EMPLOYMENT AGREEMENT
Exhibit 10.3.e.i
AGREEMENT made as of this 1st day of August, 2003, by and among Cedar Shopping
Centers, Inc., a Maryland corporation (the “Corporation”), Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership (the “Partnership”), and Xxxxx Xxxxxxxxx (the “Executive”).
1. Position and Responsibilities.
1.1 The Executive shall serve in an executive capacity as Director of Retail Leasing of both
the Corporation and the Partnership with duties consistent therewith and shall perform such other
functions and undertake such other responsibilities as are customarily associated with such
capacity. The Executive shall also hold such directorships and officerships in the Corporation,
the Partnership and any of their subsidiaries to which, from time to time, the Executive may be
elected or appointed during the term of this Agreement.
1.2 The Executive shall devote Executive’s full business time and skill to the business and
affairs of the Corporation and the Partnership and to the promotion of their interests.
2. Term of Employment.
2.1 The term of employment shall be two years, commencing with the date hereof, unless sooner
terminated as provided in this Agreement.
2.2 Notwithstanding the provisions of Section 2.1 hereof, each of the Corporation and the
Partnership shall have the right, on written notice to the Executive, to terminate the Executive’s
employment for Cause (as defined in Section 2.3), such termination to be effective as of the date
on which notice is given or as of such later date otherwise specified in the notice and, upon such
termination of employment for Cause, Executive shall not be entitled to receive any additional
compensation hereunder. The Executive shall have the right, on written notice to the Corporation
and the Partnership, to terminate the Executive’s employment for Good Reason (as defined in Section
2.4), such termination to be effective as of the date on which notice is given or as of such later
date otherwise specified in the notice; provided, however, the Executive’s right to terminate
Executive’s employment shall lapse 60 days after the occurrence of any of the events specified in
clauses (iii) or (iv) of the definition of Good Reason.
2.3 For purposes of this Agreement, the term “Cause” shall mean any of the following actions
by the Executive: (a) failure to comply with any of the material terms of this Agreement, which
shall not be cured within 10 days after written notice, or if the same is not of a nature that it
can be completely cured within such 10 day period, if Executive shall have failed to commence to
cure the same within such 10 day period and shall have failed to pursue the cure of the same
diligently thereafter; (b) engagement in gross misconduct injurious to the business or reputation
of the Corporation or the Partnership; (c) knowing and willful neglect or refusal to attend to the
material duties assigned to the Executive by the Board of Directors of the Corporation, which shall
not be cured within 10 days after written notice; (d) intentional misappropriation of property of
the Corporation or the Partnership to the Executive’s own use; (e) the commission by the Executive
of an act of fraud or embezzlement; (f) Executive’s conviction for a felony; (g) Executive’s
engaging in any activity which is prohibited pursuant to Section 5 of this Agreement, which shall
not be cured within 10 days after written notice.
2.4 For purposes of this Agreement, the term “Good Reason” shall mean any of the following:
(i) a material breach of this Agreement by the Corporation or the Partnership which shall not be
cured within 10 days after written notice; (ii) a material reduction in the Executive’s duties or
responsibilities; (iii) the relocation of the Executive’s office or the Corporation’s or
Partnership’s executive offices to a location more than 30 miles from New York City; or (iv) a
“Change in Control”, as defined below. As used herein, a “Change in Control” shall be deemed to
occur if: (i) there shall be consummated (x) any consolidation or merger of the Corporation or the
Partnership in which the Corporation or the Partnership is not the continuing or surviving
corporation or pursuant to which the stock of the Corporation or the units of the Partnership would
be converted into cash, securities or other property, other than a merger or consolidation of the
Corporation or Partnership in which the holders of the Corporation’s stock immediately prior to the
merger or consolidation hold more than fifty percent (50%) of the stock or other forms of equity of
the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or series of related transactions) of all, or substantially all, the
assets of the Corporation or the Partnership; (ii) the Board approves any plan or proposal for
liquidation or dissolution of the Corporation or the Partnership; or (iii) any person, other than
Cedar Bay Company or an affiliated entity, acquires more than 29% of the issued and outstanding
common stock of the Corporation.
3. Compensation.
3.1 The Partnership shall pay to the Executive for the services to be rendered by the
Executive hereunder to the Corporation and the Partnership a base salary at the rate of $135,000
per annum. The base salary shall be payable in accordance with the Corporation’s or Partnership’s
normal payroll practices, but not less frequently than twice a month. Such base salary will be
reviewed at least annually and may be increased (but not decreased) by the Board of Directors of
the Corporation in its sole discretion. In addition to such amounts, Executive shall be entitled
to such amounts as shall exceed Executive’s base salary, determined as of the end of the
6th and 12th month of Executive’s employment commencing as of the first day
of the month following the commencement date of Executive’s employment pursuant to the matrix
attached hereto as Exhibit A, which amounts shall be payable within thirty (30) days after such
determination dates provided, however, that such payments under the matrix shall be limited to
$180,000 as a matter of right to the Executive and thereafter shall be discretionary by the
Corporation or Partnership, but in consultation with the Executive. The Board of Directors of the
Corporation in its sole discretion may grant to the Executive an additional bonus to be paid by the
Corporation or Partnership, at any time and from time to time.
3.2 The Executive shall be entitled to participate in, and receive benefits from, on the basis
comparable to other senior executives, any insurance, medical, disability, or other employee
benefit plan of the Corporation, the Partnership or any of their subsidiaries which may be in
effect at any time during the course of Executive’s employment by the Corporation and the
Partnership and which shall be generally available to senior executives of the Corporation, the
Partnership or any of their subsidiaries.
3.3 The Partnership agrees to reimburse the Executive for all reasonable and necessary
business expenses incurred by the Executive on behalf of the Corporation or the Partnership in the
course of Executive’s duties hereunder upon the presentation by the
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Executive of appropriate vouchers therefor, including continuing education, professional
licenses and organizations and conferences approved by the CEO.
3.4 The Executive shall be entitled each year of this Agreement to a paid vacation in
accordance with the Corporation’s or Partnership’s policies but not less than 4 weeks plus personal
and floating holidays (and a ratable number of sick days), which if not taken during such year will
be forfeited (unless management requests a postponement).
3.5 In recognition of Executive’s need for an automobile for business purposes, the
Corporation or the Partnership will reimburse the Executive for Executive’s use of an automobile,
including lease payments, if any, and all related costs, including maintenance, gasoline and
insurance; provided, however, that such amount shall not exceed $500.00 a month. Insurance,
maintenance and gas for business use is additional.
3.6 If, during the period of employment hereunder, because of illness or other incapacity, the
Executive shall fail for a period of 90 consecutive days, or for shorter periods aggregating more
than six months during the term of this Agreement, to render the services contemplated hereunder,
then the Corporation or the Partnership, at either of their options, may terminate the term of
employment hereunder by notice from the Corporation or the Partnership, as the case may be, to the
Executive, effective on the giving of such notice. During any period of disability of Executive
during the term hereof, the Corporation shall continue to pay to Executive the salary and bonus to
which the Executive is entitled pursuant to Section 3.1 hereof.
3.7 In the event of the death of the Executive during the term hereof, the employment
hereunder shall terminate on the date of death of the Executive.
3.8 Each of the Corporation and the Partnership shall have the right to obtain for their
respective benefits an appropriate life insurance policy on the life of the Executive, naming the
Corporation or the Partnership as the beneficiary. If requested by the Corporation or the
Partnership, the Executive agrees to cooperate with the Corporation or the Partnership, as the case
may be, in obtaining such policy.
4. Severance Compensation Upon Termination of Employment.
4.1 If the Executive’s employment with the Corporation or the Partnership shall be terminated
(a) by the Corporation or Partnership other than for Cause or pursuant to Sections 3.6 or 3.7, or
(b) by the Executive for Good Reason, then the Corporation and the Partnership shall:
(i) pay to the Executive as severance pay, within five days after termination, a lump
sum payment equal to 50% of the sum of the Executive’s annual salary at the rate applicable
on the date of termination and the average of the Executive’s annual bonus for the preceding
two full fiscal years if such termination takes place during the first 12 months of the
Executive’s employment; 100% if during the second 12 months of employment, and 150%
thereafter; provided, however, that if the severance payment under this Section 4.1, either
alone or together with other payments which the Executive has the right to receive from the
Corporation would not be deductible (in whole or in part) by the Corporation as a result of
such payment constituting a “parachute payment” (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”)), such severance payment shall be reduced to
the largest amount as will result in no portion of the severance payment under this Section
4.1 not being fully deductible by the Corporation as a result of Section 280G of
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the Code. The determination of any reduction in the severance payment under this
Section 4.1 pursuant to the foregoing proviso shall be made exclusively by the Corporation’s
independent accountants (whose fees and expenses shall be borne by the Corporation), and
such determination shall be conclusive and binding;
(ii) arrange to provide Executive, for a 12 month period (or such shorter period as
Executive may elect), with disability, accident and health insurance substantially similar
to those insurance benefits which Executive is receiving immediately prior to the earlier of
a Change in Control, if any, or the date of termination to the extent obtainable upon
reasonable terms; provided, however, if it is not so obtainable the Corporation shall pay to
the Executive in cash the annual amount paid by the Corporation or the Partnership for such
benefits during the previous year of the Executive’s employment. Benefits otherwise
receivable by Executive pursuant to this Section 4.1(ii) shall be reduced to the extent
comparable benefits are actually received by the Executive during such 12 month period
following his termination (or such shorter period elected by the Executive), and any such
benefits actually received by Executive shall be reported by the Executive to the
Corporation; and
(iii) any options granted to Executive to acquire common stock of the Corporation which
have not vested shall immediately vest on such termination.
4.2 (a) The Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise, nor, except to the
extent provided in Section 4.1 above, shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as a result of employment by
another employer or by insurance benefits after the date of termination, or otherwise.
(b) The provisions of this Agreement, and any payment provided for hereunder, shall not reduce
any amounts otherwise payable, or in any way diminish the Executive’s existing rights, or rights
which would accrue solely as a result of the passage of time, under any benefit plan of the
Corporation or Partnership, or other contract, plan or arrangement.
5. Other Activities During Employment.
5.1 The Executive shall not during the term of this Agreement undertake or engage in any other
employment, occupation or business enterprise. Subject to compliance with the provisions of this
Agreement, the Executive may engage in reasonable activities with respect to personal investments
of the Executive.
5.2 During the term of this Agreement, without the prior approval of the Board of Directors,
neither the Executive nor any entity in which he may be interested as a partner, trustee, director,
officer, employee, shareholder, option holder, lender of money or guarantor, shall be engaged
directly or indirectly in any real estate development, leasing, marketing or management activities
other than through the Corporation and the Partnership, except for activities existing on the date
of this Agreement which have been disclosed to the Corporation; provided, however, that the
foregoing shall not be deemed to (a) prohibit the Executive from being on the Board of Directors of
another entity if approved in writing by the Compensation Committee of the Board, which approval
shall not be unreasonably withheld, (b) prevent the Executive from investing in securities if such
class of securities in which the
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investment is so made is listed on a national securities exchange or is issued by a company
registered under Section 12(g) of the Securities Exchange Act of 1934, so long as such investment
holdings do not, in the aggregate, constitute more than 1% of the voting stock of any company’s
securities or (c) prohibit passive investments, subject to any limitations contained in
subparagraph (b) above.
5.3 The Executive shall not at any time during this Agreement or after the termination hereof
directly or indirectly divulge, furnish, use, publish or make accessible to any person or entity
any Confidential Information (as hereinafter defined), except pursuant to subpoena, court order or
applicable law. Any records of Confidential Information prepared by the Executive or which come
into Executive’s possession during this Agreement are and remain the property of the Corporation or
the Partnership, as the case may be, and upon termination of Executive’s employment all such
records and copies thereof shall be either left with or returned to the Corporation or the
Partnership, as the case may be.
5.4 The term “Confidential Information” shall mean information disclosed to the Executive or
known, learned, created or observed by Executive as a consequence of or through employment by the
Corporation and the Partnership, not generally known in or otherwise available to the relevant
trade or industry, about the Corporation’s or the Partnership’s business activities, services and
processes, including but not limited to information concerning advertising, sales promotion,
publicity, sales data, research, copy, leasing, other printed matter, artwork, photographs,
reproductions, layout, finances, accounting, methods, processes, business plans, contractors,
lessee and supplier lists and records, potential lessee and supplier lists, and contractor, lessee
or supplier billing.
6. Post-Employment Activities.
6.1 During the term of employment hereunder, and for a period of one year after termination of
employment, regardless of the reason for such termination other than by the Corporation or
Partnership without Cause or by the Executive for Good Reason, the Executive shall not directly or
indirectly become employed by, act as a consultant to, or otherwise render any services to any
person, corporation, partnership or other entity which is engaged in, or about to become engaged
in, the retail shopping center business or any other business which is competitive with the
business of the Corporation, the Partnership or any of their subsidiaries nor shall Executive use
Executive’s talents to make any such business competitive with the business of the Corporation, the
Partnership or any of their subsidiaries. For the purpose of this Section, a retail shopping
center business or other business shall be deemed to be competitive if it involves the ownership,
operation, leasing or management of any retail shopping centers which draw from the same related
trade area, which is deemed to be within a radius of five miles from the location of (a) any then
existing shopping centers of the Corporation, the Partnership or any of their subsidiaries or (b)
any proposed centers for which the site is owned or under contract, is under construction or is
actively being negotiated. The Executive shall be deemed to be directly or indirectly engaged in a
business if Executive participates therein as a director, officer, stockholder, employee, agent,
consultant, manager, salesman, partner or individual proprietor, or as an investor who has made
advances or loans, contributions to capital or expenditures for the purchase of stock, or in any
capacity or manner whatsoever; provided, however, that the foregoing shall not be deemed to prevent
the Executive from investing in securities if such class of securities in which the investment is
so made is listed on a national securities exchange or is issued by a company registered under
Section 12(g) of the
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Securities Exchange Act of 1934, so long as such investment holdings do not, in the aggregate,
constitute more than 1% of the voting stock of any company’s securities.
6.2 The Executive acknowledges that Executive has been employed for Executive’s special
talents and that Executive’s leaving the employ of the Corporation and the Partnership would
seriously hamper the business of the Corporation and the Partnership. The Executive agrees that
the Corporation and the Partnership shall each be entitled to injunctive relief, in addition to all
remedies permitted by law, to enforce the provisions of Sections 5 and 6 hereof. The Executive
further acknowledges that Executive’s training, experience and technical skills are of such breadth
that they can be employed to advantage in other areas which are not competitive with the present
business of the Corporation and the Partnership and consequently the foregoing obligation will not
unreasonably impair Executive’s ability to engage in business activity after the termination of
Executive’s present employment.
6.3 The Executive will not, during the period of one year after termination of employment,
regardless of the reason for such termination, hire or offer to hire or entice away or in any other
manner persuade or attempt to persuade, either in Executive’s individual capacity or as agent for
another, any of the Corporation’s, the Partnership’s or any of their subsidiaries’ officers,
employees or agents to discontinue their relationship with the Corporation, the Partnership or any
of their subsidiaries nor divert or attempt to divert from the Corporation, the Partnership or any
of their subsidiaries any business whatsoever by influencing or attempting to influence any
contractor, lessee or supplier of the Corporation, the Partnership or any of their subsidiaries.
7. Assignment. This Agreement shall inure to the benefit of and be binding upon the
Corporation, the Partnership and their successors and assigns, and upon the Executive and
Executive’s heirs, executors, administrators and legal representatives. The Corporation and the
Partnership will require any successor or assign to all or substantially all of their business or
assets to assume and perform this Agreement in the same manner and to the same extent that the
Corporation and the Partnership would be required to perform if no such succession or assignment
had taken place. This Agreement shall not be assignable by the Executive.
8. No Third Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this Agreement, except
as provided in Section 7 hereof.
9. Headings. The headings of the sections hereof are inserted for convenience only
and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
10. Interpretation. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein. If, moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as
to be enforceable to the extent compatible with the applicable law as it shall then appear.
11. Notices. All notices under this Agreement shall be in writing and shall be deemed
to have been given at the time when mailed by registered or certified mail, addressed to the
address below stated of the party to which notice is given, or to such changed address as such
party may have fixed by notice:
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To the Corporation or the Partnership: |
||
| Cedar Shopping Centers, Inc. | ||
| 00 Xxxxx Xxxxxx Xxxxxx | ||
| Xxxx Xxxxxxxxxx, XX 00000 | ||
| Attn: President | ||
To the Executive: |
||
| Xx. Xxxxx Xxxxxxxxx | ||
| 00 Xxxxx Xxxxx | ||
| Xxxxxx, XX 00000 |
provided, however, that any notice of change of address shall be effective only upon receipt.
12. Waivers. If either party should waive any breach of any provision of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach
of the same or any other provision of this Agreement.
13. Complete Agreement; Amendments. The foregoing is the entire agreement of the
parties with respect to the subject matter hereof and may not be amended, supplemented, cancelled
or discharged except by written instrument executed by both parties hereto.
14. Governing Law. This Agreement is to be governed by and construed in accordance
with the laws of the State of New York without giving effect to principles of conflicts of law.
15. Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all of the parties hereto, notwithstanding that
all such parties are not signatories to the same counterpart.
16. Arbitration. Mindful of the high cost of litigation, not only in dollars but time
and energy as well, the parties intend to and do hereby establish a quick, final and binding
out-of-court dispute resolution procedure to be followed in the unlikely event any controversy
should arise out of or concerning the performance of this Agreement. Accordingly, the parties do
hereby covenant and agree that any controversy, dispute or claim of whatever nature arising out of,
in connection with or in relation to the interpretation, performance or breach of this Agreement,
including any claim based on contract, tort or statute, shall be settled, at the request of any
party to this Agreement, through arbitration by a dispute resolution process administered by JAMS
or any other mutually agreed upon arbitration firm involving final and binding arbitration
conducted at a location determined by the arbitrator in New York City administered by and in
accordance with the then existing rules of practice and procedure of such arbitration firm and
judgment upon any award rendered by the arbitrator may be entered by any state or federal court
having jurisdiction thereof; provided, however, that the Corporation and the Partnership shall be
entitled to seek judicial relief to enforce the provisions of Sections 5 and 6 of this Agreement.
17. Indemnification. During this Agreement and thereafter, the Corporation and the
Partnership shall indemnify the Executive to the fullest extent permitted by law against any
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judgments, fine, amounts paid in settlement and reasonable expenses (including attorneys’
fees) in connection with any claim, action or proceeding (whether civil or criminal) against the
Executive as a result of the Executive serving as an officer or director of the Corporation or the
Partnership, in or with regard to any other entity, employee benefit plan or enterprise (other than
arising out of the Executive’s act of willful misconduct, gross negligence, misappropriation of
funds, fraud or breach of this Agreement). This indemnification shall be in addition to, and not
in lieu of, any other indemnification the Executive shall be entitled to pursuant to the
Corporation’s or Partnership’s Articles of Incorporation, By-Laws, Agreement of Limited Partnership
or otherwise. Following the Executive’s termination of employment, the Corporation and the
Partnership shall continue to cover the Executive under the then existing director’s and officer’s
insurance, if any, for the period during which the Executive may be subject to potential liability
for any claim, action or proceeding (whether civil or criminal) as a result of his service as an
officer or director of the Corporation or the Partnership or in any capacity at the request of the
Corporation or the Partnership, in or with regard to any other entity, employee benefit plan or
enterprise on the same terms such coverage was provided during this Agreement, at the highest level
then maintained for any then current or former officer or director.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| Cedar Shopping Centers, Inc. |
||||
| By: | /s/ XXX X. XXXXXX | |||
| Xxx X. Xxxxxx, President | ||||
| Cedar Shopping Centers Partnership, L.P. | ||||
| By: | Cedar Shopping Centers, Inc., |
|||
| General Partner | ||||
| By: | /s/ XXX X. XXXXXX | |||
| Xxx X. Xxxxxx, President | ||||
| /s/ XXXXX XXXXXXXXX | ||||
| Xxxxx Xxxxxxxxx | ||||
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