EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
February 23, 2005, but effective as of January 1, 2005, by and between SUN
COMMUNITIES, INC., a Maryland corporation (the "Company"), and BRIAN W. FANNON
(the "Executive").
WITNESSETH:
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
Executive Vice President and 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 Company's Chief Executive Officer or the Board of
Directors of the Company (the "Board"), which duties shall be consistent with
the Executive's positions 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.
(a) Subject to the provisions for termination provided below, the
term of the Executive's employment under this Agreement shall commence on
January 1, 2005 and shall continue thereafter for a period of five (5) years
ending on December 31, 2009; provided, however, that the term of this Agreement
shall be automatically extended for successive terms of one (1) year each
thereafter, 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.
(b) Executive acknowledges and agrees that Executive is an
"at-will" employee and that Executive's employment may be terminated, with or
without cause, at the option of Executive or the Company.
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
during the term of this Agreement.
4. Compensation.
(a) 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 hereunder, the Company shall pay to the Executive, during his
employment hereunder, an annual base salary (the "Base Salary") of Four Hundred
Three Thousand Seven Hundred Dollars ($403,700.00) per year, payable in
accordance with the Company's usual pay practices (including tax withholding),
but in no event less frequently than monthly.
(c) COLA Adjustment. At the beginning of each calendar year of
this Agreement, commencing with January 1, 2006, and on such date each year
thereafter (the "Adjustment Date"), the Base Salary shall be increased in
accordance with the increase, if any, in the cost of living during the preceding
one year as determined by the percentage increase in the Consumers Price
Index-All Urban Consumers (U.S. City Average/all items) published by the Bureau
of Labor Statistics of the U.S. Department of Labor (the "Index"). The average
Index for calendar years 2003 and 2004 shall be considered the "Base." The Base
Salary for the calendar year following each Adjustment Date shall be the Base
Salary specified in Paragraph 4(b) increased by the percentage increase, if any,
in the Index for the calendar year immediately preceding the Adjustment Date
over the Base. In the event the Index shall cease to be published or the formula
underlying the Index shall change materially from the formula used for the Index
as of the date hereof, then there shall be substituted for the Index such other
index of similar nature as is then generally recognized and accepted. In no
event shall the Base Salary during each adjusted calendar year be less than that
charged during the preceding year of this Agreement.
(d) Incentive Compensation. The Company shall pay to the Executive
incentive compensation ("Incentive Compensation") in an amount up to 100% of the
Base Salary for each calendar year that the Executive is employed under this
Agreement ("Bonus Year"), which Incentive Compensation shall be determined and
calculated with respect to each Bonus Year as follows: (i) if, in the sole
discretion of the Compensation Committee of the Board, the Executive fulfills
his individual goals and objectives for such Bonus Year as approved by the
Compensation Committee, the Executive shall receive Incentive Compensation in
the amount of 25% of the then current Base Salary; (ii) if, in the sole
discretion of the Compensation Committee, the Company achieves the FFO and
financial budget objectives approved by the Company's Board of Directors at the
beginning of such Bonus Year, the Executive shall receive Incentive Compensation
in the amount of 50% of the then current Base Salary; and (iii) the remaining
25% of the Incentive Compensation may be awarded to the Executive in the sole
discretion of the Compensation Committee for extraordinary performance during
such Bonus Year. The determination of the Incentive Compensation shall be made
by the Company no later than March 1 for the preceding Bonus Year by reference
to the Company's audited financial statements. Unless otherwise specified by the
Company's Chief Executive Officer, one-twelfth of such Incentive Compensation
shall be paid monthly during the year following such Bonus Year; provided,
however, in the event that the Executive voluntarily terminates his employment
under this Agreement pursuant to paragraph 7(a)(i) hereof or the Executive's
employment under this Agreement is terminated with "cause" pursuant to paragraph
7(a)(ii) hereof, the Executive shall not be entitled to any unpaid Incentive
Compensation.
(e) Phantom Stock. In the event that the Executive is employed by
the Company on such dates, on each date that the Company pays a dividend on its
common stock through May 10, 2007, the Company shall pay the Executive a cash
bonus in an amount equal to the amount of the dividend multiplied by the Time
Units (as defined below). In the event that the Executive is employed by the
Company on May 10, 2007, the Company shall promptly thereafter pay to Executive
a cash bonus in an amount equal to the product of the Time Units and the Fair
Market Value (as such term is defined in the Company's Second Amended and
Restated 1993 Stock Option Plan) on May 10, 2007. In the event that the
Executive is employed by the
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Company through the initial term of this Agreement (i.e., until at least
December 31, 2009), the Company shall pay to Executive, no later than March 10,
2010, a cash bonus in an amount equal to the product of the Performance Units
(as defined below) and the Fair Market Value on March 1, 2010. For purposes
hereof, (i) "Time Units" means 6,250 (as such number may be appropriately
adjusted in the discretion of the Company to take into account any stock
dividend, stock split, combination or exchange of shares, or other similar event
affecting the capital structure of the Company); and (ii) "Performance Units"
means a "specified percentage" of 18,750 (as such number may be appropriately
adjusted in the discretion of the Company to take into account any stock
dividend, stock split, combination or exchange of shares, or other similar event
affecting the capital structure of the Company) determined on the basis of the
compound annual growth rate of the Company's funds from operations per weighted
average number of outstanding shares of the Company's common stock on a fully
diluted basis (as determined by reference to the Company's audited financial
statements) (the "Per Share FFO") for the period commencing January 1, 2005 and
ending December 31, 2009 ("CAGR"), determined by comparing the Per Share FFO for
the year ending December 31, 2009 to the Per Share FFO for the year ending
December 31, 2005, as follows:
At least 5% At least 7% At least 8%
Less but less than At least 6% but but less but less than
CAGR than 5% 6% less than 7% than 8% 9% At least 9%
- -------------------- ------- ------------- --------------- ----------- ------------- -----------
Specified Percentage 0 46.67% 73.33% 86.67% 93.33% 100%
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 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. Nothing contained in this Agreement shall be construed to
create any obligation on the part of the Company to establish any such plan or
to maintain the effectiveness of any such plan which may be in effect from time
to time.
(c) Annual Vacation. The Executive shall be entitled to five (5)
weeks vacation time each year, without loss of compensation. The Executive shall
not take more than fourteen (14) consecutive calendar days of vacation without
the prior approval of the Company's Chief Executive Officer. 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) business 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
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in effect on the date of such termination. For purposes of this Agreement,
one-twelfth (1/12) of the applicable annual vacation time shall accrue on the
last day of each calendar 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, entertainment
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.
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 sixty (60) 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) a material
breach of any provision of this Agreement by Executive (if the breach is
curable, it will constitute cause only if it continues uncured for a period of
twenty (20) days after Executive's receipt of written notice of such breach from
the Company); (ii) Executive's failure or refusal, in any material manner, to
perform all lawful services required of him pursuant to this Agreement, which
failure or refusal continues for more than twenty (20) days after Executive's
receipt of written notice of such deficiency; (iii) Executive's commission of
fraud, embezzlement or theft, or a crime constituting moral turpitude, in any
case, whether or not involving Company, that in the reasonable good faith
judgment 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; or (v) Executive's conviction or the entry of a
plea of guilty or no contest by Executive with respect to any felony or other
crime that, in the reasonable good faith judgment of the Company, adversely
affects the Company or its reputation or business.
8. Compensation Upon Termination or Disability.
(a) In the event that the Company terminates the Executive's
employment under this Agreement without "cause" pursuant to paragraph 7(a)(i),
(i) the Executive shall be entitled to any accrued and unpaid Base Salary,
Incentive Compensation and benefits through the effective date of such
termination, prorated for the number of days actually employed in the then
current calendar year, which shall be paid by the Company to the Executive
within thirty (30) days of the effective date of such termination, and (ii)
subject to the Executive's execution of a general release of claims in a form
satisfactory to the Company, the Company shall pay the Executive monthly an
amount equal to one-twelfth (1/12) of the Base Salary (at the rate that would
otherwise have been payable under this Agreement) 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
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Executive's termination of employment and the Severance Payment shall not be due
Executive if Executive is entitled to Change in Control Benefits (as defined in
paragraph 10 below).
(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 accrued and unpaid
Base Salary and benefits through the effective date of such termination,
prorated for the number of days actually employed in the then current calendar
year.
(c) 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. In addition, the Executive shall promptly forfeit 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. Resignation of Executive. Upon any termination of the Executive's
employment under this Agreement, the Executive shall be deemed to have resigned
from any and all offices and directorships held by the Executive in the Company
and/or any of the Affiliates (as defined below).
10. Effect of Change in 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) at any time within twenty-four (24) months after the Change in Control,
(ii) upon a Change in Control under paragraph 10(g)(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 (without regard to the last clause of paragraph 2
hereof).
(b) For purposes of this Agreement, the "Change in Control Benefits"
shall mean the following benefits:
(i) A cash payment equal to two and 99/100 (2.99) times the Base
Salary in effect on the date of such Change in Control, payable within
sixty (60) days of the Change in Control or, in the event that the
cessation of Executive's employment hereunder triggers the Change in
Control Benefits, payable within thirty (30) days after such cessation of
employment; 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).
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(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 the acceleration
of the vesting of, and the extension of the time for exercise of, stock options
as a result of the Change in Control.
(e) Notwithstanding anything to the contrary contained herein, in the
event it shall be determined that any compensation payment or distribution by
the Company to or for the benefit of the Executive would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), the Change in Control Benefits will be reduced to the
extent necessary so that no excise tax will be imposed, but only if to do so
would result in the Executive retaining a larger amount, on an after-tax basis,
taking into account the excise and income taxes imposed on all payments made to
the Executive hereunder.
(f) The Company shall pay to the Executive all reasonable legal fees and
expenses incurred by the Executive in obtaining or enforcing any right or
benefit provided by this paragraph 10, except in cases involving frivolous or
bad faith arbitration initiated by the Executive.
(g) 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 as of the date hereof 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 representing fifty percent (50%)
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
(other than as a result of an acquisition of securities directly from the
Company);
(ii) if the Company sells 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);
(iii) if the Company merges or consolidates with another person as a
result of which the shareholders of the Company immediately prior to such
merger or consolidation would beneficially own (directly or indirectly),
immediately after such merger or consolidation, securities of the
surviving entity representing less than fifty percent (50%) of the then
outstanding voting securities of the surviving entity; or
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(iv) 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(g), a "person" includes an individual, a
partnership, a corporation, an association, an unincorporated organization, a
trust or any other entity.
11. Stock Awards. 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 or permanent disability of the
Executive, all stock options and other stock based compensation awarded to the
Executive shall become fully vested and immediately exercisable, subject to the
restrictions of Section 9.02 of the Company's 1993 Stock Option Plan. Upon a
Change in Control, all stock options or other stock based compensation awarded
to the Executive shall become fully vested and immediately exercisable and may
be exercised by Employee at any time within one (1) year after the Change in
Control. All 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 this paragraph 11 and such Stock Option Agreements, this
paragraph 11 shall control.
12. Covenant Not To Compete and Confidentiality.
(a) The Executive acknowledges the Company's reliance on and
expectation of the Executive's continued commitment to performance of his duties
and responsibilities during the term of this Agreement. In light of such
reliance and expectation on the part of the Company, 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 of this Agreement (the
"Non-competition Period"), the Executive shall not, either 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 Non-competition Period shall extend until the
later of the remainder of the initial 5-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 Non-competition 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 will not at any time, for so long as any
Confidential Information (as defined below) shall remain confidential or
otherwise remain wholly or partially
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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 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 Non-competition Period, the Executive
shall not, either 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 Non-competition Period, the Executive
shall not, either directly or indirectly, call upon, compete for or solicit for
employment any person with whom the Executive was acquainted while in the
Company's employ.
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
present or past business of the Company or any of the Affiliates or any of their
respective predecessors, including, without limitation, financial information,
business plans, prospects, opportunities which have been discussed or considered
by the management of the Company, 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. This paragraph 12 shall
survive the termination of this Agreement.
(c) Executive acknowledges and agrees that the covenants set forth
above are reasonable and valid in geographical and temporal scope and in all
other respects. If any court determines that any of the covenants, or any part
of any covenant, is invalid or unenforceable, the remainder of the covenants
shall not be affected and shall be given full effect, without regard to the
invalid portion. If any court determines that any of the covenants, or any part
of any covenant, is unenforceable because of its duration or geographic scope,
such court shall have the power to reduce the duration or scope, as the case may
be, and, enforce such provision in such reduced form. Executive and the Company
intend to and hereby confer jurisdiction to enforce the covenants upon the
courts of any jurisdiction within the geographical scope of such covenants. If
the courts of any one or more of such jurisdictions hold the covenants, or any
part of any covenant, unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of Executive and the Company that such
determination not bar or in any way affect the
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right of the Company to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such covenants as to breaches of
such covenants in such other respective jurisdictions. For this purpose, such
covenants as they relate to each jurisdiction shall be severable into diverse
and independent covenants.
13. Arbitration. The parties agree that any and all disputes,
controversies or claims of any nature whatsoever relating to, or arising out of,
this Agreement or Executive's employment, 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), shall be settled by mandatory arbitration
administered by the American Arbitration Association under its National Rules
for the Resolution of Employment Disputes (the "Rules") and the following
provisions: (A) a single arbitrator (the "Arbitrator"), mutually agreeable to
the Company and Executive, shall preside over the arbitration and shall make all
decisions with respect to the resolution of the dispute, controversy or claim
between the parties; (B) in the event that the Company and Executive are unable
to agree on an Arbitrator within fifteen (15) days after either party has filed
for arbitration in accordance with the Rules, they shall select a truly neutral
arbitrator in accordance with the rules for the selection of neutral
arbitrators, who shall be the "Arbitrator" for the purposes of this paragraph
13; (C) the place of arbitration shall be Southfield, Michigan unless mutually
agreed otherwise; (D) judgment may be entered on any award rendered by the
Arbitrator in any federal or state court having jurisdiction over the parties;
(E) all fees and expenses of the Arbitrator shall be shared equally between
Company and Executive; (F) the decision of the Arbitrator shall govern and shall
be conclusive and binding upon the parties; (G) the parties shall be entitled to
reasonable levels of discovery in accordance with the Federal Rules of Civil
Procedure or as permitted by the Arbitrator, provided, however, that the time
permitted for discovery shall not exceed eight (8) weeks and each party shall be
limited to two (2) depositions; and (H) this provision shall be enforceable by
specific performance and/or injunctive relief, and shall constitute a basis for
dismissal of any legal action brought in violation of the duty to arbitrate. 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.
Notwithstanding anything to the contrary herein, nothing contained in this
paragraph shall be construed to preclude Company from obtaining injunctive or
other equitable relief to secure specific performance or to otherwise prevent
Executive's breach of paragraph 12 of this Agreement.
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.
27777 Franklin Road, Suite 200
Southfield, Michigan 48034
Fax: (248) 208-2641
Attn: Chief Executive Officer
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If to the Executive:
Brian W. Fannon
21555 Chase Drive
Novi, Michigan 48375
In all events, with a copy to:
Jaffe, Raitt, Heuer & Weiss,
Professional Corporation
27777 Franklin Road
Suite 2500
Southfield, Michigan 48034
Attn: Arthur A. Weiss
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. Cooperation in Future Matters. Executive hereby agrees that, for a
period of 18 months following his termination of employment for any reason
whatsoever, he shall cooperate with the Company's reasonable requests relating
to matters that pertain to Executive's employment by the Company, including,
without limitation, providing information or limited consultation as to such
matters, participating in legal proceedings, investigations or audits on behalf
of the Company, or otherwise making himself reasonably available to the Company
for other related purposes. Any such cooperation shall be performed at scheduled
times taking into consideration Executive's other commitments, and Executive
shall be compensated at a reasonable hourly or per diem rate to be agreed upon
by the parties to the extent such cooperation is required on more than an
occasional and limited basis. Executive shall not be required to perform such
cooperation to the extent it conflicts with any requirements of exclusivity of
services for another employer or otherwise, nor in any manner that in the good
faith belief of Executive would conflict with his rights under or ability to
enforce this Agreement.
16. 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) Neither the Company nor the Executive may make any assignment
of this Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other party; provided that the Company
may assign its rights under this Agreement without the consent of the Executive
in the event that the Company shall effect a reorganization, consolidate with or
merge into another corporation, partnership, organization or other entity, or
transfer all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity. This Agreement shall
inure to the benefit of and be binding upon the Company and the Executive, their
respective successors, executors, administrators, heirs and permitted assigns.
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(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 supersedes all agreements, understandings,
representations, warranties, negotiations and discussions between the parties
with respect to the subject matter hereof, including, without limitation, those
certain Employment Agreements, dated as of January 1, 2003, with the Company and
Sun Home Services, Inc., respectively. No modification, termination or 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.
(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.
(h) Except as otherwise provided in paragraph 10(f) above, each
party shall pay his or its own fees and expenses, including, without limitation,
legal fees, 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.
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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/ Gary A. Shiffman
------------------------------------
Gary A. Shiffman, President and
Chief Executive Officer
EXECUTIVE:
/s/ Brian W. Fannon
---------------------------------------
BRIAN W. FANNON
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