Exhibit 10.42
EMPLOYMENT AGREEMENT
AGREEMENT (“
Agreement ”),
dated as of July 23, 2007 (“ Effective Date ”) by and
among Centro Watt Management Joint Venture 2 LP, (“
CWMJV ”),
Centro Properties Group, an entity listed on the Australian
Securities Exchange (“ Centro ”) (collectively
referred to as “ Company ”) and Glenn J.
Rufrano (“ Executive ”).
R E C I T A
L
CWMJV desires to
employ Executive as of the Effective Date, on the terms and
conditions set forth in this Agreement, and Executive desires to be
so employed.
AGREEMENT
IN CONSIDERATION
of the premises and the mutual covenants set forth below, the
parties hereby agree as follows:
1.
Employment . CWMJV hereby agrees to employ Executive
and Executive hereby agrees to accept such employment, on the terms
and conditions hereinafter set forth.
2.
Prior Agreements . The Parties hereby agree that this
Agreement terminates and supersedes the Employment Agreement
between Executive and New Plan Realty Trust, Inc. dated as of
March 15, 2005 (“ Prior Employment Agreement
”) and that any provisions of the Prior Employment Agreement
that specifically survive closing are hereby waived and deemed to
be null and void and no force or effect. Accordingly, as of
the Effective Date, neither the Company (or Centro NP LLC, the
corporate successor to New Plan Excel Realty Trust, Inc.) nor
the Executive shall have any rights or obligations pursuant to the
Prior Employment Agreement; provided, however, that prior service
with New Plan Realty Trust, Inc will be recognized for all relevant
purposes including, without limitation, Sections 6(e) and
(f) of this Agreement.
3.
Term
. Executive’s
employment by CWMJV hereunder shall commence on the Effective Date
and shall continue for one (1) year (“ Original Term ”). The
term of employment hereunder shall thereafter be automatically
extended for an unlimited number of additional one-year periods
(each, an “ Additional
Term ”), and together with the Original Term and
any Additional Terms, the “ Term ”) unless, at least
180 days prior to the expiration of the Term, either the Executive
or the Company gives written notice to the other that it is
electing not to so extend the Term. Notwithstanding the
foregoing, the Term may be earlier terminated in strict accordance
with the provisions of Section 7 hereof, but subject to the
provisions of Section 9 hereof. At the time Executive
ceases to be a full-time employee of CWMJV, the Executive agrees
that he shall resign from any office he holds with Company and its
subsidiaries and any entity in control of, controlled by or under
common control with the Company or in which the Company owns any
common or preferred stock or any ownership interest or any entity
in control of, controlled by or under common control with such
entity (“ Affiliate ”).
4.
Position and Duties .
Chief
Executive Officer . During the Term, the Executive shall
serve as the Chief Executive Officer of all United States
operations of Centro and its Affiliates (“ Centro US ”); shall have
all authorities, duties and responsibilities customarily exercised
by an individual serving as the Chief Executive Officer of an
entity of the size and nature of Centro US; shall have such other
duties, authorities and responsibilities as the Centro Chief
Executive Officer may from time to time reasonably designate,
consistent with the foregoing; and shall report directly to the
Centro Chief Executive Officer. Executive will comply with
the Company’s policies including, but not limited to, the
Code of Conduct and the Employee Trading in Securities
Policy. During the Term, the Executive shall devote
substantially all of his business time and efforts to the business
and affairs of Centro US (unless otherwise directed by the Centro
CEO); however, nothing shall preclude the Executive from the
following: (i) serving on the boards of a reasonable
number of non-competing business entities, trade associations and
charitable organizations, (ii) engaging in charitable
activities and community affairs, (iii) accepting and
fulfilling a reasonable number of speaking engagements, and
(iv) managing his personal financial and legal affairs
provided that such activities do not either individually or in the
aggregate interfere with the proper performance of his duties and
responsibilities hereunder and are not likely to be contrary to the
Company’s interests. The Executive has disclosed to the
Company a list of boards of which he is currently a member, and the
Company has consented to his continued membership on such
boards. The Executive shall give prior written notice before
joining any new business board on or after the Effective
Date.
5.
Place of Performance . The principal place of
employment of Executive shall be at the Company’s US
corporate offices in New York, New York.
6.
Compensation and Related Matters .
(a)
Salary . During the
Term, CWMJV shall pay Executive an annual base salary of not less
than US$660,000 (“ Base
Salary ”) Executive’s Base Salary shall be
paid in approximately equal installments in accordance with
CWMJV’s customary payroll practices. If
Executive’s Base Salary is increased, such increased Base
Salary shall then constitute the Base Salary for all purposes of
this Agreement.
(b)
Short Term Incentive-Bonus
. Executive shall be eligible for an annual short term
incentive-bonus (“ STI ”) based on the
achievement of certain financial goals. For the financial year
ending June 30, 2008, fifty percent of the STI will be based
on achievement of Centro Distributions per Security target and
maximum goals (as defined by the Centro Board) and fifty percent of
the STI will be based on achievement of Centro US Funds from
Operations target and maximum goals (as defined by the Centro CEO
and the Centro US CEO). The target and maximum goals for the
financial year ending June 30, 2008 shall be established prior
to July 31, 2007. If a target goal is achieved, Executive
shall receive a STI of 50% of Base Salary for that STI measure. If
a maximum goal is achieved, Executive shall receive a STI of 75% of
Base Salary for that STI measure. If performance for a measure
between target goal and maximum goal is achieved, Executive shall
receive a pro rata STI between 50% and 75% of Base Salary for that
measure. Any payment of a prorated STI, if target for a measure is
not achieved, shall be subject to the discretion of the Centro
Board. For the financial year ending
2
June 30, 2007, Executive
shall be eligible for a guaranteed STI payment (the “
Stub STI Payment
”) between US$165,000 and US$250,000, the amount of such
guaranteed STI within such range to be at the discretion of the
Centro Board payable by July 31, 2007. For financial years
commencing after June 30, 2008, the Centro Board may change
the basis upon which STI may be calculated, but if the target is
achieved the Executive shall continue to receive an STI payout of a
total of 100% of Base Salary and if the maximum goal is achieved
the payout shall be a total of 150% of Base Salary (the “
STI Range ”).
If Executive’s employment is terminated for any reason prior
to the end of a financial year, he shall not be entitled to a
prorated STI unless otherwise specifically agreed by the Centro
Board. Notwithstanding anything contained herein to the contrary, a
change in the basis upon which STI may be calculated after
June 30, 2008 (but not a reduction to the STI Range) shall not
constitute a breach or violation of this Agreement by the Company
or constitute Good Reason for Executive to terminate his
employment. With the exception of the STI for the financial year
ending June 30, 2007, all STI amounts will be paid at the
first appropriate opportunity after June 30 of that financial
year, but not later than July 31 of that same calendar
year.
(c)
Long Term Incentive
Compensation . Executive shall from time to time be invited
to participate in the Centro Employee Security Plan, the Centro
Executive Option Plan or other stock or option related plans that
may be developed in the future. The Centro Board shall periodically
review the nature and extent of such plans in line with comparable
market practice
a)
Attached hereto as
Exhibit A is an invitation from the Centro Board with respect
to a grant of stock options of Centro securities to the value of
US$1,000,000. Upon submission of the invitation by the Executive to
the Company, Executive shall be granted such options and receive a
written grant of stock options consistent with the terms of
Exhibit A (the “ Option Invitation
”).
b)
Attached hereto as
Exhibit B is an invitation from the Centro Board with respect
to a grant of restricted shares of Centro to the value of
US$1,000,000. Upon submission of the invitation by the Executive to
the Company, Executive shall be granted such restricted shares and
receive a written grant of restricted shares consistent with the
terms of Exhibit B (the “ Stock Invitation
”).
(d)
Expenses . CWMJV shall
promptly reimburse Executive for all reasonable business expenses
upon the presentation of reasonably itemized statements of such
expenses in accordance with CWMJV’s policies and procedures
now in force or as such policies and procedures may be modified
with respect to all senior executive officers of CWMJV.
(e)
Vacation . Executive shall
be entitled to the number of weeks of vacation per year provided to
the CWMJV’s senior executive officers, but in no event less
than four (4) weeks annually.
3
(f)
Welfare, Pension and Incentive
Benefit Plans . During the Term, the Executive shall be
entitled to participate in all employee benefit plans, programs and
arrangements made available to other CWMJV senior executives
generally, including, without limitation, pension, income deferral,
savings, 401 (k), and other retirement plans or programs, medical,
dental, vision, prescription drug, hospitalization, short-term and
long-term disability and life insurance plans and programs,
accidental death and dismemberment protection, travel accident
insurance, and any other employee benefit plan, program or
arrangement that may from time to time be made available to other
CWMJV senior executives generally, including any plans, programs or
arrangements that supplement the above-listed types of plans,
programs or arrangements, whether funded or unfunded, subject to
the terms of the applicable plan documents and generally applicable
CWMJV policies, in each case on terms and conditions that are no
less favorable to him than those applying to other CWMJV senior
executives generally. To the extent that post-retirement welfare
and other benefits then exist, the Executive shall be entitled to
post-retirement welfare and other benefits on terms and conditions
that are no less favorable to him than those applying to other
CWMJV senior executives generally. Nothing in this
Section 6(f) shall be construed to require CWMJV to
establish or maintain any particular employee or post-retirement
benefit plan, program or arrangement except as expressly set forth
elsewhere in this Agreement. CWMJV may, to the extent consistent
with the foregoing, alter, modify, supplement or delete its
employee and post-retirement benefit plans at any time as it sees
fit without recourse by the Executive, subject to the terms of this
Section 6(f).
(g)
No Hedging . During the
Term, Executive will not in any way attempt to limit the financial
risk with respect to stock options or restricted stock which are
not vested by means of any hedging (including without limitation,
selling short) or other techniques.
7.
Termination . Notwithstanding the foregoing,
Executive’s employment hereunder may be terminated during the
Term under the following circumstances:
(a)
Death . Executive’s
employment hereunder shall terminate upon his death.
(b)
Disability . If, as a
result of Executive’s incapacity due to physical or mental
illness, Executive shall have been substantially unable to perform
his duties hereunder for an entire period of one hundred twenty
(120) consecutive days, and within thirty (30) days after written
Notice of Termination (as defined in Section 8(a)) is given
after such one hundred twenty (120) day consecutive period,
Executive shall not have returned to the substantial performance of
his duties on a full-time basis, CWMJV shall have the right to
terminate Executive’s employment hereunder for “
Disability ”,
and such termination in and of itself shall not be, nor shall it be
deemed to be, a breach of this Agreement, but shall be subject to
the terms of Section 9(c).
(c)
Cause . CWMJV shall have
the right to terminate Executive’s employment for Cause, and
such termination in and of itself shall not be, nor shall it be
deemed to be, a breach of this Agreement; provided that no
termination of the Executive’s employment hereunder for Cause
shall be effective as a termination for Cause unless the provisions
of this Section shall first have been complied with. The
Executive shall be given written notice by the Centro Chief
Executive Officer of the intention to terminate him for Cause (the
“ Notice of
Intention ”). The Notice of Intention shall state
in reasonable detail the particular circumstances
4
that constitute the grounds on
which the proposed termination for Cause is based. The Executive
shall have 10 days after receiving the Notice of Intention in which
to cure the purported grounds for termination asserted therein.
Termination for Cause shall be effective immediately upon the
Centro Chief Executive Officer’s issuance to Executive of a
written Termination for Cause Notice in the event that Executive
fails to cure the purported grounds, for termination within such 10
day period. Any allegation that Cause existed, or that cure was not
achieved, shall be subject to review, at the Executive’s
election, through arbitration in accordance with Section 14
hereof.
For purposes of
this Agreement, CWMJV shall have “ Cause ” to terminate
Executive’s employment upon Executive’s:
(i)
conviction of, or plea of guilty or polo contendere to, a felony;
or
(ii)
willful and continued failure to use reasonable best efforts to
substantially perform his duties hereunder (other than such failure
resulting from Executive’s incapacity due to physical or
mental illness or subsequent to the issuance of a Notice of
Termination by Executive for Good Reason (as defined in
Section 7(d)) after demand for substantial performance is
delivered by CWMJV in writing that specifically identifies the
manner in which CWMJV believes Executive has willfully and
continually failed to use reasonable best efforts to substantially
perform his duties hereunder; or
(iii)
willful misconduct that has a materially adverse effect on the
Company or to any Affiliate.
For purposes of
this Section 7(c), no act, or failure to act, by Executive
shall be considered “ willful ” unless committed
in bad faith and without a reasonable belief that the act or
omission was in the best interests of the Company or any Affiliates
thereof; provided, however, that the willful requirement outlined
in paragraphs (ii) or (iii) above shall be deemed to have
occurred if the Executive’s action or non-action continues
for more than ten (10) days after Executive has received
written notice of the inappropriate action or
non-action.
(d)
Good Reason . Executive
may terminate his employment for “ Good Reason ” within thirty
(30) days after Executive has actual knowledge of the occurrence,
without the written consent of Executive, of one of the following
events that has not been cured within thirty (30) days after
written notice thereof has been given by Executive to the Company;
provided, however, that any allegation that Good Reason existed, or
that cure was not achieved, shall be subject to review, at
CWMJV’s election, through arbitration in accordance with
Section 14 hereof:
(i)
the assignment to Executive of duties materially and adversely
inconsistent with Executive’s status as Centro US Chief
Executive Officer or a material and adverse alteration in the
nature of the following: Executive’s duties and/or
responsibilities, reporting obligations, titles or authority as
Chief Executive Officer;
5
(ii)
a reduction in Executive’s Base Salary or a failure to pay
any such amounts when due;
(iii)
a failure by the Company to pay the Stub STI Payment due
June 30, 2007 as described in Section 6(b) by
July 31, 2007;
(iv)
a failure by the Company to pay either the First Payment or the
Second Payment pursuant to Section 10 when due:
(v)
the relocation of Executive’s own office location to a
location that is more than fifty (50) miles from New York, New
York;
(vi)
any purported termination of Executive’s employment for Cause
which is not effected pursuant to the procedures of
Section 7(c) (and for purposes of this Agreement, no such
purported termination shall be effective);
(vii)
CWMJV’s failure to pay or provide any material employee
benefits due to be provided to Executive under this Agreement
including, but not limited to, a failure to allow the Executive to
participate in all employee benefit plans, programs and
arrangements contemplated under Section 6(f);
(viii)
CWMJV’s failure to provide in all material respects the
indemnification set forth in Section 13 of this Agreement, or
to require any successor to assume and agree to perform this
Agreement as set forth in Section 15 of this
Agreement;
(ix)
a Change in Control (as defined below);
(x)
a reduction in the STI Range as provided for in
Section 6(b);
(xi)
a failure by Centro and/or the Centro Board to accept the Option
Invitation application and/or the Stock Invitation application (if
properly submitted by the Executive) and a failure thereafter to
provide Executive with written documentation evidencing the grant
of the stock options and restricted shares as provided for in
Section 6(c) consistent with the Option Invitation and
the Stock Invitation; or
(xii)
the issuance of a notice by CWMJV to Executive indicating that
CWMJV has elected not to renew or extend the Term for an Additional
Period.
Executive’s
right to terminate his employment hereunder for Good Reason shall
not be affected by his incapacity due to physical or mental
illness. Executive’s continued employment during the thirty
(30) day cure period referred to above in this paragraph
(d) shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason
hereunder.
If Executive
terminates employment hereunder for Good Reason and thereafter
accepts reemployment by CWMN or any successor or Affiliate within
six months of such termination of
6
employment,
Executive’s termination of employment shall retroactively not
be considered a termination for Good Reason and Executive shall
have no entitlement to any payments or benefits pursuant to
Section 9(a). To the extent Executive has already received
payments or benefits pursuant to Section 9(a), Executive shall
repay to such payments or benefits or make other equitable
restitution, as the Centro Board shall determine. It is the express
intent of the parties that the provisions of this paragraph survive
termination of this Agreement.
As provided in
Section 2 of this Agreement, any similar provision contained
in the Prior Employment Agreement is specifically waived and
notwithstanding the terms thereof shall not survive the termination
of the Prior Employment Agreement.
In furtherance of
clause (xii) above, the issuance of a notice by the Executive,
indicating that the Executive has elected not to renew or extend
the Term for an Additional Period shall not constitute Good
Reason.
For purposes of
this Agreement, a “ Change
in Control ” means the occurrence of one of the
following events:
(1)
any person or party not currently affiliated with Centro gains
control of fifty percent plus one share of Centro’s issued
Stapled Securities; however, that an event described in this
paragraph (1) shall not be deemed to be a Change in Control if
any of following becomes such a beneficial owner: (A) the
Company or any majority-owned entity (provided, that this exclusion
applies solely to the ownership levels of the Company or the
majority-owned entity), (B) any tax-qualified, broad-based
employee benefit plan sponsored or maintained by the Company or any
majority-owned entity, (C) any underwriter tempo
| 
