EXHIBIT 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made as of January 13, 1998, by
and between Kimco Realty Corporation, a Maryland corporation ("Kimco"),
and Jerald Friedman ("Employee").
Recitals
A. Employee is employed by The Price REIT, Inc. ("Price REIT") and
serves as its Senior Executive Vice President and Chief
Operating Officer.
B. Kimco and Price REIT are proposing to enter into an Agreement and
Plan of Merger, to be dated as of January 13, 1998 (the "Merger
Agreement"), which provides for the merger of Price REIT with and into a
subsidiary of Kimco (the "Merger").
C. The agreement of Employee to work for Kimco, subject to the terms of
this Agreement, is a condition to Kimco's willingness and obligation to
execute the Merger Agreement.
D. Kimco wishes to contract for the managerial and business skills
possessed by the Employee and Employee desires to be employed by Kimco
upon the terms and subject to the conditions herein provided and subject
further to the condition that the Merger be consummated.
E. Employee will be hired by Kimco as its Executive Vice President. In
this capacity, he will have such duties as the Board of Directors
prescribes.
Terms and Conditions
NOW, THEREFORE, in consideration of the foregoing premises and
mutual covenants and conditions hereinafter set forth, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1. Employment and Duties.
a. Position and Duties. Employee shall serve as Executive Vice
President of Kimco after the Merger. Employee shall have such duties and
authority as the Board of Directors of Kimco prescribes.
b. Preclusion of Outside Business Activities. During his
employment, Employee shall devote substantially all of his energies,
interest, abilities and productive time to the performance of this
Agreement. Employee shall not, without the prior written consent of
Kimco, perform other services of any kind or engage in any other business
activity, with or without compensation, except as set forth in Schedule A
hereto. Employee shall not, without the prior written consent of Kimco,
engage in any activity adverse to Kimco's interests.
c. Location. Employee shall not be required to relocate outside
the metropolitan Los Angeles area.
2. Term of Employment.
a. Term. This Agreement shall continue in full force and effect
from the closing date of the Merger (the "Closing Date") until the third
anniversary of the Closing Date unless sooner terminated or extended as
hereinafter provided (the "Employment Term").
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b. Extension of Term. The Employment Term set forth in
paragraph (a) above may be extended by written amendment to this
Agreement signed by both parties.
c. Termination for Cause. Prior to the expiration of the
Employment Term, Employee's employment may be terminated for Cause by the
Board of Directors of Kimco, immediately upon delivery of notice thereof;
provided, however, that Employee shall have the opportunity, for ten days
following delivery of a notice relating solely to clause (i) or clause
(vi) of the following sentence, to cure to the satisfaction of the Board
of Directors the circumstance giving rise to such notice. For purposes of
this Agreement, "Cause" shall mean Employee's termination only upon: (i)
material incompetence in the performance of his duties or obligations
hereunder, (ii) Employee's engaging in any act which is materially
injurious to Kimco; (iii) personal dishonesty, wilful misconduct or
breach of fiduciary duty involving personal profit; (iv) intentional and
material failure to perform his stated duties; (v) wilful violation of
any law which materially adversely affects his ability to discharge his
duties or has an adverse effect on Kimco's interests; or (vi) Employee's
breaching in any material respect the terms of this Agreement or any
confidentiality or proprietary information agreement between Employee and
Kimco or any of its subsidiaries.
d. Termination due to Death or Disability. Employee's
employment hereunder shall terminate immediately upon his death. In the
event that by reason of injury, illness or other physical or mental
impairment Employee shall be: (a) completely unable to perform his
services hereunder for more than three consecutive months, or (b) unable
to perform his services hereunder for fifty percent or more of the normal
working day throughout four consecutive months, then Kimco may terminate
Employee's employment hereunder. Employee's beneficiaries, estate, heirs,
representatives, or assigns, as appropriate, shall be entitled to the
proceeds, if any, due under any Kimco-paid life insurance policy held by
Employee, as determined by and in accordance with the terms of any such
policy, as well as any vested benefits in Employee's stock options. Any
theretofore unvested options granted to Employee shall immediately vest
and become exercisable, in accordance with their terms, upon the death of
Employee or upon Employee's termination pursuant to the second sentence
of this Section 2(d).
e. Termination Without Cause. If Employee's employment is
terminated by Kimco without Cause, Employee shall be entitled to receive
severance in an amount equal to Employee's base salary and bonus then in
effect for the greater of the balance of the term of this Agreement or
one year. In addition, all theretofore unvested options to purchase Kimco
Common Stock or the common stock of the subsidiary described in Section
3(f), if any, shall immediately vest.
3. Compensation.
a. Salary. Employee's base annual salary from the Closing
Date through the third anniversary of the Closing Date shall be $300,000
per annum, payable semi-monthly.
b. Bonus. In addition to the salary set forth in paragraph (a)
above, Employee shall be entitled to an annual bonus of $150,000, which
is earned and paid quarterly as of the end of each calendar quarter of
Kimco's fiscal year. Employee must be employed for the entire fiscal
quarter in order to receive any such bonus payment, provided that
Employee shall receive a ratable portion of such quarterly bonus payment
for the fiscal quarter of Kimco during which the Merger occurs. Thus,
Employee shall not be eligible for or entitled to any bonus or pro rata
bonus if his employment is terminated prior to the final day of a fiscal
quarter pursuant to Section 2(c).
c. Options. On the Closing Date of the Merger, Kimco will grant
Employee options to purchase 100,000 shares of Kimco Common Stock at a
purchase price per share equal to the closing market price of Kimco
Common Stock on such Closing Date. Such options will be granted under the
Kimco Amended and Restated Stock Option Plan for Key Employees and
Outside Directors (the "Plan") on the terms and conditions set forth
therein; provided that Employee shall be deemed to have commenced service
with Kimco at the time he commenced service with Price REIT; and provided
further that 1/3 of such options shall become vested on each of the first
three anniversaries of this agreement.
The exercise price of the options granted to Employee hereunder
shall be reduced in the event of a distribution to Kimco stockholders of
the "leveraged REIT" referred to in Section 3(f) hereof by the per share
amount of the value of such distribution, for tax purposes, as determined
by the Board of Directors.
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Kimco shall undertake to effect the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of the shares
issuable upon exercise of the options granted hereunder, including resale
thereof.
In addition, Employee shall be eligible to receive annual
option grants, the amounts of which shall be at the discretion of the
Board of Directors of Kimco, pursuant to the Plan.
d. Benefits. Kimco will provide Employee medical and other
benefits similar to those provided by Kimco to its other executive-level
employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such benefit plans and
arrangements. In addition, Employee shall be entitled to the same
vacation as executives of Kimco who have 10 or more years of service.
Section 7.14(a) of the Merger Agreement shall also be
applicable to the terms of Employee's employment by Kimco, except to the
extent inconsistent with the terms hereof.
e. Deductions and Withholdings. All amounts payable or which
become payable under any provision of this Agreement shall be subject to
any deductions authorized by Employee and any deductions and withholdings
required by law.
f. Kimco Subsidiary Distribution. In the event that Kimco
determines to distribute to its stockholders equity interests in one of
its subsidiaries that is qualified as a real estate investment trust and
structured to be a so-called "leveraged REIT", Employee shall be entitled
to receive options to acquire shares of common stock of such subsidiary
equal to .40% of the outstanding (not fully-diluted) common shares of
such subsidiary immediately following their distribution to Kimco
stockholders. The exercise price of such options shall equal the
distribution value for tax purposes of the underlying shares at the time
of distribution. Such options shall otherwise be structured and
exercisable with terms similar in all material respects to the terms of
the Plan of Kimco. Kimco shall undertake to cause such subsidiary to
effect the registration under the Securities Act of the shares issuable
upon exercise of such options, including resale thereof. Following any
such distribution to Kimco stockholders, Employee's salary set forth in
Section 3(a) hereof shall be apportioned between Kimco and such
subsidiary in the manner determined by Kimco.
4. Covenant Not to Compete or Solicit.
a. Non-Competition. In addition to the provisions of Section
1(b) hereof, Employee agrees that during the term of this Agreement he
will not, directly or indirectly, engage in (whether as an employee,
consultant, proprietor, partner, director or otherwise), or have any
ownership interest in, or participate in the financing, operation,
management or control of, any person, firm, corporation or business that
engages in or intends to engage in a Restricted Business. "Restricted
Business" shall mean any business that involves the acquisition,
development, management or operation of commercial real estate that
competes with the properties or services offered by Kimco at the time of
this Agreement or during Employee's tenure as an employee of Kimco.
Ownership of (i) no more than one percent (1%) of the
outstanding voting stock of a publicly traded corporation or (ii) any
stock, partnership interests or memberships in limited liability
companies presently owned by Employee, shall not constitute a violation
of this provision.
b. Non-Solicitation. Employee agrees that during the term of
this Agreement and for a period of one year thereafter, he will not (i)
solicit, encourage, or take any other action which is intended to induce
any other employee of Kimco to terminate his or her employment with Kimco
or (ii) interfere in any manner with the contractual or employment
relationship between Kimco and any such employee of Kimco.
c. Worldwide. The parties acknowledge that the market for
Kimco's property and management services is worldwide. Accordingly, in
order to secure to Kimco the benefits of the Merger, the parties agree
that the provisions of this Section 4 shall apply to each of the states
and counties of the United States, including each county in California
and New York, and to each nation worldwide.
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d. Severability. The parties intend that the covenants
contained in the preceding paragraphs shall be construed as a series of
separate covenants, one for each county of California and New York, each
state of the Union, and each nation. Except for geographic coverage, each
separate covenant shall be deemed identical in terms to the covenant
contained in the preceding paragraphs. If, in any judicial proceeding, a
court shall refuse to enforce any of the separate covenants (or any part
thereof) deemed included in said paragraphs, then such unenforceable
covenant (or such part) shall be deemed eliminated from this Agreement
for the purpose of those proceedings to the extent necessary to permit
the remaining separate covenants (or portions thereof) to be enforced. In
the event that the provisions of this Section 4 should ever be deemed to
exceed the time or geographic limitations, or the scope of this covenant,
permitted by applicable law, then such provisions shall be reformed to
the maximum time or geographic limitations, as the case may be, permitted
by applicable laws.
5. Employee's Representations. Employee represents and warrants to Kimco
as follows:
a. Employee is familiar with and approves the covenants not to
compete and not to solicit set forth in Section 4, including, without
limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.
b. Notwithstanding any "what-if" scenarios of the future
results of operations and stock prices of Kimco under certain assumptions
that the parties may have discussed, Employee has not relied on any such
scenarios or any forecasts or projections provided by Kimco and
understands that Kimco has made any representation or warranty whatsoever
regarding any forecasts or projections to Employee.
6. Miscellaneous.
a. Notices. Any notice, report or other communication required
or permitted to be given hereunder shall be in writing to both parties
and shall be deemed given on the date of delivery, if delivered, or three
days after mailing, if mailed first-class mail, postage prepaid, to the
following addresses:
i) If to Employee:
145 South Fairfax Avenue, Fourth Floor
Los Angeles, CA 90036
Attn: Jerald Friedman
ii) If to Kimco:
Kimco Realty Corporation
3333 New Hyde Park Road
New Hyde Park, NY 11042-0020
Attn: Chairman
or to such other address as any party hereto may designate by notice
given as herein provided.
b. Entire Agreement. This Agreement contains the entire
understanding and sole and entire agreement between the parties with
respect to the subject matter hereof, and supersedes any and all prior
agreements, negotiations and discussions between the parties hereto with
respect to the subject matter covered hereby. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone
acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Agreement
shall be valid or binding. This Agreement may not be modified or amended
by oral agreement, but only by an agreement in writing signed by Kimco
and by Employee, and which states the intent of the parties to amend this
Agreement.
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c. Assignment and Binding Effects. Neither this Agreement nor
the rights or obligations hereunder shall be assignable by Employee.
Kimco may assign this Agreement to any successor of Kimco, and upon such
assignment any such successor shall be deemed substituted for Kimco upon
the terms and subject to the conditions hereof.
d. Arbitration. The parties agree that any and all disputes
(contract, tort, or statutory, whether under federal, state or local law)
between Employee and Kimco (including other Kimco employees, officers,
directors and representatives) arising out of Employee's employment with
Kimco, the termination of that employment, or this Agreement, shall be
submitted to final and binding arbitration. The arbitration shall take
place in the metropolitan New York area and shall be conducted before the
American Arbitration Association, according to its Commercial Arbitration
Rules. Judgment on the award the arbitrator renders may be entered in any
court having jurisdiction over the parties. Arbitration shall be
initiated in accordance with the Commercial Arbitration Rules of the
American Arbitration Association.
e. No Waiver. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed or be construed as a further or continuing
waiver of any such term, provision or condition, or as a waiver of any
other term, provision or condition of this Agreement.
f. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New
York as applied to agreements made and performed in New York by residents
of New York.
g. Effectiveness. This Agreement shall become effective on the
Closing Date of the Merger contemplated by the Merger Agreement. If the
Merger is not consummated and the Merger Agreement is terminated, the
parties' obligations hereunder shall terminate as of the effective date
of the termination of the Merger Agreement.
h. Attorneys' Fees. In the event of an arbitration or legal
action or proceeding to enforce or interpret the provisions hereof, the
prevailing party shall be entitled to reasonable attorneys' fees, whether
or not the proceeding results in a final judgment.
i. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
j. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation
of this Agreement.
k. Definitions. All capitalized terms used herein shall have
the meaning defined in the Merger Agreement, unless otherwise defined
herein.
l. Severability. The provisions of this Agreement are
severable. If any provision of this Agreement shall be held to be invalid
or otherwise unenforceable in whole or in part, the remainder of the
provisions or enforceable parts hereof shall not be affected thereby and
shall be enforced to the fullest extent permitted by law.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
KIMCO REALTY CORPORATION
By: /s/ Milton Cooper
-------------------------------------
Its: Chief Executive Officer
EMPLOYEE
/s/ Jerald Friedman
-----------------------------------
Jerald Friedman
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Schedule A
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Outside Business Activities
1. Director, officer and shareholder of National Bank of California
2. Non-managing general partner interest in KFR Properties
3. Interest in Beverly Hills Medical, a partnership that has a
minority interest in a medical office building located in Los
Angeles
4. General partner in oil and gas partnerships
5. Secretary (no ownership interest) of La Mirada Properties, a
corporation which owns real property which Price REIT currently
manages for a fee
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