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Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 1st day
of July, 2000, by and between INLAND REAL ESTATE CORPORATION, a Maryland
corporation (the "Company"), and XXXXXX X. XXXXXXXXX (the "Executive").
RECITALS:
A. The Company is a real estate investment trust which owns, operates
and acquires neighborhood retail centers and community centers within a 400 mile
radius of its headquarters in Oak Brook, Illinois (the "Business").
B. The Company, Inland Real Estate Investment Corporation, a Delaware
corporation ("IREIC"), Inland Real Estate Advisory Services, Inc., an Illinois
corporation ("IREAS"), The Inland Property Management Group, Inc., a Delaware
corporation ("TIPMG"), Inland Commercial Property Management, Inc., an Illinois
corporation ("ICPM") and The Inland Group, Inc. ("TIGI") have entered into that
certain Agreement and Plan of Merger, dated as of March 7, 2000 (the "Merger
Agreement"), pursuant to which IREAS and ICPM will each become a wholly-owned
subsidiary of the Company (the "Merger").
C. Executive as an employee of an affiliate of TIGI has obtained
certain unique and particular talents and abilities with regard to the Business.
D. The Company desires to employ Executive to assure itself of the
availability of his talents and abilities and Executive desires to be employed
by the Company, subject to the terms, conditions and covenants hereinafter set
forth.
E. The Company and the Executive desire to terminate all presently
existing employment agreements, whether written or oral, and all other
agreements, if any, regarding his employment with TIGI, IREIC, TIPMG, IREAS and
ICPM or any of their affiliates, including but not limited to those to which the
Company would have succeeded following the Merger, and intend to have this
Agreement govern instead.
F. As a condition of the Company employing Executive, Executive has
agreed to restrict his ability to enter into competition with the Company.
NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, the Executive and the Company hereby
agree as follows:
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ARTICLE I
EMPLOYMENT
1.1 Employment.
(a) The Company hereby employs, engages and hires Executive, and
Executive hereby accepts employment, upon the terms and conditions set
forth in this Agreement. The Executive shall serve as General Counsel
and Secretary, with duties commensurate with such position and such
other duties and responsibilities as assigned from time to time by the
Company.
(b) In addition, the Executive shall provide advice, consultation
and services to any other entities which control, are controlled by or
are under common control with the Company now or in the future
(together "Affiliates"), as may be requested by the Company.
1.2 Activities and Duties During Employment. Executive represents and
warrants to the Company that he is free to accept employment with the Company,
and that he has no prior or other commitments or obligations of any kind to
anyone else which would hinder or interfere with his acceptance of his
obligations under this Agreement, or the exercise of his reasonable commercial
efforts as an employee of the Company. During the Employment Term (as defined
below), Executive agrees:
(a) to faithfully serve and further the interests of the Company
in every lawful way, giving honest, diligent, loyal and cooperative
service to the Company and its Affiliates;
(b) to comply with all reasonable rules and policies which are
consistent with the terms of this Agreement and which, from time to
time, may be adopted by the Company and/or its Affiliates; and
(c) to devote all of his business time, attention and efforts to
the faithful and diligent performance of his services to the Company
and its Affiliates.
ARTICLE II
TERM
2.1 Term. The term of employment under this Agreement shall commence
on the date of the Agreement and shall last for a period of one (1) year (the
"Initial Term"). Such term shall automatically be renewed for successive
one-year periods thereafter unless terminated by either party by written notice
not less than 30 days prior to the expiration of the then-current term. The term
of Executive's employment hereunder may also be terminated as provided in
Section 2.2 (the
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Initial Term, as it may be extended or terminated, is herein referred to as the
"Employment Term").
2.2 Termination. The Employment Term and employment of Executive may
be terminated as follows:
(a) By the Company immediately for Cause (as hereinafter
defined).
(b) By the Company immediately without Cause.
(c) Automatically, without the action of either party, upon the
death of Executive.
(d) By either party upon a determination of Total Disability (as
hereinafter defined) of the Executive.
(e) Voluntarily by the Executive.
2.3 Definitions of "Cause" and "Total Disability".
(a) For the purpose of this Agreement, "CAUSE" shall mean (I)
conduct amounting to fraud, embezzlement, or illegal misconduct in
connection with Executive's duties under this Agreement and as an
employee of the Company; (II) conduct that the Company reasonably
believes has brought the Company into substantial public disgrace or
disrepute; (III) failure to perform his duties hereunder as reasonably
directed by the Company after providing written notice of such failure
to the Executive and the Executive has failed to cure such
non-performance within ten days of receiving such notice; (IV) gross
negligence or willful misconduct with respect to the Company, its
clients, its employees and its activities; or (V) any other material
breach of this Agreement or any other agreement to which the Executive
and the Company are a party or any material breach of any written
policy adopted by the Company concerning conflicts of interest,
standards of business conduct or fair employment practices and any
other similar matter, provided that the Company has provided written
notice of the breach to the Executive and Executive has failed to cure
the breach within ten days of receiving such notice.
(b) The Executive shall be determined to have a Total Disability
for purposes of this Agreement if he is unable by reason of accident or
illness to substantially perform his employment duties, and is expected
to be in such condition for periods totaling six (6) months (whether or
not consecutive) during any period of twelve (12) months. The
determination of whether a Total Disability has occurred shall be based
on the determination of a physician mutually acceptable to the Company
and the Executive. Nothing herein shall limit the Executive's right to
receive any payments to which Executive may be entitled under any
disability or employee benefit plan of the Company or under any
disability or insurance policy or plan. During a period of Total
Disability prior to
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termination hereunder, Executive shall continue to receive his
full compensation (including base salary) and benefits.
ARTICLE III
COMPENSATION AND BENEFITS
3.1 Compensation.
(a) During the Employment Term, the Company shall pay Executive
such salary and benefits as shall be agreed upon each year between
Executive and the Company. For the Initial Term, the Company shall pay
Executive a base salary of One Hundred Eighty Thousand Dollars
($180,000.00) per year (the "Base Salary"). At the expiration of the
Initial Term, and again at the expiration of each renewal of the
Initial Term, the Company shall review Executive's Base Salary to
determine an appropriate Base Salary to be effective at the beginning
of the renewal of the Initial Term or any subsequent renewal.
(b) The Company may, in addition to Executive's Base Salary, pay
Executive an annual bonus as determined by the Company. The bonus will
be determined by the Company in its sole discretion and may be based
upon, among other things, Executive's achievement of performance
objectives to be established by the Company.
3.2 Payment. All compensation shall be payable in intervals in
accordance with the general payroll payment practice of the Company; except that
any payment relating to the termination of the Executive shall be paid as a lump
sum payment within 15 days of such termination; provided, however, the Accrued
Bonus portion (if any) of any payment relating to the termination of the
Executive shall be paid within 15 days from the date the Accrued Bonus is
calculated by the Company. The compensation shall be subject to such
withholdings and deductions by the Company as are required by law.
3.3 Business Expenses.
(a) Reimbursement . The Company shall reimburse the Executive
for all ordinary and necessary business expenses incurred by him in
connection with the performance of his duties hereunder. The
reimbursement of business expenses will be governed by the policies for
the Company.
(b) Accounting. The Executive shall provide the Company with an
accounting of his expenses, which accounting shall clearly reflect
which expenses were incurred for proper business purposes in accordance
with the policies adopted by the Company and/or its Affiliates, and as
such are reimbursable by the Company. The Executive shall provide the
Company with such other supporting documentation and other
substantiation of reimbursable expenses as will conform to Internal
Revenue Service or other requirements.
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All such reimbursements shall be payable by the Company to the
Executive within a reasonable time after receipt by the Company
of appropriate documentation therefor.
3.4 Other Benefits. Executive shall be entitled to participate in any
retirement, pension, profit-sharing or other similar plans of the Company which
may now or hereafter be in effect and for which executive employees of the
Company are eligible to participate. Company agrees that the benefits to be
accrued to Executive in such plans will be at least at the same level as in
effect for employees of TIGI and its affiliates at the time of the execution of
this Agreement. In the event the Employment Term is terminated by the Company
without Cause, or in the event of a "Change in Ownership" (as defined herein) of
the Company, any benefits required to be provided by the terms of any
Company-sponsored benefit plans or programs, including stock option plans, which
Executive has earned or been awarded but to which Executive has not become fully
vested at the time of such termination or Change in Ownership, shall be deemed
to be fully vested in the Executive immediately prior to the time of such
termination or Change in Ownership. "Change in Ownership" shall mean (X) the
approval by the Company's stockholders of (A) a merger or consolidation of the
Company with an unaffiliated third party where the Company is not the surviving
entity, or (B) the sale of substantially all of the assets of the Company, or
(Y) the acquisition of not less than twenty five percent (25%) of the equity
voting securities of the Company by a person, or group of persons acting in
concert, not affiliated with TIGI.
3.5 Compensation Upon Termination. If Executive's employment
hereunder is terminated in accordance with the provisions of Article II, the
Company will be obligated to provide compensation and benefits, in lieu of any
severance under any severance plan that the Company may then have in effect, and
subject to setoff for any amounts owed by the Executive to the Company or any
affiliate of the Company under any contract, agreement, advance, failure to
return Company property or loan document, to Executive as follows:
(a) Upon Termination for Death or Total Disability. If
Executive's employment hereunder is terminated by reason of his death
or Total Disability, within 15 days of the date of termination, the
Company will provide to Executive (or his estate or beneficiaries):
(i) any Base Salary that has been accrued but not paid as
of the date of termination (the "Accrued Base Salary");
(ii) an amount equal to the Base Salary Executive would
have earned for the remaining portion of the then-current
Employment Term as if the termination had not occurred plus an
additional six months at the then-current level of Base Salary
(the "Severance Salary");
(iii) any compensation for unused vacation days accrued as
of the termination date in an amount equal to his Base Salary
multiplied by a fraction, the numerator of which is the number of
accrued unused vacation days and the denominator of which is 360
(the "Accrued Vacation Payment");
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(iv) reimbursement for expenses incurred by him prior to
the date of termination that are subject to reimbursement
pursuant to this Agreement (the "Accrued Reimbursable Expenses");
(v) any accrued and vested benefits required to be
provided by the terms of any company-sponsored benefit plans or
programs (the "Accrued Benefits"), together with any benefits
required to be paid or provided in the event of Executive's death
or Total Disability under applicable law; and
(vi) the pro-rated portion of any bonus that has accrued
but not been paid as of the date of termination (the "Accrued
Bonus").
(b) Upon Termination by Company for Cause or by Executive. If
Executive's employment is terminated by the Company for Cause or if
Executive voluntarily terminates his employment with the Company,
within 15 days of the date of termination, the Company will:
(i) pay Executive the Accrued Base Salary;
(ii) pay Executive the Accrued Vacation Payment;
(iii) pay Executive the Accrued Reimbursable Expenses;
(iv) pay Executive the Accrued Benefits, together with any
benefits required to be paid or provided under applicable law;
and
(v) pay Executive the Accrued Bonus.
(c) Upon Termination by the Company Without Cause. If
Executive's employment is terminated by the Company without Cause, the
Company will:
(i) pay Executive the Accrued Base Salary;
(ii) pay Executive the Severance Salary;
(iii) pay Executive the Accrued Vacation Payment;
(iv) pay Executive the Accrued Reimbursable Expenses;
(v) pay Executive the Accrued Benefits, together with any
benefits required to be paid or provided under applicable law;
and
(vi) pay Executive the Accrued Bonus.
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3.6 Expiration of Term. Upon the expiration of the Employment Term
because either the Company or the Executive elects not to extend the Employment
Term, the Executive shall be entitled to receive his Accrued Base Salary,
Accrued Vacation Payment, Accrued Reimbursable Expenses, Accrued Benefits and
Accrued Bonus. Additionally, provided that within 60 days after the expiration
of the Employment Term (unless waived by the Company in its sole discretion)
(the "Waiting Period") the Executive does not become an employee of TIGI or any
affiliate of TIGI, then as soon as practicable, but in no case later than 15
days following the end of the Waiting Period, the Company shall pay to the
Executive Severance Salary calculated as if the Executive's employment was
terminated without cause immediately prior to the expiration of the Employment
Term.
3.7 Cessation of Rights and Obligations: Survival of Certain
Provisions. On the date of expiration or earlier termination of the Employment
Term for any reason, all of the respective rights, duties, obligations and
covenants of the parties, as set forth herein, shall, except as specifically
provided herein to the contrary, cease and become of no further force or effect
as of the date of said termination, and shall only survive as expressly provided
for herein.
ARTICLE IV
CONFIDENTIALITY AND NON-COMPETE AGREEMENT
4.1 Non-Disclosure of Confidential Information. Executive hereby
acknowledges and agrees that the duties and services to be performed by
Executive under this Agreement are special and unique and that as a result of
his employment by the Company hereunder and his former employment with TIGI,
that Executive has developed over time and will acquire, develop and use
information of a special and unique nature and value that is not generally known
to the public or to the Company's industry, including but not limited to,
certain records, secrets, documentation, software programs, price lists, ledgers
and general information, employee records, mailing lists, client lists, client
profiles, prospective customer or client lists, accounts receivable and payable
ledgers, financial and other records of the Company or its Affiliates,
information regarding its clients or principles, and other similar matters (all
such information being hereinafter referred to as "CONFIDENTIAL INFORMATION").
Executive further acknowledges and agrees that the Confidential Information is
of great value to the Company and that the restrictions and agreements contained
in this Agreement are reasonably necessary to protect the Confidential
Information and the goodwill of the Company and the Affiliates, including that
attributable to products and services sold to clients of TIGI. Accordingly,
Executive hereby agrees that:
(a) Executive will not, during the Employment Term or at any
time thereafter, directly or indirectly, except in connection
with Executive's performance of his duties under this Agreement,
or as otherwise authorized by the Company for the benefit of the
Company or any Affiliate, divulge to any person, firm,
corporation, limited liability company, or organization, other
than the Company or any affiliated entity (hereinafter referred
to as
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"THIRD PARTIES"), or use or cause or authorize any Third Parties
to use, the Confidential Information, except as required by law;
and
(b) Upon the termination of the Employment Term for any reason
whatsoever, Executive shall deliver or cause to be delivered to the
Company any and all Confidential Information, including drawings,
notebooks, keys, data and other documents and materials belonging to
the Company or its Affiliates which is in his possession or under his
control relating to the Company or its Affiliates, regardless of the
medium upon which it is stored, and will deliver to the Company upon
such termination of employment any other property of the Company or its
Affiliates which is in his possession or under his control.
4.2 Non-Solicitation and Covenant Not to Compete.
(a) General. Executive acknowledges that the covenants set forth
in this Section 4.2 are reasonable in scope and essential to the
preservation of the business and the goodwill of the Company, and are
consideration for the amounts to be paid to the Executive hereunder.
Executive also acknowledges that the enforcement of the covenant set
forth in this Section 4.2 will not preclude Executive from being
gainfully employed in such manner and to the extent as to provide a
standard of living for himself, the members of his family and the
others dependent upon him of at least the level to which he and they
have become accustomed and may expect. In addition, Executive
acknowledges that the Company and its Affiliates have obtained an
advantage over their competitors as a result of the Merger that is
characterized by relationships with clients, principals and other
contacts which is reflected in the purchase price for the Merger.
(b) Covenant. Executive hereby covenants and agrees that, during
the term of his employment hereunder and during a period of six months
following the voluntary termination of his employment hereunder (which
shall not be deemed to include a termination resulting from the
expiration of the Initial Term or any subsequent renewal) or the
termination of Executive's employment hereunder for Cause (the
"Covenant Period"), Executive shall not, directly or indirectly: (i)
alone, together or in association with others, either as a principal,
agent, owner, shareholder, officer, director, partner, employee,
lender, investor or in any other capacity, engage in, have any
financial interest in or be in any way connected or affiliated with, or
render advice or services to, any business engaged in the Business or
any new businesses or lines of business which the Company may enter
prior to the termination of Executive's employment under this Agreement
in the greater metropolitan area of Chicago, Illinois, and any suburb
thereof, other than as an employee of TIGI, of an affiliate of TIGI or
otherwise on behalf of the Company as an employee thereof or such other
business as may be permitted by the Company in writing, or as set forth
on Exhibit A attached to this Agreement; (ii) divert, take away,
solicit, interfere with or attempt to divert, take away, solicit, or
interfere with any present or prospective customer, except on behalf of
the Company as an employee thereof; (iii) solicit, induce, influence or
attempt to solicit, induce or influence any employee or agent of the
Company to leave his employment or engagement
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with the Company; or offer employment or engagement to or employ or
engage any such employee of the Company, or assist or attempt to
assist any such employee of the Company in seeking other employment;
or (iv) in any manner slander, libel, or by other means take action
which is or intended, or could reasonably be expected, to be
detrimental to the Company or an Affiliate or their respective
employees or operations. As used in this Section 4.2, the term
"Company" shall mean the Company or an Affiliate. As used herein,
"customer" and "prospective customer" shall include: (i) any tenant or
any other person or entity with whom the Company is negotiating for
the leasing of real property from the Company or an Affiliate at the
time of the termination of Executive's employment or during the six
month period immediately prior to such termination; or (ii) any owner
of real property the purchase or sale of which is being negotiated by
the Company at the time of the termination of Executive's employment
or during the six month period immediately prior to such termination.
The restrictions imposed by subparagraph 4.2(b) hereof shall not apply
to the ownership of one percent (1%) or less of all of the outstanding
securities of any entity whose securities are listed on a national
securities exchange.
4.3 Remedies.
(a) Injunctive Relief. Executive expressly acknowledges and
agrees that the business of the Company is highly competitive and that
a violation of any of the provisions of Sections 4.1 or 4.2 would cause
immediate and irreparable harm, loss and damage to the Company or an
Affiliate not adequately compensable by a monetary award. Executive
further acknowledges and agrees that the time periods and territorial
areas provided for herein are the minimum necessary to adequately
protect the business of the Company, the enjoyment of the Confidential
Information and the goodwill of the Company. Without limiting any of
the other remedies available to the Company at law or in equity, or the
Company's right or ability to collect money damages, Executive agrees
that any actual or threatened violation of any of the provisions of
Sections 4.1 or 4.2 may be immediately restrained or enjoined by any
court of competent jurisdiction, and that a temporary restraining order
or emergency, preliminary or final injunction may be issued in any
court of competent jurisdiction, upon twenty-four (24) hour notice and
without bond. Notwithstanding anything to the contrary contained in
this Agreement, the provisions of this Section shall survive the
termination of the Employment Term.
(b) Enforcement. It is the desire of the parties that the
provisions of Sections 4.1 or 4.2 be enforced to the fullest extent
permissible under the laws and public policies in each jurisdiction in
which enforcement might be sought. Accordingly, if any particular
portion of Sections 4.1 or 4.2 shall ever be adjudicated as invalid or
unenforceable, or if the application thereof to any party or
circumstance shall be adjudicated to be prohibited by or invalidated by
such laws or public policies, such section or sections shall be: (i)
deemed amended to delete therefrom such portions so adjudicated; or
(ii) modified as determined appropriate by such a court, such deletions
or modifications to apply only with respect to the
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operation of such section or sections in the particular jurisdictions
so adjudicating on the parties and under the circumstances as to which
so adjudicated.
ARTICLE V
MISCELLANEOUS
5.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given, delivered and
received: (a) when delivered, if delivered personally, (b) four days after
mailing, when sent by registered or certified mail, return receipt requested and
postage prepaid, (c) one business day after delivery to a private courier
service, when delivered to a private courier service providing documented
overnight service, and (d) on the date of delivery if delivered by telecopy,
receipt confirmed, provided that a confirmation copy is sent on the next
business day by first class mail, postage prepaid, in each case addressed as
follows:
To Executive at his home address.
To Company at: Inland Real Estate Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.
5.2 Entire Agreement; Amendments, Etc. This Agreement contains the
entire agreement and understanding of the parties hereto, and supersedes all
prior agreements and understandings relating to the subject matter thereof. No
modification, amendment, waiver or alteration of this Agreement or any provision
or term hereof shall in any event be effective unless the same shall be in
writing, executed by both parties hereto, and any waiver so given shall be
effective only in the specific instance and for the specific purpose for which
given.
5.3 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, and shall be enforceable by, the heirs, successors and legal
representatives of Executive and the successors,
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assignees and transferees of the Company and its current or future Affiliates.
This Agreement or any right or interest hereunder may not be assigned by
Executive.
5.4 No Waiver. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or pursuant thereto.
5.5 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law but, if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. If any part of any
covenant or other provision in this Agreement is determined by a court of law to
be overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that the court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.
5.6 Compliance and Headings. The headings in this Agreement are
intended to be for convenience and reference only, and shall not define or limit
the scope, extent or intent or otherwise affect the meaning of any portion
hereof.
5.7 Governing Law. The parties agree that this Agreement shall be
governed by, interpreted and construed in accordance with the laws of the State
of Illinois, and the parties agree that any suit, action or proceeding with
respect to this Agreement shall be brought in the state courts in Chicago,
Illinois or in the U.S. District Court for the Northern District of Illinois.
The parties hereto hereby accept the exclusive jurisdiction of those courts for
the purpose of any such suit, action or proceeding. Venue for any such action,
in addition to any other venue permitted by statute, will be in Chicago,
Illinois.
5.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
5.9 No Presumption Against Drafter. Each of the parties hereto has
jointly participated in the negotiation and drafting of this Agreement. In the
event an ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by each of the parties hereto
and no presumptions or burdens of proof shall arise favoring any party by virtue
of the authorship of any provisions of this Agreement.
5.10 Enforcement. In the event either of the parties to this Agreement
shall bring an action against the other party with respect to the enforcement or
breach of any provision of this Agreement, the prevailing party in such action
shall recover from the non-prevailing party the costs
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incurred by the prevailing party with respect to such action including court
costs and reasonable attorneys' fees.
5.11 Recitals. The Recitals set forth above are hereby incorporated in
and made a part of this Agreement by this reference.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered as of the day and year first above
written.
INLAND REAL ESTATE CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
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Its: President and Chief Executive Officer
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EXECUTIVE
/s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
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