EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") is made and entered into as of
December 31, 1998 by and between Xxxx X. Xxxxxx (the "Executive") and
Banyan Strategic Realty Trust ( the "Trust").
RECITALS:
A. The Trust desires to enter into an employment agreement with
the Executive on the terms and conditions set forth herein.
B. The Executive desires to enter into an employment agreement
with the Trust on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Trust and
the Executive do hereby agree as follows:
1. EMPLOYMENT DUTIES. The Trust agrees to employ the Executive as
the First Vice President - Asset Management of the Trust to perform such
duties as the Trust's Board of Trustees (the "Board") or the Trust's
President and Chief Executive Officer may reasonably assign or delegate to
the Executive from time to time consistent with this position.
2. PERFORMANCE. The Executive accepts the appointment described
in SECTION 1 and agrees to faithfully and diligently perform the services
described in SECTION 1.
3. TERM. The term of employment under this Agreement shall begin
as of January 1, 1999 and shall remain in effect for a period of one (1)
year, ending on December 31, 1999, unless sooner terminated as provided in
SECTION 6 (the "Employment Period"). The Employment Period shall be
automatically renewed for successive one (1) year periods unless: (a) the
Trust gives the Executive written notice of non-renewal at least ninety
(90) days in advance of the end of the Employment Period; or (b) the
Executive terminates in accordance with SECTION 6(c) hereof.
4. SALARY. For the services to be rendered by the Executive
hereunder, the Trust shall pay the Executive an annual base salary equal to
$213,040 (the "Salary"). All Salary due the Executive shall be paid in
the manner and frequency in which the Trust customarily pays its employees.
Except as may be expressly provided for in SECTION 7, the Trust may, but
shall be under no obligation to, pay the Executive compensation by way of
bonus or otherwise in any year in excess of the Salary.
5. OTHER BENEFITS. The Executive shall be eligible for all non-
wage benefits the Trust provides generally to its other salaried employees.
In addition, the Trust shall reimburse the Executive for reasonable,
ordinary and necessary business expenses incurred by the Executive in
connection with performing his duties under this Agreement; PROVIDED,
HOWEVER, that the Executive shall provide the Trust with an accounting
conforming to Internal Revenue Service or other requirements substantiating
the nature of all reimbursable expenses. All reimbursable expenses shall
be payable to the Executive within a reasonable time after receipt of the
appropriate documentation.
6. TERMINATION. This Agreement may only be terminated prior to
expiration on the following grounds:
(a) "JUST CAUSE". The Trust may terminate this Agreement and
the Executive for "Just Cause." For purposes of this SECTION 6(a), "Just
Cause" shall mean the occurrence of any one or more of the following
events:
(i) the Executive is convicted of, or a civil judgment
is entered against the Executive for, theft or embezzlement of Trust
property;
(ii) a civil judgment is rendered against the Executive
for breach of a duty of loyalty owed to the Trust;
(iii)the Executive is convicted of a felony resulting in
injury to the business, property or reputation of the Trust or any
affiliate of the Trust;
(iv) the Executive breaches the obligations set forth in
SECTION 8(b) or (c) of this Agreement;
(v) the Executive refused, or willfully failed, to
perform his material duties under this Agreement;
(vi) the Executive committed intentional acts that
caused material damage to the business or property of the Trust; or
(vii)the Executive performed his material duties under
this Agreement in a manner that constituted gross negligence which caused
or is causing material damage to the business or property of the Trust.
(b) "CHANGE OF CONTROL". The Trust may terminate this
Agreement and the Executive at any time within twelve calendar months
following a "Change of Control." For purposes of this Agreement, "Change
of Control" shall mean: (i) the members of the Board as of the date of this
Agreement fail to constitute a majority of the members of the Board,
provided that any individual becoming a member of the Board with the
consent of the Trust's President and Chief Executive Officer at the time
the individual becomes a board member shall be treated as if he or she were
a member of the Board as of the date of this Agreement; or (ii) the
shareholders of the Trust adopt a plan of liquidation or take other action
having the effect of a plan of liquidation without the recommendation or
approval of the Board.
(c) TERMINATION BY EXECUTIVE. The Executive may terminate
this Agreement and his employment at any time by giving notice in writing
to the Trust at least ninety (90) days in advance of the termination date
set forth in the notice ("Executive Termination").
7. EFFECT OF TERMINATION OR NON-RENEWAL.
(a) TERMINATION. If the Trust terminates this Agreement and
the Executive for "Just Cause" under SECTION 6(a) or the Executive
terminates this Agreement and his employment under SECTION 6(c), the Trust
shall have no further obligations hereunder, except for the obligations, if
any, set forth in SECTIONS 5 and 9 hereof. If the Trust terminates this
Agreement or the Executive for any reason other than as set forth in
SECTIONS 3 and 6(a) hereof, the Trust shall immediately pay the Executive
an amount equal to the Salary that Executive would have earned during the
remaining term of the Agreement but for the termination plus Salary for
twelve (12) additional months and provide Executive with coverage, at
Trust's expense, under the Trust's group health and life insurance policies
for the same period; provided further that if the Executive is terminated
under SECTION 6(b) for a "Change of Control," the Trust shall also
immediately pay Executive an amount equal to Executive's incentive bonus
for the most recently completed fiscal year. By way of example, if the
Executive is terminated under SECTION 6(b) for a "Change of Control" on
June 30 and the Agreement would otherwise expire by its terms in six (6)
calendar months, the Trust would be required to pay the Executive eighteen
(18) months of Salary at the rate set forth in SECTION 4; six (6) months
remaining term plus twelve (12) additional months, provide Executive with
health and life insurance for eighteen (18) months and pay Executive an
amount equal to the incentive bonus Executive received for the most
recently completed fiscal year. Nothing contained herein shall excuse the
Trust from its obligation to pay any compensation already due the Executive
under this Agreement, but not paid, at the time of termination, or from the
obligation to provide the Executive with any benefits already due under
this Agreement at the time of termination.
(b) NON-RENEWAL. If the Trust does not renew this Agreement
in accordance with SECTION 3, the Trust shall pay Executive within fifteen
(15) business days of expiration of this Agreement, severance in an amount
equal to one-half of the Salary set forth in SECTION 4. The severance
provided hereunder shall be Executive's sole remedy if the Trust does not
renew this Agreement; provided, however, that for purposes of this SECTION
7(b), if a "Change of Control" has occurred within twelve (12) months of
the expiration of the Agreement, then the decision not to renew this
Agreement will be treated as a termination under SECTION 6(b) above, and
the Trust shall be obligated to pay the Executive an amount equal to the
Salary calculated in accordance with SECTION 7(a) above.
8. OTHER ACTIVITIES OF THE EXECUTIVE. The Executive shall:
(a) be required to devote such working time and attention to
the Trust's business as is necessary to carry out his responsibilities
hereunder;
(b) not engage in any activity which may be adverse to the
Trust's business, appropriate or usurp business opportunities or engage or
invest in businesses or assets which compete directly or indirectly with
the Trust; provided that the Executive may invest in publicly-traded
entities which are engaged in lines of businesses similar to the Trust; and
(c) not become an officer, director or ten percent (10%)
shareholder of any such entity.
The obligations and limitations set forth in (b) and (c) above shall
be in addition to those provided by law.
9. INDEMNIFICATION. The Trust shall indemnify and hold harmless
the Executive from liabilities which the Executive may incur resulting from
or arising out of any act undertaken in connection with the Executive's
duties under this Agreement in the same manner and to the same extent as
the Trust is permitted to indemnify any trustee or other officer of the
Trust under the Trust's Second Amended and Restated Declaration of Trust,
as it may be amended.
10. GENERAL PROVISION.
(a) NOTICE. Any notice required or permitted hereunder shall
be made in writing either by: (i) actual delivery of the notice into the
hands of the party entitled; or (ii) depositing the notice in the United
States mail certified or registered, return receipt requested, all postage
prepaid and addressed to the party to whom notice is to be given at the
party's respective address set forth below, or such other address as the
party may from time to time designate by written notice to the other party.
If to the Trust:
Banyan Strategic Realty Trust
Suite 2900
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to the Executive:
Xxxx X. Xxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
The notice shall be deemed to be received in the case of (i) on the
date of its actual receipt by the party entitled thereto and in the case of
(ii) on the third business day following the date of mailing.
(b) AMENDMENT, MODIFICATION AND WAIVER. No amendment or
modification to this Agreement shall be valid or binding on the Trust
unless made in writing and signed by an officer of the Trust duly
authorized by the Board or upon the Executive unless made in writing and
signed by the Executive. The waiver by the Trust or the Executive of the
breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the Executive's duties and
annual base cash compensation; and there are no representations,
warranties, agreements or commitments between the parties hereto with
respect to these duties or compensation except as set forth herein.
(d) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the State of Illinois.
(e) PROVISIONS SEVERABLE. If any provision of this Agreement
shall, for any reason, be held unenforceable, the provision shall be
severed from this Agreement unless, as a result of severance, the Agreement
fails to reflect the basic intent of the parties. If the Agreement
continues to reflect the basic intent of the parties, then the invalidity
of any specific provision shall not affect the enforceability of any other
provision herein, and the remaining provisions shall remain in full force
and effect.
(f) ASSIGNMENT. Except as provided herein, the Executive may
not, under any circumstances, delegate any of his rights and obligations
hereunder without the prior written consent of the Trust. This Agreement
and all of the Trust's rights and obligations hereunder may be assigned or
transferred by it, in whole or in part, to be binding upon and inure to the
benefit of any subsidiary or successor of the Trust.
(g) COST OF ENFORCEMENT. In any suit or proceeding seeking
to enforce the terms, covenants or conditions of this Agreement, the
prevailing parties shall, in addition to all of the remedies and relief
that may be available under this Agreement or applicable law, recover his
or its reasonable attorneys' fees and costs as shall be determined and
awarded by the court or the arbitrator.
IN WITNESS WHEREOF, this Agreement is entered into on the day and
year first written above.
BANYAN STRATEGIC REALTY TRUST
By:_________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
EXECUTIVE
______________________________
Xxxx X. Xxxxxx
