EXHIBIT 10.3
EMPLOYMENT AGREEMENT FOR XXXXXX X. XXXXX
This Employment Agreement (this "Agreement") is made and entered as of
January 1, 2002 (the "Effective Date") by and between Xxxxxx X. Xxxxx (the
"Executive") and Center Trust, Inc. (the "Company") and CT Operating
Partnership, L.P. (the "Partnership"). (The Company and the Partnership are
hereinafter collectively referred to as the "Employers.")
The Employers and Executive previously entered into that certain
employment agreement dated as of September 1, 1998 (the "Prior Agreement"). The
parties agree that, except as set forth herein, the Prior Agreement is
terminated as of the Effective Date.
1. Positions and Duties. The Employers hereby employ Executive as the
Chief Financial Officer and Secretary of the Company and as an employee of the
Partnership during the "Term of Employment" (as hereinafter defined) of this
Agreement, with powers and duties consistent with such position and Executive's
stature and experience and as may be required by the President and/or the Board
of Directors ("the "Board") of the Company and the General Partner (the "General
Partner") of the Partnership (the "Duties"). Executive shall report to the
President and Chief Operating Officer. Executive shall have such executive power
and authority as shall reasonably be required to enable Executive to discharge
the duties of such offices.
2. Term. The term of this Agreement will commence on the Effective Date
and shall continue until December 31, 2003 (the "Initial Term") unless earlier
terminated as provided for in Section 7. At the expiration of each year during
the Initial Term and each anniversary thereafter, the term of this Agreement
shall automatically be extended for an additional year (the "Extension Term")
(such that there shall always be a "rolling" two year term) unless either party
shall have given written notice to the other party at least ninety (90) days
prior to the end of a given year that it does not desire to continue to extend
the term of this Agreement. If Executive's employment term under this Agreement
is extended for an Extension Term, it shall thereafter or during any Extension
Term be terminable only as provided in Section 7. 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, as they may be terminated pursuant to
Section 7 below.
3. Salary. Commencing on the Effective Date, and for the duration of the
Term of Employment, the Company shall pay to Executive a Fixed Annual Salary,
payable in equal installments, no less frequently than monthly, in accordance
with the Company's prevailing payroll policy (the "Fixed Annual Salary") in the
amount of $195,000.
The Fixed Annual Salary of Executive shall be reviewed on an annual
basis and may be increased (but not decreased), if appropriate, on an annual
basis.
In addition to the Fixed Annual Salary, the Employers may pay Executive
a bonus ("Bonus") on an annual basis in an amount up to 60% of Fixed Annual
Salary to be determined by the Board in accordance with criteria as reasonably
determined by the Compensation Committee of the Board.
4. Expenses. In accordance with the Employers' policies, the Employers
will promptly reimburse Executive for all reasonable travel and business
expenses paid or incurred by Executive in the performance of his duties
hereunder. The Employers shall promptly reimburse Executive for all reasonable
expenses incurred by Executive with respect to professional memberships and
continuing education upon evidence of receipt in accordance with the Employers'
policies.
5. Executive Benefits. During the Term of Employment, Executive shall be
entitled to the following benefits (collectively, the "Executive Benefits"):
(a) Executive shall be entitled to three weeks of vacation per year
in accordance with the Company's normal vacation policy. 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 Employers in
accordance with the Employers' policies.
(c) Except as otherwise provided herein, Executive shall be entitled
to participate in any profit-sharing, stock option, pension or other plans,
benefits or policies generally available to other currently existing officers of
the Employers' 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 5.
Nothing in this Section 5(c) is intended or shall be construed to require the
Employers to institute any plan or benefits, or to maintain or refrain from
amending or terminating any such existing plan or benefits.
(d) The Employers shall provide Executive with an automobile
allowance of $500 per month.
6. Allocation of Costs of Compensation and Benefits. The obligation of
the Employers to pay Executive the compensation and benefits provided under this
Agreement shall be allocated between the Company and the Partnership based upon
the amount of the services provided by Executive to each of them, as they shall
agree from time to time, provided, however, that in the event of a default by
the Employers in paying such compensation and benefits, the Employers shall be
jointly and severally liable to Executive for such compensation and benefits.
7. Termination.
(a) The Employers shall have the right, at their election, to
terminate the Term of Employment for "good cause" (defined below). Executive
will have no right to any further Fixed Annual Salary from and after termination
for "good cause," or to accrue any Executive Benefits thereafter. For purposes
of this Agreement, the Employers shall have "good cause" to terminate
Executive's employment hereunder upon a finding by the Board or the General
Partner that Executive has (1) engaged in acts or omissions with respect to the
Employers which constitute intentional misconduct which has a material adverse
effect on the Company or Employers or a commission of a felony; (2) personally
received a benefit in money, property or
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services from the Employers or from another person dealing with the Employers
(in excess of de minimis amounts) in known violation of applicable law (which is
not returned in kind or value); (3) breached his confidentiality covenant with
the Employers which has a material adverse effect on the Company or Employers;
(4) breached his fiduciary duty of loyalty to the Employers under applicable
law; (5) failed to satisfactorily perform services for the Employers which have
been reasonably requested of him by the Board or the General Partner and which
are consistent with the terms of the Agreement; (6) failed to achieve the
performance goals reasonably set forth for Executive from time to time; or (7)
failed to otherwise comply with the terms of this Agreement; provided, however,
that "good cause" shall not exist with respect to items (5), (6), and (7) unless
and until the Employers provide Executive with (a) at least sixty (60) days
prior written notice of their 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
Executive cures such acts or omissions on which the finding of good cause is
based during the sixty (60) day period (or such reasonable time period
thereafter provided Executive is diligently and in good faith pursuing such
cure), the Employers shall not have good cause to terminate Executive's
employment hereunder. Notwithstanding the forgoing, no notice prior to "good
cause" termination shall be required from the Employers to Executive with
respect to items (1) through (4). Should the Employers terminate the Term of
Employment in accordance with the provisions of this Section 7(a) items (1)
through (4), the Employers shall pay to Executive upon the date of termination
only his Fixed Annual Salary through the date of termination and any bonus which
Executive has been awarded as of the date of termination which has not yet been
paid to him and any other vested benefits or rights. Should the Employers
terminate the Term of Employment in accordance with the provisions of this
Section 7(a) items (5) through (7), the Employers shall pay to Executive in cash
upon the date of termination his Fixed Annual Salary through the date of
termination which has not yet been paid to him, any Bonus accrued to date (based
on the prior calendar year's annual bonus) any other vested benefits and rights
and an additional twelve (12) months Fixed Annual Salary based upon the prior
twelve (12) months.
(b) Notwithstanding anything to the contrary contained in this
Agreement, including Section 2, Executive's employment with the Employers is not
for any specified term and may be terminated by the Employers at any time, for
any reason, with or without cause, without liability except with respect to the
payments provided for by this Section 7(b). Accordingly, the Employers shall
have the right, at their election, to terminate the Term of Employment without
"good cause," cause of any kind, or for any reason or no reason whatsoever, by
giving Executive at least ninety (90) days written notice of their intention to
terminate the Term of Employment. Should the Employers terminate the Term of
Employment in accordance with the provisions of this Section 7(b), the Employers
shall pay to Executive, in cash, not later than the effective date of such
termination, a sum equal to 24 months of Executives 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, any
Restricted Shares (either Incentive Stock, Bonus Stock or otherwise) or Options
to Purchase Common Stock then 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.
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(c) Executive shall have the right, at his election; to terminate
the Term of Employment for "Employers' Material Breach," which shall consist of
the Employers' failure or refusal to comply with a material term of this
Agreement or for "Good Reason" (defined below). The Employers and Executive
hereby agree that the following shall constitute a "failure or refusal to comply
with a material term of this Agreement": the Employers' 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 or Good Reason and the Employers shall have failed
to correct the claimed breach or Good Reason, if the same 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) or such reasonable time period
thereafter provided the Company is diligently and in good faith pursuing such
cure (however such additional time period shall not be applicable in the case of
non-payment of compensation) after the receipt of the applicable notice. "Good
Reason" shall mean (a) any removal of Executive from the office of Chief
Financial Officer without cause and without Executive's prior written consent;
(b) any material decrease in Executive's authority or responsibilities as Chief
Financial Officer of the Company without Executive's prior written consent; or
(c) the occurrence of a "Change of Control"(as defined below). Should Executive
terminate the Term of Employment due to Employers' Material Breach or for Good
Reason in accordance with the provisions of this Section 7(c) the Employers
shall pay to Executive, in cash not later than the effective date of such
termination, a sum equal to 24 months of Executives 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, any Options
and Restricted Stock (either Incentive Stock, Bonus Stock or otherwise) then
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 Employers elect to not renew
this Agreement as specified in Section 2 above and Executive elects to terminate
his employment with the Employers within 60 days of such notice of non-renewal,
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 as a result of which: (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 L.P. or their
affiliates (collectively, 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 or 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 transaction 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)
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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) cease 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) Executive shall have the right, at his election, to terminate
the Term of Employment for any or no reason, other than due to Employers'
Material Breach or for Good Reason, by giving the Employers 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 7(d), the Employers 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.
(e) 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 Employers,
renders Executive unable to perform his duties under this Agreement for more
than 90 days in any 180 day period. Upon the termination of the Term of
Employment in accordance with the provisions of this Section 7(e), the Employers
shall pay to Executive (or, in the event of his death, his designated
beneficiary or estate) his Fixed Annual Salary through the date of termination
and any Bonus accrued to date (based on the prior calendar year's Bonus). In
addition, the Employers' shall continue to pay to Executive (or, in the event of
his death, his designated beneficiary or estate) his Fixed Annual Salary (and
continue to provide health insurance benefits to the parties previously insured
under Employer's policy at the Executive's election) for a twelve (12) month
period ending on the first anniversary of Executive's death or termination of
employment by reason of disability.
(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 Employers belongs to the Employers and shall
be promptly returned to the Employers immediately upon the termination of the
Term of Employment. Upon the termination of the Term of Employment, Executive
shall be deemed to have resigned from all offices and directorships then held
with the Employers or any affiliate of the Employers.
8. Mitigation. The Employers and Executive agree that Executive shall
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 benefit payable pursuant to Section 7.
9. Confidential Information. During the Term of Employment and for a one
year period thereafter Executive agrees not to disclose to any person not
employed by the Employers or any affiliated
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entity and not engaged to render services to the Employers or any affiliated
entity any confidential information obtained while in the employ of the
Employers; provided, however, that the restrictions contained herein shall not
apply to information that (i) is or becomes generally available to the public
other than as a result of disclosure by Executive in violation of this
Agreement, (ii) is or becomes available to Executive on a non-confidential basis
from a source other than the Employers or their representatives) which is not,
to Executive's knowledge, prohibited from transmitting the information to
Executive or his representatives by a contractual, legal, fiduciary or other
obligation, (iii) was independently acquired or developed by Executive without
violating Executive's obligations under this Agreement, or (iv) is furnished to
a third party by the Employers or any representative of the Employers without
similar non-disclosure restrictions on the third party's use of such
information. In addition, this Section 12 shall not preclude Executive from the
use or disclosure of information known generally to the public or of information
not considered confidential by the Employers or any affiliated entity or from
making disclosures required by law or court order or to carry out Executive's
duties hereunder.
For purposes of this Agreement, the term "confidential information"
shall include all information of any nature and in any form which is owned by
the Employers and which is not publicly available or generally known to persons
engaged in businesses similar to that of the Employers, including, but not
limited to, research techniques; patents and patent applications; inventions and
improvements, whether patentable or not; development projects; computer software
and related documentation and materials; designs, practices, processes, methods,
know-how and other facts related to sales, advertising, promotions, financial
matters, customers, customer lists or customers' purchases of goods or services
from the Employers; industry contracts; and all other secrets and information of
a confidential and proprietary nature.
10. Insurance. During the term of this Agreement, the Company shall use
its best efforts to maintain, at its expense, officers and directors fiduciary
liability insurance that would cover Executive in an amount of no less than $10
million.
11. Disputes. Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall, at the election and upon
written demand of any party to this Agreement, be finally determined and settled
by arbitration in Los Angeles, California, in accordance with the Employment
Dispute Resolution rules and procedures of the American Arbitration Association,
and judgment upon the award may be entered in any court having jurisdiction
thereof If any legal action or any arbitration or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Agreement (including the occurrence of an Employers' Material Breach), the
successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief that may be granted; provided, however, that
neither party shall be entitled to recover more than $100,000 from the other
pursuant to this Section 11. Executive acknowledges and understands that by
agreeing to this provision he is waiving his right to a jury trial. Executive
also acknowledges that the provision of this paragraph on the costs of the
arbitration forum have been specifically negotiated and are fair and reasonable.
12. Binding on Successors. This Agreement shall be binding upon and
inure to the benefit of the Employers, Executive and their respective
successors, assigns, personal and legal
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representatives, executors, administrators, heirs, distributees, devisees, and
legatees, as applicable.
13. Governing Law. This Agreement is being made and executed in and is
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.
14. Validity. The invalidity or unenforceability of any provision or
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.
15. Notices. Any notice, request, claim, demand, document and other
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 Employers, addressed to the Employers' principal
offices to the attention of Secretary, at 0000 Xxxxxxxxx Xxxx., Xxxxxxxxx Xxxxx,
Xxxxxxxxxx 00000;
(b) If to 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.
16. Entire Agreement. As of the Effective Date, the terms of this
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of Executive by the Employers and may
not be contradicted by evidence of any prior or contemporaneous agreement. The
Prior Agreement is hereby terminated 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 judicial, administrative or other legal proceeding to vary the
terms of this Agreement.
17. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing and signed by Executive and the
Employers.
18. No Effect on Other Contractual Rights. The provisions of this
Agreement, and any other payment provided for hereunder shall not in any way
diminish Executive's rights under any employee benefit plan, program or
arrangement of the Employers to which he may be entitled as an employee of the
Employers.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
data and year first above written.
EXECUTIVE:
XXXXXX X. XXXXX
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Xxxxxx Xxxxxxx
0
Xxxx
Xxxxx
Zip
THE COMPANY:
CENTER TRUST, INC.,
a Maryland corporation
By:
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Its:
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THE PARTNERSHIP:
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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