedures. All such reimbursements shall be subject
to limitations, which may from time to time be prescribed by the Board.
(b) The Executive shall be entitled to participate in any and all
life insurance , medical insurance group health, disability insurance, and
other benefit plans which are made generally available during the Employment
Period by the Company to executives of the Company, including, but not
limited to, the Company's Stock Incentive Plan, Profit Sharing Plan and
performance Bonus Plan (to the extent that the Executive qualifies under the
eligibility provisions of such plan or plans). Additionally, the Executive
shall be entitled to receive annual paid vacation and paid holidays made
available pursuant to Company policy to all of the senior executives of the
Company.
(c) In the event of the death or disability of the Executive, the
Executive's employment hereunder shall terminate and in addition to any
amounts payable at such time and in accordance with the terms of Paragraph 4
hereof (appropriately pro-rated), the Company shall, for the longer of (i)
the remainder of the calendar year in which the Executive dies or becomes
disabled or (ii) six (6) months, but in no event longer than the remainder of
the Initial Term, pay to the Executive or the Executive's personal
representative, as the case may be, the Executive's salary at the date of
such death or disability. For the purposes hereof, the term "disability"
shall mean the absence of the Executive, due to physical or mental illness,
or a full time basis for one hundred twenty (120) consecutive business days
or for shorter periods which aggregate more than four months during any
consecutive twelve (12) month period.
(d) In the event the employment of the Executive is terminated by
the Company for any reason other than for cause (as defined below), the
Executive shall be entitled to all amounts payable during the Initial Term
(including, but not limited to, salary at the then applicable rate) within
ten (10) days of such termination and the Executive shall have the right to
continue to participate in all benefits plans made generally available by the
Company to its executives during the Initial Term. For purposes of this
Section 5(d) the term "cause" shall mean: (i) the Executive's willful failure
or refusal to perform specific reasonable written directives of the Board,
which directives are consistent with the scope and nature of the Executive's
duties and responsibilities under this Employment Agreement, and which are
not remedied by the Executive within sixty (60) days after being notified, in
writing, of his failure by the Board; (ii) the Executive's conviction of a
felony; (iii) any act of dishonesty involving the Company which results in an
unjust gain or enrichment to the Executive at the expense of the Company;
(iv) any act involving moral turpitude of the Executive which adversely
affects the business of the Company; or (v) a material breach by the
Executive of his obligations under Section 7 hereof.
(e) In the event this Employment Agreement is terminated by the
Company for "cause," the Executive shall forfeit his right to any and all
benefits (other than any previously vested benefits, including, without
limitation, the Executive's salary through the date of termination) which the
Executive would otherwise have been entitled to receive pursuant to the terms
of this Employment Agreement.
6. Change in Control of the Company If a Change in Control (as
hereinafter defined) of the Company occurs prior to the scheduled expiration
of the Term and within three years after the Change in Control of the Company
Executive is terminated by the Company for reasons other than death,
Disability, or Cause the Company or any successor thereto, within 30 days of
Executive's termination of employment, will pay to Executive, an amount equal
to the greater of (i) 3 times Executive's compensation, or (ii) the
Executive's compensation due over the Initial Term of this agreement which,
for purposes of this Section, Executive Compensation shall mean an amount
equal to the highest annualized rate of Executive's Salary prior to the date
of termination.
For purposes of this Agreement, a "Change in Control" shall have occurred if
at any time during the Term any of the following events occurs:
(a) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders
of Voting Stock (as hereinafter defined) of the Company immediately prior to
such transaction;
(b) The Company sells all or substantially all of its assets to
any other corporation or other legal person, less than a majority of the
combined voting power of the then-outstanding voting securities of which are
held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 25%
or more of the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors of the
Company ("Voting Stock").
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(e) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of the
Company cease for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by the Company's stockholders,
of each director of the Company first elected during such period was approved
by a vote of at least two-thirds of the directors of the Company then still
in office who were directors of the Company at the beginning of any such
period.
Notwithstanding the foregoing provision of Section 6(c) or 6(d) hereof, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Agreement solely because the Company, an entity in which the Company directly
or indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of voting securities of the Company, whether in
excess of 25% or otherwise, or because the Company, reports that a change in
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.
7. Non-Competition. The Executive agrees that (a) at all times
during the Initial Term, if the Executive is terminated for "cause" or
voluntarily terminates his employment hereunder and (b) at all times during
the Employment Period, the Executive shall not engage in any business which
is competitive with the then current business of the Company or any of its
subsidiaries. For the purposes of this Paragraph a business shall be deemed
competitive if it consists of or includes any type or line of business
engaged in by the Company or any of its subsidiaries at the time of such
terminations and which is conducted in whole or in part, within those states
where the Company then conducts business. The executive shall be deemed,
directly or indirectly, to engage in a business if he participates in such
business as a director, officer, stockholder, employee, salesman, partner or
individual proprietor, or if he participates in such business as an investor
who has made advances on loan, contributions to capital or expenditures for
the purchase of stock, permits his name to be used by, acts as a paid
consultant or paid advisor to, or if the Executive exerts a controlling
influence over such business, provided that nothing herein contained shall be
deemed to preclude the purchase of securities of publicly owned companies
which securities are listed on a national securities exchange, but the total
holding of any such securities so listed shall be limited to five percent
(5%) of the amount of such securities outstanding.
8. Confidentiality. The Executive shall not at any time use or
divulge, furnish or make accessible to anyone (other then in the regular
course of the business of the Company or any of its subsidiaries) any
knowledge or information of trade secrets and proprietary information which
has not otherwise become publicly available (including, but not limited to,
any information concerning customers or accounts) with respect to the
business affairs of the Company or any of its subsidiaries.
9. Notices. All notices relating to this Employment Agreement
shall be in writing and shall be deemed to have been given at the time when
delivered personally or sent in the United States by registered or certified
mail, return receipt requested, in a postpaid envelope, addressed to the
other party at the address set forth below, or to such changed address as the
other party may have fixed by notice; provided, however, that any notice of
change of address shall be effective only upon receipt:
To the Company Agree Realty Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
To the Executive 0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
10. Assignability, Binding Effect and Survival. This Employment
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, including without limitation any corporation which
may acquire all or substantially all of the Company's assets and business or
with or into which the Company may be consolidated or merged, and shall inure
to the benefit of and be binding upon the Executive, his heirs, executors,
administrators and legal representatives, provided that the obligations of
the Executive hereunder may not be delegated.
11. Complete Understanding; Amendment; Waiver. This Employment
Agreement constitutes the complete understanding between the parties with
respect to the employment of the Executive hereunder, and no statement,
representation, warranty or covenant has been made by either party with
respect thereto except as expressly set forth herein. this Employment
Agreement shall not be altered, modified, amended or terminated except by
written instrument signed by each of the parties hereto. Waiver by either
party hereto of any breach hereunder by the other party shall not operate as
a waiver of any other breach, whether similar to or different from the breach
waived. No delay on the part of the Company or the Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by the Company or the Executive of
any such right or remedy shall preclude other or further exercise thereof.
12. Severability. If any provision of this Employment Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Employment Agreement or
the application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be enforced to the
fullest extent permitted by law.
13. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan
without regard to conflict of laws provisions.
14. Indemnification. The Company shall indemnify the Executive
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred, in any action or
proceeding to which the Executive is made a party by reason of the fact that
he is or was an officer or director of the Company, to the fullest extent
permitted by law, the By-laws of the Company and the Articles of
Incorporation of the Company.
15. Counterparts. This Employment Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
16. Titles and Captions. All paragraph, article or section titles or
captions in this Employment Agreement are for convenience only and in no way
define, limit, extend or describe the scope or intent of any provisions
hereof.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Employment Agreement as of the date first above written.
AGREE REALTY CORPORATION
By: /s/ Xxxxxxx Agree
---------------------
Name: Xxxxxxx Agree
Title: President
/s/ Xxxxxxx Agree
-------------------------------
Xxxxxxx Agree
Schedule A
--------------------------
Xxxxxxxx Plaza
Angola Plaza
Brentwood Realty Associates
Xxxxx Realty Associates
Gas City Plaza
Grant Line Plaza
Greenwood Realty Associates
Xxxxxx Realty Associates
Xxxxxxx Realty Associates
Main Realty Associates
Xxxxxxxx Plaza
Parkway Plaza Limited Partnership
Shiloh Plaza
Southwood Realty Associates
Xxxxxxx Associates
West Frankfort Plaza
T.M.J. Incorporated
Xxxxxxxx, Inc.
