EXHIBIT 10.60
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
on this 31st day of December, 2002, but shall be effective as of January 1,
2003, by and between SUN COMMUNITIES, INC., a Maryland corporation (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to continue the employment of the
Executive, and the Executive desires to continue to be employed by the Company,
on the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. Employment.
(a) 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 Operating 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.
(b) For service as an officer and employee of the Company, the
Executive shall be entitled to the full protection of the applicable
indemnification provisions of the Articles of Incorporation and Bylaws of the
Company, as they may be amended from time to time.
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, 2003 and shall continue thereafter for a period of three (3) years
ending on December 31, 2005; provided, however, that the term of this Agreement
shall be automatically extended for successive terms of one (1) year each,
unless either party notifies the other party in writing of its desire to
terminate this Agreement at least thirty (30) days before the end of the term
then in effect.
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 below) during the term of
this Agreement.
4. Compensation.
(a) General Statement. 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
hereafter, the Company shall pay to the Executive, during his employment
hereunder, an annual base salary (the "Base Salary") of One Hundred Thousand
Dollars ($100,000.00) per year, payable in accordance with the Company's usual
pay practices (and in any event no less frequently than monthly).
(c) Bonus. The Executive shall be entitled to an annual bonus
of up to fifty percent (50%) of the Base Salary upon the Company's attainment of
certain performance milestones in accordance with the Company's executive
employee bonus program (as the same may change from time to time in the
discretion of the Board).
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 four
(4) weeks vacation time each year without loss of compensation which shall be
scheduled with the advance approval of the Company; provided, however, that,
beginning January 1, 2004, the Executive shall be entitled to five (5) weeks of
vacation time each year. In the event that the Executive is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he may accrue such unused time and add it to the vacation time for any
following year; provided, however, that no more than ten (10) days of accrued
vacation time may be carried over at any time (the "Carry-Over Limit"). In the
event that the Executive has accrued and unused vacation time in excess of the
Carry-Over Limit (the "Excess Vacation Time"), the Excess Vacation Time shall be
paid to the Executive within ten (10) days of the end of the year in which the
Excess Vacation Time was earned based on the Base Salary then in effect. Upon
any termination of this Agreement for any reason whatsoever, accrued and unused
vacation time (not to exceed twenty (20) business days) shall be paid to the
Executive within ten (10) days of such termination based on the Base Salary in
effect on the date of such termination. For purposes of this Agreement,
one-twelfth (1/12) of the applicable annual vacation shall accrue on the last
day of each month that the Executive is employed under this 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.
- 2 -
7. Termination of Employment.
(a) The Executive's employment under this Agreement may be
terminated:
(i) by either the Executive or the Company at any
time for any reason whatsoever or for no reason upon not less than
thirty (30) days written notice;
(ii) by the Company at any time for "cause" (as
defined below), without prior notice; and
(iii) upon the Executive's death.
(b) For purposes hereof, for "cause" shall mean: (i) the
breach of any material provision of this Agreement or the Sun Homes Agreement
(as defined in paragraph 9 below) by Executive, which breach is not cured within
thirty (30) days after Executive's receipt of written notice of such breach;
(ii) Executive's failure or refusal, in any material manner, to perform the
services required of him pursuant to this Agreement or the Sun Homes Agreement,
which failure or refusal continues for more than thirty (30) days after
Executive's receipt of written notice of such deficiency; (iii) Executive's
commission of fraud, embezzlement, theft or other act of dishonesty, or a crime
constituting moral turpitude, in any case whether or not involving the Company,
that in the opinion of the Company renders Executive's continued employment
harmful to the Company; (iv) Executive's misappropriation of Company assets or
property, including, without limitation, obtaining reimbursement through
fraudulent vouchers or expense reports; (v) Executive's conviction for a felony;
or (vi) Executive's substance abuse.
8. Severance Compensation.
(a) In the event that the Company terminates the Executive's
employment under this Agreement without "cause" pursuant to paragraph 7(a)(i)
hereof, the Executive shall be entitled to any unpaid Base 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 this 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.
(b) In the event of termination of the Executive's employment
under this Agreement for "cause" or if the Executive voluntarily terminates his
employment hereunder, the Executive shall be entitled to no further compensation
or other benefits under this Agreement, except only as to any unpaid Base
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 hereof 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
- 3 -
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 hereof.
9. Affiliates. Upon any termination of the Executive's employment under
this Agreement, (a) 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, including, without limitation, Sun Home Services, Inc. ("Sun
Homes"), and (b) that certain Employment Agreement, of even date herewith,
between Sun Homes and the Executive (the "Sun Homes Agreement") shall be
automatically terminated.
10. Effect of Change of Control.
(a) The Company or its successor shall pay the Executive the
Change in Control Benefits (as defined below) if there has been a Change in
Control (as defined below) and any of the following events has occurred: (i) the
Executive's employment under this Agreement is terminated in accordance with
paragraph 7(a)(i), (ii) upon a Change in Control under paragraph 10(f)(ii), the
Company or its successor does not expressly assume all of the terms and
conditions of this Agreement, or (iii) there are less than eighteen (18) months
remaining under the term of this Agreement.
(b) For purposes of this Agreement, the "Change in Control
Benefits" shall mean the following benefits:
(i) A cash payment equal to Two Hundred Ninety Nine
Thousand Dollars ($299,000.00), 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(b)(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(b)(ii).
(c) Notwithstanding anything to the contrary herein, (i) in
the event that the Executive's employment under this Agreement is terminated in
accordance with paragraph 7(a)(i) within sixty (60) days prior to a Change in
Control, such termination shall be deemed to have been made in connection with
the Change in Control and the Executive shall be entitled to the Change in
Control Benefits; and (ii) in the event that the Executive's employment under
this Agreement is terminated by the Company or its successor in accordance with
paragraph 7(a)(i) after a Change in Control and the Executive was not already
entitled to the Change in Control Benefits under paragraph 10(a)(iii), the
Company or its successor shall pay the Executive an amount equal to the
difference between the Change in Control Benefits and the amounts actually paid
to the Executive under this Agreement after the Change in Control but prior to
his termination.
(d) The Change in Control Benefits are in addition to any and
all other Company benefits to which the Executive may be entitled, including,
without limitation, Base Salary, annual bonus, and the exercise or surrender of
stock options as a result of the Change in Control; provided, however, that the
Change in Control Benefits are in lieu of the Severance Payment.
- 4 -
(e) Notwithstanding anything to the contrary contained herein,
the Change in Control Benefits shall be reduced by all other payments to the
Executive which constitute "excess parachute payments" under Section 280(G) of
the Internal Revenue Code of 1986, as amended.
(f) For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred:
(i) if any person or group of persons acting together
(other than (a) the Company or any person (I) who on December 1, 2002
was a director or officer of the Company, or (II) whose shares of
Common Stock of the Company are treated as "beneficially owned" by any
such director or officer, or (b) any institutional investor (filing
reports under Section 13(g) rather than 13(d) of the Securities
Exchange Act of 1934, as amended, including any employee benefit plan
or employee benefit trust sponsored by the Company)), becomes a
beneficial owner, directly or indirectly, of securities of the Company
(including convertible securities) representing twenty percent (20%) or
more of either the then-outstanding Common Stock of the Company or the
combined voting power of the Company's then-outstanding voting
securities;
(ii) if the directors or stockholders of the Company
approve an agreement to merge into or consolidate with, or to sell all
or substantially all of the Company's assets to, any person (other than
a wholly-owned subsidiary of the Company formed for the purpose of
changing the Company's corporate domicile); or
(iii) if the new directors appointed to the Board
during any twelve-month period constitute a majority of the members of
the Board, unless (I) the directors who were in office for at least
twelve (12) months prior to such twelve-month period (the "Incumbent
Directors") plus (II) the new directors who were recommended or
appointed by a majority of the Incumbent Directors constitutes a
majority of the members of the Board.
For purposes of this paragraph 10(f), a "person" includes an
individual, a partnership, a corporation, an association, an unincorporated
organization, a trust or any other entity.
11. Stock Options. In the event of termination of the Executive's
employment under this Agreement for "cause", all stock options or other stock
based compensation awarded to the Executive shall lapse and be of no further
force or effect whatsoever in accordance with the Company's equity incentive
plans. In the event that the Company terminates the Executive's employment under
this Agreement without "cause" or upon the death of the Executive, all stock
options and other stock based compensation awarded to the Executive shall become
fully vested and immediately exercisable; provided, however, that such options
and other stock based compensation can only be exercised during the ninety (90)
day period after expiration of the Noncompetition Period (as defined in
paragraph 12 below) and such stock options or other stock based compensation
shall be automatically forfeited upon the Executive's breach of any of the
provisions of paragraph 12 hereof. Any Stock Option Agreements between the
Company and the Executive shall be amended to conform to the provisions of this
paragraph 11. In the event of an inconsistency between the terms of a Stock
Option Agreement and the terms of this Agreement, the terms of this Agreement
shall control.
12. Covenant Not To Compete and Confidentiality.
(a) The Executive acknowledges the Company's reliance and
expectation of the Executive's continued commitment to performance of his duties
and responsibilities under
- 5 -
this Agreement. In light of such reliance and expectation on the part of the
Company and as an inducement for the Company to enter into this Agreement, the
Executive agrees that:
(i) for a period commencing on the date of this
Agreement and ending upon the expiration of twenty-four (24) months
following the termination of the Executive's employment under this
Agreement for any reason, including, without limitation, the expiration
of the term (the "Noncompetition Period"), the Executive shall not,
directly or indirectly, engage in, or have an interest in or be
associated with (whether as an officer, director, stockholder, partner,
associate, employee, consultant, owner or otherwise) any corporation,
firm or enterprise which is engaged in (A) the development, ownership,
leasing, management or financing of manufactured housing communities,
(B) the sales of manufactured homes, or (C) any other business which is
competitive with the business then or at any time during the term of
this Agreement conducted or proposed to be conducted by the Company, or
any corporation owned or controlled by the Company or under common
control with the Company (the "Affiliates"), anywhere within the
continental United States or Canada; provided, however, that,
notwithstanding anything to the contrary herein, (1) in the event that
the Executive voluntarily terminates his employment with the Company,
the Noncompetition Period shall extend until the later of the remainder
of the initial 3-year term of this Agreement or the expiration of
twenty-four (24) months following the termination of Executive's
employment under this Agreement, (2) in the event that the Company
terminates the Executive's employment hereunder without "cause", the
Noncompetition Period shall be reduced to twelve (12) months, and (3)
the Executive may invest in any publicly held corporation engaged, if
such investment does not exceed one percent (1%) in value of the issued
and outstanding capital stock of such corporation;
(ii) the Executive shall not at any time, for so long
as any Confidential Information (as defined below) shall remain
confidential or otherwise remain wholly or partially protectable,
either during the term of this Agreement or thereafter, use or
disclose, directly or indirectly, to any person outside of the Company
or any Affiliate any Confidential Information;
(iii) promptly upon the termination of this Agreement
for any reason, the Executive (or in the event of the Executive's
death, his personal representative) shall return to the Company any and
all copies (whether prepared by or at the direction of the Company or
the Executive) of all records, drawings, materials, memoranda and other
data constituting or pertaining to Confidential Information;
(iv) for a period commencing on the date of this
Agreement and ending upon the expiration of the Noncompetition Period,
the Executive shall not, directly or indirectly, divert, or by aid to
others, do anything which would tend to divert, from the Company or any
Affiliate any trade or business with any customer or supplier with whom
the Executive had any contact or association during the term of the
Executive's employment with the Company or with any party whose
identity or potential as a customer or supplier was confidential or
learned by the Executive during his employment by the Company; and
(v) for a period commencing on the date of this
Agreement and ending upon the expiration of the Noncompetition Period,
the Executive shall not, either directly or indirectly, induce or
attempt to induce any person with whom the Executive was acquainted
while in the Company's employ to leave the
- 6 -
employment of the Company or any of the Affiliates.
As used in this Agreement, the term "Confidential Information" shall
mean all business information of any nature and in any form which at the time or
times concerned is not generally known to those persons engaged in business
similar to that conducted or contemplated by the Company or any Affiliate (other
than by the act or acts of an employee not authorized by the Company to disclose
such information) and which relates to any one or more of the aspects of the
business of the Company or any of the Affiliates or any of their respective
predecessors, including, without limitation, patents and patent applications,
inventions and improvements (whether or not patentable), development projects,
policies, processes, formulas, techniques, know-how, and other facts relating to
sales, advertising, promotions, financial matters, customers, customer lists,
customer purchases or requirements, and other trade secrets.
(b) The Executive agrees and understands that the remedy at
law for any breach by him of this paragraph 12 will be inadequate and that the
damages flowing from such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that, upon adequate proof of
the Executive's violation of any legally enforceable provision of this paragraph
12, the Company shall be entitled to immediate injunctive relief and may obtain
a temporary order restraining any threatened or further breach. Nothing in this
paragraph 12 shall be deemed to limit the Company's remedies at law or in equity
for any breach by the Executive of any of the provisions of this paragraph 12
which may be pursued or availed of by the Company.
13. Arbitration. Any dispute or controversy arising out of, relating
to, or in connection with this Agreement or Executive's employment hereunder,
whether in contract, tort, or otherwise (including, without limitation, claims
of wrongful termination of employment, claims under Title VII of the Civil
Rights Act, the Fair Labor Standards Act, the Americans with Disabilities Act,
the Age Discrimination in Employment Act, or comparable state or federal laws,
and any other laws dealing with employees' rights and remedies), or the
interpretation, validity, construction, performance, breach, or termination
thereof, 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 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. The parties hereby acknowledge that
it is their intent to expedite the resolution of any dispute, controversy or
claim hereunder and that the arbitrator shall schedule the timing of discovery
and of the hearing consistent with that intent. Nothing contained in this
paragraph 13 shall be construed to preclude the Company from obtaining
injunctive or other equitable relief to secure specific performance or to
otherwise prevent a breach or contemplated breach of this Agreement by the
Executive as provided in paragraph 12 hereof.
14. 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 Communities, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
- 7 -
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
If to the Executive:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
In all events, with a copy to:
Jaffe, Raitt, Heuer & ▇▇▇▇▇,
Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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.
15. 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 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 (together with that certain Employment
Agreement, of even date herewith, by and between the Executive and Sun Home
Services, Inc.) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all
- 8 -
prior understandings or agreements relating thereto. This Agreement may not be
modified except by written instrument executed by the Company and Executive. 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, without regard to the conflicts
of laws principles 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. Copies (whether
photostatic, facsimile or otherwise) of this Agreement may be made and relied
upon to the same extent as though such copy was an original.
(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 COMMUNITIES, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
EXECUTIVE:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- 9 -