AGREEMENT AND
RELEASE
THIS
AGREEMENT AND RELEASE, is made by and between Jeffrey Erhart (the
“Executive”) and Feldman Mall Properties, Inc. (the
“Company”) as of November 3, 2006.
WHEREAS,
the Company and the Executive have entered into an employment
agreement dated August 13, 2004, (the “Employment
Agreement”); and
WHEREAS,
the Executive and the Company wish to set forth their mutual
understanding of certain terms of the Executive’s separation
from employment;
NOW,
THEREFORE, in consideration of the mutual covenants and commitments
provided for herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by both
parties, the Executive and the Company hereby agree as
follows:
1.
Termination of Employment . The date of the
Executive’s termination of employment at the Company is as of
November 3, 2006 (the “Termination Date”). The
Executive is entitled to all salary and benefits normally accruing
through the Termination Date including accrued and unpaid vacation
or sick pay but excluding any bonus for the calendar year 2006. As
of the Termination Date, the Executive shall cease to be eligible
to receive any further Company benefits whatsoever (including, but
not limited to, medical coverage, retirement plan benefits,
cellular phone reimbursement, and car allowance, except that
Executive shall have the right to COBRA insurance benefits, and
continued applicability of director’s and officer’s
errors and omissions insurance, but only to the extent that such
coverage protects the Executive in his former capacity as an
officer of the Company).
2.
Waiver . The Employment Agreement shall terminate as of the
Termination Date. Notwithstanding any provision of the Employment
Agreement to the contrary, the Executive hereby waives all rights
under or in connection with the Employment Agreement with respect
to the termination, including, for the avoidance of doubt, any
claim that the Executive’s termination of employment was
involuntary or for Good Reason, except as otherwise specifically
provided hereunder.
3.
Purchase of Interests . The Company shall pay to the
Executive in cash an amount equal to $1,743,748 (the
“Purchase Price”), which represents his equity
interests in the Company and its affiliates consisting of, the
Executive’s 160,000 OP Units in Feldman Equities Operating
Partnership LLC, and Erhart’s membership interest (which the
Company values as being equivalent to 18,846 OP Units) in Feldman
Partners LLC, but specifically excluding Erhart’s unvested
3,077 shares of restricted stock; such shares shall be deemed
forfeited to Company for purposes of payment to Executive
hereunder, at a price of $9.75 per share of the Company, payable in
cash as follows: (i) ninety percent (90%) of the Purchase Price
shall be paid within 5 business days of the Effective Date (as
defined below), and (ii) subject to clause (B) below, the remaining
ten percent (10%) of the Purchase Price shall be paid on or about
April 30, 2007, provided that (A) such payment shall not be due if
Executive has materially breached any material provision of this
Agreement and Release during the period beginning on the
Termination Date and ending on April 30, 2007, and James C. Bourg
(or in the event that Mr. Bourg is unavailable to make such
determination, the determination shall be made by the board of
directors of the Company) determines in writing that in his or its
reasonable discretion that Executive has materially breached a
material provision of this Agreement and/or Release, with Mr. Bourg
or the board of directors of the Company, as applicable having no
right to make such a determination unless Executive fails to comply
with an obligation hereunder within five (5) days following written
notice from Mr. Bourg describing the obligation and stating that
Executive has failed to comply with such obligation, (B) if
requested by the Company, the Executive and the Company execute a
mutual release substantially similar to Paragraphs 11, 12, 13 and
14, and such release has become irrevocable, (C) Company shall pay
Executive interest on the ten percent (10%) of the Purchase Price
from the Termination Date through April 30, 2007 at a rate of 5%
per annum (with such interest rate increasing to 12% per annum if
the payment is not paid when due). Company waives any right to not
pay the sums required to be paid under this paragraph for any
reason other than Executive’s material breach of any material
provision of this Agreement and Mr. Bourg’s (or the board of
directors of the Company, as applicable) determination under part
(A) above.
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4.
Acknowledgment of Consideration . The Executive acknowledges
and agrees that his execution of this Agreement and Release is a
prerequisite to his receipt of all payments provided for in
paragraph 3 above.
5.
Return of Property . The Executive acknowledges that all
written materials, records, and documents made by him or in his
possession, custody, or control concerning the business or affairs
of the Company and its affiliates are the sole property of the
Company and its affiliates. The Executive agrees that he will
return immediately following the Effective Date or has returned to
the Company, all property of the Company or its affiliates which is
or has been in his possession, custody, or control, including but
not limited to documents (whether in hard copy format or
electronically stored) and any and all copies thereof; cellular
telephones, personal handheld devices, and any other electrical or
other equipment; and company credit cards, identification cards or
any other applicable access rights, accounts or lines of credit he
may have had access to due to his employment with the Company. The
Executive represents that there are no documents or other property
of the Company or its affiliates made by him or is or has been in
his possession. In addition, the Executive represents that there
are no documents or other property of the Company or its affiliates
that is in his possession, custody, or control that cannot be
accessed by the Company and that immediately upon request by the
Company he will disclose to the Company all computer passwords and
other like access codes to any Company documents, e-mails, records
or other information. Notwithstanding the foregoing, the Executive
may retain his Company supplied laptop computer, which he will
promptly return to the Company no later than April 30, 2007, and,
in order to allow Executive to provide counsel to Company, the
Executive may retain electronic copies of Company documents until
the later to occur of April 30, 2007 or the date on which Company
requests that such electronic copies of documents be returned to
Company.
6.
Post-Termination Consulting and Services . (a) The Executive
agrees to cooperate to use his commercially reasonable efforts
after the Termination Date to assist the Company in the transfer of
the duties and responsibilities that he performed in connection
with his employment with the Company to any successor or other
persons designated by the Company. Within 14 business days
following the Termination Date (or sooner if the matter is
reasonably deemed to be urgent by the Company), the Executive shall
provide a detailed list of outstanding or pending legal issues,
including any contact persons involved in each issue, and a
detailed memorandum for use by any successor to the
Executive’s responsibilities describing the duties associated
therewith and providing strategy and guidance for resolving all
pending legal and other issues for which the Executive was
responsible. Executive shall revise and supplement such memorandum
upon request from time to time by Company.
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(b)
To the extent practicable, the Executive shall complete all pending
legal matters that are reasonably capable of being substantially
completed or otherwise resolved by him within two months following
the Termination Date. A complete description of such matters shall
be drafted by the Executive and submitted to the Company within 7
days following the Termination Date.
(c)
The Executive agrees that, upon reasonable request of the Company,
the Executive shall (A) consult with the Company with respect to
all matters concerning the Company in which the Executive had
personal involvement during his period of employment with the
Company or any of its subsidiaries or affiliates, (B) assist the
Company in the defense of any claims or potential claims that may
be made or threatened to be made against it in any action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative (a “ Proceeding ”) and in the
prosecution of any claims that may be made by the Company in any
Proceeding, that may relate to matters with respect to which the
Executive has or had personal knowledge or involvement during his
employment with the Company or any of its subsidiaries or
affiliates, and unless precluded by law, promptly inform the
Company if the Executive is asked to participate (or otherwise
become involved) in any Proceeding involving such claims or
potential claims, and (C) unless precluded by law, promptly inform
the Company if the Executive is asked to assist in any
investigation (whether governmental or private) of the Company (or
its actions), regardless of whether a lawsuit has then been filed
against the Company with respect to such investigation. The Company
agrees to reimburse the Executive for all of his reasonable
out-of-pocket expenses associated with such assistance, including
travel expenses and any attorneys’ fees. The
Executive’s obligations under this subparagraph (c) shall
continue until April 30, 2009.
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(d)
Notwithstanding the foregoing, Executive shall have no obligation
to expend more than forty (40) hours (the “Service
Obligation”) on the matters described in paragraphs (a)
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