EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into
as of the 24th day of February 1994, by and between SUMMIT MANAGEMENT COMPANY, a
Maryland corporation, and Xxxxx Xxxxxx ("Employee").
STATEMENT OF PURPOSE
The "Company" (as hereinafter defined) is principally engaged in the
business of real estate acquisition, development, construction, management,
leasing and brokerage. The Company desires to employ Employee and Employee
desires to be employed in the business of the Company in the manner hereinafter
specified in order to obtain for the Company the benefit of Employee's
experience and expertise and also to make provision for payment of reasonable
and proper compensation to Employee for such services. For purposes of this
Agreement, the term "Company" means and refers to (i) Summit Management Company,
(ii) Summit Properties, Inc., (iii) any business entity that is, directly or
indirectly, controlled by or under common control with Summit Properties, Inc.
or (iv) any of their respective successors.
As previously agreed between the parties, this Agreement is being
executed as a condition precedent to the commencement of the employment of
Employee with the Company, and Employee has agreed to accept initial employment
subject to and in accordance with all the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and the aforesaid Statement of Purpose, the Company and Employee
hereby agree as follows:
1. Employment and Employee's Duties. The Company employs Employee
to assist the Company in expanding, developing, operating and managing its
business operations, primarily in the field of acquisition, development,
management, leasing and construction of real estate, and specifically, the
acquisition, development, management, leasing and construction of multi-family
housing developments and other commercial real estate projects. In such
capacity, Employee shall perform the duties and have responsibilities as may be
assigned to Employee from time to time by the Company. In the performance of
Employee's duties hereunder, Employee shall at all times be under the
supervision, control and direction of the Company, and Employee shall perform
Employee's duties hereunder in accordance with, and at all times strictly adhere
to, all such reasonable rules, regulations, guidelines and instructions as may
be adopted from time to time by the Company.
2. Sole Employment. Employee agrees to devote Employee's full
time during the customary business hours of the company and give Employee's best
efforts to the business of the
Company and, during the period of Employee's employment by the Company, Employee
shall not engage in any manner, whether as an officer, employee, owner, partner,
stockholder, director, consultant or otherwise, directly or indirectly, in any
business other than as provided for herein without the prior written approval of
the President of the Company, and shall not accept any other employment
whatsoever from any other person, firm, corporation or entity; provided,
however, that Employee may acquire an interest in a business entity so long as
such interest is a passive investment of Employee not exceeding ten percent
(10%) of the total ownership interest in such entity.
3. Term. The employment relationship under the Agreement shall
commence as of the date (the "Effective Date") Summit Properties, Inc.
successfully consummates an initial public offering of its Common Stock and
shall continue until the date ten (10) business days after written notice is
given to the other party by either the Company or Employee that the employment
relationship shall terminate. Such termination notice may be given by either
party without cause and for any or no reason.
4. Compensation.
(a) Base Salary. Commencing on the Effective Date (as
defined in paragraph 3), the Company shall pay Employee during the term of
Employee's employment under this Agreement, a base salary equal to $78,300.00
per annum (the "Base Salary"), which amount shall be subject to adjustment, if
any, in accordance with this paragraph 4(a). The Company shall review Employee's
Base Salary on an annual basis, and the Company upon such review and in its sole
discretion, may increase or decrease Employee's Base Salary by an amount which
the Company deems appropriate in light of the Company's and Employee's
performance during the period covered by such review. The Base Salary, less all
applicable withholding taxes, shall be paid to Employee in accordance with the
payroll procedures in effect with respect to officers of the Company.
(b) Incentive Compensation. In addition to the Base
Salary payable to Employee pursuant to paragraph 4(a) and any special
compensatory arrangements which the Company provides for Employee, effective as
of the Effective Date, Employee shall be entitled to participate in any
incentive compensation plans in effect with respect to employees of the Company
whose positions in the Company are commensurate to Employee's, with the criteria
for Employee's participation in such plans to be established by the Company in
its sole discretion.
(c) Stock Options. Employee shall be entitled to
participate in employee stock option plans from time to time established for the
benefit of employees of the Company in accordance with the terms and conditions
of such plans.
(d) Participation in Employee Benefit Plans. Employee
shall be entitled to participate in such medical, dental, disability,
hospitalization, life insurance, profit sharing and other benefit plans as the
Company shall maintain from time to time for the benefit of executive officers
of the Company, on the terms and subject to the conditions set forth in such
plans.
2
(e) Compensation upon Termination of Employment. If
Employee's employment under this Agreement is terminated for any reason
whatsoever, Employee shall not thereafter be entitled to receive any Base Salary
for periods following such termination; provided, however, that Employee shall
be entitled to receive any Base Salary which may be owed to Employee but is
unpaid as of the date on which Employee's employment is terminated. The
benefits, if any, payable to or on behalf of Employee upon Employee's
termination of employment from the Company under any employee benefit plans and
incentive compensation and other compensatory arrangements shall be governed by
the terms and conditions for benefit payments set forth in such plans and
arrangements.
5. Employee's Obligations upon Termination of Employment.
(a) Definitions. For purposes of this paragraph 5, the
following terms shall have the following meanings:
"Affiliate" means (i) any entity directly or
indirectly controlling (including without limitation an entity for
which Employee serves as an officer, director, employee, consultant or
other agent), controlled by, or under common control with Employee, and
(ii) each other entity in which Employee, directly or indirectly, owns
any controlling interest or of which Employee serves as a general
partner.
"Company Project" means any Multifamily Property that
the Company owns, operates or manages as of the date of Employee'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 a
property) during the twelve (12) month period immediately preceding
Employee's termination of employment with the Company.
"Multifamily Property" means any real property on
which multifamily residential-use development has been constructed or
is now or hereafter proposed to be constructed (for example, and not by
way of limitation, a property of the type managed by the Company).
(b) Anti-Pirating of Employees. For a two (2) year period
immediately following the termination of Employee's employment with the Company,
Employee 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 an
employee of the Company at any time during the twelve (12) month period
immediately preceding the termination date of Employee's employment with the
Company.
(c) Anti-Pirating of Company Projects. For a period of
one (1) year immediately following the termination of Employee's employment with
the Company, Employee agrees not to engage in any manner, whether as an officer,
employee, owner, partner, stockholder, director, consultant or otherwise ,
directly or indirectly, in any business which engages or attempts to engage,
directly or indirectly, in the acquisition, development,
3
construction, operation, management or leasing of any Company Project.
Notwithstanding the foregoing, the provisions of this paragraph 5(c) shall not
apply with respect to Employee's engagement in such a business to the extent
that Employee demonstrates to the Company's satisfaction (as determined by the
Company in its sole discretion) that Employee has no involvement whatsoever in
such business's activities with respect to any Company Project.
(d) Trade Secrets and Confidential Information. Employee
hereby agrees that Employee 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 defined hereinafter, that Employee may have acquired during the term
of Employee's 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, Employee
agrees that during the period of Employee's employment by the Company and for a
period of one (1) year thereafter, Employee 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 defined hereinafter,
that Employee may have acquired (whether or not developed or compiled by
Employee and whether or not Employee was authorized to have access to such
Information) during the term of, in the course of or as a result of Employee's
employment by the Company. The term "Confidential or Proprietary Information" as
used in this Agreement means any secret, confidential or proprietary information
of the Company 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.
4
(e) Return of Information. Upon termination of Employee's
employment relationship with the Company, Employee agrees to turn over and
return to the Company all property in Employee's possession which belongs to the
Company and all files, information and data received, held or developed by
Employee while employed by the Company.
(f) Reasonable and Necessary Restrictions. Employee
acknowledges that the restrictions, prohibitions and other provisions of this
paragraph 5, including without limitation the various periods of restrictions
set forth in paragraphs 5(b), 5(c) and 5(d), 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 this Agreement. Employee covenants that Employee will not challenge the
enforceability of this Agreement nor will Employee raise any equitable defense
to its enforcement.
(g) Specific Performance. Employee acknowledges that the
obligations undertaken by Employee pursuant to this paragraph 5 are unique and
that the Company likely will have no adequate remedy at law if Employee shall
fail to perform any of Employee's obligations hereunder, and Employee therefore
confirms that the Company's right to specific performance of the terms of this
paragraph 5 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 paragraph 5 specifically
performed by Employee, 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 paragraph 5 by Employee, and
Employee submits to the jurisdiction of the courts of the State of North
Carolina for this purpose.
(h) Operations of Affiliates. Employee agrees that
Employee 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 paragraph 5 if they were performed by Employee.
(i) Survival. The provisions of this paragraph 5 shall
survive the termination of this Agreement regardless of the date, cause or
manner of such termination.
6. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:
(a) If to Employee:
Xxxxx Xxxxxx
0000 Xxxxxxxx Xx.
Xxxxx, Xxx 00000
(b) If to the Company, addressed to:
Summit Management Company
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
5
7. Non-waiver. No waiver by a party hereto of any breach by
another party to this Agreement of any provision hereof, shall be deemed to be a
waiver of any later or other breach thereof or as a waiver of any such other
provisions of this Agreement.
8. Severability. Should any provision of this Agreement be
declared invalid or unenforceable as a matter of law, such invalidity or
unenforceability shall not affect or impair the validity or enforceability of
any other provision of this Agreement or the remainder of this Agreement as a
whole.
9. Entire Agreement. This Agreement constitutes the entire
Agreement and sets forth all the terms of the understanding between the parties
hereto with respect to the subject matter hereof, and any amendment, change or
modification in any provision of this Agreement or any waiver of this Agreement
shall be in writing signed by the parties hereto.
10. Section Headings. The section headings inserted in this
Agreement are for convenience of reference only and shall not be deemed to have
any legal effect whatsoever on the interpretation of this Agreement.
11. Applicable Law. This Agreement shall be governed, enforced and
construed according to the laws of the State of North Carolina.
12. Assignment. The benefits hereunder with respect to the rights
of the Company may be assigned by the Company to any other corporation acquiring
all or substantially all of the assets of the Company or to any other
corporation into which the Company may be liquidated or with which the Company
may be merged or consolidated. The rights of the Company under this Agreement,
as well as the obligations and the liabilities of the Company hereunder, shall
inure to and be binding upon any successors-in-interest or transferees of the
business or assets of the Company, and Employee agrees on demand to execute any
and all documents in connection therewith. Employee may not assign this
Agreement or any rights or benefits hereunder, whether for collateral purposes
or otherwise.
13. Freedom of the Company to Act. No provision of this Agreement
shall be deemed to restrict the absolute right of the Company, at any time, to
sell or dispose of all or any part of its assets, or reconstitute the same into
any one or more subsidiary corporations, or to merge, consolidate, sell or to
otherwise dispose of said subsidiary corporation or any of the assets thereof.
14. Execution. This Agreement is executed in duplicate originals,
one of which is being retained by each of the parties hereto, and each of which
shall be deemed an original hereof.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SUMMIT MANAGEMENT COMPANY
By: /S/ Xxxx X. Xxxx
--------------------------------
Xxxx X. Xxxx, President
/S/ Xxxxx Xxxxxx [SEAL]
----------------------------------
[Name]
"Employee"
7
