Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated September 21, 2005 is made by and between Kimco Realty
Corporation (the "Company"), a Maryland corporation, and Jerald Friedman (the
"Executive").
1. Employment. The Company hereby agrees to employ Executive, and Executive
hereby agrees to be employed by the Company, upon the terms and subject to
the conditions set forth in this Agreement.
2. Certain Definitions.
(a) "Base Salary" is defined in Section 6(a)
(b) "Bonus" is defined in Section 6(b).
(c) "Automobile" is defined in Section 6(c).
(d) "Benefits" is defined in Section 6(e).
(e) "Board" means the Board of Directors of the Company.
(f) "Calendar Quarter" shall mean each of the three-month periods ending
March 31, June 30, September 30 and December 31 of each year.
(g) "Cause" For purposes of this Agreement, "Cause" shall mean any of the
following (i) conviction of a crime (including conviction on a nolo
contendere plea) involving the commission by Executive of a felony or
of a criminal act involving, in the good faith judgment of the Board,
fraud, dishonesty, or moral turpitude; (ii) deliberate and continual
refusal to perform employment duties reasonably requested by the
Company or an affiliate after thirty (30) days' written notice by
certified mail of such failure to perform, specifying that the failure
constitutes cause (other than as a result of vacation, sickness,
illness or injury); (iii) fraud or embezzlement determined in
accordance with the Company's normal, internal investigative
procedures consistently applied in comparable circumstances; or (iv)
gross misconduct or gross negligence in connection with the business
of the Company or an affiliate which has a substantial adverse effect
on the Company or the affiliate (v) violation of any of the company
policies prohibiting harassment or discrimination in the workplace.
(h) "Change in Control" For purposes of this Agreement, a "Change in
Control" shall mean (i) a sale of all or substantially all of the
assets of the Company to a Person who is not an Affiliate of the
Company or an entity in which the shareholders of the Company
immediately prior to such transaction do not control more than 50% of
the voting power immediately following the transaction, (ii) a sale by
any Person resulting in more than 50% of the voting stock of the
Company being held by a Person or Group that does not include Company
or (iii) a merger or consolidation of the Company into another entity
which is not an Affiliate of the Company or an entity in which the
shareholders of the Company immediately prior to such transaction do
not control more than 50% of the voting power immediately following
the transaction.
(i) "Significantly Disabled" For purposes of this Agreement, Executive
shall be "Significantly Disabled" (also referred to as "Significant
Disability") if Executive is physically or mentally incapacitated so
as to render Executive incapable of performing his usual and customary
duties under this Agreement with or without reasonable accommodation.
Executive's receipt of disability benefits under the Company's
long-term disability benefits plan (the "LTD Plan") or receipt of
Social Security disability benefits shall be deemed conclusive
evidence of Total Disability for purpose of this Agreement; provided,
however, that in the absence of Executive's receipt of such long-term
disability benefits or Social Security benefits, the Board may, in its
reasonable discretion (but based upon appropriate medical evidence),
determine that Executive is Significantly Disabled.
(j) "Effective Date" shall mean January 1, 2006.
(k) "Stock Options" is defined in Section 6(d).
(l) "Term of Employment" is defined in Section 3.
(m) "Renewed Term of Employment" is defined in Section 4.
(n) "Annual Salary" is defined in Section 6(a).
3. Term of Employment. The period of Executive's employment under this
Agreement shall begin as of the Effective Date and shall continue until
December 31, 2007 (the "Term of Employment "), unless sooner terminated in
accordance with Section 7 below or unless renewed pursuant to Section 4 or
extended by mutual agreement of the parties.
4. Renewal. If this Agreement is not otherwise terminated, it will
automatically renew for a term of one (1) year (the "Renewed Term of
Employment") effective on the day after the Term of Employment ends (the
"renewal date"), unless either party hereto gives written notice of
non-renewal at least ninety (90) days prior to the end of the Term of
Employment.
5. Duties and Responsibilities.
(a) During the Term of Employment and any Renewed Term of Employment, the
Executive shall serve as President of Kimco Developers Inc. In such
capacity, Executive shall perform the customary duties and have the
customary responsibilities of such positions and such other duties as
may be assigned to Executive from time to time by the officer to whom
Executive reports or by the designee of the Company's Chief Executive
Officer.
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(b) Executive agrees to faithfully serve the Company, devote his full
working time, attention and energies to the business of the Company,
its subsidiaries and affiliated entities, and perform the duties under
this Agreement to the best of his abilities.
(c) Executive agrees (i) to comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply with the
Company's rules, procedures, policies, requirements, and directions;
and (iii) not to engage in any other business or employment without
the written consent of the Company except as otherwise specifically
provided herein.
(d) In connection with his employment during the Term of Employment and
Renewed Term of Employment, the Executive shall be based at the
Company's Los Angeles, CA offices, or such other location as shall be
agreed between the Executive and the Company.
6. Compensation and Benefits.
(a) Base Salary. During the Term of Employment or Renewed Term of
Employment, if any, the Executive shall receive a base salary ("Base
Salary") at a rate of $500,000 per annum (or such greater amount as
shall be recommended by the Company's Chief Executive Officer and
approved by the Executive Compensation Committee, which shall be
referred to as "Annual Salary"), payable semi-monthly. Such base
salary shall be reviewed at least annually.
(b) Bonus. For each twelve month period during the Employment Term in
which Development Company profits are realized, Employee shall
be eligible to receive a bonus, less all required deductions ("Yearly
Bonus"). The total Yearly Bonus during each twelve month period ending
on December 31 shall be an amount equal to fifteen percent (15%) of
Development Company Profits or $450,000, whichever is less. The Yearly
Bonus shall be paid to Employee at the end of each Calendar Quarter in
the amount of $112,500 for the first three Calendar Quarters and, at
the end of the fourth Calendar Quarter, in an amount equal to the
difference between $337,500 and i) fifteen percent (15%) of
Development Company Profits or ii) $450,000, whichever is less. In the
event fifteen percent (15%) of Development Company Profits for the
twelve month period ending on December 31 is less than the $337,500
already received by Executive during the first three Calendar
Quarters, he will reimburse to the Company the overpayment, which is
the difference between $337,000 and fifteen percent (15%) of
Development Company Profits. The Yearly Bonus to be earned by the
Employee shall not be in excess of $450,000 for any said twelve month
period ending on December 31, unless the Executive Compensation
Committee of the Board so states in writing.
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Development Company Profit shall be calculated by Kimco for each
Development Company project that is, in whole or in part, either sold
or is subject to a written contract of sale which, in Kimco's
reasonable judgment is probable to be sold, such Development Company
Profit to be determined by Kimco in accordance with Development
Company's books and records and also in accordance with generally
accepted accounting principles. Consistent with past practice that has
developed in the determination of Development Company Profit, Kimco
shall determine Development Company Profit without consideration or
offset for taxes, and Kimco shall continue to earn a 10% priority
return on all funds contributed to a project (whether it be in the
form of debt or equity capital).
(c) Automobile. During the term of Employment the Company shall also
provide Executive with a car allowance in the amount of $8,400 per
year, paid in equal installments in Executive's weekly paycheck
(d) Equity Compensation. Executive shall be eligible to be granted options
to purchase shares of the Company's common stock ("Stock Options") in
accordance with the terms of the Stock Option Plan for Key Employees
and Outside Directors of Kimco Realty Corporation (the "Amended and
Restated 1998 Equity Participation Plan") and may be eligible for
future grants as well. In accordance with the above mentioned "Amended
and Restated 1998 Equity Participation Plan", he is also entitled to
participate in the Restricted Stock Program.
(e) Benefits. During the Term of Employment or Renewed Term of Employment,
if any, the Executive shall be entitled to participate in or receive
benefits under the employee benefit plans (including health, welfare
and insurance plans) and other arrangements made available by the
Company to its senior employees generally (collectively "Benefits"),
subject to and on a basis consistent with the terms, conditions and
overall administration of such plans or arrangements.
(f) Business Expenses. The Company shall reimburse the Executive for all
reasonable travel and other business expenses incurred by the
Executive in the performance of his duties to the Company hereunder
provided that such expenses are incurred for business reasons and
accounted for in accordance with the Company's policy.
(g) No Waiver. The Executive shall also be entitled to such other benefits
or terms of employment as are required by law.
7. Termination of Employment. The Executive's employment hereunder may be
terminated by the Company or the Executive, as applicable, without any
breach of this Agreement only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his
death.
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(b) Disability. If the Company determines in good faith that the Executive
is Significantly Disabled during the Term of Employment, the Company
may give the Executive written notice of its intention to terminate
the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive, provided that within the 30
days after such receipt, the Executive shall not have returned to
full-time performance of his duties with or without a reasonable
accommodation.
(c) Cause. The Company may terminate the Executive's employment hereunder
for Cause.
(d) Without Cause. The Company may terminate the Executive's employment at
any time hereunder without Cause upon thirty (30) days notice.
(e) Expiration of Term of Employment and Ninety Day Notice Not to Renew.
Executive's employment hereunder shall terminate upon expiration of
the Term of Employment upon written notice by either party provided
ninety (90) days before the expiration of the Term of Employment in
accordance with Section 3, above, or if this Agreement is renewed,
before expiration of the Renewed Term of Employment, if applicable.
The giving of notice not to renew shall not constitute a termination
without Cause.
(f) Notice of Termination. Any termination of the Executive's employment
hereunder (other than by reason of the Executive's death or expiration
of the Term of Employment or Renewed Term of Employment, if any) shall
be communicated by a notice of termination to the other parties
hereto. For purposes of this Agreement, a "notice of termination"
shall mean a written notice which (i) indicates the specific
termination provision in the Agreement relied upon, (ii) sets forth in
reasonable detail any facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision indicated and (iii) specifies the effective date of the
termination.
8. Compensation Following Termination of Employment. Upon termination of
Executive's employment under this Agreement, Executive (or his/her
designated beneficiary or estate, as the case may be) shall be entitled to
receive the following compensation:
(a) Base Salary and Accrued but Unpaid Expenses and Vacation. The Company
shall pay Executive any Base Salary for services rendered to the date
of termination, any accrued but unpaid expenses required to be
reimbursed under this Agreement, and any vacation accrued, but unused,
to the date of termination.
(b) Other Compensation and Benefits. Except as otherwise provided under
this Agreement,
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(i) any other compensation or benefits to which Executive may
be entitled at the time of termination shall be determined
and paid in accordance with the terms of such plans,
policies and arrangements providing such compensation or
benefits, and
(ii) except as provided hereunder, Executive shall have no right
to receive any other compensation, or to participate in any
other plan, arrangement or benefit, with respect to future
periods after such termination or resignation.
(c) Additional Compensation Payable Following Termination without
Cause. If the Executive's employment shall terminate without Cause
(pursuant to Section 7(d)), and if Executive executes a
"Separation Agreement and General Release" in substantially the
same form as attached hereto as Exhibit A, the Company shall
provide the following compensation and benefits to Executive
unless the Change in Control provisions of Section 23 below apply:
(i) Base Salary. The Company shall pay the Executive a
severance benefit equal to the greater of A) the remaining
Base Salary payments to which Executive would be entitled
for the remainder of the Term of Employment (or if this
Agreement is renewed, the Renewed Term of Employment) if
such termination had not occurred or B) one year's payment
of Base Salary. Such payments shall be made at the same
time and in the same manner as such compensation had been
paid prior to such termination of employment.
(ii) Bonus. The Company shall pay to the Executive a bonus in an
amount equal to the total number of Yearly Bonuses he would
have received during each twelve month period ending on
December 31 occurring during the Term of the Contract (or
if this Agreement is renewed, during the Renewed Term of
Employment) calculated at a rate of $450,000 (less all
required deductions) per twelve month period ending on
December 31 less any payments he already has received
towards any Yearly Bonuses during the Term of the Contract
(or if this Agreement is renewed, during the Renewed Term
of Employment). For example, if the Executive is terminated
without cause after six months of the Term of Contract has
expired and he already has received two payments of
$112,500 toward his yearly bonus for the first year of the
Term of Contract, he would receive $675,000, which is the
remainder of $900,000 minus $225,000 (i.e., two years
@$450,000 = $900,000 - two payments of $112,500 =
$675,000).
(iii) Continuation of Benefits. The Company shall make all
necessary payments for and provide all Benefits to
Executive under this Agreement as if his employment had
continued until the end of the Term of Employment (or if
this Agreement is renewed, until the end of the Renewed
Term of Employment) or for one year, whichever is greater.
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(iv) Vesting of Stock Options and Restricted Stock. All
outstanding unvested Stock Options and Restricted Stock
shall become immediately vested and fully exercisable.
(v) Upon death or Significant Disability, the Executive (or
such Payee as the Executive shall have designated on the
signature page hereof) shall be entitled to six (6) months
of Annual Salary and any options with respect to common
stock options of the Company then held by Executive, which
are not yet exercisable shall thereupon become exercisable
in accordance with the terms of such option.
(d) No Other Compensation. If Executive's employment is terminated by
reason of Cause or resignation by Executive (other than in
accordance with Section 23 below following a Change in Control) or
Expiration of the Term of Employment or Renewed Term of
Employment, if any, then Executive shall not be entitled to any
other compensation or benefits from the Company except as
described in Section 8(a) and (b) above.
9. Survival. The expiration or termination of the Term of Employment or
Renewed Term of Employment, if any, shall not impair the rights or
obligations of any party hereto which shall have accrued hereunder prior
to such expiration.
10. Disputes. Any dispute or controversy arising under, out of, in connection
with or in relation to this Agreement shall, at the election and upon
written demand of any party to this Agreement, be finally determined and
settled by arbitration in Los Angeles County, California or as otherwise
agreed to by the parties, in accordance with National Rules for
Resolution of Employment Disputes of the American Arbitration Association
(available at www.adr.org), and judgment upon the award may be entered in
any court having jurisdiction thereof. The single arbitrator shall be
selected by mutual agreement of the parties or by striking names pursuant
to AAA procedures. The arbitrator shall permit adequate discovery and
shall issue a written award. The Company shall bear all costs of
arbitration that would not be incurred in court. The parties shall bear
their own attorneys' fees and allowable litigation costs, except as
awarded by the arbitrator. The arbitrator shall be empowered to award any
remedy available under the substantive law that is the subject of the
claim. Provisional remedies shall be permitted to the extent allowed
under the California Arbitration Act. The prevailing party in any such
proceeding shall be entitled to collect from the other party, all legal
fees and expenses as permitted by law.
11. Restrictive Covenants.
This Section 11 shall not apply in the event of termination following a
Change in Control (as defined in Section 2(h), above), pursuant to
Section 23, below.
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(a) Confidentiality.
(i) During Executive's Term of Employment or Renewed Term of
Employment, if any, with the Company, Executive will not
use or disclose to any individual or entity any
Confidential Information (as defined below) except (i) in
the performance of Executive's duties for the Company, (ii)
as authorized in writing by the Company, or (iii) as
required by law or legal process, provided that prior
written notice of such required disclosure is provided to
the Company and that all reasonable efforts to preserve the
confidentiality of such information shall be made.
(ii) As used herein, "Confidential Information" shall mean
information that (i) is used or potentially useful in the
Company's business, (ii) the Company treats as proprietary,
private or confidential, and (iii) is not generally known
to the public. "Confidential Information" includes, without
limitation, information relating to the Company's products
or services; marketing, selling or business or development
plans; current or prospective customer, client, landlord,
owner and tenant lists and data, trade secrets, call lists,
manuals, policies, memoranda, notes, records, technical
data, sketches, plans, drawings, formulae, research and
development data, sources of supply and material, operating
and cost data, financial information and personnel
information. "Confidential Information" also includes
proprietary and/or confidential information of the
Company's customers, clients, landlords, owners, tenants,
suppliers and business or joint venture partners who may
share such information with the Company pursuant to a
confidentiality agreement or otherwise.
(b) Non-Solicitation.
(i) While employed by the Company or, if he resigns or is
deemed to have resigned from employment (e.g., job
abandonment), until December 31, 2007, Executive shall not
in any capacity employ or solicit for employment, or
recommend that another person employ or solicit for
employment, any person who is then and was at any time
during Executive's employment an employee, sales
representative or agent of the Company or any subsidiary or
affiliate of the Company.
(ii) Executive agrees that while employed by the Company or, if
he resigns or is deemed to have resigned from employment
(e.g., job abandonment), until December 31, 2007, he will
not, on behalf of himself, or any other person, firm or
corporation, solicit any of the Company's customers,
clients, landlords, owners, tenants, and business or joint
venture partners with whom he has had contact while working
for the Company; nor will Executive in any way, directly or
indirectly, for himself, or any other person, firm,
corporation or entity, divert, or take away any of the
Company's customers, clients, landlords, owners, tenants,
suppliers and business or joint venture partners with whom
Executive has had contact. For purposes of this Section,
the term "contact" shall mean engaging in any
communication, whether written or oral, with the customer,
client, landlord, owner, tenant, supplier and business or
joint venture partner or any representative thereof, or
obtaining any information with respect to such customer,
client, landlord, owner, tenant, supplier and business or
joint venture partner or representative thereof.
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(c) Remedies for Breach of Confidentiality and Non-Solicitation
Provisions of this Agreement. Executive acknowledges that this
Section 11, its terms and his compliance are necessary to protect
the Company's Confidential and Proprietary Information, its
business and its goodwill, and that a breach of any of Executive's
promises contained in this Section 11 will irreparably and
continually damage the Company to an extent that money damages may
not be adequate. For these reasons, Executive agrees that in the
event of a breach or threatened breach by the Executive of this
Section 11, the Company shall be entitled to a temporary
restraining order and preliminary injunction restraining Executive
from such breach, without the posting of a bond. Nothing contained
in this Section shall be construed as prohibiting the Company from
pursuing any other remedies available for such breach or
threatened breach or any other breach of this Agreement. The
Company and Executive further acknowledge and agree that it may be
difficult, if not impossible; to compute the actual damages that
will be suffered by the Company upon Executive's violation of this
Section 11. It is agreed, therefore, that in the event Executive
breaches these provisions, Executive shall pay to the Company
liquidated damages of a full year's salary during any period of
breach and forfeit any payments due under Agreement, or any actual
damages that the Company may incur as a result of such breach,
whichever amount is greater, in addition to any other damages,
including without limitation punitive damages, attorney's fees and
costs, awarded by a court or arbitrator related to any breach of
these provisions.
(d) Effect of Termination of Employment. Notwithstanding the
provisions of Section 7(e) of this Agreement, the period of
Executive's employment for purposes of determining the
applicability of the restrictions contained in Section 11 of this
Agreement shall include any period during which Executive is
employed by the Company's successors or assigns. Upon termination
of employment, as defined herein and for whatever cause, Executive
shall immediately deliver to the Company or its successors or
assigns, all Company property, including without limitation all
Confidential Information as defined above.
12. Withholding of Taxes. The Company shall withhold from any compensation
and benefits payable under this Agreement all applicable federal, state,
local, or other taxes.
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13. Binding on Successors. This Agreement shall be binding upon and inure to
the benefit of the Company, the Executive and their respective
successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as
applicable. The Company shall cause any successor to all or substantially
all of its assets or business to assume this Agreement.
14. Governing Law. This Agreement is being made and executed in and is
intended to be performed in the State of New York, and shall be governed,
construed, interpreted and enforced in accordance with the substantive
laws of the State of New York without regard to its conflict or choice of
law rules.
15. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
16. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or
sent, by telex, telecopy, facsimile transmission, or certified or
registered mail, postage prepaid, as follows:
If to the Company, addressed to:
3333 New Hyde Park Rd.
New Hyde Park, NY 11042
Att: Vice President of Human Resources
If to the Executive, to him at the address set forth below under his
signature; or at any other address as any party shall have specified by
notice in writing to the other parties in accordance herewith.
17. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement. This Agreement shall
not become enforceable until executed by the Company.
18. Entire Agreement. The terms of this Agreement, which are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company, may not be contradicted by
evidence of any prior or contemporaneous agreement and supersedes any and
all prior agreements. The parties further intend that this Agreement
shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this
Agreement.
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19. Amendments; Severability; Waivers. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, signed by the
Executive and approved by the Executive Compensation Committee of the
Board of Directors; or by an arbitrator or court seeking to render
enforceable through "judicial" modification an otherwise unenforceable
provision. 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, however, 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.
Should an arbitrator or Court determine that any part of this Agreement
is invalid, the Court or arbitrator shall sever the invalid portion such
that the remainder of the Agreement remains in full force and effect.
20. No Inconsistent Actions; Cooperation.
(a) The parties hereto shall not voluntarily undertake or fail to
undertake any action or course of action inconsistent with the
provisions or essential intent of this Agreement. Furthermore, it
is the intent of the parties hereto to act in a fair and
reasonable manner with respect to the interpretation and
application of the provisions of this Agreement.
(b) Each of the parties hereto shall cooperate and take such actions,
and execute such other documents as may be reasonably requested by
the other in order to carry out the provisions and purposes of
this Agreement.
21. No Alienation of Benefits. To the extent permitted by law the benefits
provided by this Agreement shall not be subject to garnishment,
attachment or any other legal process by the creditors of the Executive,
his beneficiary or his estate.
22. Indemnification. The Company shall provide indemnification to the
Executive to the extent permitted by the Company's corporate bylaws and
under New York law.
23. Change in Control.
(a) Requirements for Additional Compensation. If a Change in Control
occurs and the Executive's employment is terminated for any
reason, at any time by the Company without Cause pursuant to
Section 7(d) above, or by the Executive if prior to the end of the
60-day period beginning on the date of the Change in Control, the
Company shall provide the Executive with the additional
compensation and benefits described in this Section 23.
(b) Lump Sum Payment. The Company shall pay Executive an amount equal
to the lesser of:
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(i) The amount of Base Salary under this Agreement (or any
salary of greater amount he was receiving as was determined
pursuant to Section 6(a)) and bonus (defined by the amount
of bonus he most recently received or the Executive's
minimum bonus, if he has never yet received a bonus), that
would have been payable to the Executive if he had
continued in employment until the end of the Term of
Employment or Renewed Term of Employment, if any; or
(ii) The greatest payment which in combination with all other
payments to which he would be entitled, would not
constitute an "excess parachute payment" as such term is
defined in Section 280(G)(b)(1) of the Internal Revenue
Code.
The amount determined under this subsection (b) of this Section
23 will be paid to Executive in a single lump sum within thirty
(30) days after his last day of employment.
(c) Continuation of Benefits. The Company shall make all necessary
payments for and provide all Benefits to Executive under this
Agreement as if his employment had continued until the later of
the end of the Term of Employment (or if the Agreement is renewed,
the Renewed Term of Employment) or the end of the one-year period
beginning on his date of termination.
(d) Vesting of Stock Options and Restricted Stock. All outstanding
unvested Stock Options and Restricted Stock shall become
immediately vested and fully exercisable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
KIMCO REALTY CORPORATION,
a Maryland corporation
By: /s/ Paul Weinberg
------------------------------
EXECUTIVE
/s/ Jerald Friedman
- -----------------------------------
Jerald Friedman
603 N. Walden Drive
Beverly Hills, CA 90210
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