EXHIBIT 10.24
Employment Agreement for Xxxxxx Xxxxxxx
This Employment Agreement (this "Agreement") is made and entered as of
the 1st day of January, 1999, ("Effective Date") by and between Center Trust,
Inc. and CT Operating Partnership, L.P. (collectively the "Company"), and Xxxxxx
Xxxxxxx ("Executive").
The Company and Executive previously entered into that certain
employment agreement dated as of March 1, 1998 (the "Prior Agreement"). The
parties agree that the Prior Agreement is terminated as of the Effective Date.
1. Positions and Duties. The Company hereby employs Executive as the
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Senior Vice President and Chief Financial Officer during the "Term of
Employment" (as hereinafter defined) of this Agreement, with powers and duties
consistent with such position and such additional or different duties as may be
required by the President and/or the Board of Directors (the "Board") of Center
Trust, Inc., ("Duties"). The Duties shall be generally performed at the offices
of the Company where located from time to time. In addition, the Duties may be
performed by Executive from time to time on a temporary travel basis at such
other locations as Company shall reasonably request consistent with its
reasonable business needs. Executive shall report to the President of the
Company and to the Board. Executive shall be employed full time and shall
devote such time, attention and energies to the business of the Company as are
reasonably necessary to satisfy Executive's responsibilities and duties
hereunder. Executive shall use his good faith best efforts to promote the
Company's products and services.
2. Term. The term of this Agreement will commence on the Effective
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Date and shall continue until December 31, 2000 (the "Initial Term") unless
earlier terminated as provided in Section 9. At the expiration of each year of
the Initial Term and each anniversary thereafter, the term of this Agreement
shall automatically be extended for an additional one year (the "Extension
Term") unless either party shall have given written notice to the other party at
least sixty (60) days prior to the end of the Initial Term or the Extension
Term, as the case may be, that it does not desire to extend the term of this
Agreement. During any Extension Term, this Agreement may be earlier terminated
as provided in Section 9. References herein to either the "Term" or the "Term
of Employment" of this Agreement shall refer to both such Initial Term and any
Extension Term.
3. Salary. Commencing on the Effective Date, and for the duration of
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the Term of Employment, the Company shall pay to Executive a fixed annual salary
in the amount of Two Hundred Thirty Thousand Dollars ($230,000) per year,
payable in equal installments, no less frequently than monthly, in accordance
with the Company's prevailing payroll policy (the "Fixed Annual Salary"). The
Fixed Annual Salary of Executive shall be reviewed on an annual basis and may be
increased, if appropriate, on an annual basis.
In addition to the Fixed Annual Salary, Executive may be eligible for
a bonus (the "Bonus"), at the sole discretion of the President and the Board or
any compensation or similar committee thereof. (The maximum Bonus potential for
Executive shall be 75% of Executive's fixed annual salary). The amount of
Bonus for the calendar year ended December 31, 1999 paid to Executive shall be
based on several factors at the discretion of the Company which shall include
the substantial achievement of the goals (e.g. completion of the
recapitalization program, achieving stated FFO targets, etc.) set forth in that
certain Business Plan dated as of July 9, 1999 and may include such other
factors related to Executive's performance and that of the Company and the Board
deems appropriate. For the years after 1999 the Company may pay Executive a
Bonus in an amount to be determined by the Company in its sole discretion.
Any Bonus, to the extent awarded by the Company at the end of each
fiscal year, shall be earned and paid on an annual basis in accordance with
Company practice.
4. Expenses. In accordance with Company policies, the Company will
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promptly reimburse Executive for all reasonable travel and other business
expenses paid or incurred by Executive in the performance of his duties
hereunder. The Company shall promptly reimburse the Executive for all
reasonable expenses incurred by the Executive with respect to professional
memberships and continuing education upon evidence of receipt in accordance with
Company policies.
5. Incentive Compensation. As a further inducement to Executive, the
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Company has concurrently herewith entered into a Restricted Stock Agreement with
Executive whereby it grants Executive One Hundred Thousand (100,000) shares of
Restricted Stock of the Company (as defined in the Restricted Stock Agreement)
(the "Incentive Stock"), subject to certain vesting requirements.
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The vesting requirement is that at the end of each calendar year,
upon the date that the Board of Directors determines the Bonus as set forth in
paragraph 3 above, the Board shall make a determination as to the success of
Executive in reaching corporate goals and based upon such determination the
Board in its sole discretion shall approve the vesting of up to one-third of the
Incentive Stock as it deems appropriate ("Performance Vesting Component").
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Notwithstanding anything to the contrary contained in this Agreement,
regardless of the failure of Executive to satisfy the Performance Vesting
Component, one hundred percent (100%) of the Incentive Stock shall be fully
vested on the last day of the seventh year subsequent to the Effective Date
provided that the Executive is employed by the Company on such date.
Dividends on the vested and unvested Incentive Stock shall be paid to
Executive on that date when dividends are paid to shareholders.
The Company and Executive agree that in consideration of entering into
this Agreement, the 100,000 stock options issued to Executive pursuant to the
Prior Agreement are hereby cancelled and of no further force or effect.
6. Executive Benefits. During the Term of Employment, Executive
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shall be entitled to the following benefits (collectively, the "Executive
Benefits"):
(a) Executive shall be entitled to vacation benefits in accordance
with the Company's normal vacation policies but in no event less than a paid
vacation of four (4) weeks each year. Such vacation shall be taken at such time
or times during the applicable year as may be determined by Executive subject to
the Company's reasonable business needs.
(b) Executive and his eligible dependents shall be included in
group hospital, surgical, medical and dental benefit plans of the Company in
accordance with Company policies.
(c) Except as otherwise provided herein, Executive shall be
entitled to participate in any profit-sharing, stock option, pension, 401(k)
plans, or other plans, benefits or policies generally available to other
currently existing officers of the Company on the terms generally applicable to
such officers, if and to the extent that Executive is eligible to participate in
accordance with the provisions of any such plans or benefits; provided, however,
that any such benefits or plans are not duplicative of those provided in this
Section 6. Nothing in this Section 6(c) is intended or shall be construed to
require the Company to institute any plan or benefits, or to maintain or refrain
from amending or terminating any such existing plan or benefits.
7. Reserved.
8. Reserved.
9. Termination.
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(a) The Company shall have the unilateral right, at its election
and in its sole discretion, to terminate Executive's employment at any time
during the Term of Employment so long as "good cause" (defined below) exists.
Should the Company terminate the Term of Employment in accordance with the "good
cause" provisions of this Section 9(a), notwithstanding anything herein to the
contrary, the Company shall pay to Executive only his Fixed Annual Salary
through the date of termination, any bonus which Executive has been awarded as
of the date of termination but which has not yet been paid to him and any other
vested benefits or rights. All other benefits provided for in this Agreement and
compensation payable under this Agreement shall cease on such date of
termination of employment except to the extent accrued as of such date. For
purposes of this Agreement, the Company shall have "good cause" to terminate the
Executive's employment hereunder upon a finding by the President of the Company
or the Board that the Executive has (1) engaged in acts or omissions with
respect to the Company which constitute intentional misconduct or a knowing
violation of law; (2) personally received a benefit in money, property or
services from the Company or from another person dealing with the Company (in
excess of de minimis amounts) in violation of applicable law; (3) breached his
confidentiality covenant with the Company; (4) breached his fiduciary duty of
loyalty to the Company under applicable law; (5) engaged in gross negligence in
the performance of his duties to the Company; (6) failed to satisfactorily
perform services for the Company which have been reasonably requested of him by
the Board or the President of the Company and which are consistent with the
terms of the Agreement; or (7) failed to achieve the performance goals
reasonably set forth for Executive from time to time; provided, however, that
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"good cause" shall not exist with respect to items (5), (6) and (7) unless and
until the Company provides the Executive with (a) at least fifteen (15) days
prior written notice of its intention to terminate his employment for good
cause, and (b) a reasonable opportunity and a reasonable period of time to cure
any curable acts or omissions on which the finding of good cause is based. If
the Executive cures the acts or omissions on which the finding of good cause is
based during the fifteen (15) day period, the Company shall not have good cause
to terminate the Executive's employment hereunder. Notwithstanding the forgoing,
no notice prior to "good cause" termination shall be required from the Company
to the Executive with respect to items (1) through (4).
(b) Notwithstanding anything to the contrary contained in this
Agreement, including Section 2, Executive's employment with the Company may be
terminated by the Company at any time, for any reason, with or without cause,
without liability except with respect to the payments provided for by this
Section 9(b). Accordingly, the Company shall have the right, at its election,
to shorten the Term of Employment without "good cause," cause of any kind, or
for any reason or no reason whatsoever, by giving Executive at least thirty (30)
days written notice of its intention to shorten the Term of Employment in which
event the Company shall pay to Executive, in cash, not later than the effective
date of such termination, a sum equal to 24 months of Executive's Fixed Annual
Salary and two years of Bonus payments (deemed for this purpose to be two times
the prior year's bonus), less withholding for applicable taxes. In addition, the
Incentive Stock granted pursuant to Section 5 above shall immediately and fully
vest as follows: In the event that Executive's employment is terminated under
the provisions of this Section prior to the last day of the first year
subsequent to the Effective Date, 100% of the Incentive Stock shall fully vest
without condition; during the second calendar year subsequent to the Effective
Date, two-thirds of the Incentive Stock shall immediately vest without
condition; and during the third calendar year subsequent to the Effective Date,
one-third of the Incentive Stock shall immediately and fully vest without
condition; after the last day of the third calendar year there shall be no
vesting of the Incentive Stock. In the event that the Executive's employment is
terminated after the completion of a calendar year but before the Board has
determined the appropriate vesting of the Incentive Shares pursuant to the
Performance Vesting Component set forth above, the Executive shall immediately
vest in one-third of the Incentive Stock representing the Performance Vesting
for the prior calendar year. Further, any options granted prior to or
subsequent to the Effective Date and any restricted stock other than the
Incentive Stock held by the Executive shall immediately and fully vest without
condition. All other benefits provided for in this Agreement and compensation
payable in this Agreement shall cease on such date of termination of employment
except to the extent accrued as of such date.
(c) Notwithstanding anything to the contrary contained in this
Agreement, including Section 2, Executive shall have the right, at his election,
to terminate the Term of Employment in the event of the "Company's Material
Breach," which shall consist of the Company's failure or refusal to comply with
a material term of this Agreement. The Company and Executive hereby agree that
the following shall constitute a "failure or refusal to comply with a material
term of this Agreement": the Company's failure or refusal to comply with the
provisions of Sections 3, 4, 5, or 6 hereof unless such failure or refusal to
comply arises out of a bona fide dispute. In order to terminate the Term of
Employment, Executive shall be required to give written notice specifying the
claimed breach and the Company shall have failed to correct the claimed breach,
if such breach is curable, or alter the objectionable pattern of conduct
specified in the applicable written notice, thirty (30) days (ten (10) days in
the case of a breach based upon non-payment of compensation due under this
Agreement) after the receipt of the applicable notice. Executive shall also
have the right to terminate the Term of Employment in the event of (i) any
removal of Executive from the office of Senior Vice President and Chief
Financial Officer without good cause (as defined in Section 9(a)) and without
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Executive's prior written consent, or (ii) any material decrease in Executive's
authority or responsibilities as Senior Vice President and Chief Financial
Officer without Executive's prior written consent, or (iii) a "Change of
Control" (as defined below). Should Executive terminate the Term of Employment
in accordance with the provisions of this Section 9(c), the Company shall pay to
Executive, in cash, not later than the effective date of such termination, a sum
equivalent to 24 months of the Executive's Fixed Annual Salary and two years of
Bonus payments (deemed for this purpose to be two times the prior year's bonus).
In addition, the Incentive Stock granted pursuant to Section 5 above shall
immediately and fully vest as follows: In the event that Executive's employment
is terminated under the provisions of this Section prior to the last day of the
first year subsequent to the Effective Date, 100% of the Incentive Stock shall
fully vest without condition; during the second calendar year subsequent to the
Effective Date, two-thirds of the Incentive Stock shall immediately vest
without condition; and during the third calendar year subsequent to the
Effective Date, one-third of the Incentive Stock shall immediately and fully
vest without condition; after the last day of the third calendar year there
shall be no vesting of the Incentive Stock. In the event that the Executive's
employment is terminated after the completion of a calendar year but before the
Board has determined the appropriate vesting of the Incentive Shares pursuant to
the Performance Vesting Component set forth above, the Executive shall
immediately vest in one-third of the Incentive Stock representing the
Performance Component for the prior calendar year. Further, any options
granted prior to or subsequent to the Effective Date, as well as any restricted
stock other than the Incentive Stock held by Executive, shall immediately and
fully vest without condition. All other benefits provided for in this Agreement
and compensation payable under this Agreement shall cease on such date of
termination of employment except to the extent accrued as of such date. In the
event the Company elects to not renew this Agreement as specified in Section 2
above and Executive elects to terminate his employment with the Company within
60 days of receipt of such notice of nonrenewal, such termination shall be
deemed to be a termination pursuant to this subparagraph (c) and Executive shall
be entitled to the severance benefits set forth in this subparagraph (c).
"Change of Control" shall mean an event whereby Executive does not
remain as an executive officer of the Company and associated therewith: (1) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities and
Exchange Act of 1934, as amended, (the "Exchange Act")) other than Prometheus
Western Retail, LLC or LF Strategic Realty Investors LP. or their affiliates
(collective, "Lazard Entities") or any employee benefit plan maintained by the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act, except that a person has the right to acquire, whether such
right is exercisable immediately or only upon the passage of time), directly or
indirectly, of more than 40% of the total voting power of the voting stock of
the Company; (2) the Company consolidates with or merges with or into another
corporation or sells, assigns, conveys, transfers, leases or otherwise disposes
of all substantially all of its assets to any person, or any corporation
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding voting stock of the Company
is changed into or exchanged for cash, securities or other property, other than
any such transactions where (A) the outstanding voting stock of the Company is
changed into or exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including voting stock) or
other property, and (B) the holders of the voting stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
60% of the voting power of the voting stock of the surviving corporation
immediately after such transaction; or (3) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
the Company (which individuals shall be deemed to include any "new" directors
whose election or appointment by such Board or whose nomination for election by
the stockholders of the Company was approved by a vote of at least 66 2/3% of
the directors then still in office who were either directors at the beginning of
such period or whose election, appointment or nomination was previously so
approved) ceased for any reason to constitute a majority of the Board of the
Company then in office; or (4) the Company is liquidated or dissolved or adopts
a plan of liquidation.
(d) Notwithstanding anything to the contrary contained in this
Agreement, including Section 2, Executive shall have the right, at his election,
to shorten the Term of Employment for any or no reason, other than due to
Company's Material Breach, by giving the Company at least sixty (60) days
written notice of his intention to terminate the Term of Employment. Should
Executive terminate the Term of Employment in accordance with the provisions of
this Section 9(d), the Company shall pay to Executive only his Fixed Annual
Salary through the date of termination and any bonus which Executive has been
awarded as of the date of termination but which has not yet been paid to him.
All other benefits provided for in this Agreement and compensation payable under
this Agreement shall cease on such date of termination of employment except to
the extent accrued as of such date.
(e) Notwithstanding anything to the contrary contained in this
Agreement, including Section 2, the Term of Employment shall terminate
automatically upon Executive's death or upon Executive's physical or mental
disability or infirmity, which in the opinion of a competent physician selected
by the Company, renders the Executive unable to perform the essential functions
of his position under this Agreement for more than 90 days in any 180 day
period. Upon the termination of
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the Term of Employment in accordance with the provisions of this Section 9(e),
the Company shall pay to Executive (or, in the event of his death, his
designated beneficiary or estate) only his Fixed Annual Salary through the date
of termination and any bonus which Executive has been awarded as of the date of
termination but which has not yet been paid to him. All other benefits provided
for in this Agreement and compensation payable under this Agreement shall cease
on such date of termination of employment except to the extent accrued as of
such date.
(f) Executive hereby acknowledges and agrees that all personal
property and equipment furnished to or prepared by Executive in the course of or
incident to his employment by the Company belongs to the Company and shall be
promptly returned to the Company immediately upon the termination of this
Agreement. Upon the termination of Executive's employment under any subsection
of this Section 9, Executive shall be deemed to have resigned from all offices
and directorships then held with the Company or any affiliate, effective the
date of his termination.
10. Mitigation. The Company and Executive agree that Executive shall
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have no duty of mitigation. Accordingly, the parties agree that any
compensation earned by Executive after the date of his termination of employment
hereunder shall not be used to offset any severance or other benefits payable
pursuant to Section 9.
11. Confidential and Proprietary Information.
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Executive acknowledges that during the course of his employment
hereunder, he has been given and will have access to and be exposed to trade
secrets and confidential information in written, oral, electronic and other form
regarding the Company and its business, products and employees, including,
without limitation, leasing plans; development plans; acquisition strategies;
underwriting process; advertising and sales materials; research, and related
materials; vendor and industry information; practices, processes, techniques,
methods, and know-how; the identities of the Company's tenants, customers and
potential customers (hereinafter referred to collectively as "Customers"); and
the Company's business methods, practices, strategies, forecasts, pricing and
marketing techniques. Executive expressly agrees to use such information only
for purposes of carrying out his duties for the Company and not for any other
purpose. Except as required by law, Executive will not otherwise disclose such
information, directly or indirectly, to any third party or entity.
All trade secrets, reports, manuals, and other ideas and materials
developed by Executive during the period of his employment, either solely or in
collaboration with others, which relate to the actual or anticipated business of
the Company, which result from or are suggested by any work Executive may do for
the Company, (collectively, the "Developments") shall be the sole and exclusive
property of the Company. Executive agrees to assign to the Company his entire
right and interest in any such Development, and will execute any documents in
connection therewith that the Company may reasonably request.
Executive acknowledges that the provisions of this Section 11 are
reasonable and necessary to protect the legitimate interests of the Company, and
any violation of this Section 11 will result in irreparable injury to the
Company, the exact amount of which will be difficult to ascertain, and that the
remedies at law for any such violation would not be reasonable or adequate
compensation the Company for such a violation. Accordingly, Executive agrees
that if he violates the provisions of this Section 11, in addition to any other
remedy which may be available at law or in equity, the Company shall be entitled
to specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual damages.
12. Non-Solicitation. During the term of this Agreement, Executive
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shall not divert or subvert any Company opportunity for continued existing
business or prospective business to his own benefit or for the benefit of any
third parties, nor shall Executive induce or attempt to induce any Customer to
reduce its business with the Company. Additionally, during the term of this
Agreement and for one (1) year after its termination, Executive shall not,
directly or indirectly, either of himself or for any other person, firm, company
or corporation, call upon, solicit, divert, take away or accept business from,
or attempt to solicit, divert, take away or accept business from any of the
Customers of the Company upon whom he called or whom he solicited or to whom he
catered or with whom he became acquainted after entering the employ of the
Company. Executive further acknowledges that, during the term of this Agreement
and for one (1) year after its termination, he shall not, directly or
indirectly, offer employment to, seek to hire, induce, solicit, encourage, or
attempt to induce any professional employee of the Company to seek or accept
employment with any other person or entity. Executive acknowledges that even an
unsuccessful solicitation of the Company's employees will negatively impact the
morale, commitment and performance of the employees in question, and that any
such solicitation may cause substantial financial loss to the Company.
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Executive acknowledges that the provisions of this Section 12 are
reasonable and necessary to protect the legitimate interests of the Company, and
any violation of this Section 12 will result in irreparable injury to the
Company, the exact amount of which will be difficult to ascertain, and that the
remedies at law for any such violation would not be reasonable or adequate
compensation the Company for such a violation. Accordingly, Executive agrees
that if he violates the provisions of this Section 12, in addition to any other
remedy which may be available at law or in equity, the Company shall be entitled
to specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual damages.
13. Reserved
14. Disputes. Except as set forth in Sections 11 and 12 herein, any
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and all disputes, grievances, demands, causes of action or controversies
whatsoever (including but not limited to tort and contract claims, and claims
upon any law, statute, order or regulation) (hereinafter "Claims"), arising
under, out of, in connection with or in relation to (i) Executive's employment
with the Company; (ii) questions of arbitrability under this Agreement; (iii)
any relationship between Executive and the Company before, at the time of
entering, during the term of, upon or after expiration or determination of this
Agreement; or (iv) the performance, interpretation and breach of this Agreement,
shall, upon written demand of either party to this Agreement, be finally
determined and settled by arbitration in Los Angeles, California, in accordance
with the then existing JAMS/Endispute Arbitration Rules and Procedures for
Employment Disputes, and judgment upon the award may be entered in any court
having jurisdiction thereof. The prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in the arbitration, in
addition to any other relief, including equitable and injunctive relief, that
may be granted. This dispute resolution process shall survive the termination
of Executive's employment.
15. Binding on Successors. This Agreement shall be binding upon and
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inure to the benefit of the Company, the Executive and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.
16. Governing Law. This Agreement is being made and executed in and is
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intended to be performed in the State of California and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of California, without regard to the conflict of laws principles
thereof.
17. Validity. The invalidity or unenforceability of any provision or
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provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
18. Notices. Any notice, request, claim, demand, document and other
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communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:
(a) If to the Company, addressed to its principal offices to the
attention of President, at 0000 Xxxxxxxxx Xxxx., Xxxxxxxxx Xxxxx, Xxxxxxxxxx
00000;
(b) If to the Executive, to him at the address set forth below
under this signature; or at any other address as any party shall have specified
by notice in writing to the other parties.
19. Entire Agreement. As of the Effective Date, the terms of this
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Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and may
not be contradicted by evidence of any prior or contemporaneous agreement, and
the previously existing employment agreement between the Executive and the
Company is hereby terminated and superseded by this Agreement as of the
Effective Date. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any proceeding to vary the terms of this
Agreement.
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20. Amendments; Waivers. This Agreement may not be modified,
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amended, or terminated except by an instrument in writing and signed by the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
EXECUTIVE:
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XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
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Xxxx Xxxxx Zip
COMPANY:
CT OPERATING PARTNERSHIP, L.P.
a California limited partnership
By: CENTER TRUST,
INC., a Maryland corporation
By:
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Its:
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