EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), is made and entered into as of December
14, 2001, between GRUBB & ELLIS COMPANY, a Delaware corporation (the "Company"),
and ROBERT J. WALNER (the "Executive").
1. POSITION AND DUTIES. The Executive shall have the title and position of
Chief Administrative Officer, Chief Legal Officer, Executive Vice President and
Corporate Secretary of the Company. The Executive shall have such duties and
responsibilities commensurate with his titles and position as shall be assigned
to him, from time to time, by the Chief Executive Officer of the Company (the
"CEO"), and shall report to the Chief Executive Officer of the Company. Subject
to the preceding sentence, Executive's supervisory responsibilities shall
include, without limitation, responsibilities relating to legal matters and risk
management. Executive shall be an Executive Officer of the Company during the
Period of Contract Employment.
2. LOCATION OF EMPLOYMENT. Executive's principal place of employment during
the entire Period of Contract Employment shall be Northbrook, Illinois.
3. PERIOD OF CONTRACT EMPLOYMENT. The term "Period of Contract Employment,"
as used in this Agreement, means the period beginning on the date set forth
above and ending on the earlier of June 30, 2004 (the "Expiration Date") or,
subject to the terms hereof, upon termination of the Executive's employment with
the Company. Upon Executive's written request therefor, no sooner than 180 days
and no later than 120 days prior to the Expiration Date, the Company will advise
the Executive of the Company's preliminary intentions regarding renewal of
Executive's employment (without any obligation regarding a renewal).
4. ANNUAL BASE SALARY. Executive's base salary for the period July 1, 2001
through December 31, 2001 shall be $325,000. The Company agrees to pay the
Executive a base salary (the "Base Salary") in the annual amount of $375,000 for
the twelve month period commencing on January 1, 2002 and ending December 31,
2002, and $450,000 (annually) for the eighteen month period beginning on January
1, 2003 and ending June 30, 2004. The Base Salary shall be payable as current
salary, in installments (not less frequently than monthly) subject to all
applicable withholding and deductions, in accordance with the Company's
customary payroll practices applicable to all employees in positions comparable
to the Executive. Subject to the preceding sentences hereof, on January 2, 2002,
Executive shall be paid a sum necessary to retroactively increase Executive's
Base Salary as provided above to $325,000 effective as of July 1, 2001.
5. BONUS COMPENSATION. During the Period of Contract Employment, the
Executive shall receive annual cash bonus compensation ("Bonus Compensation") as
follows:
PERIOD BONUS COMPENSATION
Guaranteed Bonus for period ending
December 31, 2001 $120,000
Annually thereafter through the end of the Target bonus of 50% of Base
Term Salary; Maximum Bonus of 80%
of Base Salary
Except for the Guaranteed Bonus, Bonus Compensation shall be based upon the
performance of the Executive of goals to be established by the Chief Executive
Officer of the Company, in consultation with the Executive, within three (3)
months of the date of this Agreement. All Bonus Compensation shall be payable
after December 31st of the year to which the Bonus Compensation is applicable in
one lump sum, subject to all applicable withholding and deductions, in
accordance with the Company's customary payroll and bonus payment practices. In
the absolute discretion of the Company, Executive may be paid bonuses in excess
of guaranteed sums or maximum targets. Notwithstanding the above, a pro-rata
bonus, if any, for the six (6) month period ending June 30, 2004 shall be paid
to Executive promptly after said date.
6. STOCK OPTIONS. Pursuant to the Company's 1990 Amended and Restated Stock
Option Plan (referred to throughout this Agreement as the "Plan"), subject to
the approval of the Compensation Committee of the Board of Directors of the
Company, and if required by the Plan, the Board of Directors of the Company (the
"Board"), on the date of the next most practicable meeting of the Board, the
Company shall grant the Executive a stock option (the "Option") to purchase an
aggregate of fifty thousand (50,000) shares of the Company's common stock, $.01
par value per share (the "Common Stock"), at an exercise price, pursuant to the
terms of the Plan, equal to the closing price of the Common Stock on The New
York Stock Exchange on the trading day next preceding the date of grant (the
"Exercise Price"). The terms of the Options shall be set forth in an agreement
between the Company and the Executive, which shall reflect the terms hereof and
the terms and conditions set forth in the Company's standard form of option
agreement (the "Option Agreement"). The Options shall become exercisable: (i)
twenty percent (20%) one year from the date of grant, (ii) an additional twenty
percent (20%) two years from the date of grant, and (iii) the remaining sixty
percent (60%) on the day preceding the last day of the Period of Contract
Employment, and shall expire ten (10) years after the date of grant; provided,
however, that in the event that the Executive's employment with the Company is
terminated by the Company for any reason other than for "Cause", the Executive
resigns for Good Reason or the Period of Contract Employment is not extended,
the Executive shall have the right to exercise vested Options (i.e., Options
which are exercisable as of the termination date) for a period of six (6) months
after such termination date. Notwithstanding the foregoing, (i) in the event of
a "Change of Control" as defined in the Plan, or (ii) if the Executive
terminates his employment for "Good Reason" as defined herein, or (iii) if the
Executive is terminated by the Company other than for "Cause" as defined herein,
pursuant to Section 8(a) hereof, then, in any of such events, all unvested
Options shall immediately vest and become exercisable and remain so for a period
of six (6) months unless otherwise cancelled or assumed following a Change of
Control as provided by the terms of the Plan. In addition, at the discretion of
the Administrator (as defined in the Plan), the Executive may receive further
grants of Options, subject to the terms of the Plan. Provided that Executive is
still actively employed by the Company following the expiration of the Period of
Contract Employment, Executive shall be entitled to the benefits of the second
preceding sentence, which shall survive the expiration of the Period of Contract
Employment, for so long as Executive shall be so actively employed, such that in
the event that an event set forth in (i), (ii) or (iii) of the second preceding
sentence shall
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occur following the expiration of the Period of Contract Employment but while
Executive shall be actively employed by the Company, Executive shall
nevertheless be entitled to the benefits thereof.
7. BENEFITS. During the Period of Contract Employment, and in the event of
a termination under Section 8(a) or 8(d) of this Agreement during the Severance
Period (as defined below), as applicable, the Executive shall be entitled to
participate in or receive benefits equivalent to any employee benefit plan or
other arrangement, including but not limited to any medical, dental, retirement,
disability, life insurance, sick leave and vacation plans or arrangements, as
well as perquisites for executive officers of the Company, generally made
available by the Company to its employees having a title and position equivalent
to Executive's, subject to or on a basis consistent with the terms, conditions
and overall administration of such plans or arrangements; PROVIDED, that such
plans and arrangements are made available at the discretion of the Company and
nothing in this Agreement establishes any right of the Executive to the
availability or continuance of any such plan or arrangement. The Company shall
reimburse the Executive for the reasonable attorneys fees expended in the
negotiation of this Agreement not to exceed $5,000. Provided that Executive is
insurable at commercially reasonable rates, during the Period of Contract
Employment, the Company shall pay the cost of providing to executive $1,000,000
of term life insurance coverage naming the Executive's estate or designated
beneficiary as the beneficiary thereof.
8. TERMINATION. The following termination provisions and benefits are in
lieu of the benefits available under the Company's Executive Change of Control
Plan ("COC Plan"). Executive agrees that his termination provisions and benefits
shall not be governed by such Plan:
(a) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment under this Agreement without Cause at
any time by giving written notice to the Executive. Such termination will
become effective upon the date specified in such notice (the "Effective
Date"), provided that such date is at least 30 days after the date of such
notice. Upon any such termination, the Company will pay the Executive,
within five days of the Effective Date of termination and subject to the
Executive's execution and delivery of such documents of release as the
Company may reasonably request: (i) all earned but unpaid Base Salary and
vacation pay through the Effective Date, payable in a lump sum within five
(5) days after the Effective Date; and (ii) all Base Salary payable in
accordance with the Company's customary payroll practices, and the benefits
set forth in Section 7 above for the period (the "Severance Period") of
either twelve (12) months following the Effective Date or through the end
of the Contract Period of Employment, whichever period is shorter (the
"Severance Benefit").
(b) TERMINATION BY THE COMPANY FOR CAUSE. The Company may immediately
terminate the Executive's employment at any time for Cause by giving
written notice to the Executive. Upon any such termination for Cause, the
Executive shall have no right to compensation under Section 8(a)(ii),
including, without limitation, and except as required by law, to
participate in any employee benefit programs under Section 7 for any period
subsequent to the date of termination. For purposes of this Section 8(b),
"Cause" shall mean: (i) the Executive is convicted of or pleads guilty or
nolo contendere to a felony;
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(ii) the Executive, in carrying out his duties hereunder, commits unlawful
acts involving dishonesty (including, without limitation, misappropriation
and embezzlement) or fraud or is guilty of gross negligence or willful
misconduct; or (iii) the Executive refuses to comply with any reasonable
lawful directive of the Board that is commensurate with the Executive's
duties within 15 days after written notice has been given to the Executive
by the Company.
(c) DEATH OR DISABILITY. This Agreement and the obligations of the
Company hereunder will, upon the Company's election in writing to the
Executive within 30 (thirty) days thereafter, terminate upon the death or
disability of the Executive. For purposes of this Section 8(c),
"disability" shall mean that for a period of more than twelve (12) weeks in
any twelve (12) month period the Executive is unable to perform the
essential functions of his duties because of physical, mental or emotional
incapacity resulting from injury, sickness or disease.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate his employment under this Agreement at any time for Good Reason
by giving written notice to the Company. For purposes of this Section 8(d),
"Good Reason" shall mean: (i) there is a Change of Control; (ii) the
Executive's principal place of employment is moved to a location other than
in the Chicago metropolitan area; (iii) the Executive suffers a reduction
in title or is required to report to someone other than the Chief Executive
Officer of the Company; (iv) a material breach of the Agreement by the
Company that is not cured fifteen (15) days after written notice of the
breach has been given to the Company by the Executive or (v) a material
reduction in Executive's responsibilities or the assignment of duties not
commensurate with Executive's positions and titles. In the event of such a
termination, the Executive shall be entitled to the Severance Benefit set
forth in Section 8(a) and benefits set forth in Section 7 during the
Severance Period.
(e) TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The Executive
may terminate his employment under this Agreement without Good Reason at
any time by giving written notice to the Company. Such termination will
become effective upon the date specified in such notice, provided that such
date is at least 30 days after the date of delivery of the notice. Upon any
such termination, the Company shall be relieved of all of its obligations
under this Agreement, except for payment of salary and the provision of
benefits through the effective date of termination.
9. NO SOLICITATION. The Executive hereby covenants and agrees that during
the Period of Contract Employment and for one (1) year following the expiration
or termination of employment with the Company, he will not, for himself or any
third party, directly or indirectly: (i) divert or attempt to divert from the
Company any business of any kind in which the Company is engaged, or (ii) employ
or solicit for employment any person employed by the Company during the period
of such person's employment.
10. COMPETING BUSINESS. The Executive hereby covenants and agrees that,
during the Period of Contract Employment: (i) the Executive will not have any
investment in a Competing Business (as defined in this Section) other than an
investment in a mutual fund or
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other similar entity, or an equity interest of less than five percent (5%) of
any company whose securities are listed on The New York Stock Exchange, The
American Stock Exchange or quoted on NASDAQ; and (ii) Executive will not render
personal services to any Competing Business in any manner, including, without
limitation, as owner, partner, director, trustee, officer, employee, consultant
or advisor thereof.
For purposes of this Agreement, "Competing Business" shall mean any
business which derives a substantial portion of its revenue from business
similar or competitive to that now, or at any time during the Period of Contract
Employment, conducted by the Company, in any metropolitan area, city, county or
other political subdivision, where the Company presently does business or, at
any time during the Period of Contract Employment, will do business.
If the Executive breaches the agreement contained in this Section, such
breach may render the Executive liable to the Company for damages therefor and
entitle the Company to enjoin the Executive from making such investment or from
rendering such personal services. In addition, the Company shall have the right
in such event to enjoin the Executive from disclosing any confidential
information concerning the Company to any Competing Business, to enjoin any
Competing Business from receiving from the Executive or using such confidential
information and/or to enjoin any Competing Business from retaining or seeking to
retain any other employees or other associates of the Company.
11. CONFIDENTIALITY. The Executive hereby covenants and agrees, for a
period of five (5) years from the date hereof (the "Restricted Period"), he will
not, directly or indirectly, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means or any other
confidential information concerning the business or policies of the Company or
any subsidiary thereof. The Executive's obligations shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his receipt of such information from the Company
or any of its subsidiaries, as evidenced by the Executive's written records;
(iv) is disclosed to the Executive by a third party not under an obligation of
confidence to the Company; or (v) is required to be disclosed by law or legal
proceeding.
12. SEVERABILITY, ENFORCEABILITY. In the event that the provisions of the
Sections captioned "Competing Business" or "No Solicitation" or
"Confidentiality" or any portion thereof, should ever be adjudicated by a court
of competent jurisdiction in proceedings to which the Company is a proper party
to exceed the time or geographic or other limitations permitted by applicable
law, then such provisions will be deemed reformed to the maximum time or other
limitations permitted by applicable law, as determined by such court in such
action, the parties hereby acknowledging their desire that in such event such
action be taken. Without limiting the foregoing, the covenants contained herein
will be construed as separate covenants covering their respective subject
matters, including, without limitation, with respect to (a) each of the separate
cities, counties, metropolitan areas, and each other political subdivision of
the United States in which any of the Company or its successors now transact any
business or propose to transact business, (b) each business now conducted by the
Company or its successors, and (c) the Company and its successors separately. In
addition to the above, all provisions of this Agreements are severable, and the
invalidity or unenforceability of any provision or
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provisions of this Agreement or portions or aspects thereof will not affect the
validity or enforceability of any other provision, or portion of this Agreement,
which will remain in full force and effect as if executed with the unenforceable
or invalid provision or portion or aspect thereof modified, as set forth above.
13. GOVERNING LAW. This Agreement is being made and executed in and is
intended to be performed in the State of Illinois and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Illinois, without regard to the conflict of laws principles
thereof.
14. ENTIRE AGREEMENT. The obligations of the Company under this Agreement
shall be binding on the Company and its successors and assigns. This Agreement
and the Option Agreement comprise the entire agreement between the parties
hereto relating to the subject matter hereof and, as of the date hereof,
supersede, cancel and annul all previous employment agreements between the
Company (and/or its predecessors) and the Executive, including without
limitation, the COC Plan, as the same may have been amended or modified, and any
right of the Executive thereunder, and all agreements executed in connection
therewith, and, supersede, cancel and annul all other prior written and oral
agreements between the Executive and the Company or any predecessor to the
Company. The parties agree that notwithstanding the foregoing, nothing contained
herein shall, subject to the provisions set forth in Section 7 hereof, operate
to cancel or annul any right of Executive under the plans, programs or
agreements set forth on Exhibit A annexed hereto. The terms of this Agreement
and the Option Agreement are intended by the parties to be the final expression
of their agreement with respect to the employment of the Executive by the
Company and may not be contradicted by evidence of any prior or contemporaneous
agreement. The parties acknowledge that the award of Options is a material
inducement to Executive in entering into this Agreement with the Company.
15. DISPUTES. In the event a claim or controversy arises concerning any
provision of this Agreement or the performance of this Agreement, such claim or
controversy shall be settled by final, binding arbitration in accordance with
the Streamlined Arbitration Rules of JAMS, which rules are incorporated herein
by reference. All persons nominated to act as arbitrators of such claim or
controversy shall be attorneys at law duly licensed to practice before the
courts of the state where the arbitration is conducted. The arbitrator(s) shall
apply the internal law of the State of Illinois, without regard to the
conflict-of-law provisions, and should the arbitrator(s) fail to follow such
law, the ruling of the arbitrator(s) can be appealed to the court of general
jurisdiction in the state where the arbitration is conducted. The arbitration
shall be conducted in the city of Chicago, Illinois. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Discovery may be obtained during such arbitration proceedings to the
same extent as authorized in Illinois civil judicial proceedings. The
unsuccessful party shall pay the costs of conducting the arbitration. In the
event any arbitration proceeding, or any legal action to enforce an arbitration
award, is commenced hereunder, the prevailing party shall be entitled to recover
its expenses and reasonable attorneys' fees incurred therein from the
unsuccessful party.
16. NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party will be effective upon receipt (or refusal
of receipt) and will be in writing and delivered personally or sent by telecopy
or certified or registered mail,
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postage prepaid, as follows: if to the Company, addressed to the attention of
its Chief Executive Officer at 55 East 59th Street, New York, New York 10022;
and if to the Executive, at:
Robert J. Walner
1889 Cavell Avenue
Highland Park, IL 60035
Either party may change the notice address by notifying the other party in
writing.
17. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, approved by the Compensation
Committee of the Board and signed by the Executive and the Company. By an
instrument in writing similarly executed, the Executive or the Company may waive
compliance by the other party with any provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, that such
waiver shall not operate as a waiver of, or estoppel with respect to, any other
or subsequent failure. No failure to exercise and no delay in exercising any
right, remedy or power hereunder shall preclude any other or further exercise of
any other right, remedy or power provided herein or by law or in equity.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
GRUBB & ELLIS COMPANY
By: /s/ BARRY M. BAROVICK /s/ ROBERT J. WALNER
---------------------- ------------------------
Barry M. Barovick Robert J. Walner
Chief Executive Officer and President
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EXHIBIT A
1. Health and welfare plans
2. Company stock options previously granted to the Executive
3. Retirement and deferred compensation plans
4. Executive perquisites and fringe benefits
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