1
EXHIBIT 10(v)
XXXXX REALTY INVESTORS, INC.
00000 XXXXXXXXX XXXX, XXXXX 000
XXXXXXX XXXXX, XXXXXXXX 00000-0000
EMPLOYMENT AGREEMENT
AGREEMENT, commencing September 26, 2000, by and between Xxxxx
Realty Investors, Inc., a Michigan corporation (the "Company") and Xxxxxxx Xxxxx
("Executive").
RECITALS
In order to induce Executive to serve as the Chief Executive
Officer of the Company, the Company desires to provide Executive with
compensation and other benefits on the terms and conditions set forth in this
Agreement.
Executive is willing to accept such employment and perform
services for the Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as
follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the term hereof as its Chief Executive
Officer. In his capacity as Chief Executive Officer of the Company, Executive
shall report to the Company's Board of Directors (the "Board"), and shall have
the customary powers, responsibilities and authorities of Chief Executive
Officer of corporations of the size, type and nature of the Company, as it
exists from time to time, and as are assigned by the Board.
2
1.2 Subject to the terms and conditions of this Agreement, Executive
hereby accepts employment as the Chief Executive Officer of the Company
commencing on the date hereof, and agrees to devote his full working time and
efforts, to the best of his ability, experience and talent, to the performance
of services, duties and responsibilities in connection therewith. Executive
shall perform such duties and exercise such powers, commensurate with his
position as the Chief Executive Officer of the Company, as the Board shall from
time to time delegate to him on such terms and conditions and subject to such
restrictions as such Board may reasonably from time to time impose. Executive
also agrees to continue to serve, unless otherwise requested by the Board, as a
member of the Board.
1.3 Except as provided in Section 12, nothing in this Agreement shall
preclude Executive from engaging, so long as, in the reasonable determination of
the Board, such activities do not interfere with his duties and responsibilities
hereunder, in charitable and community affairs, from managing any passive
investment made by him in publicly traded equity securities or other property
(provided that no such investment may exceed 1% of the equity of any entity,
without the prior approval of the Board) or from serving, subject to the prior
approval of the Board, as a member of boards of directors or as a trustee of any
other corporation, association or entity.
2. Term of Employment. Executive's term of employment under this
Agreement shall commence on the date hereof and, subject to the terms hereof,
shall terminate on the earlier of (i) the third anniversary of the date hereof
(the "Termination Date") or (ii) the termination of Executive's employment
pursuant to this Agreement (the period from the Effective Date until the
termination of this Agreement shall be the "Term"). This agreement shall be
renewed automatically for succeeding terms of one (1) year following the
Termination Date (in which case both the Termination Date and the Term shall be
extended one year on each renewal),
2
3
unless either party gives written notice to the other at least ninety (90) days
prior to the applicable Termination Date of its intention not to renew.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $230,000 per annum during the Term. Base Salary shall be
payable in accordance with the ordinary payroll practices of the Company. Any
increase in Base Salary shall be in the sole discretion of the Board and, as so
increased, shall constitute "Base Salary" hereunder.
3.2 Annual Bonus. In addition to his Base Salary, Executive shall be
eligible to receive an annual bonus (the "Bonus") during the Term with a target
amount equal to 30% of Base Salary (the "Target Bonus") and a maximum amount
equal to 50% of Base Salary, based on performance criteria determined by the
Board in its sole discretion.
3.3 Compensation Plans and Programs. Executive shall be eligible to
participate in any compensation plan or program maintained by the Company and
generally made available to other senior executives of the Company, on terms
comparable to those applicable to such other senior executives.
4. Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. The Company shall
provide Executive during the Term with coverage under all employee pension and
welfare benefit programs, plans and practices (commensurate with his position in
the Company and to the extent permitted under any employee benefit plan) in
accordance with the terms thereof, which the Company generally makes available
to its senior executives.
4.2 Vacation and Fringe Benefits. Executive shall be entitled to no
less than twenty (20) business days paid vacation in each calendar year, which
shall be taken at such times as are
3
4
consistent with Executive's responsibilities hereunder. Unless otherwise
approved by the Board, any vacation days not taken in any calendar year shall be
forfeited without payment therefor. In addition, Executive shall be entitled to
the perquisites and other fringe benefits generally made available to senior
executives of the Company, commensurate with his position with the Company.
5. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The Company will reimburse Executive for all such expenses
upon presentation by Executive, from time to time, of accounts of such
expenditures (appropriately itemized and approved consistent with the Company's
policy).
6. Termination of Employment.
6.1 Termination Not for Cause or for Good Reason. (a) The Company may
terminate Executive's employment at any time for any reason. If Executive's
employment is terminated by the Company other than for Cause (as defined in
Section 6.4 hereof) or as a result of Executive's death or Permanent Disability
(as defined in Section 6.2 hereof), or if Executive terminates his employment
for Good Reason (as defined in Section 6.1 (c) hereof) prior to the Termination
Date, Executive shall receive such payments, if any, under applicable plans or
programs, including but not limited to those referred to in Section 3.3 hereof,
to which he is entitled pursuant to the terms of such plans or programs. In
addition, Executive shall be entitled to receive an amount (the "Termination
Amount") in lieu of any Bonus in respect of all or any portion of the fiscal
year in which such termination occurs and any other cash compensation (other
than the Vacation Payment and the Compensation Payment referred to below), which
4
5
Termination Amount shall be payable in twelve (12) equal monthly installments at
the beginning of each month following such termination of employment. The
Termination Amount shall consist of an amount equal to the sum of (i) the
greater of (A) the Base Salary which Executive would have received over the
remaining Term, or (B) six (6) months of Base Salary, plus (ii) an amount equal
to the product of (x) the number of full months remaining in the Term and (y)
one-twelfth (1/12) of the Target Bonus. In addition, Executive shall be entitled
to receive a cash lump sum payment in respect of accrued but unused vacation
days (the "Vacation Payment") and to Base Salary earned but not yet paid (the
"Compensation Payment"), and to continued coverage through the Termination Date
under any employee medical plans in accordance with the respective terms
thereof.
(b) The Vacation Payment and the Compensation Payment shall be
paid by the Company to Executive within 30 days after the termination of
Executive's employment by check payable to the order of Executive or by wire
transfer to an account specified by Executive.
(c) For purposes of this Agreement, "Good Reason" shall mean any
of the following (without Executive's express prior written consent):
(i) Any material breach by the Company of this Agreement,
including any material reduction by the Company of Executive's duties
or responsibilities (except in connection with the termination of
Executive's employment for Cause, as a result of Permanent Disability,
as a result of Executive's death or by Executive other than for Good
Reason); or
(ii) A reduction by the Company in Executive's Base Salary.
6.2 Permanent Disability. If during the Term, the Executive becomes
totally and permanently disabled (as defined in the Company's Long-Term
Disability Benefit Plan applicable to senior executive officers as in effect on
the date hereof) ("Permanent Disability"),
5
6
the Company or Executive may terminate Executive's employment on written notice
thereof, and Executive shall receive or commence receiving, as soon as
practicable:
(i) amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company maintains
during the term hereof;
(ii) the Target Bonus in respect of the fiscal year in which
his termination occurs, multiplied by a fraction, the numerator of
which is the number of days of the fiscal year prior to termination and
the denominator of which is 365;
(iii) the Vacation Payment and the Compensation Payment; and
(iv) such payments under applicable plans or programs, including
but not limited to those referred to in Section 3.3 hereof, to which he
is entitled pursuant to the terms of such plans or programs.
6.3 Death. In the event of Executive's death during the Term,
Executive's estate or designated beneficiaries shall receive or commence
receiving, as soon as practicable:
(i) the Target Bonus in respect of the fiscal year in which his
death occurs, multiplied by a fraction, the numerator of which is the
number of days of the fiscal year prior to his death and the
denominator of which is 365;
(ii) any death benefits provided under the employee benefit
programs, plans and practices referred to in Section 4.1 hereof, in
accordance with their terms;
(iii) the Vacation Payment and the Compensation Payment; and
(iv) such payments under applicable plans or programs, including
but not limited to those referred to in Section 3.3 hereof, to which
Executive's estate or designated beneficiaries are entitled pursuant to
the terms of such plans or programs.
6.4 Discharge for Cause; Voluntary Termination by Executive. (a) The
Company shall have the right to terminate the employment of Executive for Cause.
In the event that Executive's employment is terminated (i) by the Company for
Cause, as hereinafter defined, or (ii) by Executive other than (A) for Good
Reason or (B) as a result of the Executive's Permanent Disability or death,
prior to the Termination Date, Executive shall only be entitled to receive the
6
7
Compensation Payment and the Vacation Payment. Executive shall not be entitled,
among other things, to the payment of any Bonus in respect of all or any portion
of the fiscal year in which such termination occurs. After the termination of
Executive's employment under this Section 6.4, the obligations of the Company
under this Agreement to make any further payments, or provide any benefits
specified herein, to Executive shall thereupon cease and terminate.
(b) As used herein, the term "Cause" shall be limited to (i)
willful malfeasance or willful misconduct by Executive in connection with his
employment, (ii) continuing refusal by Executive to perform his duties hereunder
or any lawful direction of the Board as required under Section 1.2, after notice
of any such refusal to perform such duties or direction was given to Executive,
(iii) any breach of the provisions of Section 12 of this Agreement by Executive
or any other material breach of this Agreement by Executive or (iv) the
commission by Executive of (A) any felony or (B) a misdemeanor involving moral
turpitude. Termination of Executive pursuant to this Section 6.4 shall be made
by delivery to Executive of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the then members of the Board at
a meeting of the Board called and held for the purpose (after 30 days prior
written notice to Executive and reasonable opportunity for Executive to be heard
before the Board prior to such vote), finding that in the reasonable judgment of
the Board, Executive was guilty of conduct set forth in any of clauses (i)
through (iv) above and specifying the particulars thereof.
7. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder, and any amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall not reduce the amount of any
Termination Amount otherwise payable to him.
7
8
8. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company: Xxxxx Realty Investors, Inc.
00000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Chairman of the Board of Directors
with a copy to: Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
To Executive: Xxxxxxx Xxxxx
0000 XX 000xx Xxxxxx
Xxxxxx, XX 00000
with a copy to:
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after the
actual date of mailing shall constitute the time at which notice was given.
9. Separability; Legal Fees. If any provision of this Agreement shall
be declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement.
10. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this
8
9
Agreement nor any rights or obligations hereunder shall be assignable or
otherwise subject to hypothecation by Executive (except by will or by operation
of the laws of intestate succession) or by the Company, except that the Company
may assign this Agreement to any successor (whether by merger, purchase or
otherwise) to all or substantially all of the stock, assets or business(es) of
the Company, if such successor expressly agrees to assume the obligations of the
Company hereunder.
11. Amendment. This Agreement may only be amended by written agreement
of the parties hereto.
12. Nondisclosure of Confidential Information; Non-Disparagement;
Non-Competition.
(a) Executive shall not, without the prior written consent of the
Company, use, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity any Confidential Information (as
defined below) pertaining to the business of the Company or any of its
affiliates, except (i) while employed by the Company, in the business of and for
the benefit of the Company, or (ii) when required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of the Company, or by any administrative body or legislative
body (including a committee thereof) with jurisdiction to order Executive to
divulge, disclose or make accessible such information. For purposes of this
Section 12(a), "Confidential Information" shall mean non-public information
concerning the financial data, strategic business plans, product development (or
other proprietary product data), customer lists, marketing plans and other
non-public, proprietary and confidential information of the Company or its
affiliates (the "Restricted Group") or customers, that, in any case, is not
otherwise available to the public (other than by Executive's breach of the terms
hereof).
9
10
(b) During the Term and for one (1) year thereafter, Executive
agrees that, without the prior written consent of the Company, (A) he will not,
directly or indirectly, either as principal, manager, agent, consultant,
officer, director, stockholder, partner, investor, lender or employee or in any
other capacity, carry on, be engaged in or have any financial interest in, any
business which is in competition with any business of the Restricted Group and
(B) he shall not, on his own behalf or on behalf of any person, firm or company,
directly or indirectly, solicit or offer employment to any person who has been
employed by the Restricted Group at any time during the 12 months immediately
preceding such solicitation, and (C) he shall not, on his own behalf or on
behalf of any person, firm or company, solicit, call upon, or otherwise
communicate in any way with any client, customer, prospective client or
prospective customer of the Company or of any member of the Restricted Group for
the purposes of causing or of attempting to cause any such person to purchase
products sold or services rendered by the Company or by any member of the
Restricted Group from any person other than the Company or any member of the
Restricted Group (i.e. in competition with the Company or any member of the
Restricted Group).
(c) Executive agrees that he will not, directly or indirectly,
individually or in concert with others, engage in any conduct or make any
statement that is likely to have the effect of undermining or disparaging the
reputation of the Company or any member of the Restricted Group, or their good
will, products, or business opportunities, or that is likely to have the effect
of undermining or disparaging the reputation of any officer, director, agent,
representative or employee, past or present, of the Company or any member of the
Restricted Group.
(d) For purposes of this Section 12, a business shall be deemed to
be in competition with the Restricted Group if it is principally involved in the
purchase, sale or other dealing in any property or the rendering of any service
purchased, sold, dealt in or rendered by
10
11
the Restricted Group as a material part of the business of the Restricted Group
within the same geographic area and of the same property type in which the
Restricted Group effects such purchases, sales or dealings or renders such
services. Nothing in this Section 12 shall be construed so as to preclude
Executive from investing in any publicly or privately held company, provided
Executive's beneficial ownership of any class of such company's securities does
not exceed 1% of the outstanding securities of such class.
(e) Executive and the Company agree that this covenant not to
compete is a reasonable covenant under the circumstances, and further agree that
if in the opinion of any court of competent jurisdiction such restraint is not
reasonable in any respect, such court shall have the right, power and authority
to excise or modify such provision or provisions of this covenant as to the
court shall appear not reasonable and to enforce the remainder of the covenant
as so amended. Executive agrees that any breach of the covenants contained in
this Section 12 would irreparably injure the Company. Accordingly, Executive
agrees that the Company may, in addition to pursuing any other remedies it may
have in law or in equity, cease making any payments otherwise required by this
Agreement and obtain an injunction against Executive from any court having
jurisdiction over the matter restraining any further violation of this Agreement
by Executive.
13. Beneficiaries; References. Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal
11
12
representative. Any reference to the masculine gender in this Agreement shall
include, where appropriate, the feminine.
14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. In
particular, the provisions of Section 12 hereunder shall remain in effect as
long as is necessary to give effect thereto.
15. Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Michigan, without reference
to rules relating to conflicts of law.
16. Withholding. The Company shall be entitled to withhold from payment
any amount of withholding required by law.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
Xxxxx Realty Investors, Inc.
By Date:
-------------------- ---------------
Name: Xxxx Xxxx
Title: Chairman
Date:
----------------------- ----------------
Xxxxxxx Xxxxx
12
