EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of February 11, 1997, by and between
CHATEAU PROPERTIES, INC., a Maryland corporation (hereinafter referred to as
the "COMPANY"), and Xxxxxx X. Xxxxxxx (hereinafter referred to as the
"EXECUTIVE").
WHEREAS, the Amended and Restated Agreement and Plan of Merger,
dated as of September 17, 1996, as amended, among ROC COMMUNITIES, INC., a
Maryland corporation ("ROC"), the Company, and R ACQUISITION SUB, INC., a
Maryland corporation and a direct subsidiary of the Company contemplates that
the Company enter into an employment agreement with the Executive;
WHEREAS, the Company wishes to offer employment to the Executive,
and the Executive wishes to accept such offer, on the terms set forth below;
Accordingly, the parties hereto agree as follows:
1. TERM. The Company hereby employs the Executive, and the
Executive hereby accepts such employment for an initial term commencing as of
the date hereof and ending on December 31, 1999, unless sooner terminated in
accordance with the provisions of Section 4 or Section 5 (the period during
which the Executive is employed hereunder being hereinafter referred to as
the "TERM").
2. DUTIES. The Executive, in her capacity as Chief Financial
Officer of the Company shall faithfully perform for the Company the duties of
said office and shall perform such other duties of an executive, managerial
or administrative nature as
shall be specified and designated from time to time by the Board of Directors
of the Company (the "BOARD"), the Chief Executive Officer or the President of
the Company (including the performance of services for, and serving on the
Board of Directors of, any subsidiary of the Company without any additional
compensation). The Executive shall devote substantially all of the
Executive's business time and effort to the performance of the Executive's
duties hereunder, provided that in no event shall this sentence prohibit the
Executive from performing personal and charitable activities and any other
activities approved by the Board, so long as such activities do not interfere
with the Executive's duties for the Company.
3. COMPENSATION.
3.1 SALARY. The Company shall pay the Executive during the
Term a salary at the rate of $175,000 per annum (the "ANNUAL SALARY"), in
accordance with the customary payroll practices of the Company applicable to
senior executives generally. Annual Salary will increase annually on January
1 of each year by a percentage equal to the percentage that represents the
average salary increase for all employees of the Company, or such higher
amount as may be approved by the Board, with such increase to be effective on
the date salary increases are effective for employees of the Company
generally and, upon such increase, the increased amount shall thereafter be
deemed to be the "Annual Salary."
3.2 BONUS. The Executive will be eligible to participate in the
Chateau Communities, Inc. Annual Bonus Program
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(the "Bonus Plan"), the terms of which will be established by the Executive
Compensation Committee of the Company.
3.3 BENEFITS - IN GENERAL. The Executive shall be permitted
during the Term to participate in any group life, hospitalization or
disability insurance plans, health programs, pension and profit sharing plans
and similar benefits (but not stock option or other equity-based plans, which
are provided for under Section 3.4) that may be available to other senior
executives of the Company generally, on the same terms as may be applicable
to such other executives, in each case to the extent that the Executive is
eligible under the terms of such plans or programs.
3.4 EQUITY-BASED BENEFITS - IN GENERAL. The Executive will
be eligible to participate in the Company's 1997 Equity Compensation Plan
which as of the date hereof is in the form attached hereto as Exhibit A.
3.5 VACATION. The Executive shall be entitled to vacation of
20 days per year.
3.6 AUTOMOBILE. The Company will provide Executive with an
automobile of suitable standard to the Executive's position. At the option
of the Company, in lieu of providing such automobile, the Company will
provide the Executive with a monthly allowance of $750 for the use of an
automobile.
3.7 DISABILITY BENEFITS AND LIFE INSURANCE. The Executive
shall be entitled to long-term disability benefits and life insurance
benefits from the Company each of which shall be reasonably commensurate with
benefits provided to similarly situated senior executives of comparable
companies.
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3.8 EXPENSES. The Company shall pay or reimburse the
Executive for all ordinary and reasonable out-of-pocket expenses actually
incurred (and, in the case of reimbursement, paid) by the Executive during
the Term in the performance of the Executive's services under this Agreement;
provided that the Executive submits such expenses in accordance with the
policies applicable to senior executives of the Company generally.
4. TERMINATION UPON DEATH OR DISABILITY. If the Executive dies
during the Term, the obligations of the Company to or with respect to the
Executive shall terminate in their entirety except as otherwise provided
under this Section 4. If the Executive becomes eligible for disability
benefits under the Company's long-term disability plans and arrangements (or,
if none apply, would have been so eligible under the most recent plan or
arrangement), the Company shall have the right, to the extent permitted by
law, to terminate the employment of the Executive upon notice in writing to
the Executive; provided that the Company will have no right to terminate the
Executive's employment if, in the opinion of a qualified physician reasonably
acceptable to the Company, it is reasonably certain that the Executive will
be able to resume the Executive's duties on a regular full-time basis within
30 days of the date the Executive receives notice of such termination. Upon
death or other termination of employment by virtue of disability, (i) the
Executive (or the Executive's estate or beneficiaries in the case of the
death of the Executive) shall have no right to receive any compensation or
benefit hereunder on and after the effective date of the termination of
employment other
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than Annual Salary and other benefits (but excluding any bonuses except as
provided in the Bonus Plan) earned and accrued under this Agreement prior to
the date of termination (and reimbursement under this Agreement for expenses
incurred prior to the date of termination); and (ii) this Agreement shall
otherwise terminate upon such death or other termination of employment and
there shall be no further rights with respect to the Executive hereunder
(except as provided in Section 7.14).
5. CERTAIN TERMINATIONS OF EMPLOYMENT.
5.1 TERMINATION FOR CAUSE; TERMINATION OF EMPLOYMENT BY THE
EXECUTIVE WITHOUT GOOD REASON.
(a) For purposes of this Agreement, "CAUSE" shall mean
(i) the Executive's conviction for (or pleading nolo contendere
to) any felony, or a misdemeanor involving moral turpitude;
(ii) the Executive's commission of an act of fraud, theft or
dishonesty related to the performance of the Executive's duties
hereunder;
(iii) the willful and continuing failure or habitual neglect by
the Executive to perform the Executive's duties hereunder after
reasonable notice and affording the Executive a reasonable
opportunity to cease such failure or neglect;
(iv) any material violation by the Executive of the covenants
contained in Section 6; or
(v) the Executive's willful and continuing material breach of
this Agreement after reasonable notice and affording the
Executive a reasonable opportunity to cure such breach.
(b) For purposes of this Agreement, "GOOD REASON" shall mean,
unless otherwise consented to by the Executive,
(i) the material reduction of the Executive's authority, duties
and responsibilities, or the assignment to the Executive of
duties materially
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inconsistent with the Executive's position or positions with
the Company and its subsidiaries;
(ii) a reduction in Annual Salary of the Executive or the failure
to provide for the increases in Annual Salary required by this
Agreement;
(iii) the failure by the Company to obtain an agreement in form
and substance reasonably satisfactory to the Executive from any
successor to the business of the Company to assume and agree to
perform this Agreement; or
(iv) the Company's material and willful breach of this Agreement.
Notwithstanding the foregoing, if there exists (without regard to this
sentence) an event or condition that constitutes Good Reason under clause
(i), (ii) or (iv) above, the Company shall have 30 days from the date such
notice is given to cure such event or condition and, if the Company does so,
such event or condition shall not constitute Good Reason hereunder.
(c) The Company may terminate the Executive's employment hereunder
for Cause. If the Company terminates the Executive for Cause, (i) the
Executive shall have no right to receive any compensation or benefit
hereunder on and after the effective date of the termination of employment
other than Annual Salary and other benefits (but excluding any bonuses except
as provided in the Bonus Plan) earned and accrued under this Agreement prior
to the effective date of the termination of employment (and reimbursement
under this Agreement for expenses incurred prior to the effective date of the
termination of employment); and (ii) this Agreement shall otherwise terminate
upon such termination of employment and the Executive shall have no further
rights hereunder (except as provided in Section 7.14).
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(d) The Executive may terminate her employment without Good Reason.
If the Executive terminates the Executive's employment with the Company
without Good Reason and such termination is not covered by Section 5.2 by
virtue of the last sentence thereof, (i) the Executive shall have no right to
receive any compensation or benefit hereunder on and after the effective date
of the termination of employment other than Annual Salary and other benefits
(but excluding any bonuses except as provided in the Bonus Plan or in clause
(ii) below) earned and accrued under this Agreement prior to the effective
date of the termination of employment (and reimbursement under this Agreement
for expenses incurred prior to the effective date of the termination of
employment); (ii) the Executive shall be entitled to receive (A) a cash
payment equal to the sum of (x) the Executive's Annual Salary (as in effect
on the effective date of such termination) payable no later than 30 days
after such termination and (y) the "TERMINATION BONUS," which shall be the
average of the two previous annual bonuses received by the Executive as
provided for in the Bonus Plan, or, in the event the Executive has received
only one annual bonus pursuant to the Bonus Plan at the time of such
termination, the Termination Bonus shall be equal to the amount of such
annual bonus, or, in the event the Executive has not received any annual
bonuses pursuant to the Bonus Plan at the time of such termination, the
Termination Bonus shall be equal to the annual bonus the Executive would have
received under the Bonus Plan if the Executive would have remained employed
through the period required to be entitled to receive the annual bonus,
payable no later than 30 days
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after such termination (or, if later, as soon as practicable, but in no event
more than 30 days after, the amount of the Termination Bonus is known) and
(B) for a period of one year after termination of employment such continuing
health benefits (including any medical, vision or dental benefits), under the
Company's health plans and programs applicable to senior executives of the
Company generally as the Executive would have received under this Agreement
(and at such costs to the Executive) as would have applied in the absence of
such termination (but not taking into account any post-termination increases
in Annual Salary that may otherwise have occurred without regard to such
termination and that may have favorably affected such benefits); it being
expressly understood and agreed that nothing in this clause (ii) shall
restrict the ability of the Company to amend or terminate such plans and
programs from time to time in its sole discretion; provided, however, that
the Company shall in no event be required to provide such coverage after such
time as the Executive becomes entitled to receive health benefits from
another employer or recipient of the Executive's services (and provided,
further, that such entitlement shall be determined without regard to any
individual waivers or other arrangements); and (iii) this Agreement shall
otherwise terminate upon such termination of employment and the Executive
shall have no further rights hereunder (except as provided in Section 7.14).
5.2 TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON. The
Company may terminate the Executive's employment at any time for any reason
or no reason and the Executive may
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terminate the Executive's employment with the Company for Good Reason. If
the Company or the Executive terminates the Executive's employment, and such
termination is not described in Section 4 or Section 5.1, (i) the Executive
shall have no right to receive any compensation or benefit hereunder on and
after the effective date of the termination of employment other than Annual
Salary and other benefits (but excluding any bonuses except as provided in
the Bonus Plan or in clause (ii) below) earned and accrued under this
Agreement prior to the effective date of the termination of employment (and
reimbursement under this Agreement for expenses incurred prior to the
effective date of the termination of employment); (ii) the Executive shall
receive (A) a cash payment equal to two times the sum of (x) the Executive's
Annual Salary (as in effect on the effective date of such termination)
payable no later than 30 days after such termination and (y) the Termination
Bonus payable no later than 30 days after such termination (or, if later, as
soon as practicable, but in no event more than 30 days after, the amount of
the Termination Bonus is known) and (B) for a period of two years after
termination of employment such continuing health benefits (including any
medical, vision or dental benefits), under the Company's health plans and
programs applicable to senior executives of the Company generally as the
Executive would have received under this Agreement (and at such costs to the
Executive) as would have applied in the absence of such termination (but not
taking into account any post-termination increases in Annual Salary that may
otherwise have occurred without regard to such termination and that may have
favorably affected such benefits); it being
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expressly understood and agreed that nothing in this clause (ii) shall
restrict the ability of the Company to amend or terminate such plans and
programs from time to time in its sole discretion; provided, however, that
the Company shall in no event be required to provide such coverage after such
time as the Executive becomes entitled to receive health benefits from
another employer or recipient of the Executive's services (and provided,
further, that such entitlement shall be determined without regard to any
individual waivers or other arrangements); (iii) all outstanding unvested
options and restricted stock held by the Executive shall vest and all options
shall remain exercisable for two years (or, if longer, the balance of the
regular term of the options); and (iv) this Agreement shall otherwise
terminate upon such termination of employment and the Executive shall have no
further rights hereunder (except as provided in Section 7.14). For purposes
of this Section 5, if the Executive's employment is not terminated under
Section 4 or this Section 5 before the Term would otherwise expire under
Section 1, then a termination of employment at the expiration of the Term,
which termination is not covered by Section 4, shall be covered under this
Section 5.2 rather than under Section 5.1(c); provided, however, that, in
such event, "two times" in clause (ii)(A) above shall be replaced with "one
and one-half times" and "two years" in clause (ii)(B) above shall be replaced
with "18 months".
6. COVENANTS OF THE EXECUTIVE.
6.1 COVENANT AGAINST COMPETITION; OTHER COVENANTS. The
Executive acknowledges that (i) the principal business of the
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Company is the owning, acquiring, developing or operating of manufactured
housing communities (such businesses, and any and all other businesses that
after the date hereof, and from time to time during the Term, become material
and substantial with respect to the Company's then-overall business, herein
being collectively referred to as the "BUSINESS"); (ii) the Company knows of
a limited number of persons who have developed the Company's Business; (iii)
the Company's Business is, in part, national in scope; (iv) the Executive's
work for the Company and its subsidiaries (and the predecessors of either)
has given and will continue to give the Executive access to the confidential
affairs and proprietary information of the Company; (v) the covenants and
agreements of the Executive contained in this Section 6 are essential to the
business and goodwill of the Company; and (vi) the Company would not have
entered into this Agreement but for the covenants and agreements set forth in
this Section 6. In light of the foregoing, during the Term and for a period
of one year thereafter (and, as to Section 6.1(b) and (d), at any time during
and after the Executive's employment with the Company and its subsidiaries
(and the predecessors of either)):
(a) The Executive shall not, directly or indirectly,
own, manage, control or participate in the ownership, management, or control
of, or be employed or engaged by or otherwise affiliated or associated as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business that is in
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competition in any manner whatsoever with the business of the Company in any
county of any state in which the Company owns or leases manufactured home
communities. In the case of a termination by the Company without Cause or by
the Executive for Good Reason, the preceding covenant shall expire on the
date of termination; provided, however, that, notwithstanding the foregoing,
the Executive may invest in securities of any entity, solely for investment
purposes and without participating in the business thereof, if (i) such
securities are traded on any national securities exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System, (ii) the
Executive is not a controlling person of, or a member of a group which
controls, such entity and (iii) the Executive does not, directly or
indirectly, own one percent or more of any class of securities of such entity.
(b) The Executive shall keep secret and retain in
strictest confidence, and shall not use for her benefit or the benefit of
others, except in connection with the business and affairs of the Company and
its affiliates, all confidential matters relating to the Company's Business
and the business of any of its affiliates and to the Company and any of its
affiliates, learned by the Executive heretofore or hereafter directly or
indirectly from the Company or any of its subsidiaries (or any predecessor of
either) (the "CONFIDENTIAL COMPANY INFORMATION"), including, without
limitation, information with respect to the Business and any aspect thereof,
profit or loss figures, and the Company's or its affiliates' (or any of their
predecessors') properties, and
12
shall not disclose such Confidential Company Information to anyone outside of
the Company except with the Company's express written consent and except for
Confidential Company Information which (i) at the time of receipt or
thereafter becomes publicly known through no wrongful act of the Executive,
(ii) is clearly obtainable in the public domain, (iii) was not acquired by
the Executive in connection with the Executive's employment or affiliation
with the Company, (iv) was not acquired by the Executive from the Company or
its representatives, or (v) is required to be disclosed by rule of law or by
order of a court or governmental body or agency.
(c) The Executive shall not, without the Company's prior
written consent, directly or indirectly, (i) knowingly solicit or encourage
to leave the employment or other service of the Company or any of its
affiliates, any employee thereof or hire (on behalf of the Executive) or any
other person or entity) any employee who has left the employment or other
service of the Company or any of its affiliates (or any predecessor of
either) within one year of the termination of such employee's or independent
contractor's employment or other service with the Company and its affiliates,
or (ii) whether for the Executive's own account or for the account of any
other person, firm, corporation or other business organization, intentionally
interfere with the Company's or any of its affiliates' relationship with, or
endeavor to entice away from the Company or any of its affiliates, any person
who during the Executive's employment with the Company and its affiliates (or
the predecessors of either) is or was a customer
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or client of the Company or any of its affiliates (or any predecessor of
either).
(d) All memoranda, notes, lists, records, property and
any other tangible product and documents (and all copies thereof) made,
produced or compiled by the Executive or made available to the Executive
concerning the Business of the Company and its affiliates shall be the
Company's property and shall be delivered to the Company at any time on
request.
6.2 RIGHTS AND REMEDIES UPON BREACH. The Executive acknowledges
and agrees that any breach by her of any of the provisions of Section 6.1
(the "RESTRICTIVE COVENANTS") would result in irreparable injury and damage
for which money damages would not provide an adequate remedy. Therefore, if
the Executive breaches, or threatens to commit a breach of, any of the
Restrictive Covenants, the Company and its affiliates shall have the right
and remedy to have the Restrictive Covenants specifically enforced (without
posting bond and without the need to prove damages) by any court having
equity jurisdiction, including, without limitation, the right to an entry
against the Executive of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or actual,
and whether or not then continuing, of such covenants. This right and remedy
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company and its affiliates under law or in equity
(including, without limitation, the recovery of damages). The existence of
any claim or cause of action by the Executive, whether predicated on this
Agreement or otherwise, shall
14
not constitute a defense to the enforcement of the Restrictive Covenants.
7. OTHER PROVISIONS.
7.1 SEVERABILITY. The Executive acknowledges and agrees that
(i) the Executive has had an opportunity to seek advice of counsel in
connection with this Agreement and (ii) the Restrictive Covenants are
reasonable in geographical and temporal scope and in all other respects. If
it is determined that any of the provisions of this Agreement, including,
without limitation, any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the provisions of this Agreement
shall not thereby be affected and shall be given full effect, without regard
to the invalid portions.
7.2 DURATION AND SCOPE OF COVENANTS. If any court or other
decision-maker of competent jurisdiction determines that any of the
Executive's covenants contained in this Agreement, including, without
limitation, any of the Restrictive Covenants, or any part thereof, are
unenforceable because of the duration or geographical scope of such
provision, then, after such determination has become final and unappealable,
the duration or scope of such provision, as the case may be, shall be reduced
so that such provision becomes enforceable and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
7.3 ENFORCEABILITY; JURISDICTIONS. The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope
of the Restrictive Covenants. If the
15
courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of breadth of scope or otherwise it
is the intention of the Company and the Executive that such determination not
bar or in any way affect the Company's right, or the right of any of its
affiliates, to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as
to breaches of such Restrictive Covenants in such other respective
jurisdictions, such Restrictive Covenants as they relate to each
jurisdiction's being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of RES JUDICATA. Any
controversy or claim arising out of or relating to this Agreement or the
breach of this Agreement that is not resolved by the Executive and the
Company (or its affiliates, where applicable), other than those arising under
Section 6, to the extent necessary for the Company (or its affiliates, where
applicable) to avail itself of the rights and remedies provided under Section
6.2, shall be submitted to arbitration in Denver, Colorado in accordance with
Colorado law and the procedures of the American Arbitration Association. The
determination of the arbitrator(s) shall be conclusive and binding on the
Company (or its affiliates, where applicable) and the Executive and judgment
may be entered on the arbitrator(s)' award in any court having jurisdiction.
7.4 ATTORNEYS' FEES. In the event of any legal proceeding
(including an arbitration proceeding) relating to this Agreement or any term
or provision thereof in which the Executive
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is the prevailing party, the Company shall be responsible to pay or reimburse
the Executive for all reasonable attorneys' fees incurred by the Executive in
connection with such proceeding.
7.5 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails as follows:
(i) If to the Company, to:
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
(ii) If to the Executive, to:
Xxxxxx X. Xxxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
with a copy in either case to:
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
and
Timmis & Xxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, III, Esq.
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Any such person may by notice given in accordance with this Section to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
7.6 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with the Company or its
subsidiaries (or any predecessor of either).
7.7 WAIVERS AND AMENDMENTS. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case of
a waiver, by the party waiving compliance. No delay on the part of any party
in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege nor any single or partial exercise of any such
right, power or privilege, preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.
7.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
7.9 ASSIGNMENT. This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive; any
purported assignment by the Executive in violation hereof shall be null and
void. In the event of any sale, transfer or other disposition of all or
substantially all of the
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Company's assets or business, whether by merger, consolidation or otherwise,
the Company may assign this Agreement and its rights hereunder.
7.10 WITHHOLDING. The Company shall be entitled to withhold
from any payments or deemed payments any amount of withholding required by
law. No other taxes, fees, impositions, duties or other charges or offsets
of any kind shall be deducted or withheld from amounts payable hereunder,
unless otherwise required by law.
7.11 NO DUTY TO MITIGATE. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor will any
payments hereunder be subject to offset in the event the Executive does
mitigate.
7.12 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors,
permitted assigns, heirs, executors and legal representatives.
7.13 COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original but all such counterparts together shall
constitute one and the same instrument. Each counterpart may consist of two
copies hereof each signed by one of the parties hereto.
7.14 SURVIVAL. Anything contained in this Agreement to the
contrary notwithstanding, the provisions of Sections 6, 7.3, 7.4 and 7.10 and
the other provisions of this Section 7 (to the
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extent necessary to effectuate the survival of Sections 6, 7.3, 7.4 and 7.10)
shall survive termination of this Agreement and any termination of the
Executive's employment hereunder.
7.15 EXISTING AGREEMENTS. Executive represents to the Company
that the Executive is not subject or a party to any employment or consulting
agreement, non-competition covenant or other agreement, covenant or
understanding which might prohibit the Executive from executing this
Agreement or limit the Executive's ability to fulfill the Executive's
responsibilities hereunder.
7.16 HEADINGS. The headings in this Agreement are for
reference only and shall not affect the interpretation of this Agreement.
7.17 PARACHUTE PROVISIONS. If any amount payable to or other
benefit receivable by the Executive pursuant to this Agreement is deemed to
constitute a Parachute Payment (as defined below), alone or when added to any
other amount payable or paid to or other benefit receivable or received by
the Executive which is deemed to constitute a Parachute Payment (whether or
not under an existing plan, arrangement or other agreement), and would result
in the imposition on the Executive of an excise tax under Section 4999 of the
Internal Revenue Code, then, in addition to any other benefits to which the
Executive is entitled under this Agreement, the Executive shall be paid by
the Company an amount in cash equal to the sum of the excise taxes payable by
the Executive by reason of receiving Parachute Payments plus the amount
necessary to put the Executive in the same after-tax position (taking into
account any and all applicable federal, state and local excise, income or
20
other taxes at the highest applicable rates on such Parachute Payments and on
any payments under this Section 7.17) and if no excise taxes had been imposed
with respect to Parachute Payments. The amount of any payment under this
Section 7.17 shall be computed by a certified public accounting firm mutually
and reasonably acceptable to the Executive and the Company, the computation
expenses of which shall be paid by the Company. "Parachute
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Payment" shall mean any payment deemed to constitute a "parachute payment" as
defined in Section 280G of the Internal Revenue Code.
IN WITNESS WHEREOF, the parties hereto have signed their names as
of the day and year first above written.
Chateau Properties, Inc.
By: /s/Xxxx X. Xxxx
--------------------------
its Chairman
/s/Xxxxxx X. Xxxxxxx
--------------------------
Xxxxxx X. Xxxxxxx
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