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EXHIBIT 10.37
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
on this 31st day of December, 1998, but shall be effective as of January 1,
1999, by and between SUN HOME SERVICES, INC., a Michigan corporation (the
"Company"), and XXXXX X. XXXXXX (the "Executive").
PRELIMINARY NOTE:
This Agreement is entered into contemporaneously with that certain
Employment Agreement (the "Sun Agreement") by and between the Executive and Sun
Communities, Inc., a Maryland corporation ("Sun Communities"), and, in the event
of any contradiction between the terms of this Agreement and the terms of the
Sun Agreement, the Sun Agreement shall control.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. Employment.
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 the
Chief Executive Officer 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 position as set forth above.
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,
1999 and shall continue thereafter for a period of three (3) years ending on
December 31, 2001.
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
and its Affiliates (as defined in paragraph 12 of the Sun Agreement) during the
term of this Agreement.
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 hereunder, the Company shall pay to the Executive, during his
employment hereunder, an annual base salary (the "Base Salary") of Two Hundred
Twenty Five Thousand Dollars ($225,000.00) per year, payable in accordance with
the Company's usual pay practices (and in any event no less frequently than
monthly).
(c) Annual Salary Increase. On January 1 of each year, commencing
January 1, 2000, 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, in
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its sole and absolute 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.
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 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 the
vacation time specified in the Sun Agreement.
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.
This Agreement, and the Executive's employment hereunder, shall
automatically be terminated upon termination of the Sun Agreement.
8. Severance Compensation.
(a) In the event that Sun Communities terminates the Executive's
employment under the Sun Agreement without "cause" pursuant to paragraph 7(a)(i)
thereof, the Executive shall be entitled to 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 twelve (12) months if the Executive fully
complies with paragraph 12 of the Sun 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.
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(b) In the event of termination of the Executive's employment
under the Sun Agreement for "cause" or if the Executive voluntarily terminates
his employment under the Sun Agreement, 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) Regardless of the reason for termination of the Executive's
employment hereunder, bonuses and benefits shall be prorated for any period of
employment not covering an entire year of employment.
(d) 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, shall terminate upon the Executive's breach of any provision
of paragraph 12 of the Sun Agreement or the Executive's breach of any provision
of that certain Reimbursement Agreement by and between the Executive and Sun
Communities Operating Limited Partnership. In addition, the Executive shall
promptly forfeit any compensation received from the Company under this paragraph
8, including, without limitation, the Severance Payment, upon the Executive's
breach of any provision of paragraph 12 of the Sun Agreement.
9. Affiliates. 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 the
Affiliates.
10. Effect of Change of Control.
(a) In the event that Sun Communities is required to pay the
Executive Change in Control Benefits (as defined in the Sun Agreement), the
Company shall pay the Executive the following (the "SHS Change in Control
Benefits"):
(i) A cash payment equal to two and 99/100 (2.99) times
the Base Salary in effect on the date of such Change in Control (as
defined in the Sun Agreement), payable within sixty (60) days of the
Change in Control; and
(ii) Continued receipt of all compensation and benefits set
forth in paragraphs 5(a) and 5(b) of this Agreement, until the earlier
of (i) one year following the Change in Control (subject to the
Executive's COBRA rights) or (ii) the commencement of comparable
coverage from another employer. The provision of any one benefit by
another employer shall not preclude the Executive from continuing
participation in Company benefit programs provided under this paragraph
10(a)(ii) that are not provided by the subsequent employer. The
Executive shall promptly notify the Company upon receipt of benefits
from a new employer comparable to any benefit provided under this
paragraph 10(a)(ii).
(b) The benefits set forth in paragraph 10(a) above are in
addition to any and all other Company benefits to which the Executive may be
entitled, including, without limitation, the Base Salary and Severance Payment.
(c) Notwithstanding anything to the contrary herein, the SHS
Change in Control Benefits shall be reduced by all payments to the Executive
which constitute "excess parachute payments" under Section 280(G) of the
Internal Revenue Code of 1986, as amended.
11. 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 expedited procedures of the Commercial
Arbitration Rules of the American
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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.
12. Notice. Any notice, request, consent or other communication given
or made hereunder shall be given or made only in writing and (a) delivered
personally to the party to whom it is directed; (b) sent by first class mail or
overnight express mail, postage and charges prepaid, addressed to the party to
whom it is directed; or (c) telecopied to the party to whom it is directed, at
the following addresses or at such other addresses as the parties may hereafter
indicate by written notice as provided herein:
If to the Company:
Sun Home Services, Inc.
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, President
If to the Executive:
Xxxxx X. Xxxxxx
00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
In all events, with a copy to:
Jaffe, Raitt, Heuer & Xxxxx,
Professional Corporation
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
Any such notice, request, consent or other communication given or made:
(i) in the manner indicated in clause (a) of this paragraph shall be deemed to
be given or made on the date on which it was delivered; (ii) in the manner
indicated in clause (b) of this paragraph shall be deemed to be given or made on
the third business day after the day in which it was deposited in a regularly
maintained receptacle for the deposit of the United States mail, or in the case
of overnight express mail, on the business day immediately following the day on
which it was deposited in the regularly maintained receptacle for the deposit of
overnight express mail; and (iii) in the manner indicated in clause (c) of this
paragraph shall be deemed to be given or made when received by the telecopier
owned or operated by the recipient thereof.
13. 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
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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.
(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.
(h) Each party shall pay his or its own fees and expenses
incurred in connection with the transactions contemplated by this Agreement,
including, without limitation, any fees incurred in connection with any
arbitration arising out of the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on the date first written above.
COMPANY:
SUN HOME SERVICES, INC.,
a Michigan corporation
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, President
EXECUTIVE:
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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