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EXHIBIT 10.16
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (this "AGREEMENT") is entered into as of
May 10, 1996 by and between Richard Gershenson ("EXECUTIVE") and
Ramco-Gershenson Properties Trust, formerly known as RPS Realty Trust, a
Massachusetts business trust (the "TRUST").
R E C I T A L S :
A. On the date hereof, the Company (as defined below) and
Ramco-Gershenson, Inc. and its affiliates (collectively "RAMCO") have
consummated a transaction (the "RAMCO TRANSACTION") pursuant to which the
Company and Ramco have contributed cash and properties to Ramco-Gershenson
Properties, L.P., a Delaware limited partnership.
B. It was a condition to the consummation of the Ramco Transaction
that the Trust and Executive enter into an agreement restricting the activities
of Executive that would eliminate potential conflicts of interest that may arise
in the future and would otherwise protect the Company's legitimate business
interests.
Accordingly, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used herein shall have the
meanings set forth below:
"AFFILIATE" means (i) any entity directly or indirectly controlling
(including without limitation an entity for which Executive serves as an
officer, director, employee, consultant or other agent), controlled by, or under
common control with Executive, and (ii) each other entity in which Executive,
directly or indirectly, owns any controlling interest or of which Executive
serves as a general partner.
"AGREEMENT" shall have the meaning set forth in the heading of this
Agreement.
"COMPANY" means (i) Ramco-Gershenson Properties Trust, formerly known
as RPS Realty Trust, (ii) Ramco-Gershenson, Inc., a Michigan corporation, (iii)
any corporation, partnership or other business entity that is, directly or
indirectly, controlled by or under common control with Ramco-Gershenson
Properties Trust and (iv) their respective successors.
"COMPANY PROJECT" means any properties, development land and
development out parcels that the Company owns, operates or manages as of the
date of Executive's termination of employment with the Company or that the
Company has in any manner taken steps to acquire, develop, construct, operate,
manage or lease (including without limitation making market surveys of a site,
talking to the owner or his agent concerning the purchase or joint venture of a
site, optioning or contracting to buy a site or discussions with the owner or
his agent regarding managing or leasing
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a property) during the twelve (12) month period immediately preceding
Executive's termination of employment with the Company.
"COVENANT PERIOD" means the period commencing on the Effective Date
and ending on the later of the following:
(i) the date Executive is no longer an officer or trustee of the
Company and
(ii) three (3) years following the Effective Date;
provided, that if at any time during Covenant Period Executive becomes
Chairman, Vice Chairman, President or Chief Executive Officer of the Company
(or holds any other office in the Company that is vested with powers and duties
substantially similar to those powers and duties typically vested by
corporations or business trusts in the office of Chairman and President, the
Covenant Period shall expire on the later of the following:
(x) one year after the date Executive is no longer an
officer or trustee of the Company and
(y) four years following the Effective Date.
"EFFECTIVE DATE" means the date of the closing of the Ramco
Transaction.
"EMPLOYMENT AGREEMENT" shall mean the Employment Agreement dated the
date hereof between the Trust and Executive.
"EXECUTIVE" shall have the meaning set forth in the heading of this
Agreement.
"OPERATING PARTNERSHIP" shall have the meaning set forth in Recital A.
"RAMCO" shall have the meaning set forth in Recital A.
"RAMCO TRANSACTION" shall have the meaning set forth in RecitalEA.
"PROPERTY" means any real property on which shopping center or retail
use (or any combination of the foregoing) development has been constructed or is
now or hereafter proposed to be constructed or any other type of real property
which hereafter the Company may acquire, develop, own, construct, manage or may
disclose or authorize any intention, plan or arrangement to acquire, develop,
own, construct or manage.
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2. Executive's Obligations While Employed by the Company.
(a) Sole Employment. Subject to the provisions of paragraph
2(b) below, Executive agrees to devote substantially his full time during the
customary business hours of the Company and give his best efforts to the
business of the Company and, during the period of his employment by the Company,
Executive shall not engage in any manner, whether as an officer, employee,
owner, partner, stockholder, trustee, director, consultant or otherwise,
directly or indirectly, in any business other than on behalf of the Company
without the prior written approval of the Board of Trustees of the Company, and
Executive shall not accept any other employment whatsoever from any other
person, firm, corporation or entity.
(b) Exceptions. Notwithstanding the provisions of paragraph
2(a) above and of paragraph 3, Executive may during the term of his employment
by the Company and at any time thereafter (i) acquire an interest in any
corporation, partnership, venture or other business entity so long as (A) any
such interest is a passive investment of Executive, provided such interest does
not represent a direct or indirect interest in any Property, (B) such interest
does not afford Executive the power to influence in any material fashion the
decision making processes of the entity in which such interest is held and (C)
Executive is not the sponsor, promoter or similar initiator of such entity, (ii)
continue (W) to serve as a general or limited partner of each of the
partnerships which own the Properties identified on Schedule 1, attached hereto
and incorporated by this reference, as an officer, director and shareholder of
each of the corporations identified on such Schedule 1, and as a beneficiary of
the estate properties listed on ScheduleE1, (X) to discharge Executive's
fiduciary and contractual duties and obligations with respect thereto, even
though such limited partnerships and corporations (or any partnership of which
any such limited partnership or corporation is a general or limited partner) may
directly compete with the Company, (Y) to serve on not more than three (3)
Boards of Directors of publicly traded entities and (Z) to serve on the Board of
Directors of any charitable institution, and (iii) continue to engage in
Executive's existing video arcade and fast food businesses, as those businesses
may be expanded in the ordinary course.
3. Executive's Obligations Following Termination of Employment with
the Company.
(a) Anti-Pirating of Employees. During the Covenant Period,
Executive agrees not to hire, directly or indirectly, or entice or participate
in any efforts to entice to leave the Company's employ, any person who was or is
a "key employee" (as hereinafter defined) of the Company at any time during the
twelve (12) month period immediately preceding the termination date of
Executive's employment with the Company. For purposes of this Agreement, "key
employee" means an employee who has an annualized rate of base salary equaling
or exceeding sixty thousand dollars ($60,000).
(b) Anti-Pirating of Company Projects. During the Covenant
Period, Executive agrees not to, directly or indirectly, own, manage, join or
control, or participate in the ownership, operation or control of, or be an
officer of, director, employee or owner of, or a consultant to, or
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otherwise authorize the use of his name by, or be connected in any manner with,
any business, firm or corporation which engages or attempts to engage, directly
or indirectly, in the acquisition, development, construction, operation,
management or leasing of any Company Project, other than on behalf of the
Company.
(c) Noncompetition. During the Covenant Period, Executive
agrees not to, directly or indirectly, own, manage, join or control, or
participate in the ownership, operation or control of, or be an officer,
director, employee or owner of, or a consultant to, or otherwise authorize the
use of his name by, or be connected in any manner with, any business, firm or
corporation which at the time or at any time during the Covenant Period is
involved in the acquisition, development, construction, operation, management or
leasing of any Property within a 200 mile radius of any Company Project that
existed at any time during the twelve (12) month period immediately preceding
the termination date of Executive's employment with the Company.
(d) Trade Secrets and Confidential Information. Executive
hereby agrees that he will hold in a fiduciary capacity for the benefit of the
Company, and shall not directly or indirectly use or disclose any Trade Secret
(as hereinafter defined), that Executive may have acquired during the term of
his employment by the Company for so long as such information remains a Trade
Secret. The term "Trade Secret" as used in this Agreement shall mean
information including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers which:
derives economic value, actual or
potential from not being generally known
to, and not being readily ascertainable by
proper means by, other persons who can
obtain economic value from its disclosure
or use; and is the subject of reasonable
efforts by the Company to maintain its
secrecy.
In addition to the foregoing and not in limitation thereof,
Executive agrees that during the period of his employment by the Company and the
Covenant Period, he will hold in a fiduciary capacity for the benefit of the
Company and shall not directly or indirectly use or disclose, any Confidential
or Proprietary Information (as hereinafter defined), that Executive may have
acquired (whether or not developed or compiled by Executive and whether or not
Executive was authorized to have access to such Information) during the term of,
in the course of or as a result of his employment by the Company and Ramco. The
term "Confidential or Proprietary Information" as used in this Agreement means
any secret, confidential or proprietary information of the Company and Ramco not
otherwise included in the definition of "Trade Secret" above. The term
"Confidential and Proprietary Information" does not include information that has
become generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company.
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(e) Exceptions. Notwithstanding any provision of paragraph 3(c)
to the contrary, Executive shall not be restricted at any time after his
termination of employment with the Company from engaging in any activities for
which Executive would not be restricted from performing during the term of his
employment with the Company as set forth in paragraph 2(b) above.
4. Reasonable and Necessary Restrictions. Executive acknowledges
that the restrictions, prohibitions and other provisions hereof, including
without limitation the 200-mile radius set forth in paragraph 3(c) and the
Covenant Period, are reasonable, fair and equitable in scope, terms and
duration, are necessary to protect the legitimate business interests of the
Company, and are a material inducement to the Company to enter into the Ramco
Transaction. Executive hereby waives, and covenants not to assert in any action
or proceeding relating to this Agreement, any claim or defense that there exists
an adequate remedy at law for breach of this Agreement.
5. Restrictions In Addition to Employment Agreement. Executive
acknowledges that the restrictions, prohibitions and other provisions hereof
shall be in addition to and not in substitution of the restrictions,
prohibitions and other provisions of the Employment Agreement, as such agreement
shall be amended and supplemented from time to time.
6. Specific Performance. Executive acknowledges that the
obligations undertaken by him pursuant to this Agreement are unique and that the
Company likely will have no adequate remedy at law if Executive shall fail to
perform any of his obligations hereunder, and Executive therefore confirms that
the Company's right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the Company. Accordingly, in
addition to any other remedies that the Company may have at law or in equity,
the Company shall have the right to have all obligations, covenants, agreements
and other provisions of this Agreement specifically performed by Executive, and
the Company shall have the right to obtain preliminary and permanent injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement by Executive, and Executive submits to the jurisdiction
of the courts of the State of Michigan for this purpose.
7. Operations of Affiliates. Executive agrees that he will refrain
from (i) authorizing any Affiliate to perform or (ii) assisting in any manner
any Affiliate in performing any activities that would be prohibited by the terms
of this Agreement if they were performed by Executive. Notwithstanding anything
to the contrary contained in this paragraph 7 (or in any other paragraph of this
Agreement), Executive shall not be required by the terms of this Agreement to
violate any fiduciary or contractual duty he owes as a director or officer of a
corporation, as a partner of a partnership or as a trustee of a trust, which
position he holds not in violation of this Agreement or the Employment
Agreement.
8. Miscellaneous Provisions.
(a) Binding Effect. Subject to any provisions hereof
restricting assignment, all covenants and agreements in this Agreement by or on
behalf of any of the parties hereto shall bind
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and inure to the benefit of the respective successors, assigns, heirs, and
personal representatives. None of the parties hereto may assign any of its
rights under this Agreement or attempt to have any other person or entity assume
any of its obligations hereunder.
(b) Severability. If any clause, provision or section of this
Agreement shall be invalid or unenforceable, the invalidity or unenforceability
of such clause, provision or section shall not affect the enforceability or
validity of any of the remaining clauses, provisions or sections hereof to the
extent permitted by applicable law.
(c) Governing Law. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of New York, without
reference to its rules as to conflicts or choice of laws.
(d) Amendment. This Agreement may not be changed, modified,
discharged or amended, except by an instrument signed by all of the parties
hereto.
(e) Headings. Paragraph and subparagraph headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
(f) Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
(g) Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
(h) Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter herein.
(i) Notices. All notices, requests, demands, consents and other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and delivered by hand, by overnight courier delivery service
or by certified mail, return receipt requested, postage prepaid. Notices shall
be deemed given when actually received, which shall be deemed to be no later
than the next business day if sent by overnight courier or after five business
days if sent by mail. Notice to the Company shall be made at 27600 Northwestern
Highway, Suite 200, Southhold, Michigan 48034; Attn: Chairman. Notice to
Executive shall be made at the address set forth on the books of the Company.
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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement,
or caused this Agreement to be duly executed on its behalf, as of the date
first set forth above.
RAMCO-GERSHENSON PROPERTIES TRUST
By: /s/ Dennis Gershenson
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Name: Dennis Gershenson
Title: Chief Executive Officer
/s/ Richard Gershenson
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Richard Gershenson
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Schedule 1
River's Edge Office Building Saginaw, Michigan
Summit Complex (Summit Place, Summit Sterling Heights, Michigan
Crossing, Summit North) Sandusky, Ohio
Livonia Towne Square Toledo, Ohio
Bay Towne Plaza
Builders Square (vacant)
Park Place Shopping Center
North Towne Commons
Estate Properties
Land Contracts
Southfield Properties - GGJ Associates
Melvindale Plaza
Gershenson-Wittbold Mt. Clemens
Nine Mile & Harper
Southfield Properties - Plymouth/
Southfield
Southfield Properties - Van Born
Southfield Properties - Ypsilanti
Partnership Interest in Sale/Leaseback
Assets
Southfield Properties - Southgate
Southfield Properties - Westland
Partnership Interest in Real Estate Owned
in Fee
Southfield Properties - Cedar/Jolly
Maple & Livernois Plaza
G & R Development
G & S Realty Company
Southfield Properties - Lansing Mart
Gershenson-Wittbold Louisville
Michigan Mart Associates
Southfield, Michigan
Waterford, Michigan
Livonia, Michigan