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Exhibit 10.4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of this 1st day of
July, 2000, by and between INLAND REAL ESTATE CORPORATION, a Maryland
corporation (the "Company"), and Xxxxxx X. Xxxxx (the "Consultant").
RECITALS:
A. The Company is a real estate investment trust ("REIT") which owns,
operates and acquires neighborhood retail centers and community centers within a
400 mile radius of its headquarters in Oak Brook, Illinois (the "Business").
B. The Company, Inland Real Estate Investment Corporation, a Delaware
corporation ("IREIC"), Inland Real Estate Advisory Services, Inc., an Illinois
corporation ("IREAS"), The Inland Property Management Group, Inc., a Delaware
corporation ("TIPMG"), Inland Commercial Property Management, Inc., an Illinois
corporation ("ICPM") and The Inland Group, Inc. ("TIGI") have entered into that
certain Agreement and Plan of Merger, dated as of March 7, 2000 (the "Merger
Agreement"), pursuant to which IREAS and ICPM will each become a wholly-owned
subsidiary of the Company (the "Merger").
C. Consultant, as an employee of an affiliate of TIGI and as a director of
the Company, has obtained certain unique and particular talents and abilities
with regard to the Business and will be able to assist the Company with the
transition from an externally managed and advised REIT to a self-administered
REIT (the "Transition").
D. The Company desires to engage Consultant to assure itself of the
availability of his talents and abilities and Consultant desires to be a
consultant for the Company, subject to the terms, conditions and covenants
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, the Consultant and the Company hereby
agree as follows:
SECTION 1
1.1 ENGAGEMENT. The Company hereby engages Consultant, and Consultant
hereby accepts such engagement upon the terms and conditions hereinafter set
forth. Consultant shall provide the Company with strategic advise regarding
operations of the Company and its affiliates in connection with the Transition
and shall use reasonable efforts to attend meetings of senior management of the
Company with respect to the near and long-term operations of the Company.
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Consultant acknowledges that his duties described in this Agreement are in
addition to, and in no way limit, his duties to the Company as a director of the
Company.
1.2 ACTIVITIES AND DUTIES DURING ENGAGEMENT. Consultant represents and
warrants to the Company that he is free to accept engagement by the Company,
provided, however, that the Consultant and the Company acknowledge and agree
that Consultant will devote a limited amount of time to his duties hereunder,
and nothing contained herein shall restrict Consultant from accepting
employment, consulting arrangements or other positions with other businesses
provided that such activities do not violate Section 4 hereof.
SECTION 2
2.1 TERM. The term of this Agreement shall commence on the date of the
Agreement and shall last for a period of one year (1) (each one year period
being hereinafter referred to as the "Term" and the first one year period
sometimes being referred to as the "Initial Term"). Such term shall
automatically be renewed for successive one-year periods thereafter unless
terminated by either party by written notice not less than 30 days prior to the
expiration of the then-current term, provided, however, that the Term of this
Agreement shall terminate upon the occurrence of the following events (the Term,
as it may be extended or terminated, is herein referred to as the "Engagement
Term").
(a) Death of Consultant;
(b) At any time subsequent to the Initial Term by the Company for
Cause (as defined below);
(c) At any time by the Company without Cause; or
(d) Upon a determination of Total Disability (as defined below) of the
Consultant.
2.2 DEFINITIONS OF "CAUSE" AND "TOTAL DISABILITY".
(a) For the purpose of this Agreement, "CAUSE" shall mean (I) conduct
amounting to fraud, embezzlement, recklessness, or illegal misconduct in
connection with Consultant's duties under this Agreement; (II) conduct that the
Company reasonably believes brings the Company into substantial public disgrace
or disrepute; (III) failure to perform his duties hereunder as reasonably
directed by the Company after providing written notice of such failure to the
Consultant; (IV) gross negligence or willful misconduct with respect to the
Company, its clients, its employees and its activities; or (V) any other
material breach of this Agreement or any other agreement to which the Consultant
and the Company are a party, provided that the Company has
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provided written notice of the breach to the Consultant and Consultant has
failed to cure the breach within ten days of receiving such notice.
(b) The Consultant shall be determined to have a Total Disability for
purposes of this Agreement if he is unable by reason of accident or illness to
substantially perform his duties, and is expected to be in such condition for
periods totaling six (6) months (whether or not consecutive) during any period
of twelve (12) months. The determination of whether a Total Disability has
occurred shall be based on the determination of a physician mutually acceptable
to the Company and the Consultant. Nothing herein shall limit the Consultant's
right to receive any payments to which Consultant may be entitled under any
disability or employee benefit plan of the Company or under any disability or
insurance policy or plan. During a period of Total Disability prior to
termination hereunder, Consultant shall continue to receive his full
compensation (including base salary) and benefits.
2.3 CESSATION OF RIGHTS AND OBLIGATIONS: SURVIVAL OF CERTAIN PROVISIONS.
On the date of expiration or earlier termination of Consultant's engagement
hereunder for any reason, all of the respective rights, duties, obligations and
covenants of the parties, as set forth herein, shall, except as specifically
provided herein to the contrary, cease and become of no further force or effect
as of the date of said termination, and shall only survive as expressly provided
for herein.
SECTION 3
3.1 COMPENSATION. During the Engagement Term, the Company shall pay
Consultant a salary of Fifty Thousand and No/100 Dollars ($50,000) per year.
3.2 PAYMENT. All compensation shall be payable in intervals in accordance
with the general payroll payment practice of the Company.
3.3 OTHER BENEFITS.
(a) Consultant shall be entitled to participate under any benefit plan
or plans of the Company which may now or hereafter be in effect with respect to
consultants.
(b) The Company shall reimburse Consultant for all ordinary and
necessary business expenses incurred by him in connection with the performance
of his duties hereunder. The reimbursement of business expenses will be governed
by the policies for the Company. Consultant shall provide the Company with an
accounting of his expenses, which accounting shall clearly reflect which
expenses were incurred for proper business purposes in accordance with the
policies adopted by the Company, and as such are reimbursable by the Company.
Consultant shall provide the Company with such other supporting documentation
and other substantiation of reimbursable expenses as will conform to Internal
Revenue Service or other requirements. All such
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reimbursements shall be payable by the Company to Consultant within a reasonable
time after receipt by the Company of appropriate documentation therefor.
(c) Consultant may, in addition to compensation, be paid such annual
bonuses as the Directors of the Company, in their discretion, shall from time to
time decide.
(d) Any compensation paid to Consultant pursuant to this Section 3
shall be in addition to any compensation Consultant may be eligible to receive
as a director of the Company.
3.4 DEATH AND TOTAL DISABILITY. This Agreement shall automatically
terminate upon the death of Consultant or upon the determination of a Total
Disability of Consultant and thereafter the Company shall pay to Consultant's
heirs, executors, personal representatives or legal guardians, as the case may
be, all Compensation that would otherwise have been payable to Consultant for
the balance of the then current Term, in one lump-sum within 30 days of
Consultant's death or Total Disability.
3.5 TERMINATION WITHOUT CAUSE. If Consultant's engagement hereunder is
terminated by the Company without Cause, the Company shall pay to Consultant all
Compensation that would otherwise have been payable to Consultant for the
balance of the then current Term in one lump-sum within 30 days of the date of
such termination.
SECTION 4
4.1 ASSIGNMENT. This Agreement or any right or interest hereunder may not
be assigned by either party without the prior written consent of the other
party.
4.2 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Consultant hereby
acknowledges and agrees that the duties and services to be performed by
Consultant hereunder are special and unique and that, by reason of and/or as of
a result of his prior services and his services hereunder, Consultant will
acquire, make use of and/or add to confidential information of a special and
unique nature and value relating to certain records, secrets, documentation,
financial and other records of and/or with respect to the Company, its
subsidiaries and affiliates, customers and other similar matters (all such
information, together with that certain information described herein, being
hereinafter referred to as "Confidential Information"); provided, however, any
information that is made available to the public or that Consultant became aware
of prior to the date of this Agreement through Consultant's affiliation with
TIGI and its affiliates shall not be deemed Confidential Information. Consultant
further acknowledges and agrees that the Confidential Information is of great
value to the Company and/or its subsidiaries and affiliates and that it is
reasonably necessary to protect the Confidential Information and the goodwill of
the Company and/or its subsidiaries and affiliates. Accordingly, Consultant
hereby agrees that:
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(a) Consultant will not, at any time, directly or indirectly, except
in connection with Consultant's services hereunder or as otherwise authorized by
the Board of Directors of the Company for the benefit of the Company divulge to
any person, firm or corporation other than the Company, TIGI or affiliates of
TIGI (hereinafter referred to as "Third Parties"), or use or cause or authorize
any Third Parties to use, the Confidential Information or any other information
relating to the business or interests of the Company which Consultant knows or
should know is regarded as confidential and valuable by the Company and/or its
subsidiaries and affiliates (whether or not any of the foregoing information is
actually novel or unique or is actually known to others), except as required by
law.
(b) Upon the termination of this Agreement for any reason whatsoever,
Consultant shall forthwith deliver or cause to be delivered to the Company any
and all Confidential Information, including notes, notebooks, keys, data and
other documents and materials belonging to the Company and/or its subsidiaries
and affiliates which is in his possession or under his control relating to the
Company and/or its subsidiaries and affiliates, or the Business of the Company
and/or its subsidiaries and affiliates regardless of the medium upon which it is
stored, and will deliver to the Company upon such termination of this Agreement
any other property of the Company and/or its subsidiaries and affiliates which
is in his possession or under his control.
4.3 NON-SOLICITATION. During the Term of this Agreement and in the event
of termination of this Agreement for any reason, Consultant agrees that, in
addition to any other limitation during the Term of this Agreement, and for a
period of one (1) year after termination or expiration of this Agreement, he
will not, other than through his capacity as an officer of TIGI or an affiliate
of TIGI, directly or indirectly, on behalf of himself or as a partner, officer,
director, manager, consultant, agent or shareholder of any other entity or
person, or as a trustee, fiduciary or other representative of any other person
or entity, contact any persons or companies which are customers of Company, or
any of its affiliates or subsidiaries for the purpose of soliciting the
customers in competition with Company, its affiliates or subsidiaries, nor will
he in any way, directly or indirectly, for himself, or as a partner or as an
officer, director, agent, consultant or shareholder of any other entity or
person, or as a trustee, fiduciary or other representative of any other person
or entity, solicit or divert, or cause anyone to solicit or divert, any such
customers from Company, its affiliates or its subsidiaries.
4.4 REMEDIES. Consultant hereby acknowledges and agrees that the services
to be rendered by him to the Company hereunder are of a special and unique
nature and that it would be very difficult or impossible to measure the damages
resulting from a breach of this Agreement. Consultant hereby further
acknowledges and agrees that the restrictions herein are reasonable and
necessary for the protection of the Business and the goodwill of the Company and
its subsidiaries and affiliates and that a violation by the Consultant of any
such covenant will cause irreparable damage to the Company and/or its
subsidiaries and affiliates. Consultant therefore agrees that any breach or
threatened breach by him of any of the covenants or provisions of this Section 4
shall entitle the Company and/or its subsidiaries and affiliates, in addition to
any other legal remedy available to them, to apply to any court of competent
jurisdiction for a temporary and permanent
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injunction or any other applicable decree of specific performance, without any
bond or security being required thereof, in order to enjoin such breach or
threatened breach. The parties understand and intend that each covenant,
provision and restriction agreed to in this Section 4 shall be construed as
separate and divisible from every other provision and restriction and that the
unenforceability of any one provision or restriction shall not limit the
enforceability, in whole or in part, of any other provision or restriction and
that one or more of all of such provisions or restrictions may be enforced, in
whole or in part, as the circumstances warrant.
SECTION 5
MISCELLANEOUS
5.1 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received:
(a) when delivered, if delivered personally, (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, (c) one business day after delivery to a private courier service, when
delivered to a private courier service providing documented overnight service,
and (d) on the date of delivery if delivered by telecopy, receipt confirmed,
provided that a confirmation copy is sent on the next business day by first
class mail, postage prepaid, in each case addressed as follows:
To Consultant at: Xxxxxx X. Xxxxx
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Company at: Inland Real Estate Corporation
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile: 000-000-0000
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With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.
5.2 ENTIRE AGREEMENT; AMENDMENTS, ETC. This Agreement contains the entire
agreement and understanding of the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter thereof. No
modification, amendment, waiver or alteration of this Agreement or any provision
or term hereof shall in any event be effective unless the same shall be in
writing, executed by both parties hereto, and any waiver so given shall be
effective only in the specific instance and for the specific purpose for which
given.
5.3 BENEFIT. This Agreement shall be binding upon, and inure to the
benefit of, and shall be enforceable by, the heirs, successors and legal
representatives of Consultant and the successors, assignees and transferees of
the Company and its current or future subsidiaries and/or affiliates.
5.4 NO WAIVER. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or pursuant thereto.
5.5 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law but, if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. If any part of any
covenant or other provision in this Agreement is determined by a court of law to
be overly broad thereby making the covenant unenforceable, the parties hereto
agree, and it is their desire, that the court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant shall
be binding upon the parties as if originally set forth herein.
5.6 COMPLIANCE AND HEADINGS. The headings in this Agreement are intended
to be for convenience and reference only, and shall not define or limit the
scope, extent or intent or otherwise affect the meaning of any portion hereof.
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5.7 GOVERNING LAW. The parties agree that this Agreement shall be governed
by, interpreted and construed in accordance with the laws of the State of
Illinois, and the parties agree that any suit, action or proceeding with respect
to this Agreement shall be brought in the state courts in Chicago, Illinois or
in the U.S. District Court for the Northern District of Illinois. The parties
hereto hereby accept the exclusive jurisdiction of those courts for the purpose
of any such suit, action or proceeding. Venue for any such action, in addition
to any other venue permitted by statute, will be in Chicago, Illinois.
5.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
5.9 NO PRESUMPTION AGAINST DRAFTER. Each of the parties hereto has jointly
participated in the negotiation and drafting of this Agreement. In the event an
ambiguity or a question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any provisions of this Agreement.
5.10 ENFORCEMENT. In the event either of the parties to this Agreement
shall bring an action against the other party with respect to the enforcement or
breach of any provision of this Agreement, the prevailing party in such action
shall recover from the non-prevailing party the costs incurred by the prevailing
party with respect to such action including court costs and reasonable
attorneys' fees.
5.11 RECITALS. The Recitals set forth above are hereby incorporated in and
made a part of this Agreement by this reference.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered as of the day and year first above written.
INLAND REAL ESTATE CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
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Its: President and Chief Executive Officer
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CONSULTANT
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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