EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 18th day of June, 1997, by and between Price Enterprises, Inc., a Delaware
corporation ("Employer"), and Xxxx XxXxxxx Executive").
RECITALS
A. Employer desires to employ Executive as an Executive Officer of
Employer.
B. Executive desires to accept such position upon the terms and subject to
the conditions herein provided.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
1.1 Position and Duties. Executive shall serve as Executive Vice President
of Employer and Chief Operating Officer of Employer's real estate division and,
after an anticipated reorganization of Employer (whereby the Employer's
merchandising businesses will be spun off into a separate public company),
Executive shall serve as the Chief Executive Officer of Employer. Executive's
responsibilities shall include management of Employer's real estate portfolio.
Executive shall have such other duties and authority as are customary for, and
commensurate with, such positions, and such other related duties and authority
as may from time to time be delegated or assigned to him by the Chief Executive
Officer or the Board of Directors of Employer. In addition, it is anticipated
that after the aforementioned reorganization is effectuated, Executive shall
serve as a Director of Employer and as an
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Ex-Officio Director of the separate merchandising public company. Executive
shall discharge his duties in a diligent and professional manner.
1.2 Outside Business Activities Precluded. During his employment, Executive
shall devote his full energies, interest, abilities and productive time to the
performance of this Agreement. Executive shall not, without the prior written
consent of Employer, perform other services of any kind or engage in any other
business activity, with or without compensation, that would interfere with the
performance of his duties under this Agreement. Executive shall not, without the
prior written consent of Employer, engage in any activity adverse to Employer's
interests.
1.3 Place of Employment. Unless the parties agree otherwise in writing,
during the Employment Term (as defined in Section 3.1 below) Executive shall
perform the services he is required to perform under this Agreement at
Employer's offices located in San Diego, California; provided, however, that
Employer may from time to time require Executive to travel temporarily to other
locations on Employer's business.
ARTICLE II
COMPENSATION
2.1 Salary. For Executive's services hereunder, Employer shall pay as base
salary to Executive the amount of $200,000 during the first year of the
Employment Term and the amount of $250,000 during each of the second and third
year of the Employment Term. Said salary shall be payable in equal installments
in conformity with Employer's normal payroll period. Executive's salary shall be
reviewed by Employer's Board of Directors from time to time at its discretion,
and Executive shall receive such salary increases, if any, as Employer's Board
of Directors, in its sole discretion, shall determine.
2.2 Bonus. In addition to the salary set forth in Section 2.1 above, upon
completion of the first year of the Employment Term Executive shall receive a
bonus in the amount of $50,000; thereafter, Executive shall participate in
Employer's bonus plan for executive
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management personnel. All decisions regarding said bonus plan shall be made in
the sole discretion of Employer's Board of Directors, or the Compensation
Committee thereof.
2.3 Other Benefits. Executive shall be entitled to participate in and
receive benefits under Employer's standard company benefits practices and plans
for officers of Employer, including medical insurance, long-term disability,
life insurance, profit sharing and retirement plan, and Employer's other plans,
subject to and on a basis consistent with the terms, conditions and overall
administration of such practices and plans. Executive shall be entitled to a
paid vacation each year, which will accrue and be paid out in conformity with
Employer's normal vacation pay practices. Employer may in its sole discretion
grant such additional compensation or benefits to Executive from time to time as
Employer deems proper and desirable.
2.4 Expenses. During the term of his employment hereunder, Executive shall
be entitled to receive prompt reimbursement for all reasonable business-related
expenses incurred by him, in accordance with the policies and procedures from
time to time adopted by Employer, provided that Executive properly accounts for
such business expenses in accordance with Employer policy.
2.5 Stock Option Plan. Employer has adopted The Price Enterprises 1995
Combined Stock Grant and Stock Option Plan (the "Stock Plan"). Effective as of
the first date of the Employment Term, Executive will receive a grant of options
to purchase shares of Employer's Common Stock, the number of such options
equating to 1% of Employer's then-issued and outstanding shares of Common Stock.
Said options will be exercisable at a price equal to the fair market value of
the Common Stock as of the effective date of the grant (i.e., the first date of
the Employment Term), with such options vesting at twenty percent (20%) per year
over a period of five (5) years and expiring six (6) years from the effective
date of grant. Said grant of options shall provide, among other things, that in
the event of any merger, consolidation or reorganization of Employer with any
other entity or entities not affiliated with
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Employer, where Employer is not the surviving entity, occurring within three (3)
years of the commencement of the Employment Term, 60% of the total options
granted shall be deemed vested and the remaining 40% shall be deemed cancelled.
In addition, such options shall otherwise be granted in accordance with and
subject to all other terms, conditions and restrictions set forth in the Stock
Plan.
2.6 Deductions and Withholdings. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any deductions
authorized by Executive and any deductions and withholdings required by law.
ARTICLE III
TERM OF EMPLOYMENT
3.1 Term. The term of Executive's employment hereunder shall commence on
September 2, 1997 and shall continue until September 1, 2000 unless sooner
terminated or extended as hereinafter provided (the "Employment Term").
3.2 Extension of Term. The Employment Term may be extended by written
amendment to this Agreement signed by both parties.
3.3 Early Termination by Executive. Executive may terminate this Agreement
at any time by giving Employer written notice of his resignation ninety (90)
days in advance; provided, however, that the Board of Directors may determine
upon receipt of such notice that the effective date of such resignation shall be
immediate or some time prior to the expiration of the ninety-day notice period.
Executive's employment shall terminate as of the effective date of his
resignation as determined by the Board of Directors.
3.4 Termination for Cause. Prior to the expiration of the Employment Term,
Executive's employment may be terminated for Cause by the Board of Directors of
Employer, immediately upon delivery of notice thereof. In such event, Executive
will be informed in writing as to the basis for such termination and will be
given an opportunity to address the Board of Directors of Employer and request
an opportunity to remedy such basis for
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termination. For these purposes, termination for "Cause" shall mean termination
because of Executive's (a) personal dishonesty, willful misconduct, or breach of
fiduciary duty involving personal profit; or (b) intentional failure to perform
his stated duties.
3.5 Termination Due to Death or Disability. Executive's employment
hereunder shall terminate immediately upon his death. In the event that by
reason of injury, illness or other physical or mental impairment Executive shall
be: (a) completely unable to perform his services hereunder for more than three
(3) consecutive months, or (b) unable to perform his services hereunder for
fifty percent (50%) or more of the normal working days throughout six (6)
consecutive months, then Employer may terminate Executive's employment hereunder
immediately upon delivery of notice thereof. Executive's beneficiaries, estate,
heirs, representatives, or assigns, as appropriate, shall be entitled to the
proceeds, if any, due under any Employer-paid life insurance policy held by
Executive, as determined by and in accordance with the terms of any such policy,
as well as any vested benefits and accrued vacation benefits.
ARTICLE IV
BENEFITS AFTER TERMINATION OF EMPLOYMENT
4.1 Benefits Upon Termination. Upon termination of this Agreement under
Section 3.3 (Early Termination by Executive), Section 3.4 (Termination for
Cause) or Section 3.5 (Termination Due to Death or Disability), all salary and
benefits of Executive hereunder shall cease immediately. Upon termination of
this Agreement by Employer for any reason other than those set forth in Section
3.4 or Section 3.5, Executive shall be entitled to the continuation of
Executive's base salary for the remainder of the Employment Term, payable in
equal installments in conformity with Employer's normal payroll period. During
the period of this severance pay, Executive shall cooperate with Employer in
providing for the orderly transition of Executive's duties and responsibilities
to other individuals, as reasonably requested by Employer.
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4.2 Rights Against Employer. The benefits payable under this Article IV are
exclusive, and no amount shall become payable to any person (including the
Executive) by reason of termination of employment for any reason, with or
without Cause, except as provided in this Article IV. Employer shall not be
obligated to segregate any of its assets or procure any investment in order to
fund the benefits payable under this Article IV.
ARTICLE V
CONFIDENTIAL INFORMATION
5.1 Executive acknowledges that Employer holds as confidential, and
Executive may have access to during the Employment Term, certain information and
knowledge respecting the intimate and confidential affairs of Employer in the
various phases of its business, including, but not limited to, trade secrets,
data and know-how, improvements, inventions, techniques, marketing plans,
strategies, forecasts, pricing information, and customer lists. During his
employment by Employer and thereafter, Executive shall not directly or
indirectly disclose such information to any person or use any such information,
except as required in the course of his employment during the Employment Term.
All records, files, keys, documents, and the like relating to Employer's
business, which Executive shall prepare, copy or use, or come into contact with,
shall be and remain Employer's sole property, shall not be removed from
Employer's premises without its written consent, and shall be returned to
Employer upon the termination of this Agreement.
ARTICLE VI
GENERAL PROVISIONS
6.1 Entire Agreement. This Agreement contains the entire understanding and
sole and entire agreement between the parties with respect to the subject matter
hereof, and supersedes any and all prior agreements, negotiations and
discussions between the parties hereto with respect to the subject matter
covered hereby. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or
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otherwise, have been made by any party, or anyone acting on behalf of any party,
which are not embodied herein, and that no other agreement, statement or promise
not contained in this Agreement shall be valid or binding. This Agreement may
not be modified or amended by oral agreement, but rather only by an agreement in
writing signed by Employer and by Executive which specifically states the intent
of the parties to amend this Agreement.
6.2 Assignment and Binding Effect. Neither this Agreement nor the rights or
obligations hereunder shall be assignable by the Executive. Employer may assign
this Agreement to any successor or affiliate of Employer, and upon such
assignment any such successor or affiliate shall be deemed substituted for
Employer upon the terms and subject to the conditions hereof. In the event of
any merger of Employer or the transfer of all (or substantially all) of
Employer's assets, the provisions of this Agreement shall be binding upon, and
inure to the benefit of, the surviving business entity or the business entity to
which such assets shall be transferred.
6.3 Arbitration. The parties hereto agree that any and all disputes
(contract, tort, or statutory, whether under federal, state or local law)
between Executive and Employer (including Employer's employees, officers,
directors, stockholders, members, managers and representatives) arising out of
Executive's employment with Employer, the termination of that employment, or
this Agreement, shall be submitted to final and binding arbitration. Such
arbitration shall take place in the County of San Diego, and may be compelled
and enforced according to the California Arbitration Act (Code of Civil
Procedure xx.xx. 1280 et seq.). Unless the parties mutually agree otherwise,
such arbitration shall be conducted before the American Arbitration Association,
according to its Commercial Arbitration Rules. Judgment on the award the
arbitrator renders may be entered in any court having jurisdiction over the
parties. Arbitration shall be initiated in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.
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6.4 No Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed or be construed as a further or continuing waiver of any such term,
provision or condition, or as a waiver of any other term, provision or condition
of this Agreement.
6.5 Governing Law; Rules of Construction. This Agreement has been
negotiated and executed in, and shall be governed by and construed in accordance
with the laws of, the State of California. Captions of the several Articles and
Sections of this Agreement are for convenience of reference only, and shall not
be considered or referred to in resolving questions of interpretation with
respect to this Agreement.
6.6 Notices. Any notice, request, demand or other communication required or
permitted hereunder shall be d-eemed to be properly given when personally served
in writing, or when deposited in the United States mail, postage pre-paid,
addressed to Employer or Executive at his last known address. Each party may
change its address by written notice in accordance with this Section.
Address for Employer:
Price Enterprises, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, XX. 00000
Address for Executive:
Xxxx XxXxxxx
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, XX 00000
6.7 Severability. The provisions of this Agreement are severable. If any
provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions or
enforceable parts hereof shall not be affected thereby and shall be enforced to
the fullest extent permitted by law.
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6.8 Attorneys' Fees. In the event of any arbitration or litigation brought
to enforce or interpret any part of this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys' fees, as well as all other
litigation costs and expenses as an element of damages.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
EMPLOYER EXECUTIVE
PRICE ENTERPRISES, INC. /s/ Xxxx XxXxxxx
---------------------------
Xxxx XxXxxxx
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
