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EXHIBIT 10.18
RAMCO-GERSHENSON, INC.
27600 Northwestern Hwy., Suite 200
Southfield, Michigan 48034
April 15, 1996
Mr. Richard Smith
10538 Wellington Boulevard
Powell, Ohio 43065
Dear Richard:
This letter states our agreement with respect to your employment with
Ramco-Gershenson, Inc. (the "Company").
1. Your Employment Duties and Responsibilities.
(a) During the "Term" (as defined in paragraph 2 below), you will be
employed by the Company as its Chief Financial Officer and will devote
substantially all of your full working time and attention, as well as your best
efforts, to such position. You will report to the President and Chief
Executive Officer of the Company and will have such authority and
responsibilities and perform such duties for the Company as may from time to
time be established by the Board of Directors of the Company.
(b) It is currently contemplated that, upon consummation of a series of
transactions, Ramco-Gershenson Properties L.P., a Delaware limited partnership
which will be controlled by Ramco-Gershenson Properties Trust, a Maryland
business trust (the "Trust"), will acquire the Company (the "Acquisition").
You hereby consent in such event to the assignment by the Company of this
Agreement to the Trust, and agree that, from and after consummation of the
Acquisition, (i) all rights and obligations of the Company under this Agreement
will be vested in the Trust and (ii) all references in this Agreement to the
"Company" will be deemed references to the "Trust".
2. Term. The term of your employment under this Agreement (the "Term")
will begin on the date you will commence your employment with Company, which
date, subject to the mutual agreement of the parties, is expected to occur
approximately May 15, 1996 and will continue, subject to the termination
provisions set forth in paragraph 5 below, until the third anniversary of that
date.
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Mr. Richard Smith
April 15, 1996
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3. Compensation.
(a) During each year of the Term, you will receive the following
compensation, payable in accordance with the Company's standard payroll
procedures:
(i) For the portion of the Term ending
December 31, 1996, you will receive a base salary at the
annual rate of $150,000, plus a bonus of $25,000
prorated for the number of weeks during the Term ending
on or prior to December 31, 1996.
(ii) For subsequent calendar years of the
Company, or portions thereof, during the Term, you will
receive a base salary and bonus as will be determined to
be appropriate from time to time by the Company's Board
of Directors, in its sole discretion; provided that in
no event will your base salary be less than $150,000 on
an annualized basis nor will your base salary plus bonus
for the 1997 calendar year, or for any subsequent year,
be less than $175,000 on an annualized basis.
(b) At the time the Acquisition is consummated, and simultaneously with
the closing thereof (the "Grant Date"), you will be granted options, pursuant
to a stock option agreement from the Trust, to purchase 25,000 shares of the
Trust (the "Options"). The stock option agreement will provide that the
Options will vest, subject to paragraph 6(c) below, in two equal installments
of 8,333 shares on the first and second anniversaries of the Grant Date and in
a single installment of 8,334 shares on the third anniversary of the Grant
Date. The Options will be exercisable at the closing price of Trust shares on
the New York Stock Exchange on the date of consummation of the Acquisition, and
except as otherwise specifically described in this Agreement, the Options will
be subject to the same general terms and conditions as other options granted by
the Trust.
4. Fringe Benefits.
(a) In addition to your other compensation, during the Term, you will be
entitled to receive from the Company the same fringe benefits as are generally
made available from time to time to other executives of the Company; except
(i) you will be entitled to three weeks of vacation for each 12-month period of
the Term and (ii) the Company will reimburse you, until you become eligible
for the Company's medical and hospitalization coverage, for the cost to you of
continuing to purchase your current medical and hospitalization insurance
through your current employer pursuant to the Consolidated Omnibus Budget
Reconciliation Act ("COBRA").
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Mr. Richard Smith
April 15, 1996
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(b) The Company also agrees to pay and/or reimburse you for those moving
and living expenses in connection with your relocation to the Metropolitan
Detroit area as will be mutually agreeable to you and the Company, including
the following:
(i) reasonable expenses incurred in
moving your home furnishings from Columbus, Ohio to the
Metropolitan Detroit area;
(ii) reasonable commuting costs between
your home in Columbus and the Metropolitan Detroit area
prior to your purchase of a new home;
(iii) reasonable apartment rental costs
(to the extent necessary) in the Metropolitan Detroit
area for a period not to exceed six months from the
commencement of your employment under this Agreement;
and
(iv) reasonable and customary realtor fees
and closing costs incurred by you in connection with the
sale of your current house in Ohio plus any loss
incurred by you in connection with the sale of your
current house (such loss to be measured by the excess,
if any, of (a) the sum of your original acquisition cost
of the house over (b) the net sales proceeds you receive
for the house), but not to exceed, in the aggregate,
$30,000.
(c) You will be responsible for accounting for and payment of taxes on
benefits provided to you by the Company and you will keep such records
regarding usage of these benefits as the Company requires.
5. Termination.
(a) Death. This Agreement will terminate immediately upon your death.
(b) Disability. This Agreement will terminate immediately upon your
Disability. "Disability" means your inability, whether mental or physical,
to perform the normal duties of your position for six consecutive
months. If the Company and you are unable to agree as to whether you are
Disabled, the question will be decided by a physician mutually agreed upon by
each of us and paid for by the Company, whose decision will be conclusive and
binding. If you and the Company are unable to agree on a physician, you and
the Company will each choose one physician who will mutually choose a third
physician, whose decision will be conclusive and binding.
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Mr. Richard Smith
April 15, 1996
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(c) With Cause. The Company will have the right, upon written notice to
you, to terminate your employment under this Agreement for Cause. Such
termination will be effective immediately upon such written notice. For
purposes of this Agreement, termination of your employment for "Cause" means
termination for your commission of a felony or crime involving moral turpitude;
embezzlement, misappropriation of Company property or other acts of dishonesty
or fraud; material breach of this Agreement or any other agreement with the
Company (or its successors or assigns) to which you are a party which is not
cured within 10 days of your receipt of written notice of such breach; or
repeated failure, after written notice, to follow reasonable directions from
the President and Chief Executive Officer and/or the Board of Directors of the
Company.
(d) Change in Control. If your employment is terminated by the Company
prior to expiration of the Term and within twelve months after a Change in
Control (as defined below), the provisions of paragraph 6(c) below will apply.
The term "Change in Control" means the first to occur of the following events:
(i) any person or group of commonly controlled persons, other than the existing
shareholders of the Company as of the date of this Agreement (the "Ramco
Principals") or their affiliates, owns or controls, directly or indirectly,
more than twenty-five percent (25%) of the voting control or value of the
capital stock of the Company; or (B) the shareholders of the Company approve an
agreement to merge or consolidate with another corporation or other entity,
other than a corporation or entity controlled by the Ramco Principals or their
affiliates, resulting (whether separately or in connection with a series of
transactions) in a change in ownership of twenty-five percent (25%) or more of
the voting control or value of the capital stock of the Company, or an
agreement to sell or otherwise dispose of all or substantially all of the
Company's assets (including a plan of liquidation or dissolution), or otherwise
approve a fundamental change in the nature of the Company's business.
Notwithstanding the foregoing, the Acquisition will not constitute a Change in
Control.
6. Termination Benefits.
(a) The amounts described in this paragraph 6 will be in lieu of any
termination or severance payments required by the Company's policy or
applicable law (other than continued medical or disability coverage to which
you or your family are entitled under the Company's then existing employment
policies covering Company executives or then applicable law), and will
constitute your sole and exclusive rights and remedies with respect to the
termination of your employment with the Company. All payments under this
paragraph 6 will be payable in accordance with the Company's normal payroll
procedures, and the Company may withhold from any payments made under this
paragraph 6 all federal, state, city or other taxes to the extent such taxes
are required to be withheld by applicable law.
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Mr. Richard Smith
April 15, 1996
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(b) If your employment is terminated because of your death or
Disability or by the Company for Cause, you will receive the pro-rata portion of
your salary under paragraph 3(a) above through the date of termination, and no
other payment.
(c) If your employment is terminated by the Company prior to
expiration of the Term and within twelve months after a Change in Control, (i)
you will receive the pro-rata portion of your salary under paragraph 3(a) above
through the date of termination, (ii) you will also receive an additional amount
equal to one year's salary at the rate in effect on the date of termination,
payable in accordance with the Company's standard payroll procedures, (iii) the
Company will pay you an amount equal to the most recent bonus paid you, under
paragraph 3(a) above, prior to your termination, (iv) any Options or other plan
benefits, if any, remaining unvested on the date of your termination will
immediately vest, and (v) you will be entitled to a continuation of your fringe
benefits under paragraph 4(a) above for one year following your termination, and
no other payment.
7. Confidentiality/Nonsolicitation.
(a) During your employment with the Company and thereafter, you will
not disclose or make accessible to any person or entity or use in any way for
your own personal gain or to the Company's detriment any confidential
information relating to the business of the Company or its affiliates. Upon
termination of your employment with the Company for any reason, you will
immediately return to the Company all confidential materials over which you
exercise any control.
(b) You will not at any time during your employment with the Company,
and for a period of one year after the termination of such employment for any
reason, directly or indirectly, induce or solicit any employee of the Company to
leave the employ of, any independent contractor to terminate any independent
contractor relationship with, or any customer, tenant, lender or other party
which transacts business with the Company to adversely change any relationship
with, the Company.
(c) Paragraphs 7(a) and (b) above are intended to protect
confidential information of the Company and its affiliates, and relate to
matters which are of a special and unique character, and their violation would
cause irreparable injury to the Company, the amount of which will be extremely
difficult, if not impossible, to determine and cannot be adequately
compensated by monetary damages alone. Therefore, if you breach or threaten
to breach either of those paragraphs, in addition to any other remedies which
may be available to the Company under this Agreement or at law or equity, the
Company may obtain an injunction, restraining order, or other equitable
relief against you and such other persons and entities as are appropriate.
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Mr. Richard Smith
April 15, 1996
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8. Continuation of Employment Beyond Term. There is not, nor will there
be, unless in writing signed by both of us, any express or implied agreement as
to your continued employment with the Company after the Term. Any continued
employment after the Term will be employment at will and your compensation,
benefits and termination benefits, if any, will be determined by the Board of
Directors of the Company in its sole discretion.
9. Miscellaneous.
(a) This Agreement is the complete agreement between us, supersedes
any prior agreements between us and may be modified only by written instrument
executed by both of us.
(b) This Agreement will be governed by and construed in accordance
with the laws of the State of Michigan.
(c) The provisions of this Agreement will be deemed severable, and if
any part of any provision is held illegal, void or invalid under
applicable law, such provision will be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will remain binding in accordance with their terms.
(d) This Agreement will be binding upon and will inure to the benefit
of the Company and its successors and assigns (including the Trust) but is
personal to you and cannot be sold, assigned or pledged by you without the
Company's written consent.
(e) We will give notices under this Agreement to you in writing
either by personal delivery or certified or registered mail at your address, as
listed on our records at the time of the notice, and you will give notices to
us in writing in care of the Company's President and Chief Executive Officer.
Any such notice will be deemed given when delivered or mailed in accordance with
the preceding sentence.
(f) You represent and warrant that you have the right to enter into
and perform your obligations under this Agreement and that you are not currently
and will not during the Term become a party to or bound by any agreement or
understanding, written or otherwise, which would in any way restrict or conflict
with your performance under this Agreement.
(g) The failure of either party to enforce any provision or provisions
of this Agreement will 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
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Mr. Richard Smith
April 15, 1996
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waiver of any single remedy will not constitute a waiver of such party's right
to assert all other legal remedies available to it under the circumstances.
If this Agreement correctly expresses our mutual understanding, please
sign and date the enclosed copy and return it to us.
Very truly yours,
RAMCO-GERSHENSON, INC.
By: /s/ Dennis Gershenson
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Dennis Gershenson
Its: President
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The terms of this Agreement
are accepted and agreed to
on April 30, 1996:
/s/ Richard Smith
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Richard Smith