AGREEMENT made as
of this18th day of September, 2008, by and among Cedar Shopping
Centers, Inc., a Maryland corporation (the
“Corporation”), Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership (the
“Partnership”), and Frank C. Ullman (the
“Executive”).
1.
Position and Responsibilities .
1.1
The Executive shall serve in an executive capacity as Vice
President of both the Corporation and the Partnership with duties
consistent therewith and shall perform such other functions and
undertake such other responsibilities as are customarily associated
with such capacity. The Executive shall also hold such
directorships and officerships in the Corporation, the Partnership
and any of their subsidiaries to which, from time to time, the
Executive may be elected or appointed during the term of this
Agreement.
1.2
The Executive shall devote Executive’s full business time and
skill to the business and affairs of the Corporation and the
Partnership and to the promotion of their interests.
2.1
The term of employment shall be one year, commencing with the date
hereof, unless sooner terminated as provided in this
Agreement.
2.2
Notwithstanding the provisions of Section 2.1 hereof, each of
the Corporation and the Partnership shall have the right, on
written notice to the Executive, to terminate the Executive’s
employment for Cause (as defined in Section 2.3), such
termination to be effective as of the date on which notice is given
or as of such later date otherwise specified in the notice and,
upon such termination of employment for Cause, Executive
shall
not be entitled
to receive any additional compensation hereunder. The Executive
shall have the right, on written notice to the Corporation and the
Partnership, to terminate the Executive’s employment for Good
Reason (as defined in Section 2.4), such termination to be
effective as of the date on which notice is given or as of such
later date otherwise specified in the notice; provided, however,
the Executive’s right to terminate Executive’s
employment shall lapse 60 days after the occurrence of any of
the events specified in clauses (iii) or (iv) of the
definition of Good Reason.
2.3
For purposes of this Agreement, the term “Cause” shall
mean any of the following actions by the Executive:
(a) failure to comply with any of the material terms of this
Agreement, which shall not be cured within 10 days after
written notice, or if the same is not of a nature that it can be
completely cured within such 10 day period, if Executive shall
have failed to commence to cure the same within such 10 day
period and shall have failed to pursue the cure of the same
diligently thereafter; (b) engagement in gross misconduct
injurious to the business or reputation of the Corporation or the
Partnership; (c) knowing and willful neglect or refusal to
attend to the material duties assigned to the Executive by the
Board of Directors of the Corporation, which shall not be cured
within 10 days after written notice; (d) intentional
misappropriation of property of the Corporation or the Partnership
to the Executive’s own use; (e) the commission by the
Executive of an act of fraud or embezzlement;
(f) Executive’s conviction for a felony;
(g) Executive’s engaging in any activity which is
prohibited pursuant to Section 5 of this Agreement, which
shall not be cured within 10 days after written
notice.
2.4
For purposes of this Agreement, the term “Good Reason”
shall mean any of the following: (i) a material breach of this
Agreement by the Corporation or the Partnership which shall not be
cured within 10 days after written notice; (ii) a
material reduction in the
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Executive’s duties or responsibilities;
(iii) the relocation of the Executive’s office or the
Corporation’s or Partnership’s executive offices to a
location more than 30 miles from New York City; or (iv) a
“Change in Control”, as defined below. As used herein,
a “Change in Control” shall be deemed to occur if:
(i) there shall be consummated (x) any consolidation or
merger of the Corporation or the Partnership in which the
Corporation or the Partnership is not the continuing or surviving
corporation or pursuant to which the stock of the Corporation or
the units of the Partnership would be converted into cash,
securities or other property, other than a merger or consolidation
of the Corporation or Partnership in which the holders of the
Corporation’s stock immediately prior to the merger or
consolidation hold more than fifty percent (50%) of the stock or
other forms of equity of the surviving corporation immediately
after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or series of related transactions) of
all, or substantially all, the assets of the Corporation or the
Partnership; (ii) the Board approves any plan or proposal for
liquidation or dissolution of the Corporation or the Partnership;
or (iii) any person acquires more than 29% of the issued and
outstanding common stock of the Corporation.
3.1
The Partnership shall pay to the Executive for the services to be
rendered by the Executive hereunder to the Corporation and the
Partnership a base salary at the rate of $185,000 per annum. The
base salary shall be payable in accordance with the
Corporation’s or Partnership’s normal payroll
practices, but not less frequently than twice a month. Such base
salary will be reviewed at least annually and may be increased (but
not decreased) by the Board of Directors of the
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Corporation in
its sole discretion. The Board of Directors of the Corporation in
its sole discretion may grant to the Executive a bonus to be paid
by the Corporation or Partnership, at any time and from time to
time.
3.2
The Executive shall be entitled to participate in, and receive
benefits from, on the basis comparable to other senior executives,
any insurance, medical, disability, or other employee benefit plan
of the Corporation, the Partnership or any of their subsidiaries
which may be in effect at any time during the course of
Executive’s employment by the Corporation and the Partnership
and which shall be generally available to senior executives of the
Corporation, the Partnership or any of their
subsidiaries.
3.3
The Partnership agrees to reimburse the Executive for all
reasonable and necessary business expenses incurred by the
Executive on behalf of the Corporation or the Partnership in the
course of Executive’s duties hereunder upon the presentation
by the Executive of appropriate vouchers therefor, including
continuing legal education, professional licenses and organizations
and conferences approved by the CEO.
3.4
The Executive shall be entitled each year of this Agreement to paid
vacation in accordance with the Corporation’s or
Partnership’s policies but not less than 4 weeks plus
personal and floating holidays (and a ratable number of sick days),
which if not taken during such year will be forfeited (unless
management requests postponement).
3.5
In recognition of Executive’s need for an automobile for
business purposes, the Corporation or the Partnership will
reimburse the Executive for Executive’s use of an automobile,
including lease payments, if any, and all related costs, including
maintenance, gasoline and insurance; provided, however, that such
amount shall not exceed $450.00 a month. Insurance, maintenance and
gas for business use is additional.
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3.6
If, during the period of employment hereunder, because of illness
or other incapacity, the Executive shall fail for a period of 90
consecutive days, or for shorter periods aggregating more than six
months during the term of this Agreement, to render the services
contemplated hereunder, then the Corporation or the Partnership, at
either of their options, may terminate the term of employment
hereunder by notice from the Corporation or the Partnership, as the
case may be, to the Executive, effective on the giving of such
notice. During any period of disability of Executive during the
term hereof, the Corporation shall continue to pay to Executive the
salary and bonus to which the Executive is entitled pursuant to
Section 3.1 hereof.
3.7
In the event of the death of the Executive during the term hereof,
the employment hereunder shall terminate on the date of death of
the Executive.
3.8
Each of the Corporation and the Partnership shall have the right to
obtain for their respective benefits an appropriate life insurance
policy on the life of the Executive, naming the Corporation or the
Partnership as the beneficiary. If requested by the Corporation or
the Partnership, the Executive agrees to cooperate with the
Corporation or the Partnership, as the case may be, in obtaining
such policy.
4.
Severance Compensation Upon Termination of Employment
.
4.1
If the Executive’s employment with the Corporation or the
Partnership shall be terminated (a) by the Corporation or
Partnership other than for Cause or pursuant to Sections 3.6
or 3.7, or (b) by the Executive for Good Reason, then the
Corporation and the Partnership shall:
(i)
pay to the Executive as severance pay, within five days after
termination, a lump sum payment equal to 250% of the sum of the
Executive’s
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annual salary
at the rate applicable on the date of termination and the average
of the Executive’s annual bonus for the preceding two full
fiscal years;
(ii)
arrange to provide Executive, for a 12 month period (or such
shorter period as Executive may elect), with disability, accident
and health insurance substantially similar to those insurance
benefits which Executive is receiving immediately prior to the
earlier of a Change in Control, if any, or the date of termination
to the extent obtainable upon reasonable terms; provided, however,
if it is not so obtainable the Corporation shall pay to the
Executive in cash the annual amount paid by the Corporation or the
Partnership for such benefits during the previous year of the
Executive’s employment. Benefits otherwise receivable by
Executive pursuant to this Section 4.1(ii) shall be reduced to
the extent comparable benefits are actually received by the
Executive during such 12 month period following his
termination (or such shorter period elected by the Executive), and
any such benefits actually received by Executive shall be reported
by the Executive to the Corporation; and
(iii)
any options granted to Executive to acquire common stock of the
Corporation, any restricted shares of common stock issued to the
Executive and any other awards granted to the Executive under any
employee benefit plan that have not vested shall immediately vest
on said termination.
4.2
(a) 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, except to the extent
provided in Section 4.1 above, shall the amount of any payment
provided for under this Agreement be reduced by any compensation
earned by the
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Executive as a
result of employment by another employer or by insurance benefits
after the date of termination, or otherwise.
(b) The
provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive’s existing rights, or rights
which would accrue solely as a result of the passage of time, under
any benefit plan of the Corporation or Partnership, or other
contract, plan or arrangement.
4.3
(a) Notwithstanding anything to the contrary in this
Agreement, if it shall be determined (as hereafter provided) that
any payment, benefit or distribution (or combination thereof) by
the Corporation, any of its affiliates (including the Partnership),
one or more trusts established by the Corporation for the benefit
of its employees, or any other person or entity, to or for the
benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise
pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock
option, restricted stock award, stock appreciation right or similar
right, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a
“Payment”), would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”) (or any successor provision
thereto) by reason of being “contingent on a change in
ownership or control” of the Corporation or an affiliate,
within the meaning of Section 280G of the Code (or any
successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the
“Excise Tax”), then the Corporation shall make an
additional
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payment (the
“Gross-Up Payment”) to the Executive such that, after
payment of all Excise Taxes and any other taxes payable in respect
of such Gross-Up Payment, the Executive shall retain the same
amount as if no Excise Tax had been imposed. In addition, the
Corporation shall reimburse the Executive for any and all costs and
expenses (including attorneys’ fees) incurred by the
Executive with respect to (i) the determination of the Excise
Tax, any other taxes payable in respect of the Gross-Up Payment or
the Gross-Up Payment, (ii) any disputes regarding the
determination of the Excise Tax, any other taxes payable in respect
of the Gross-Up Payment or the Gross-Up Payment, or (iii) the
applicability of this Section 4.3.
(b) Subject
to the provisions of Section 4.3(a) hereof, all determinations
required to be made under this Section 4.3, including whether
an Excise Tax is payable by the Executive and the amount of such
Excise Tax, shall be made by the nationally recognized firm of
certified public accountants (the “Accounting Firm”)
used by the Corporation prior to the change in control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall be a
nationally recognized firm of certified public accountants selected
by the Executive). The Accounting Firm shall be directed by the
Corporation or the Executive to submit its preliminary
determination and detailed supporting calculations to both the
Corporation and the Executive within 15 calendar days after the
receipt of notice from the Executive
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