EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 13th day of April, 1992, (the
"Effective Date") by and among DIAL REIT, INC. ("Employer"), a Maryland
corporation with its principal place of business at Suite 205, 00000 Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000, and XXXXXX X. XXXXXXXXX ("Executive"), a
resident of the State of Nebraska.
WITNESSETH:
WHEREAS, Employer desires to employ Executive, and Executive wishes to
be employed by Employer in the capacities hereinafter described, upon the
terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties hereto mutually agree as follows:
FIRST: EMPLOYMENT OF EXECUTIVE.
(a) EMPLOYMENT. Subject to the terms and provisions of this Agreement
and for the term hereinafter set forth, Employer hereby employs Executive to
perform the duties of Executive Vice-President and Chief Operating Officer of
Employer. Executive hereby accepts such employment.
(b) REPRESENTATION BY EXECUTIVE. By signing this Agreement, Executive
represents and warrants to Employer that he is not subject to any
non-competition or other undertaking which in any respect would restrict
Executive's rendering services hereunder and Executive shall indemnify and
hold harmless
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Employer against all liability and expense which Employer might incur as a
result of any breach of this representation and warranty.
SECOND: DUTIES OF EXECUTIVE.
(a) FULL WORKING TIME. Executive agrees that, during the term of his
employment hereunder, he will devote his full working time and attention to
the business and affairs of Employer as the Executive Vice-President and
Chief Operating Officer; provided, however, Employer agrees that until
January 1, 1993, Executive may spend a small portion of his working time in
winding up his duties as President of Investors Realty, Inc. ("Investors").
The parties hereto acknowledge that from and after January 1, 1993 Executive
may remain as a shareholder and a member of the Board of Directors of
Investors and in such capacities may participate during non-working time in
making significant policy decisions on behalf of Investors; provided,
however, Executive shall not participate in the day-to-day management or
operations of Investors; provided, further that Executive shall be entitled
to continue to retain his Real Estate License through Investors indefinitely
into the future and commensurate with said retention of his Real Estate
License through Investors, Executive shall be entitled to receive
referral fees from any source through Investors, free from any claim by
Employer.
(b) ASSIGNED DUTIES. Executive agrees that he will perform faithfully
and to the best of his abilities such duties
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and services as are customarily performed and rendered by one holding the
positions of Executive Vice-President and Chief Operating Officer, as well as
such other duties and services as may be assigned to Executive from time to
time by the Chief Executive Officer or the Board of Directors (the "Board")
of the Employer.
(c) PASSIVE INVESTMENTS. Anything to the contrary notwithstanding,
during the term of this Agreement and thereafter, Executive may continue to
expend a limited portion of his working time and may continue to invest as a
passive investor in any real estate project or venture so long as (i) such
investment does not require Executive to devote to such investment (or
anything related thereto) any significant portion of his working time and
(ii) such real estate project or venture does not involve the development,
construction, operation, management, purchase or sale of a shopping center
with more than 25,000 rentable square feet; provided, that any and all
proceeds, fees and income from said investments shall be received directly by
Executive, free from any claim by Employer.
(d) OTHER FEES. Prior to Executive accepting or agreeing to accept any
fee, salary, commission, interest, security or other gratuity, directly or
indirectly (e.g., through any affiliate or family member), from any tenant,
supplier or other person dealing, directly or indirectly, with Employer,
Executive shall give prior written notice thereof to the Board. Upon written
request of Employer, Executive shall provide to
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Employer copies of Executive's federal income tax returns to verify
compliance with this provision.
THIRD: COMPENSATION AND BENEFITS.
In full consideration for the services to be performed by Executive
hereunder and subject to the due performance thereof, Executive shall receive,
during the term of his employment hereunder, the following remuneration:
(a) BASE SALARY. Employer will pay Executive a base salary (hereinafter
called the "Base Salary") at the rate of not less than One Hundred Twenty
Thousand Dollars ($120,000.00) per annum, which Base Salary shall be payable,
in accordance with Employer's usual paying practices, at such intervals as
Employer pays its other senior executive employees (but in any event not
less frequently than monthly). Executive's Base Salary shall be reviewed by
the Board each calendar year during the term of Executive's employment
hereunder (commencing in 1993), at which time the Board will set Executive's
Base Salary for the then current calendar year; provided, however, in no event
shall such Base Salary for any calendar year be less than the Base Salary set
for the immediately preceding calendar year. In the event Executive shall be
appointed the President of Employer, his then current Base Salary shall be
increased prospectively by Ten Thousand Dollars ($10,000) per annum;
provided, further that in the event that Executive has eliminated Employer's
potential conflicts of interest with Employer's affiliates, as determined by
the Board, in its sole discretion, Executive shall receive an
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increase in salary of $10,000 independent of his entitled annual salary
increase and other increases as provided herein; provided, further that it is
generally understood that if Executive meets his expected performance as
represented to Employer, Executive shall be entitled to an annual salary of
not less than $150,000 following Executive's third year of employment.
(b) FRINGE BENEFITS. Executive shall also be entitled to receive those
customary "fringe benefits" (for example, medical and health insurance,
disability insurance, group life insurance, paid sick leave, paid vacation
and holidays and retirement plans) afforded by Employer from time to time to
its senior level executives, provided Executive is otherwise eligible to
receive the same and in each case Executive's participation shall be in
accordance with the terms and conditions of the plans and programs as may be
in effect from time to time (including any required employee contributions).
Executive agrees that Employer may change, alter or eliminate, without
Executive's consent, any and all of such "fringe benefits" at any time so
long as any such change is applicable to all senior level executives.
Subject to the provisions of the policies providing any insured "fringe
benefit", Employer will continue to provide (the "Continuation Benefit") any
such "fringe benefits" which were being provided to Executive on his
Termination date, as defined in Paragraph FOURTH below, for up to two years
following termination of this agreement by Employer (other than a Termination
pursuant to Paragraph FIFTH hereof), or until
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Executive secures alternative employment providing similar benefits,
whichever is sooner; provided, however, if the terms of any such insured
"fringe benefit" will not permit such continued participation, Employer will
reimburse Executive for the cost of comparable individual coverage.
(c) EXPENSE REIMBURSEMENT. Employer shall reimburse Executive for all
reasonable business expenses incurred by the Executive for all reasonable
business expenses incurred by the Executive in the performance of his duties
hereunder, which expenses shall be substantiated in accordance with the
procedures of Employer and in accordance with the rules and regulations of
the Internal Revenue Service (and any other taxing authority) to ensure that
Employer is entitled to a deduction for same on its federal income tax
returns (and any other applicable tax return), to the fullest extent
permitted by law. Notwithstanding the foregoing, (i) any such expense in
excess of $5,000 shall require the prior written approval of the Board and
(ii) any expense (regardless of the amount thereof) shall require the prior
written approval of the Board if the sum of such expense and all other
expenses for which Executive has requested reimbursement within the
immediately preceding thirty (30) days shall exceed $3,500.
(d) STOCK OPTION PLAN. Employer agrees to establish for the benefit of
Executive the Stock Option Plan attached hereto as Exhibit A (the "Stock
Plan"). Upon the termination for any reason of Executive's employment
hereunder, Executive shall forfeit all of his unvested rights under the Stock
Plan and shall
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not be entitled to any compensation or remuneration for the value of any such
unvested rights or otherwise forfeited rights. Executive agrees that any
stock he may purchase under the Stock Plan shall be for his own Account, for
investment only, and not with a view towards resale or distribution thereof.
Executive understands that there will be substantial restrictions on the
transferability of any such stock and he will have no right to require that
the stock be registered under the Securities Act of 1933 or any state
securities law. The investment rights and privileges conferred on Executive
by the Stock Plan shall not be transferred, assigned, pledged, hypothecated
or otherwise disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process, and upon any attempted disposition or levy of attachment or similar
process, such rights and privileges will immediately become null and void.
(e) TAXES. The payment of all remuneration and benefits to Executive
hereunder shall be subject to such federal, state and local taxes, deductions
and withholdings as may be required by law. Executive acknowledges that his
Internal Revenue Service Form W-2 (as well as corresponding state and local
forms) with respect to each calendar year during the term hereof may include
as income the value of certain of the "fringe benefits" and executive
perquisites provided the Executive under this Agreement as and to the extent
required by applicable law.
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FOURTH: TERM OF EMPLOYMENT.
This Agreement shall continue in effect at will from and after the
Effective Date until terminated by Employer or the Executive upon notice, as
provided below. Upon any termination of Executive's employment hereunder,
the obligation of Employer to pay further compensation or expenses to the
Executive, except as provided in subparagraph (c) of Paragraph THIRD and
Paragraphs SIXTH and SEVENTH, shall cease; provided, however, that any
obligation of Employer which accrued prior to the Termination Date shall not
be affected thereby. Executive's last day of employment with Employer shall
be referred to in this Agreement as the "Termination Date" and shall
constitute the end of the term of employment.
FIFTH: TERMINATION "FOR CAUSE".
Executive's employment under this Agreement shall be terminated
immediately upon notice to Executive (which notice shall contain a concise
statement of the event(s) giving rise to the termination) (notice shall not
be required with respect to subparagraph (f) of this Paragraph FIFTH) if any
of the following events shall occur during the term hereof:
(a) NEGLIGENCE. A good faith determination by the Board that Executive
has been grossly negligent in carrying out, or willfully failed or refused to
serve and carry out his duties and responsibilities as required by Paragraph
SECOND; or
(b) BREACH OF AGREEMENT. Executive breaches any material term of this
Agreement and fails to cure such breach
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(where capable of cure) within ten (10) days after the receipt of written
notice from Employer to Executive of such breach, which notice shall state in
reasonable detail the facts and circumstances claimed to be a breach and of
the intent of Employer to terminate the Executive's employment upon the
failure of the Executive to timely cure; or
(c) MISCONDUCT. A good faith determination by the Board that Executive
has willfully and knowingly committed an act of fraud, misappropriation,
embezzlement, theft, dishonesty, breach of fiduciary duty involving personal
profit or has willfully and knowingly violated any law, rule, or regulation
(other than traffic violations or similar minor offenses); or
(d) CRIMINAL OFFENSE. The indictment of Executive for any criminal
offense (other than traffic violations or similar minor offenses); or
(e) DISABILITY. The permanent disability of Executive, which, for the
purposes hereof, shall be deemed to have occurred if, during any year during
the term hereof, because of ill health, physical or mental disability, or for
other reasons beyond Executive's control, Executive shall have been
continuously unable to perform substantially all of his duties hereunder for
ninety (90) or more consecutive days, or if, during any year during the term
hereof, Executive shall have been unable to perform substantially all of his
duties for a total period of one hundred and twenty (120) or more work days
(exclusive of earned vacation and paid holidays), irrespective of whether
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or not such days are consecutive (for the purposes hereof, the phrase "any
year during the term hereof" is defined to mean any continuous twelve (12)
calendar month period during the term of the Agreement); or
(f) DEATH. The death of Executive. Anything to the contrary
notwithstanding, Executive shall not be entitled to receive the Termination
Severance Payments, as described in Paragraph SIXTH, in the event Executive's
employment is terminated pursuant to this Paragraph FIFTH. In the event that
any termination by Employer pursuant to this Paragraph FIFTH is ever
ultimately determined by any court, agency, or other tribunal to have been
for a cause other than described under this Paragraph FIFTH, Employer's sole
liability to Executive under this Agreement or otherwise at law or equity
shall be for it to pay the Executive said Termination Severance Payments.
SIXTH: TERMINATION "WITHOUT CAUSE".
(a) TERMINATION OF EMPLOYER WITHOUT CAUSE. In addition to its rights to
terminate the employment of Executive under Paragraph FIFTH hereof, Employer
shall have the right to terminate the employment of Executive for any reason
at any time immediately upon notice to the Executive pursuant to this
Paragraph SIXTH. In the event Employer shall exercise its termination rights
under this Paragraph SIXTH, Employer will continue to pay Executive, as
severance pay (herein the "Termination Severance Payments"), Executive's then
current Base
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Salary, payable on Executive's normal pay dates for a period of twenty four
(24) months following the Termination Date; provided, however, that (i)
during the period Executive is receiving the Termination Severance Payments,
the Executive is receiving the Termination Severance Payments, the Executive
shall make himself reasonably available to consult with the Board on
Employer's business matters for up to five (5) days per month, and (ii) the
obligation of Employer to make the Termination Severance Payments hereunder
shall cease if the Executive shall violate any of the provisions of
Paragraphs EIGHTH or NINTH hereof.
(b) TERMINATION BY EXECUTIVE. Executive may terminate his employment
hereunder at any time upon ninety (90) days' advance notice; provided,
however, Employer may treat the employment of Executive as terminated at any
time after receipt of such notice (in which case Employer shall continue to
pay the Executive the Base Salary and to provide the Executive the benefits
and perquisites he would have otherwise received for the remainder of such
ninety-day notice period). No Termination Severance Payments will be due
Executive in the event he terminates his employment hereunder.
SEVENTH: CHANGE IN CONTROL.
(a) APPLICABILITY. The provisions of this Paragraph SEVENTH shall
take effect only upon a change in control as defined in subparagraph (c) of
this Paragraph SEVENTH ("Change in Control") of Employer which occurs during
the first seventy-two (72) months of Executive's employment hereunder, which
Change in Control must be followed by a deemed termination of Executive's
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employment as provided in subparagraph (d) of this Paragraph SEVENTH within
twelve (12) months thereafter, and in such event, the provisions of this
Paragraph SEVENTH shall supersede any other provisions in this Agreement to
the contrary.
(b) CHANGE IN CONTROL SEVERANCE PAYMENT. In the event Executive's
employment shall be deemed terminated pursuant to subparagraph (d) of this
Paragraph SEVENTH after a Change in Control, Executive shall be entitled to a
single, lump sum, cash severance payment (the "Change in Control Severance
Payment") in an amount equal to 200% of the Executive's then current annual
rate of Base Salary. The Change in Control Severance Payment shall be made
within thirty (30) days of the date of termination. In addition to the
Change of Control Severance Payment, Executive shall also be entitled to
receive the Continuation Benefit, as provided for in subparagraph (b) of
Paragraph THIRD hereof.
(c) DEFINITION OF "CHANGE IN CONTROL". For purposes of this Agreement,
"Change in Control" shall be deemed to have occurred if:
(i) Employer shall be merged or consolidated with another
corporation and as a result of such merger or consolidation,
less than 50% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the
aggregate by former shareholders of Employer or any of their
affiliates
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(within the meaning of the Securities Exchange Act of 1934);
(ii) Employer shall sell substantially all of its assets to an
unaffiliated corporation. For purposes of this provision,
an "unaffiliated corporation" shall mean any corporation in
which Employer or any of its affiliate owns less than 50% of
the outstanding voting securities; or
(iii) a person, within the meaning of Section 3(a)(9) or Section
13(d)(3) (as in effect on the Effective Date or the date of
the deemed termination of employment) of the Securities
Exchange Act of 1934, which is not an affiliate of Employer
shall acquire more than 50% of the outstanding voting securities
of Employer, beneficially or of record).
For purposes of this subparagraph (c), ownership of voting
securities shall take into account and shall include ownership as determined
by applying the provisions of Rule 13d-3(d)(1)(i) (as in effect on September
1, 1989) pursuant to the Securities Exchange Act of 1934.
(d) DEEMED TERMINATION. For the purposes of this Paragraph SEVENTH,
executive's Employment with Employer hereunder shall be deemed terminated if:
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(i) There is a significant change in the level of responsibility or
authority given to Executive from that held by him
immediately prior to the Change in Control, unless such change
is agreed to in writing by Executive; or
(ii) There is a reduction in Base Salary, or significant reduction
in benefits from that to which Executive was entitled
immediately prior to the Change in Control, unless such change
is agreed to in writing by Executive; or
(iii) Executive is required to change the location of his employment
in effect immediately prior to the Change in Control by more
than fifty (50) miles, unless Executive agrees in writing to
such change.
EIGHTH: CONFIDENTIAL INFORMATION.
(a) EXECUTIVE COVENANTS. Executive hereby acknowledges that during the
course of his employment hereunder he may come into contact with certain
confidential and proprietary information of Employer. Executive agrees that
during the term of his employment, and for a two-year period after the
Termination Date, he will not, directly or indirectly, use for himself or use
for, or disclose to, any party other than Employer, any secret or
confidential information or data of
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Employer. including, but not limited to, Employer's prices, uses, methods,
customers or suppliers (and pertinent information respecting transactions and
prospective transactions therewith).
(b) DOCUMENTS. All documents, files (including files stored on any
media) and tangible items provided to Executive by Employer, created by
Executive or otherwise coming into Executive's use in connection with his
employment hereunder are the property of Employer and shall be promptly
returned to Employer upon termination of Executive's employment hereunder
together with all copies, recordings, abstracts, notes, or reproductions of
any kind made from or about such documents, files and tangible items or the
information they contain.
NINTH: POST-TERMINATION RESTRICTIONS.
Recognizing that an important element of Employer's business success is
the information, business relationships and confidential and proprietary
business information entrusted to its employees, Executive agrees that for a
period of two (2) years following the Termination Date, regardless of how
Executive's termination occurs, Executive will not directly or indirectly
cause or attempt to cause any actual tenant or prospective tenant of Employer
with whom Executive has dealt or on whose account Executive worked, at any
time during Executive's last two (2) years of employment with Employer, to
divert, terminate, limit or in any manner modify or fail to enter into any
actual or potential business relationship with Employer.
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TENTH: EMPLOYER'S RIGHT TO INJUNCTIVE RELIEF.
In the event of a breach or threatened breach of any of Executive's
duties and obligations under the terms and provisions of Paragraphs EIGHTH or
NINTH hereof, Employer shall be entitled, in addition to any other legal or
equitable remedies Employer may have in connection therewith (including any
right to damages that Employer may suffer), to a temporary, preliminary
and/or permanent injunction restraining such breach or threatened breach.
Executive hereby expressly acknowledges that the harm which might result to
Employer's goodwill or its relationships with its tenants or prospective
tenants of Employer with whom Executive has dealt, or as a result of the
disclosure or use of Employer's confidential and proprietary information, is
largely irreparable. In view of the parties' recognition and agreement that
Employer is entitled after Executive's termination of employment to certain
limited protection from competition by Executive, Executive and Employer
agree that the running of the period set forth in Paragraph NINTH hereof
shall be tolled during any period of time in which Executive violates such
Paragraph.
ELEVENTH: NON-WAIVER OF RIGHTS.
The failure of Employer to enforce at any time any of the provisions of
this Agreement or to require at any time performance by Executive of any of
the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement, or any part
hereof,
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or the right of Employer thereafter to enforce each and every provision in
accordance with the terms of this Agreement.
TWELFTH: GOVERNING LAW.
This Agreement is executed and delivered in the State of Nebraska and
shall be construed and enforced in accordance with, and shall be governed by,
the laws of such State.
THIRTEENTH: NOTICES.
All notices, requests, consents and other communications required or
permitted under this Agreement shall be in writing and shall be deemed
sufficient if delivered or mailed, by certified or registered mail, return
receipt requested, postage paid, in the case of Executive, to his last known
address on file with Employer, and, in the case of Employer, to its principal
office. Such notice shall be effective upon deposit in the United States mail
or actual delivery, as the case may be.
FOURTEENTH: SEVERABILITY; INTERPRETATION; LEGAL FEES.
Whenever possible, each provision of this Agreement and any portion
hereof shall be interpreted in such a manner as to be effective and valid
under applicable laws, rules, and regulations. If any covenant or other
provision of this Agreement (or portion thereof) shall be held to be invalid,
illegal, or incapable of being enforced, by reason of any rule of law, rule,
regulation, administrative order, judicial decision, or public policy, all
other conditions and provisions of this Agreement shall, nevertheless, remain
in full force and effect,
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and no covenant or provision shall be deemed dependent upon any other
covenant or provision (or portion) unless so expressed herein. The rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in interpreting this Agreement. In the
event of any dispute which Employer and Executive are not able to resolve
amicably, and either party thereafter commences any litigation to enforce any
right or benefit provided under this Agreement, which is the subject of such
dispute, the successful party for the reasonable legal fees and expenses
incurred by the successful party in such litigation.
Anything to the contrary notwithstanding, any payment otherwise payable
to Executive hereunder shall not be due and payable if the payment of same
would violate any applicable law, rule or regulation and, in such event, no
compensating payments to Executive shall be due or made.
FIFTEENTH: ENTIRE AGREEMENT.
Except for a certain agreement by and between Executive and Employer
dated December 20, 1991 concerning certain consulting duties to be provided
by Executive to the Employer, this Agreement constitutes the entire agreement
between the parties relative to the employment by Employer of Executive and
any and all prior representations, agreements, correspondence, or memoranda
with respect thereto are superseded hereby. No promises, covenants or
representations of any character or nature
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other than those expressly stated herein have been made to induce to either
party to enter into this Agreement. This Agreement shall not be modified,
waived, or discharged except in a writing duly signed by each of the parties.
SIXTEENTH: ASSIGNABILITY.
The services to be performed by Executive hereunder are personal in
nature and therefore Executive shall not assign all or any portion or his
rights, or delegate all or any portion of his obligations, under this
Agreement, and any attempted or purported assignment or delegation not
expressly permitted by Employer in writing shall be null and void, AB INITIO.
SEVENTEENTH: SUCCESSORS.
Subject to the provisions of Paragraph SIXTEENTH hereof, this Agreement
shall be binding upon and shall inure to the benefit of Employer and
Executive and their respective heirs, executors, administrators, legal
administrators, successors and assigns.
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EIGHTEENTH: HEADINGS.
Headings are provided herein for convenience only and shall not modify
or alter the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
DIAL REIT, INC.
By: /s/ XXXXXX X. XXXXXX
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Its: President
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Date of Execution: 4-30-92
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/s/ XXXXXX X. XXXXXXXXX
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XXXXXX X. XXXXXXXXX
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Date of Execution: 4-30-92
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