1
EXHIBIT 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into on this
13th day of June, 1996, effective as of January 1, 1996, by and between SUN
COMMUNITIES, INC., a Maryland corporation (the "Company"), and XXXXXXX X.
XXXXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to continue the employment of the
Executive, and the Executive desires to continue to be employed by the Company,
on the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. Employment.
(a) The Company agrees to employ the Executive and the
Executive accepts the employment, on the terms and subject to the conditions
set forth below. During the term of employment hereunder, the Executive shall
serve as Senior Vice President, Treasurer, Chief Financial Officer and
Secretary of the Company, and shall do and perform diligently all such
services, acts and things as are customarily done and performed by such
officers of companies in similar business and in size to the Company, together
with such other duties as may reasonably be requested from time to time by the
Board of Directors of the Company (the "Board"), which duties shall be
consistent with the Executive's positions as set forth above.
(b) For service as an officer and employee of the Company,
the Executive shall be entitled to the full protection of the applicable
indemnification provisions of the Articles of Incorporation and Bylaws of the
Company, as they may be amended from time to time.
2. Term of Employment.
Subject to the provisions for termination provided below, the
term of the Executive's employment under this Agreement shall commence on
January 1, 1996 and shall continue thereafter for a period of three (3) years
ending on December 31, 1998.
3. Devotion to the Company's Business.
The Executive shall devote his best efforts, knowledge, skill,
and his entire productive time, ability and attention to the business of the
Company during the term of this Agreement.
2
4. Compensation.
(a) During the term of this Agreement, the Company shall
pay or provide, as the case may be, to the Executive the compensation and other
benefits and rights set forth in paragraphs 4, 5 and 6 of this Agreement.
(b) Base Compensation. As compensation for the services to
be performed hereafter, the Company shall pay to the Executive, during his
employment hereunder, a base salary (the "Base Salary") payable in accordance
with the Company's usual pay practices (and in any event no less frequently
than monthly) at the rate of One Hundred Fifty Seven Thousand Five Hundred
Dollars ($157,500.00) per year.
(c) Annual Salary Increase. On September 1 of each year,
commencing September 1, 1996, the Base Salary shall be increased by five
percent (5%) of the Base Salary for the immediately prior year or such greater
increase as may be deemed appropriate by the Board of Directors of the Company,
in its sole discretion.
(d) Bonus. The Board shall prepare and adopt an executive
bonus plan (the "Bonus Plan") which shall be established for the payment of an
incentive bonus to the Executive based on the Company achieving certain
performance criteria to be established by the Company and the Executive. Upon
adoption, a copy of the Bonus Plan shall be attached to this Agreement and
incorporated herein, and the Executive shall be eligible to receive an award
under the Bonus Plan on the terms and conditions set forth in that document;
provided, however, that such bonus shall not exceed fifty percent (50%) of the
Executive's then current Base Salary.
(e) Disability. During any period that the Executive fails
to perform his duties hereunder as a result of incapacity due to physical or
mental illness (the "Disability Period"), the Executive shall continue to
receive his full Base Salary, bonuses and other benefits at the rate in effect
for such period until his employment is terminated by the Company pursuant to
paragraph 7(a)(iii) hereof; provided, however, that payments so made to the
Executive during the Disability Period shall be reduced by the sum of the
amounts, if any, which were paid to the Executive at or prior to the time of
any such payment under disability benefit plans of the Company.
5. Benefits.
(a) Insurance. The Company shall provide to the Executive
life, medical and hospitalization insurance for himself, his spouse and
eligible family members as may be determined by the Board to be consistent with
the Company's standard policies.
(b) Benefit Plans. The Executive, at his election, may
participate, during his employment hereunder, in all retirement plans, 401(K)
plans and other benefit plans of the Company generally available from time to
time to other executive employees of the Company and for which the Executive
qualifies under the terms of the plans (and nothing in this Agreement shall or
shall be deemed to in any way affect the Executive's right and benefits under
any such plan except as expressly provided herein). The Executive shall also
be entitled to participate in any equity, stock option or other employee
benefit plan that is generally available to senior executives, as distinguished
from general management, of the
3
Company. The Executive's participation in and benefits under any such plan
shall be on the terms and subject to the conditions specified in the governing
document of the particular plan.
(c) Annual Vacation. The Executive shall be entitled to
four (4) weeks vacation time each year without loss of compensation which shall
be scheduled with the advance approval of the Company. In the event that the
Executive is unable for any reason to take the total amount of vacation time
authorized herein during any year, he may accrue such unused time and add it to
the vacation time for any following year; provided, however, that no more than
ten (10) days of accrued vacation time may be carried over at any time (the
"Carry-Over Limit"). In the event that the Executive has accrued and unused
vacation time in excess of the Carry-Over Limit (the "Excess Vacation Time"),
the Excess Vacation Time shall be paid to the Executive within ten (10) days of
the end of the year in which the Excess Vacation Time was earned based on the
Base Salary then in effect. Upon any termination of this Agreement for any
reason whatsoever, accrued and unused vacation time shall be paid to the
Executive within ten (10) days of such termination based on the Base Salary in
effect on the date of such termination; provided, however, that no more than
twenty (20) days of accrued vacation time may be carried over at any time.
6. Reimbursement of Business Expenses.
The Company shall reimburse the Executive or provide him with
an expense allowance during the term of this Agreement for travel, car
telephone, and other expenses reasonably and necessarily incurred by the
Executive in connection with the Company's business. The Executive shall
furnish such documentation with respect to reimbursement to be paid hereunder
as the Company shall reasonably request.
7. Termination of Employment.
(a) The Executive's employment under this Agreement may be
terminated:
(i) by either the Executive or the Company at any
time for any reason whatsoever or for no reason upon not less than thirty (30)
days written notice;
(ii) by the Company at any time for "cause" as
defined below, without prior notice;
(iii) by the Company upon the Executive's "permanent
disability" as defined below, without prior notice; and
(iv) upon the Executive's death.
(b) For purposes hereof, for "cause" shall mean the
material breach of any provision of this Agreement by the Executive, or any
action of the Executive (or the Executive's failure to act), which, in the
reasonable determination of the Board, involves malfeasance, fraud, or moral
turpitude, or which, if generally known, would or might have a material adverse
effect on the Company and/or its reputation.
(c) For purposes hereof, the Executive's "permanent
disability"
4
shall be deemed to have occurred after one hundred eighty (180) consecutive
days during which the Executive, by reason of his physical or mental disability
or illness, shall have been unable to discharge his duties under this
Agreement. The date of permanent disability shall be such one hundred
eightieth (180th) day. In the event either the Company or the Executive, after
receipt of notice of the Executive's permanent disability from the other,
disputes that the Executive's permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the chief of
medicine of any major accredited hospital in Michigan and, unless such
physician shall issue his written statement to the effect that in his opinion,
based on his diagnosis, the Executive is capable of resuming his employment and
devoting his full time and energy to discharging his duties within thirty (30)
days after the date of such statement, such permanent disability shall be
deemed to have occurred.
8. Compensation Upon Termination or Disability.
(a) In the event that the Company terminates the
Executive's employment under this Agreement without "cause" pursuant to
paragraph 7(a)(i) hereof, the Executive shall be entitled to a portion of any
unpaid salary, bonus and benefits accrued and earned by him hereunder up to and
including the effective date of such termination and the Company shall pay the
Executive monthly an amount equal to one-twelfth (1/12) of the Base Salary in
effect on the date of such termination for a period of up to eighteen (18)
months if the Executive fully complies with paragraph 12 of this Agreement (the
"Severance Payment"). Notwithstanding the foregoing, the Company, in its sole
discretion, may elect to make the Severance Payment to the Executive in one
lump sum due within thirty (30) days of the Executive's termination of
employment.
(b) In the event of termination of the Executive's
employment under this Agreement for "cause" or if the Executive voluntarily
terminates his employment hereunder, the Executive shall be entitled to no
further compensation or other benefits under this Agreement, except only as to
any unpaid salary, bonus and benefits accrued and earned by him hereunder up to
and including the effective date of such termination.
(c) In the event of termination of the Executive's
employment under this Agreement due to the Executive's permanent disability or
death, the Executive (or his successors and assigns in the event of his death)
shall be entitled to a portion of any unpaid salary, bonus and benefits accrued
and earned by him hereunder up to and including the effective date of such
termination and the Company shall pay the Executive monthly an amount equal to
one-twelfth (1/12) of the Base Salary in effect on the date of such termination
for a period of up to twenty four (24) months if the Executive fully complies
with paragraph 12 of this Agreement (the "Disability Payment"); provided,
however, that payments so made to the Executive shall be reduced by the sum of
the amounts, if any, which were paid to the Executive at or prior to the time
of any such payment under disability benefit plans of the Company.
Notwithstanding the foregoing, the Company, in its sole discretion, may elect
to make the Disability Payment to the Executive in one lump sum due within
thirty (30) days of the Executive's termination of employment.
(d) In the event that, other than by mutual agreement of
the Company and the Executive, the Company fails or refuses to renew this
Agreement on terms and conditions no less favorable to the Executive as the
terms and conditions applicable during the last year of this Agreement, the
5
Company shall pay to the Executive monthly an amount equal to one-twelfth
(1/12) of the Base Salary in effect on the date of such failure or refusal for
a period of up to twelve (12) months if the Executive fully complies with
paragraph 12 of this Agreement (the "Non-Renewal Payment"). Notwithstanding
the foregoing, the Company, in its sole discretion, may elect to make the
Non-Renewal Payment to the Executive in one lump sum due within thirty (30)
days of the Executive's termination of employment.
(e) Regardless of the reason for termination of the
Executive's employment hereunder, bonuses and benefits shall be prorated and
paid for any period of employment not covering an entire year of employment.
(f) Notwithstanding anything to the contrary in this
paragraph 8, the Company's obligation to pay, and the Executive's right to
receive, any compensation under this paragraph 8, including, without
limitation, the Severance Payment and the Disability Payment, shall terminate
upon the Executive's breach of any provision of paragraph 12 hereof. In
addition, the Executive shall promptly forfeit any compensation received from
the Company under this paragraph 8, including, without limitation, the
Severance Payment and the Disability Payment, upon the Executive's breach of
any provision of paragraph 12 hereof.
9. Resignation of Executive. Upon any termination of the
Executive's employment under this Agreement, the Executive shall be deemed to
have resigned from any and all offices or directorships held by the Executive
in the Company and/or any of the Affiliates (as defined below). In addition,
upon any termination of the Executive's employment under this Agreement, the
Executive shall transfer one-half (1/2) of his stock in Sun Home Services,
Inc., a Michigan corporation, to each of Xxxxxx X. Xxxxxxxx and Xxxx X.
Xxxxxxxx.
10. Effect of the Company's Merger, Transfer of Assets, or
Dissolution. In the event of any voluntary or involuntary dissolution of the
Company resulting from either a merger or consolidation in which the Company is
not the consolidated or surviving corporation, or a transfer of all or
substantially all of the assets of the Company, pursuant to which the
Executive's employment under this Agreement is terminated, the Company shall
pay to the Executive, immediately prior to such merger, consolidation, or
transfer of assets, an amount equal to the sum of (a) the portion of any unpaid
salary, bonus and benefits accrued and earned by the Executive hereunder up to
and including the effective date of such change in control; and (b) the greater
of (i) an amount equal to two (2) years' Base Salary at the rate in effect on
the date of such termination; or (ii) the full Base Salary and other benefits
(excluding any bonus) which would otherwise have been paid to the Executive for
the remainder of the term of this Agreement.
11. Stock Options. In the event of termination of the Executive's
employment under this Agreement for "cause", all stock options or other stock
based compensation awarded to the Executive shall lapse and be of no further
force or effect whatsoever in accordance with the Company's 1993 Stock Option
Plan. In the event that the Company terminates the Executive's employment
under this Agreement without "cause" or upon the death or permanent disability
of the Executive, all stock options and other stock based compensation awarded
to the Executive shall become fully vested and immediately exercisable;
provided, however, that such options and other stock based compensation cannot
be exercised until the expiration of the eighteen (18) month period referenced
in
6
paragraph 12 hereof and such stock options or other stock based compensation
shall be automatically forfeited upon the Executive's breach of any of the
provisions of paragraph 12 hereof. Any Stock Option Agreements between the
Company and the Executive shall be amended to conform to the provisions of this
paragraph 11.
12. Covenant Not To Compete and Confidentiality.
(a) The Executive acknowledges the Company's reliance and
expectation of the Executive's continued commitment to performance of
his duties and responsibilities under this Agreement. In light of such
reliance and expectation on the part of the Company, the Executive
agrees that:
(i) for a period commencing on the date of this
Agreement and ending upon the expiration of eighteen (18) months
following the termination of the Executive's employment under this
Agreement for any reason, the Executive shall not, directly or
indirectly, engage in, or have an interest in or be associated with
(whether as an officer, director, stockholder, partner, associate,
employee, consultant, owner or otherwise) any corporation, firm or
enterprise which is engaged in (A) the real estate business (the "Real
Estate Business"), including, without limitation, the development,
ownership, leasing, sales, management or financing of single family or
multi-family housing, condominiums, townhome communities or other form
of housing, or (B) any business which is competitive with the business
then or at any time during the term of this Agreement conducted or
proposed to be conducted by the Company, or any corporation owned or
controlled by the Company or under common control with the Company
("Affiliate"), anywhere within the continental United States or Canada;
(ii) the Executive will not at any time, for so long as
any Confidential Information (as defined below) shall remain
confidential or otherwise remain wholly or partially protectable, either
during the term of this Agreement or thereafter, use or disclose,
directly or indirectly, to any person outside of the Company or any
Affiliate any Confidential Information;
(iii) promptly upon the termination of this Agreement
for any reason, the Executive (or in the event of the Executive's death,
his personal representative) shall return to the Company any and all
copies (whether prepared by or at the direction of the Company or the
Executive) of all records, drawings, materials, memoranda and other data
constituting or pertaining to Confidential Information;
(iv) for a period commencing on the date of this
Agreement and ending upon the expiration of eighteen (18) months from
the termination of this Agreement for any reason, the Executive shall
not directly or indirectly divert, or by aid to others, do anything
which would tend to divert, from the Company or any Affiliate any trade
or business with any customer or supplier with whom the Executive had
any contact or association during the term of the Executive's employment
with the Company or with any party whose identity or potential as a
customer or supplier was confidential or
7
learned by the Executive during his employment by the Company; and
(v) for a period commencing on the date of this
Agreement and ending upon the expiration of eighteen (18) months from
the termination of this Agreement for any reason, the Executive shall
not, either directly or indirectly, induce or attempt to induce any
person with whom the Executive was acquainted while in the Company's
employ to leave the employment of the Company or any of the Affiliates.
As used in this Agreement, the term "Confidential Information" shall
mean all business information of any nature and in any form which at the time
or times concerned is not generally known to those persons engaged in business
similar to that conducted or contemplated by the Company or any Affiliate
(other than by the act or acts of an employee not authorized by the Company to
disclose such information) and which relates to any one or more of the aspects
of the present or past business of the Company or any of the Affiliates or any
of their respective predecessors, including, without limitation, patents and
patent applications, inventions and improvements (whether or not patentable),
development projects, policies, processes, formulas, techniques, know-how, and
other facts relating to sales, advertising, promotions, financial matters,
customers, customer lists, customer purchases or requirements, and other trade
secrets.
(b) The Executive agrees and understands that the remedy at
law for any breach by him of this paragraph 12 will be inadequate and that the
damages flowing from such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that, upon adequate proof
of the Executive's violation of any legally enforceable provision of this
paragraph 12, the Company shall be entitled to immediate injunctive relief and
may obtain a temporary order restraining any threatened or further breach.
Nothing in this paragraph 12 shall be deemed to limit the Company's remedies at
law or in equity for any breach by the Executive of any of the provisions of
this paragraph 12 which may be pursued or availed of by the Company.
13. Arbitration. Any dispute or controversy arising out of or
relating to this Agreement shall be settled finally and exclusively by
arbitration in the State of Michigan in accordance with the rules of the
American Arbitration Association then in effect. Such arbitration shall be
conducted by an arbitrator(s) appointed by the American Arbitration Association
in accordance with its rules and any finding by such arbitrator(s) shall be
final and binding upon the parties. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof, and the
parties consent to the jurisdiction of the courts of the State of Michigan for
this purpose. Nothing contained in this paragraph 13 shall be construed to
preclude the Company from obtaining injunctive or other equitable relief to
secure specific performance or to otherwise prevent a breach or contemplated
breach of this Agreement by the Executive as provided in paragraph 12 hereof.
14. Notice. All notices, requests, consents and other
communications, required or permitted to be given hereunder to be given under
this Agreement shall be personally delivered in writing or shall have been
deemed duly given when received after it is posted in the United States mail,
postage prepaid, registered or certified, return receipt requested addressed as
follows:
8
If to the Company:
Sun Communities. Inc.
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, President
If to the Executive:
Xxxxxxx X. Xxxxxxxx
00000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
In all events, with a copy to:
Jaffe, Raitt, Heuer & Xxxxx,
Professional Corporation
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
15. Miscellaneous.
(a) The provisions of this Agreement are severable and if
any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision to the extent enforceable in any jurisdiction
nevertheless shall be binding and enforceable.
(b) The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding on, the Company
and its successors and assigns, and the rights and obligations (other than
obligations to perform services) of the Executive under this Agreement shall
inure to the benefit of, and shall be binding upon, the Executive and his
heirs, personal representatives and assigns. This Agreement is personal to
Executive and he may not assign his obligations under this Agreement in any
manner whatsoever.
(c) The failure of either party to enforce any provision or
protections of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision of
this Agreement. The rights granted the parties herein are cumulative and the
waiver of any single remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
(d) This Agreement supersedes all agreements and
understandings between the parties and may not be modified or terminated
orally. No modification, termination or attempted waiver shall be valid unless
in writing and signed by the party against whom the same is sought to be
enforced.
(e) This Agreement shall be governed by and construed
according to the laws of the State of Michigan.
9
(f) Captions and paragraph headings used herein are for
convenience and are not a part of this Agreement and shall not be used in
construing it.
(g) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on the date first written above.
COMPANY:
SUN COMMUNITIES, INC.,
a Maryland corporation
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Xxxx X. Xxxxxxxx, President
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
XXXXXXX X. XXXXXXXX
