EMPLOYMENT AGREEMENT
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THIS AGREEMENT is entered into as of January 3, 1997 by and between
The Taubman Company Limited Partnership, a Michigan limited partnership (the
"Company"), and Lisa A. Payne ("Payne").
WHEREAS, the Company desires to employ Payne, and Payne desires to
be employed by the Company, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:
Article I. (a) The Company hereby employs Payne as an Executive Vice
President and its Chief Financial Officer, and Payne accepts such employment and
agrees to perform such services and duties as may be reasonably assigned or
delegated to her from time to time by the Chief Executive Officer of the
Company, the Partnership Committee (the "Partnership Committee") of The Taubman
Realty Group Limited Partnership, a Delaware limited partnership ("TRG"), or the
General Partner of the Company, upon the terms and conditions set forth herein,
during the Employment Period (as defined hereinafter). In addition to the
foregoing capacities, she shall serve TRG as a member of the Partnership
Committee as an appointee of Taub-Co Management, Inc. or TG Partners Limited
Partnership to serve as such in accordance with the Partnership Agreement of
TRG, and shall serve Taubman Centers, Inc. ("TCI") as an Executive Vice
President, its Chief Financial Officer and, subject to the ByLaws of TCI and if
designated in the first instance by the Board of Directors of TCI to fill the
vacancy created by the resignation of Bernard Winograd and thereafter if elected
by the Shareholders of TCI, as a member of its Board of Directors.
(b) Payne's term of employment shall commence as of a
date mutually acceptable to the Company and Payne, which shall not be later than
January 31,
1997, and continue through the third anniversary of the commencement of
employment (the "Initial Term"). On the second anniversary of the commencement
of employment and on each anniversary thereafter, the term of Payne's employment
under this Agreement shall automatically be extended for an additional one-year
period (each, an "Extension Term"), unless prior to any such anniversary either
the Company or Payne provides written notice to the other of such party's
intention that Payne's employment under this Agreement not be so extended. As
used herein, the term "Employment Period" means the Initial Term and each
Extension Term. In the event that Payne's employment with the Company is
terminated as provided in Article III hereof, the Employment Period shall
terminate as of the termination of such employment, except for the continuation
of payments as provided in Article III(a) hereof.
Article II. (a) During the Employment Period, the Company shall pay to
Payne for all services rendered under this Agreement a base salary of not less
than $500,000, payable in accordance with the general payroll practices of the
Company (the "Base Salary"). The Company will review the amount of such Base
Salary annually with consideration to an upward adjustment; however, nothing
contained herein obligates the Company to increase the Base Salary. Once
increased by the Company, the Base Salary may not be decreased.
(b) During the Employment Period, Payne shall
participate in the Senior Short Term Incentive Plan of the Company (the "SSTI"),
having a target of $250,000 and a maximum annual award of $375,000, it being
understood that all amounts payable under the SSTI shall be paid by March 15 of
the year following the year in which the award was made in accordance with
normal Company practice. For the year ended December 31, 1997, the Company
hereby agrees that the award to Payne under the SSTI will be at least $250,000.
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(c) During the Employment Period, Payne shall
participate in the Company's Long-Term Performance Compensation Plan (the
"LTPC") with a "Basic Grant Amount" for her initial grant under the LTPC of 7.25
"Notional Units", such initial grant to be made at the March 1997 meeting of the
Compensation Committee of TRG (the "Compensatio Committee") or the Partnership
Committee (the "March Meeting").
(d) No later than the March Meeting, Payne shall be
granted an option to purchase the equivalent in Units of Partnership of TRG of
100,000 shares of Common Stock of TCI pursuant to the TRG 1992 Incentive Option
Plan (the "Incentive Option Plan").
(e) During the Employment Period, Payne shall be
eligible to participate in all the Company's employee benefit programs as the
same may be in effect from time to time and shall be entitled to receive the
same perquisites provided to other senior executives of the Company. Article
III. (a) If Payne's employment with the Company terminates for any reason other
than Payne's voluntary termination of her employment hereunder, death or
"disability" (as that term is defined in the LTPC), or other than the Company's
termination for "cause" (as hereinafter defined), Payne shall have no further
obligations hereunder and in addition to any and all benefits under this
Agreement that have accrued to the date of termination of the employment, shall
be entitled to receive, subject to Section (d) below, her Base Salary and target
bonus under the SSTI, in either case, in effect at the time of such termination
(which shall continue to be payable in the same manner as prior to such
termination) for the remainder of the Employment Period. In addition, all
benefits under the various compensatory plans of the Company that Payne is
participating in shall immediately vest in accordance with the terms of such
compensatory plans, it being understood, however,
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that the Company shall recommend to the Compensation Committee that the
Compensation Committee take the following action: (i) with respect to the LTPC,
that at the time of the grant of the "Basic Grant Amount", such "Basic Grant
Amount" shall automatically vest pursuant to Section 5.5 of the LTPC in the
event Payne's employment with the Company terminates for any reason other than
Payne's voluntary termination of her employment hereunder, death or
"disability", or other than the Company's termination for "cause" or in the
event that the Initial Term is not automatically renewed pursuant to Article
I(b) hereof; and (ii) with respect to the Incentive Option Plan, that at the
time of the grant contemplated by Article II(d) hereof, such grant shall
automatically vest pursuant to Section 7.6 of the Incentive Option Plan 6 months
and 1 day following the date of such grant in the event Payne's employment with
the Company terminates for any reason other than Payne's voluntary termination
of her employment hereunder, death or "disability", or other than the Company's
termination for "cause" and shall be exercisable for a period of 90 days
thereafter, provided that such termination of employment occurs not sooner than
6 months and 1 day following the date of such grant, or in the event that the
Initial Term is not automatically renewed pursuant to Article 1(b) hereof . For
purposes hereof and for purposes of Article III(c) hereof, Payne shall not be
deemed to have voluntarily terminated her employment hereunder if she leaves the
employ of the Company for any reason within 90 days following (i) a "Change in
Control Event" as that term is defined in the LTPC, (ii) a substantial
diminution of duties or responsibilities, (iii) a change in title without
Payne's consent or (iv) a change in location of Payne's place of employment
outside of the metropolitan Detroit area.
(b) The Company may terminate Payne's employment for
"cause" in which event neither the Company nor Payne shall have any further
obligations to the other hereunder other than the Company's obligation to Payne
for any and all benefits
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under this Agreement that have accrued to the date of termination of employment
and as provided in the applicable compensatory plans of the Company. "Cause" is
hereby defined to mean the willful and continual failure to substantially
perform her duties with the Company or the engagement in conduct (including any
peculation) which is demonstrably and materially injurious to the Company,
monetarily or otherwise ("Termination for Cause"); provided, that such
termination shall be effective only if it shall have been preceded by a notice
specifying the facts and circumstances claimed to provide a basis for
Termination for Cause. For purposes hereof, no act, or failure to act, on
Payne's part shall be considered "willful" unless done, or omitted to be done,
by Payne not in good faith and without reasonable belief that her action or
omission was in the best interests of the Company.
(c) In the event that Payne's employment with the
Company terminates by reason of her voluntary termination of her employment
hereunder, death or "disability", neither the Company nor Payne shall have any
further obligations to the other hereunder other than the Company's obligation
to Payne for any and all benefits under this Agreement that have accrued to the
date of termination of employment and as provided in the applicable compensatory
plans of the Company. (d) If during the payout period provided in Article III
(a) (other than in connection with a "Change in Control Event" in which event
this Article III(d) shall not apply) Payne shall accept employment with a
person, corporation or other entity other than the Company, then any amounts to
be paid to Payne thereafter pursuant to this Article III shall be reduced by the
amount of any compensation paid to Payne by such other person, corporation or
other entity during the balance of the payout period, provided, however, if the
event resulting in the termination payments to Payne under Article III(a) hereof
occurs during the first two years of the Initial Term, such reduction shall only
take into account the amount
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of base salary received by Payne from her new employer. As a condition to the
continued receipt by Payne of payments pursuant to Article III, Payne shall, at
the written request from time to time of the Company, certify to the Company
either (i) that she has not accepted employment; or (ii) if she has accepted
employment, the total compensation to be paid to her by such other corporation,
person or entity during such balance of the payout period.
Article IV. It is the intent of the Company and Payne that Payne relocate
her family residence to the Bloomfield Hills, Michigan area (the "New
Residence") as soon as possible after the commencement of employment. In this
regard, the Company and Payne hereby agree as follows:
(a) The Relocation - Current Employees policy (the
"Policy") of the Company (a copy of which is attached hereto) shall apply
to the relocation of Payne with the following exceptions:
(i) Temporary Living Expenses. The 30 day
limitation in the Policy with respect to temporary living expenses is hereby
changed to six months, subject to such reasonable increase(s) as the Company and
Payne may agree to in the future; and
(ii) Relocation Loan Allowance. This portion of
the Policy shall not be applicable to Payne's relocation.
(b) In addition to the foregoing, in the event that
Payne sells her Brooklyn Heights, New York residence (the "Old Residence") for
less than $1,650,000 (including a sale pursuant to that portion of the Policy
relating to Home Sale Assistance), the Company shall pay to Payne one-half the
difference between $1,650,000 and the actual selling price in connection with
such sale up to a maximum of $175,000 upon the presentment to the Company of an
executed closing statement reflecting the sale price of the Old Residence.
Notwithstanding anything to the contrary contained herein, this section 4(b)
shall
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continue to apply after the termination of the Employment Period for any reason
until such time as the Old Residence is sold.
Article V. During the Employment Period, Payne shall devote her best
efforts and her full time and attention during normal business hours (except for
usual vacation periods and periods of illness or other incapacities) to the
business and affairs of the Company.
Article VI. (a) This Agreement shall inure to the benefit of and be
enforceable by Payne's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If Payne
should die during the Employment Period all amounts payable hereunder shall be
paid in accordance with the terms of this Agreement to her devisee, legatee or
other designee or if there is no such designee, to her estate. Payne may not
assign, pledge or encumber her interest in this Agreement without the written
consent of the Company.
(b) This Agreement may not be assigned by either party
hereto without the prior written consent of the other, and no such consent shall
operate as a waiver of any other rights pursuant to this Agreement.
Article VII. All notices required or contemplated under this Agreement
shall be delivered (a) personally, (b) by next day courier service, or (c) by
certified or registered mail, return receipt requested, addressed as follows (or
to such other address as any party may provide in writing to the other):
If to the Company:
The Taubman Company Limited Partnership
200 East Long Lake Road
Suite 200
Bloomfield Hills, Michigan 48304
Attention: Mr. Robert S. Taubman
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with a copy to:
Miro Weiner & Kramer
500 North Woodward Avenue
Suite 100
Bloomfield Hills, Michigan 48304
Attention: Kenneth H. Gold, Esq.
If to Payne:
Lisa A. Payne
99 Battery Place Apt. 9F
New York, New York 10280
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Alan G. Berkshire, Esq.
All notices under this Agreement shall be deemed received when personally
delivered, on the first business day after depositing with a next day courier
service, or on the third day after mailing, as the case may be.
Article VIII. This Agreement shall be construed according to the laws of
the State of Michigan (excluding the choice of law rules thereof).
Article IX. This Agreement contains the entire agreement of the parties
hereto relating to the employment of Payne by the Company and supersedes all
oral or written agreements, commitments or understandings between the parties
hereto with respect to the matters provided herein. No amendment, modification
or waiver of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the
amendment, modification or waiver is sought (which in the case of the Company
must be signed by its President), and then any such waiver shall be effective
only
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in the specific instance and for the specific purpose for which given. The
parties hereby expressly agree that there are no implied contracts, promises,
covenants, or conditions governing their employment relationship.
Article X. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
THE TAUBMAN COMPANY LIMITED PARTNERSHIP
By : /s/ Robert S. Taubman
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Its: President
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/s/ Lisa A. Payne
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Lisa A. Payne
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