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EXHIBIT 10(j)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 15th
day of January, 1996, by and between Interstate General Company L.P., a
Delaware limited partnership (the "Company"), and James J. Wilson (the
"Executive").
RECITALS
WHEREAS, the Executive has served the Company and its predecessors as
Chief Executive Officer for over thirty years and thereby possesses unique and
valuable expertise pertaining to the operational and strategic needs of the
Company and its affiliates; and
WHEREAS, the Company has been engaged in efforts to ensure the
availability of qualified executive management to guide the Company for the
foreseeable future; and
WHEREAS, the Company wishes to secure the continued services of the
Executive and availability of his unique and valuable expertise, particularly
with respect to development of business strategies and strategic opportunities;
and
WHEREAS, the Company also wishes to acknowledge and reward the valuable
contributions made by the Executive throughout the Company's entire history;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree to be bound by the following terms and conditions:
I. POSITION AND AUTHORITY
The Executive will hold the title of Chairman and Chief Executive Officer
of the Company and Chairman of the Board of Interstate General Management
Corporation ("IGMC"). The Executive shall report to the Board of Directors of
IGMC (the "Board of Directors") and shall render such services to the Company
as are customarily rendered by the Chief Executive Officer, and the Executive
shall be deemed to satisfy such obligations so long as he continues to hold the
titles set forth above. Without limitation of the foregoing, subject to the
direction of the Board of Directors, the Executive shall have general
supervision over the business and affairs of the Company and over its officers
and agents and general management and control of all of its properties.
II. TERM
The term of employment of the Executive by the Company hereunder (the
"Term") shall begin on January 1, 1996, and shall continue thereafter through
the Expiration Date. The Expiration Date shall be December 31, 1998. However,
notwithstanding the Term, the Executive's employment may terminate prior to the
Expiration Date if one or more of the following circumstances occur:
A. If the Executive dies or becomes Disabled (as defined below) the
Executive's employment and this Agreement shall terminate automatically upon
such date of death or Disability. In the event the Executive dies during the
term of this Agreement, the Executive's estate shall be entitled to Company
benefits per Company policies and procedures, including life insurance
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benefits, plus an amount equal to six (6) months of the Executive's base salary
payable in accordance with the terms hereof. In the event that the Executive
becomes Disabled during the term of this Agreement, during the six (6) months
following the date he becomes Disabled, the Company shall pay the Executive an
amount, if any, which when added to any other disability benefits to be
received by the Executive during such period under the Company's benefit plans,
would equal six (6) months of the Executive's base salary. For purposes of
this Agreement, the Executive shall become "Disabled" at such time as the
Executive has a physical or mental condition, verified by a physician
designated by the Company, which in the judgment of the Board of Directors
prevents the Executive from carrying out one or more of the material aspects of
his assigned duties for at least 270 consecutive days and termination of
Executive's employment on such grounds would not be in violation of the
Americans with Disabilities Act or other applicable law. The Executive agrees,
upon request of the Board of Directors, at a time convenient to the Executive
during a 30-day period designated by the Board of Directors, to submit to any
medically reasonable examination by a physician designated by the Company.
B. The Company may, at its election, terminate the Executive's
employment and this Agreement for cause. For purposes hereof, "cause" shall be
defined as (1) engaging in fraud or conduct with the intent of causing
substantial harm to the Company and/or (2) conviction of a felony, other crime
involving theft or fraud, or other crime of moral turpitude involving the
Company; provided, that "cause" shall not include any conviction of charges
pending as of the date of this Agreement. In the event the Company elects to
terminate the Executive's employment for cause, such termination may be made
effective immediately, and no advance notice shall be required. The decision
to terminate the Executive's employment for cause must be approved by the Board
of Directors.
C. Either the Executive may elect to terminate the employment
relationship or the Company may elect to terminate such employment without
cause. In such a case, advance written notice of termination shall be
delivered by the terminating party to the non-terminating party at least ninety
(90) days prior to the date of termination. In addition, if the Company
terminates the employment without cause or the Executive terminates the
employment for a Good Reason (defined below), the Company agrees to pay the
Executive his base salary for the balance of the Term. The decision to
terminate the Executive's employment without cause must be approved by the
Board of Directors.
For purposes of this section II.C., the Executive shall have terminated
the employment for a Good Reason if the Executive terminates the employment
relationship within 6 months following the occurrence of (i) the Company
materially reducing, diminishing, terminating or otherwise impairing the
Executive's duties, titles and/or responsibilities without the Executive's
consent, or without cause; (ii) the Company instructing the Executive despite
his written objection delivered to the Board of Directors to take any action
which is in violation of any law, ordinance or regulation or would require any
act of dishonesty or moral turpitude; or (iii) the Company committing a
material breach of any of the provisions of this Agreement.
After termination of employment, regardless of the ground or basis
therefor, the Company shall pay the Executive any accrued benefits to which he
is entitled (including unpaid bonus, if any, for performance by the Executive
of the preceding completed year) according to Company policies and procedures.
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III. COMPANY RULES AND REGULATIONS
The Executive agrees to comply with all directives of the Board of
Directors and all written rules, policies, and regulations of the Company,
including, but not limited to, those set forth in the Employee Handbook, and to
carry out and perform such directives, policies, and mandates of the Company as
set forth herein. In the event of an express conflict between the terms of
this Agreement and the written rules, policies, and regulations of the Company,
as set forth in the Employee Handbook the terms of this Agreement shall govern.
IV. DUTIES AND RESPONSIBILITIES
A. During the period of his employment hereunder, and for a period of
three (3) years thereafter, the Executive shall not, without the written
consent of the Board of Directors or a person authorized by the Board of
Directors, disclose to any person other than as required by law or court order,
or other than to an authorized employee of the Company or its affiliates, or to
a person to whom disclosure is necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Company
(e.g., disclosure to the Company's or its affiliates' outside accountants or
bankers of financial data properly requested by such persons and approved by an
authorized officer of the Company), any confidential information obtained by
him while in the employ of the Company with respect to any of the Company's or
its affiliates' products, services, customers, suppliers, marketing techniques,
methods or future plans; provided, however, that confidential information shall
not include any information known generally to the public (other than as a
result of unauthorized disclosure by the Executive) or any information of a
type not otherwise considered confidential by persons engaged in the same
business or a business similar to that conducted by the Company. The Executive
shall be allowed to disclose confidential information to his attorney solely
for the purpose of ascertaining whether such information is confidential within
the intent of this Agreement; provided, however, that the Executive
(a) discloses to his attorney the provisions of this subsection A and
(b) agrees not to waive the attorney-client privilege with respect thereto.
B. While the Executive is employed by the Company hereunder, the
Executive shall use his best efforts to make available to the Company business
opportunities that come to his attention or to the attention of persons (other
than natural persons) under his control.
C. Nothing in this Agreement shall be deemed to restrict the Executive
from pursuing or engaging in other business activities provided that such
activities do not unreasonably interfere with the performance of his
responsibilities hereunder.
V. COMPENSATION
The Executive shall be compensated by the Company with an annual base
salary of $473,000 payable semi-monthly. The Executive's compensation will be
reviewed for modification on an annual basis and will be reviewed for
modification by March 1, 1996, with any modification to be made retroactive to
January 1, 1996.
VI. FRINGE BENEFITS
In addition to the compensation as defined above, the Executive shall be
entitled to the following fringe benefits:
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A. The Executive shall be eligible to participate in the Company's
health plans and life and disability insurance programs available to senior
executive employees in accordance with the terms and provisions thereof.
B. The Executive will be eligible to participate in all other employee
benefits available to senior executive employees including vacations,
retirement plans, bonus plans, and equity-based incentive compensation plans in
accordance with the terms and provisions thereof.
C. The Executive's position requires continuing education and idea
exchanges to keep abreast with emerging trends. Accordingly, during the term
of this Agreement the Company shall pay all of the Executive's dues and
membership fees to the Chief Executive Organization.
D. The Company will provide the Executive with an executive sedan. The
Company shall bear all costs and expenses, such as insurance premiums and
necessary repairs, associated with this automobile, including costs and
expenses of a driver. Upon termination of the employment relationship, the
Executive shall return the automobile to the Company or, if such automobile is
owned by the Company, the Executive may purchase such automobile from the
Company for a price equal to its current fair market value determined by
reference to a nationally published reference of used car values. If such
automobile is leased by the Company, upon termination of the employment
relationship and request of the Executive, the Company will use reasonable
efforts to transfer the lease, to the extent permitted thereunder, to the
Executive.
E. Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Executive or his
estate or beneficiaries shall be subject to the withholding of such amounts
relating to taxes as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation. In lieu of withholding such
amounts, in whole or in part, the Company may, in its sole discretion, accept
other provisions for payment of taxes and withholdings as required by law,
provided it is satisfied that all requirements of law affecting its
responsibilities to withhold compensation have been satisfied.
VII. INDEMNIFICATION
The Company agrees to indemnify the Executive, with respect to his
performance of his duties described herein, to the maximum extent permitted by
law, subject to the terms of the Third Amended and Restated Limited Partnership
Agreement of the Company.
VIII. ARBITRATION
A. Any dispute or controversy arising between the Executive and the
Company relating to this Agreement shall be submitted to private, binding
arbitration, upon the written request of either the Executive or the Company,
before a panel of three arbitrators, under the administration of and in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). In the event of such dispute or controversy, the Company
and the Executive shall independently and simultaneously select and identify
one arbitrator each, both of whom must have no past or present familial or
business relationships with the parties and must possess expertise in the area
of compensation of senior management employees in the real estate industry. In
the event that a party has not selected its arbitrator within 60 days of
initiation of the arbitration, the AAA shall select such arbitrator. These two
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arbitrators shall jointly agree upon and select a third arbitrator who also
possesses such credentials. These three arbitrators shall hear and decide the
dispute or controversy by majority vote, and their decision and award shall be
final and conclusive upon the parties, and their heirs, administrators,
executors, successors, and assigns. The arbitrators shall have no power or
authority to add to, subtract from, or otherwise modify the terms of this
Agreement. Wherever the Commercial Arbitration Rules of the AAA conflict with
the procedures set forth in this section, the terms of this section shall
govern. The Executive and the Company agree that the arbitration must be
initiated by personally delivering a statement of claim to the AAA and to the
party against whom the claim is asserted no later than ninety (90) days after
the basis of the claim becomes known, or reasonably should have been known or
discovered, by the party asserting the claim. In the event arbitration is not
initiated within such ninety (90) day period, such claim, dispute, or
controversy shall be irrevocably time-barred. A judgment based upon such
arbitration award may be entered in any court having jurisdiction thereof.
B. Notwithstanding the foregoing, any action brought by the Company
seeking a temporary restraining order, temporary and/or permanent injunction,
and/or a decree of specific performance of the terms of this Agreement may be
brought in a court of competent jurisdiction without the obligation to proceed
first to arbitration.
IX. ASSIGNABILITY AND BINDING EFFECT
The Executive may not assign this Agreement, or any obligation or rights
hereunder, to any other person or entity without the express written consent of
the Company. This Agreement shall be binding upon the Executive and his heirs,
executors, administrators, and successors.
X. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware
(excluding the choice-of-law rules thereof).
XI. CAPTIONS
All captions contained in this Agreement are for convenience only and in
no way define or describe the intent of the parties or specific terms hereof.
XII. SEVERABILITY
If any provision of this Agreement shall to any extent be held invalid or
unenforceable, the remaining terms and provisions shall not be affected
thereby.
XIII. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof. All prior negotiations or stipulations
concerning any matter which preceded or accompanied the execution hereof are
conclusively deemed to be superseded hereby.
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and such officer or director as may be specifically designated by
the Board of Directors.
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XIV. NOTICES; MISCELLANEOUS
For purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be duly given when
delivered by hand or facsimile transmission or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company:
Interstate General Company L.P.
222 Smallwood Village Center
St. Charles, Maryland 20602
Attention: President
If to the Executive:
Mr. James J. Wilson
Dresden Farm
39997 Snickersville Turnpike
Middleburg, Virginia 22117
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first set forth below, and the parties represent that they have the
capacity and authorization, whether it be personal or by the Board of Directors
of the managing general partner of the Company, to execute this Agreement.
INTERSTATE GENERAL COMPANY L.P.
BY: INTERSTATE GENERAL MANAGEMENT CORPORATION,
its managing general partner
Date: January 19, 1996 /s/ Donald G. Blakeman
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Donald G. Blakeman
Executive Vice President
Date: /s/ James J. Wilson
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James J. Wilson