EXHIBIT 10
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 28th day of September 1995, by and between Xxxxxxx
Pacific Properties, Inc., a California corporation with its main office in San
Diego, California (the "Company"), and J. Xxxxx Xxxxxx (the "Executive").
WITNESSETH
In consideration of the mutual covenants contained herein, the Company and
the Executive agree as follows:
1. Employment. The Company agrees to employ the Executive and the
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Executive agrees to be employed by the Company on the terms and conditions
hereinafter set forth.
2. Capacity. The Executive shall serve the Company as its President and
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Chief Executive Officer and as a Director and shall serve the Company in such
additional offices in which the Executive may be requested to serve by the Board
of Directors of the Company (the "Board of Directors"). In such capacity or
capacities, the Executive shall have full authority to operate and manage the
business and operations of the Company with all authority customarily afforded
to such office subject to normal supervision and authority of the Company's
Board of Directors. The Executive shall also perform such services and duties
in connection with the business, affairs and operations of the Company
consistent with such offices as may be assigned or delegated to him from time to
time by or under the authority of the Board of Directors.
3. Effective Date. The effective date of this Agreement shall be October
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1, 1995 (the "Effective Date").
4. Compensation and Benefits. The regular compensation and benefits
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payable to the Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Executive under this
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Agreement, the Company shall pay the Executive a base salary at the rate of
$250,000 per year, commencing as of the Effective Date and continuing through
December 31, 1995. Such base salary is to be subject to review and adjustment
in accordance with a comprehensive compensation policy to be established for all
employees of the Company, and which the Company expects to be adopted on or
before and effective as of January 1, 1996 (the "Comprehensive Compensation
Policy"). The Executive's base salary shall be payable in periodic installments
not less frequently than monthly in accordance with the Company's usual practice
for its senior executives.
(b) The Executive shall also be entitled to a bonus with respect to 1996
and each subsequent year in such amount as the Compensation Committee of the
Board of Directors determines consistent with the Comprehensive Compensation
Policy.
(c) Stock Options
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The Executive has been granted a non-transferable stock option for 250,000
shares of the Company's Common Stock (the "Initial Option") at an exercise price
of $12.875 per share, the New York Stock Exchange closing price and fair market
value of a share of such stock on July 19, 1995, the date of the original letter
of intent relating to the Executive's employment by and certain other
transactions with the Company. The Initial Option is intended to be a
Nonqualified Option under the Company's Stock Option Plan ("Plan"), which the
Company's Board of Directors has amended effective July 19, 1995 (such
amendment, however, being subject to the approval by the Company's shareholders
at the next meeting of shareholders) so as both (i) to increase the number of
shares available for option under the Plan by at least the number required by
this section 4(c) and (ii) to remove the 200,000 share limit on the aggregate
number of shares for which options may be granted to any individual during any
consecutive three-year period (the "Plan Amendment"). In the event that the
Plan Amendment is not approved at the next meeting of shareholders, the Initial
Option shall be considered to have been issued under the general authority of
the Company's Board of Directors to issue securities of the Company. In either
event, the Initial Option shall not vest prior to the later of the Effective
Date or the next meeting of shareholders of the Company and shall expire July
18, 2005. To the extent that the Executive exercises the Initial Option prior
to the first anniversary of the Effective Date and is then eligible for further
grants under the Plan, and provided that the shareholders have by then approved
the Plan Amendment, the Company will replenish the Initial Option with further
options for a like number of shares at the then market value of the Company's
shares. The Company shall as soon as practicable file a registration statement
under the Securities Act of 1933 on Form S-8 with respect to the Initial Option
and other options subject to the Plan Amendment and the shares to be issued upon
exercise of such option and to apply for the listing of such shares on the New
York Stock Exchange.
(d) Regular Benefits. The Executive shall also be entitled to participate
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in any Executive benefit plans, medical insurance plans, life insurance plans,
disability income plans, retirement plans, vacation plans and other benefit
plans which the Company may from time to time have in effect for all or most
senior executives of the Company. Such participation shall be subject to the
terms of the applicable plan documents, generally applicable policies of the
Company, applicable law and the discretion of the Board of Directors or any
administrative or other committee provided for in or contemplated by any such
plan. Nothing contained in this Agreement shall be construed to create any
obligation on the part of the Company to establish any such plan or to maintain
the effectiveness of any such plan which may be in effect from time to time.
(e) Professional Memberships. The Company shall bear the costs of
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memberships in and the Executive's reasonable costs of participating on behalf
of the Company in the activities of the National Association of Real Estate
Investment Trusts, the International
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Association of Shopping Centers, the Urban Land Institute and (while the
Executive remains eligible) the Young Presidents Organization.
(f) Reimbursement of Business Expenses. The Company shall promptly
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reimburse the Executive for his reasonable business and entertainment expenses
incurred on behalf of the Company. Such expenses may include first class or
business class air travel when used by the Executive.
5. Reimbursement of Relocation Expenses. The Company shall reimburse the
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Executive for reasonable moving costs incurred in moving to San Diego and
reasonable costs of temporary lodging in San Diego.
6. Extent of Service. During the Executive's employment hereunder, the
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Executive shall, subject to the direction and supervision of the Board of
Directors, devote substantially his full business time, best efforts and
business judgment, skill and knowledge to the advancement of the Company's
interests and to the discharge of the Executive's duties and responsibilities
hereunder. The Executive shall resign as an active employee of The Xxxxxx Group
of Companies, Inc. (the "Xxxxxx Group") and any other company of which he may be
an employee and shall not engage in any other business activity, except as may
be disclosed to the Board of Directors; provided, however, that the Executive
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may, so long as such activities do not impair his ability to perform his duties
and responsibilities under this Agreement:
(a) continue in his capacities as Chairman of the Board and sole
stockholder of The Xxxxxx Group;
(b) devote a reasonable portion of his time to the development of the Marin
City Retail Center;
(c) devote time to the construction of any of the properties that is the
subject of one of the limited partnership agreements being entered into
substantially concurrently herewith among the Company as general partner and
certain limited partners (each a "Limited Partnership Agreement") relating to
the development of Richmond Hilltop, Downtown Pleasant Hill Retail Center, East
Palo Alto Retail Center and 1000 Xxx Xxxx Retail Center (each a "Property") if
the Company declines to make contributions to the partnership that is the
subject of the Limited Partnership Agreement ("Partnership") necessary for the
construction of such Property and if the Executive and the other limited
partners named in the Limited Partnership Agreement have exercised their right
to purchase the Company's interest in the Partnership pursuant to the "Limited
Partner Purchase Rights" set forth in the Limited Partnership Agreement;
(d) serve as an outside director of other companies, including other REITs
whose business operations and investments are not competitive with the Company;
and
(e) engage in religious, charitable or other community or non-profit
activities.
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To the extent that The Xxxxxx Group pursues non-retail property
opportunities in the San Francisco Bay area during the Executive's employment by
the Company, the Executive agrees that such opportunities will be pursued
through other personnel of The Xxxxxx Group and not by the Executive. All
opportunities with respect to the development, acquisition, ownership or other
activities involving properties that are or will be primarily retail properties
which may come to the attention of the Executive during his employment by the
Company will be acted upon for the benefit of the Company. The Executive will
not make any future investments that will require significant time or attention
by him or that will impair his ability to fulfill his duties and
responsibilities under this Agreement. The Executive will advise the Board of
Directors of any real estate investments (other than passive investments of less
than 10% of the outstanding equity interests) in which the Executive has or may
acquire any interest and the nature of such interest.
7. Termination. The Executive's employment will be at-will, for no
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definite term, and can be terminated with or without cause by either party upon
notice to the other party. Upon termination by either the Company or the
Executive, all payments of salary and bonus and benefits provided for in this
Agreement and other incidents of employment shall cease, except that the
Employee may receive any bonus with respect to the year in which termination
occurs or any prior year to the extent that such bonus is earned pursuant to
Section 4(b).
8. Litigation and Regulatory Cooperation. Both during the Executive's
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employment with the Company and after its termination, the Executive shall
cooperate fully with the Company in the defense or prosecution of any claims or
actions which may be brought against or on behalf of the Company which relate to
events or occurrences that transpired while the Executive was employed by the
Company. The Executive's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. The Executive shall also cooperate
fully with the Company in connection with any examination or review of any
federal, state or local regulatory authority as any such examination or review
relates to events or occurrences that transpired while the Executive was
employed by the Company. If such cooperation is required after the Executive's
employment has terminated, the Company shall compensate the Executive for such
cooperation at a mutually agreeable rate payable monthly in arrears, and will
reimburse the Executive for any reasonable out-of-pocket expenses incurred in
connection therewith.
9. Confidential Information and Injunctions.
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(a) Definition. As used in this Agreement, "Confidential Information"
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means information which the Company possesses or to which the Company has rights
which has commercial value. Confidential Information includes, by way of
example and without limitation, trade secrets, designs, configurations,
software, improvements, data, know-how, project and building concepts, plans and
specifications, marketing plans and strategies, sales and financial reports and
forecasts, and customer or tenant lists. Confidential Information includes
information developed by the Executive in the course of the Executive's
employment by the Company as well as other nonpublic information to which the
Executive may have access in connection with the Executive's employment,
including confidential information of others with which the Company has a
business relationship.
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(b) Confidentiality. The Executive understands and agrees that his
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employment creates a relationship of confidence and trust between the Executive
and the Company with respect to all Confidential Information. At all times,
both during the Executive's employment with the Company and after its
termination, the Executive will keep in confidence and trust all such
Confidential Information and will not use or disclose any such Confidential
Information without the written consent of the Company, except as may be
necessary in the ordinary course of performing the Executive's duties to the
Company. The restrictions set forth in this Section 9(b) will not apply to
information which is generally known to the public or in the trade, unless such
knowledge results from an unauthorized disclosure by the Executive, but this
exception will not affect the application of any other provision of this
Agreement to such information in accordance with the terms of such provision.
(c) Documents, Records, etc. All documents, records, apparatus, equipment
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and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by the Company or are produced
by the Executive in connection with the Executive's employment will be and
remain the sole property of the Company. The Executive will return to the
Company all such materials and property as and when requested by the Company.
In any event, the Executive will return all such materials and property
immediately upon termination of the Executive's employment for any reason and
will not retain any such material or property or any copies thereof after such
termination, except to the extent that such material or property or copies
relate to any Property which the Executive has repurchased or has the right to
repurchase under a Repurchase Right described in any of the Limited Partnership
Agreements.
(d) Injunction. The Executive agrees that it would be difficult to
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measure any damages caused to the Company which might result from any breach by
the Executive of the promises set forth in this Agreement, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
the Executive agrees that if the Executive breaches, or proposes to breach, any
portion of this Agreement, the Company shall be entitled, in addition to all
other remedies that it may have and notwithstanding the provisions of Section
11, to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage to the Company.
10. Third-Party Agreements and Rights. The Executive represents to the
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Company that his execution of this Agreement, his employment with the Company
and the performance of his proposed duties for the Company will not violate any
obligations he may have to any previous employer or other party. In the
Executive's work for the Company, he will not disclose or make use of any
information in violation of any agreements with or rights of any previous
employer or other party.
11. Arbitration. Any controversy or claim for damages arising out of or
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relating to this Agreement or the breach thereof or otherwise arising out of the
Executive's employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration under the auspices of the American Arbitration Association ("AAA")
in San
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Diego, California in accordance with the Employment Dispute Resolution Rules of
the AAA, including, but not limited to, the rules and procedures applicable to
the selection of arbitrators; provided, however, that this Section 11 shall not
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preclude the Company's seeking equitable relief as provided in Section 9(d).
Any awards for violation of any anti-discrimination law shall not exceed the
maximum award to which the Executive could be entitled under the applicable (or
most analogous) federal anti-discrimination or civil rights laws.
12. Withholding. All payments made by the Company under this Agreement
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shall be net of any tax or other amounts required to be withheld by the Company
under applicable law.
13. Integration. This Agreement constitutes the entire agreement between
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the parties with respect to the terms of employment of the Executive by the
Company and the termination thereof and supersedes all prior agreements between
the parties with respect to such subject matter, except for the limited purposes
such other agreements or documents have been specifically referenced herein.
14. Assignment; Successors and Assigns, etc. Neither the Company nor the
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Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that the Company may assign its rights under this
Agreement without the consent of the Executive in the event that the Company
shall hereafter effect a reorganization, consolidate with or merge into any
other corporation, partnership, organization or other entity, or transfer all or
substantially all of its properties or assets to any other corporation,
partnership, organization or other entity. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.
15. Enforceability. If any portion or provision of this Agreement shall
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to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16. Waiver. No waiver of any provision hereof shall be effective unless
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made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
17. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Company or, in the case of the Company, at its main offices, attention of the
Chairman and at least one other member (not including the Executive) of its
Board of Directors.
18. Attorneys' Fees. If either party commences judicial or arbitration
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proceedings for relief against the other party arising out of this Agreement,
the prevailing party shall be entitled to
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recover its reasonable attorneys' fees and court or arbitration costs incurred,
including but not limited to attorneys' fees after the award, and prior to the
payment, of any judgment or other settlement. The prevailing party shall be
that party receiving substantially the relief or result sought from the
proceeding, whether brought to final judgment or not.
19. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Executive and by a duly authorized
representative of the Company.
20. Governing Law. This is a California contract and shall be construed
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under and be governed in all respects by the laws of the State of California.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Company, by its duly authorized officer, and by the Executive, as of the
date first above written.
XXXXXXX PACIFIC PROPERTIES, INC.
By: /S/Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chairman, Compensation Committee
/S/ J. Xxxxx Xxxxxx
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J. Xxxxx Xxxxxx, an individual
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