Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement
(this “Agreement”), dated September 29, 2023, is entered into by and between Howard Hughes Holdings Inc., a Delaware
corporation (“HHH”), and Anton Nikodemus (the “Executive”).
RECITALS
WHEREAS, the parties desire
to enter into and be bound by this Agreement.
WHEREAS, the Executive shall
initially be employed by HHH, but as soon as a to-be-formed company with the working name of “Seaport Entertainment Corp.”
(“Seaport”) is publicly listed on a nationally recognized exchange, he will become employed by Seaport.
WHEREAS, during the time
that Executive is employed by HHH, the term “Company” in this Agreement shall mean HHH.
WHEREAS, during the time
that Executive is employed by Seaport, the term “Company” in this Agreement shall mean Seaport.
NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment
Period. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to work in the employ of the Company,
subject to the terms and conditions, rights and obligations of this Agreement, for the period commencing no later than January 2,
2024 (the “Effective Date”) and ending, unless terminated earlier pursuant to Section 3 hereof, on the fifth
(5th) anniversary of the Effective Date (the “Employment Period”). No later than seven (7) days after Executive’s
employment begins, the parties shall append the attached Exhibit A to the Agreement stating the agreed upon Effective Date.
Thereafter, the Employment Period shall renew automatically additional periods of one (1) year, unless either party provides the
other party with written notice of non-renewal at least sixty (60) days prior to the date of automatic renewal. Notwithstanding anything
herein to the contrary, this Agreement shall become null and void, ab initio, in the event the Executive does not commence employment
with the Company, for any reason, on or prior to Effective Date.
2. Terms
of Employment.
(a) Position
and Duties.
(i) During
the Employment Period, the Executive shall serve as Chief Executive Officer of HHH Seaport Division, and on the date Seaport begins being
publicly listed on a nationally recognized exchange will become Chief Executive Officer of Seaport. Executive’s job duties and
responsibilities as Chief Executive Officer of HHH Seaport Division and Chief Executive Officer of Seaport include the management of
all matters related to the Seaport region, including the Jean George-related joint venture and related projects, the Aviators minor league
baseball team, and the Fashion Show air rights, with such authority, duties and responsibilities as are normally attendant to such position
and such other duties commensurate with this position that may be reasonably assigned by the Company’s Board of Directors (the
“Board”). During his employment at HHH, the Executive shall report to the Board of HHH. During his employment at Seaport,
the Executive shall report to the Board of Seaport. Within thirty (30) days of Seaport being publicly listed on a nationally recognized
exchange, the Executive shall be appointed as a director on the Board of Seaport, and Seaport shall nominate the Executive for election
to the Board at each annual stockholders’ meeting of Seaport that occurs during the Employment Period.
(ii) During
the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote all of his business attention and time to the business and affairs of the Company, and to use his reasonable best efforts to
perform such responsibilities. During the Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve
on civic or charitable boards or committees, (B) manage personal and family investments, and (C) engage in lectures or teaching,
so long as any such activities referenced in Section 2(a)(ii)(A)-(C) do not, individually or in the aggregate, interfere with
the discharge of the Executive’s responsibilities pursuant to this Agreement; provided, however, for the avoidance
of doubt, during the Employment Period, the Executive shall not hold any other management positions at other companies or any other entities.
(b) Compensation.
(i) Annual
Base Salary. During the Employment Period, unless increased by the Board in its sole discretion, the Executive shall receive an annual
base salary of ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000) (the “Annual Base Salary”), payable in
equal installments in accordance with the Company’s normal payroll practice for its senior executives, subject to the Executive’s
continued employment with the Company.
(ii) Annual
Bonus. Commencing in 2024, and continuing during each subsequent calendar year of the Employment Period, the Executive shall be eligible
for an annual cash bonus (the “Annual Bonus”) in the targeted amount of ONE HUNDRED PERCENT (100%) of Annual Base
Salary (the “Target Bonus Amount”), which shall be awarded each year during the Employment Period by the Compensation
Committee of the Board (the “Compensation Committee”) based upon its evaluation of such performance measures and objectives
as may be established by the Compensation Committee from time to time (the “Annual Bonus Performance Metrics”). The
amount of the Annual Bonus that shall be paid to Executive each year shall be determined by the Compensation Committee based on the achievement
of the Annual Bonus Performance Metrics; provided, however, that, if the Compensation Committee establishes a minimum overall
performance goal that is required to be achieved for the Executive to be eligible to receive any Annual Bonus in respect of a calendar
year, and that minimum overall goal is achieved for such calendar year, then the Annual Bonus for such calendar year shall be equal to
at least FIFTY PERCENT (50%) of the Target Bonus Amount, but not more than ONE-HUNDRED AND FIFTY PERCENT (150%) of the Target Bonus Amount.
The Annual Bonus for each year shall be paid to the Executive as soon as reasonably practicable following the end of such year and at
the same time that other senior executives of the Company receive bonus payments, but in no event later than March 15 following
the end of the calendar year to which such Annual Bonus relates.
(iii) Initial
Seaport LTIP Award. As soon as reasonably practicable following the date that Seaport begins trading on a nationally recognized exchange
and has filed a Form S-8, Seaport will award Executive an initial LTIP Award having an initial value of TEN MILLION DOLLARS ($10,000,000)
(calculated based on a volume weighted average trading price for the first five (5) days that Seaport is traded on a nationally
recognized exchange) and cliff vests on the five year anniversary of the date Seaport begins trading on a nationally recognized exchange
(such award, the “Seaport LTIP Award”). One-third (1/3rd) of the Seaport LTIP Award will be granted in
the form of restricted stock; one-third (1/3rd) of the Seaport LTIP Award will be granted in the form of an option to purchase
shares of Seaport at the fair market value of Seaport as of the date of grant; and one-third (1/3rd) of the Seaport LTIP Award
will be granted in the form of an option to purchase shares of Seaport at a price equal to one hundred and fifty percent (150%) of the
fair market value of Seaport on the date of grant. The Seaport LTIP Award will be contingent upon approval of Seaport’s Compensation
Committee and/or Board of Directors and subject to the terms and conditions of Seaport’s equity incentive plan and the applicable
award agreements issued thereunder.
(iv) Initial
LTIP Award. On the Effective Date, the Company awarded the Executive an initial Annual LTIP Award under the Company’s
Amended and Restated Incentive Plan (the “Incentive Plan”) with an aggregate targeted grant value of TWO MILLION
AND FOUR HUNDRED THOUSAND DOLLARS ($2,400,000), consisting of restricted stock of the Company. The foregoing award is subject to the
terms and conditions of the Incentive Plan and the applicable award agreements issued thereunder (including, without limitation, the
vesting terms contained therein). This award shall provide for pro rata time vesting over three years in accordance with the
terms of the applicable award agreement.
(v) Cash
Bonus. The Executive shall receive a cash bonus in the amount of ONE MILLION DOLLARS ($1,000,000) in February 2024.
(vi) Relocation.
The Executive agrees to relocate his principal residence to the New York City, New York metropolitan area no later than twelve (12) months
following the Effective Date. The Company shall provide the Executive with (A) reimbursement for temporary housing for Executive
up to twelve (12) months after commencement of employment, provided that the allowance shall cease upon close of the sale of Executive’s
residence located in Henderson, Nevada; (B) reimbursement for all documented incurred expenses related to all aspects of Executive’s
relocation not to exceed $200,000, including but not limited to closing costs for Executive’s sale of Executive’s Henderson,
Nevada residence and closing costs for purchase of residence in the New York City, New York metropolitan area; full-service full packing
and unpacking of Executive’s and Executive’s family’s personal property; transport of Executive’s vehicles; and
travel costs for Executive and Executive’s family related to relocation efforts and obligations related thereto.
(vii) Indemnification.
Beginning on the Effective Date, the Company and the Executive will enter into an indemnification agreement on substantially the same
terms as the indemnification agreements entered into by the Company and each of its directors, officers and senior executives. Thereafter,
as promptly as practicable after Seaport begins being publicly listed on a nationally recognized exchange, the Company and the Executive
will enter into an indemnification agreement on substantially the same terms as the indemnification agreements entered into by the Company
and each of its directors, officers and senior executives. In addition, to the extent not covered by such indemnification agreement or
the Company’s other directors and officers indemnification arrangements, the Company shall indemnify the Executive for any losses,
costs, or expenses (including reasonable and documented attorneys’ fees) actually incurred by the Executive in connection with
the Executive’s execution of certain liquor licenses on behalf of the Company (or one or more of its subsidiaries) in New York
City, New York, to the fullest extent permitted by the Company’s organizational documents and applicable law.
(c) Benefits.
During the Employment Period, except as otherwise expressly provided herein, the Executive shall be entitled to participate in all employee
welfare benefit plans, practices, policies and programs and fringe benefits to the extent applicable generally and on a basis no less
favorable than that provided to other senior officers of the Company, including, without limitation, health, medical, dental, long-term
disability and life insurance plans. The Executive shall be entitled to paid annual vacation totaling four (4) weeks per calendar
year in accordance with the Company’s vacation policy in effect from time to time.
(d) Expenses.
The Company shall reimburse the Executive for all reasonable and necessary expenses actually incurred by the Executive in connection
with the business affairs of the Company and the performance of the Executive’s duties hereunder, in accordance with Company policy
as in effect from time to time.
(e) Business
Travel. Notwithstanding the foregoing, to the extent that the Executive is required to travel during the Employment Period in connection
with the Executive’s duties and responsibilities hereunder, the Company shall, in accordance with Company policy as in effect from
time to time, reimburse the Executive as follows: (i) for first class commercial air travel for the Executive (and the Executive’s
spouse, if the Executive’s spouse’s presence is required for Company events, consistent with the Company’s general
policies); and (ii) for first-class hotel accommodations.
3. Termination
of Employment.
(a) Death
or Permanent Disability. The Executive’s employment shall terminate automatically upon the Executive’s death or if the
Executive suffers a Permanent Disability. For purposes of this Agreement, “Permanent Disability” means the inability
of the Executive to perform the essential functions of his job with the Company by reason of a medically determinable physical or mental
impairment that can be expected to last for sixty (60) or more consecutive days or more than ninety (90) days during any three hundred
sixty-five (365) day period, as determined by a duly licensed physician. If the Executive suffers a Permanent Disability during the Employment
Period, the Company may give to the Executive written notice, in accordance with Section 12(b), of its intention to terminate
the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the thirtieth
(30th) day after the Executive’s receipt of such notice by the Company, provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. The Executive shall fully
cooperate in connection with the determination of whether a Permanent Disability exists.
(b) Cause.
The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause”
shall mean, as determined in good faith by a unanimous vote (excluding the Executive if he is then a member of the Board) of the Board
at a meeting of the Board held for such purpose, and where the Executive and the Executive’s counsel had an opportunity (on at
least 15 days prior notice) to be heard before the Board, the Executive’s:
(i) conviction,
plea of guilty or no contest to any felony;
(ii) gross
negligence or willful misconduct in the performance of the Executive’s duties;
(iii) drug
addiction or habitual intoxication;
(iv) commission
of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty, material violation of law or a material act of dishonesty
against the Company, in each case that the Board determines was willful;
(v) material
and continued breach of this Agreement, after notice for substantial performance is delivered by the Company in writing that identifies
in reasonable detail the manner in which the Company believes the Executive is in breach of this Agreement;
(vi) willful
material breach of Company policy or code of conduct; or
(vii) willful
and continued failure to substantially perform his duties hereunder (other than such failure resulting from the Executive’s incapacity
due to physical or mental illness);
provided, however, that in each case the Company
shall provide the Executive with written notice that an event constituting Cause has occurred (such notice to be provided within sixty
(60) days of the initial occurrence of such event) and specifying the details of such event. With respect to any events described under
Sections 3(b)(ii), (v), (vi) or (vii) above, the Executive shall be given thirty (30) days from his receipt of written notice
to cure such events. If the Executive cures an event during such period that would otherwise constitute Cause, then the Company will
have no right to terminate the Executive’s employment for Cause. For purposes of this provision, no act or omission on the part
of the Executive shall be considered “willful” unless it is done or omitted not in good faith or without reasonable belief
that the act or omission was in the best interests of the Company. Any act or omission by the Executive based upon a resolution duly
adopted by the Board or advice of counsel for the Company shall be conclusively presumed to have been done or omitted in good faith and
in the best interests of the Company. This Section 3(b) shall not prevent the Executive from challenging whether the
Board acted in good faith in determining that Cause exists or that the Executive has failed to cure any act (or failure to act) that
purportedly formed the basis for the Board’s determination in accordance with the procedures set forth in Section 10.
In addition, and for the avoidance of doubt, the burden of proof regarding the existence of Cause shall be on the Company.
(c) Good
Reason. The Executive may terminate the Executive’s employment during the Employment Period for Good Reason. For purposes of
this Agreement, “Good Reason” shall mean the occurrence of any of the following events without the Executive’s written
consent:
(i) a
material diminution in the Executive’s base compensation;
(ii) a
material diminution in the Executive’s authority, duties or responsibilities;
(iii) the
Executive no longer reports directly to the Board;
(iv) any
other action or inaction that constitutes a material breach by the Company of this Agreement; or
(v) any
requirement that the Executive relocate or maintain his Principal Location more than fifty (50) miles from New York, New York;
provided, however, that in each case the Executive
must provide the Company with written notice that an event constituting Good Reason has occurred (such notice to be provided within sixty
(60) days of the initial occurrence of such event) and specifying the details of such event. With respect to any events described under
Section 3(c)(i), (ii), (iv) or (v) above, the Company shall be given thirty (30) days from its receipt of written notice
to cure such events. If the Company cures an event during such period that would otherwise constitute Good Reason, then the Executive
will have no right to terminate his employment for Good Reason. Following the occurrence of a Change in Control (as defined below), any
claim by the Executive that Good Reason exists shall be presumed to be valid and correct unless an AAA arbitrator determines, in accordance
with Section 10, that the Company has established by clear and convincing evidence that Good Reason does not exist. A termination
of the Executive’s employment for Good Reason in accordance with this Section 3(c) is intended to be treated as
an involuntary separation from service for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
(d) Without
Cause. Subject to the provisions of this Agreement, the Company shall have the right to terminate the Executive’s employment
hereunder without Cause by providing the Executive with sixty (60) days’ prior written Notice of Termination, and such termination
shall not in and of itself be, nor shall it be deemed to be, a breach of this Agreement.
(e) Without
Good Reason. The Executive will have the right to voluntarily terminate his employment hereunder without Good Reason by providing
the Company with sixty (60) days’ prior written Notice of Termination, and such voluntary termination shall not in and of itself
be, nor shall it be deemed to be, a breach of this Agreement.
(f) Notice
of Termination. Any termination by the Company or by the Executive shall be communicated by providing Notice of Termination to the
other party hereto given in accordance with Section 12(b). For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, and (iii) the contemplated date of termination.
4. Obligations
of the Company upon Termination.
(a) Non-Change
in Control Termination (Other than Non-Renewal). If (1) during the Employment Period, the Company shall terminate the Executive’s
employment without Cause (and other than upon the Executive’s death or Permanent Disability) or (2) during the Employment
Period, the Executive shall terminate his employment for Good Reason, the Company shall have no further obligations to the Executive
except as follows:
(i) the
Company shall pay or provide the Executive, to the extent not theretofore paid, as soon as practicable after the date of termination
(but in no event later than 60 days after the date of termination): (A) accrued Annual Base Salary and vacation pay through the
date of termination; (B) any reimbursement to which the Executive is entitled pursuant to Company policy, but which was not reimbursed
prior to the date of termination; and (C) any other earned but unpaid outstanding compensatory arrangements ((A), (B) and (C)),
together, the “Accrued Benefits”);
(ii) the
Company shall pay the Executive at the normally scheduled time an amount equal to the product of (x) the Target Bonus Amount multiplied
by (y) a fraction, the numerator of which is the number of days of during such calendar year that the Executive was employed by
the Company and the denominator of which is 365 (the “Prorated Bonus”);
(iii) the
Company shall pay the Executive, on the 60th day following the date of termination, a lump sum amount equal to the product
of one times (1x) the sum of (A) the Annual Base Salary (which shall be the Annual Base Salary prior to any reduction if the termination
is for Good Reason because of a reduction in the Annual Base Salary) plus (B) the Target Bonus Amount; and
(iv) (A) all
prior share Awards (as defined in the Incentive Plan or its predecessor), granted to Executive pursuant to any agreement(s) entered
into prior to the Effective Date between Executive and the Company to the extent outstanding as of the date of termination that are subject
to forfeiture on the date of termination shall fully vest and become non-forfeitable; provided, that any such Awards that are
subject to performance-based vesting restrictions or conditions shall instead be treated in accordance with clause (C) of this Section 4(a)(iv),
(B) all outstanding Time Vesting LTIP Awards, if any, that are subject to forfeiture on the date of termination shall fully vest
and become non-forfeitable, and (C) all outstanding Performance Vesting LTIP Awards, if any, that are subject to forfeiture on the
date of termination shall remain outstanding and continue to vest in accordance with the terms and conditions of the grant of the applicable
equity award as if Executive’s employment had continued through the date on which the performance metrics are measured (and the
Company shall take any action that is necessary to ensure that such equity awards remain outstanding under the Incentive Plan), and at
such time such equity awards shall either be vested or forfeited based on the achievement of the applicable performance metrics (the
“Continued Eligibility for Vesting”).
The amounts payable or to be provided under this
Section 4(a) shall be in lieu of any amounts that would otherwise be paid or provided under Section 4(b),
Section 4(c) and Section 4(d).
(b) Non-Renewal.
If the Executive’s employment is terminated based on the Company electing to not renew or extend the Employment Period on the fifth
(5th) anniversary, or any subsequent anniversary, of the Effective Date, the Company shall have no further obligations to
the Executive except as follows:
(i) the
Accrued Benefits;
(ii) the
Prorated Bonus; and
(iii) (A) all
outstanding Time Vesting LTIP Awards, if any, that are subject to forfeiture on the date of termination shall fully vest and become non-forfeitable,
and (B) the Continued Eligibility for Vesting.
The amounts payable or to be provided under this
Section 4(b) shall be in lieu of any amounts that would otherwise be paid or provided under Section 4(a),
Section 4(c) and Section 4(d).
(c) Termination
Because of Death or Permanent Disability. If, during the Employment Period, the Executive’s employment terminates because the
Executive dies or as a result of Permanent Disability, the Company shall have no further obligations to the Executive except as follows:
(i) the
Accrued Benefits;
(ii) the
Prorated Bonus; and
(iii) (A) all
outstanding Time Vesting LTIP Awards, if any, that are subject to forfeiture on the date of termination shall fully vest and become non-forfeitable,
and (B) the Continued Eligibility for Vesting.
The amounts payable or to be provided under this
Section 4(c) shall be in lieu of any amounts that would otherwise be paid or provided under Section 4(a),
Section 4(b) and Section 4(d).
(d) Change
in Control Termination. If, during the Employment Period, the Company shall terminate the Executive’s employment without Cause
(and other than upon the Executive’s death or Permanent Disability), or if the Executive shall terminate his employment for Good
Reason, in either case, in connection with, or within twelve (12) months following, a Change in Control (any such termination of employment,
a “Change in Control Termination”), the Company shall have no further obligations to the Executive except as follows:
(i) the
Accrued Benefits;
(ii) the
Prorated Bonus;
(iii) the
Company shall pay the Executive, on the 60th day following the date of termination, a lump sum amount equal to the product
of two times (2x) the sum of (A) the Annual Base Salary (which shall be the Annual Base Salary prior to any reduction if the termination
is for Good Reason because of a reduction in the Annual Base Salary) plus (B) the Target Bonus Amount; and
(iv) (A) all
prior share Awards granted to Executive pursuant to any agreement(s) entered into prior to the Effective Date between Executive
and the Company to the extent outstanding as of the date of termination that are subject to forfeiture on the date of termination shall
fully vest and become non-forfeitable; provided, that any such Awards that are subject to performance-based vesting restrictions
or conditions shall instead be treated in accordance with clause (C) of this Section 4(d)(iv); (B) all outstanding Time
Vesting LTIP Awards, if any, that are subject to forfeiture on the date of termination shall fully vest and become non-forfeitable, and
(C) all outstanding Performance Vesting LTIP Awards, if any, that are subject to forfeiture on the date of termination shall fully
and immediately vest and become non-forfeitable at the greater of (1) one hundred percent (100%) of the number of shares of Common
Stock granted pursuant to each such award, or (2) the performance level that has been achieved as of the date of termination.
The amounts payable or to be provided under this
Section 4(d) shall be in lieu of any amounts that would otherwise be paid or provided under Section 4(a),
Section 4(b) and Section 4(c).
(e) Condition.
The Company shall not be required to make the payments and provide the benefits specified in Sections 4(a)(ii), 4(a)(iii), 4(a)(iv),
4(b)(ii), 4(b)(iii), 4(c)(ii), 4(c)(iii), 4(d)(ii), 4(d)(iii) or 4(d)(iv) hereof unless, prior to payment, the parties
hereto (or the Executive’s estate in the event of Executive’s death) have entered into a release substantially in the form
attached hereto as Exhibit B (for which the applicable seven-day revocation period has expired), prior to the 60th
day following the date of termination, under which the Executive releases the Company, its Affiliates and their officers, directors and
employees from all liability (other than the payments and benefits under this Agreement); provided, that if the time period for executing
and returning the release begins in one taxable year and ends in a second taxable year, any payments shall not commence until the second
taxable year. In the event that such release is not executed and delivered to the Company in accordance with this Section 4(e) prior
to the 60th day following the date of termination (with the applicable seven-day revocation period having expired), the Executive
shall forfeit the payments and benefits specified in Sections 4(a)(ii), 4(a)(iii), 4(a)(iv), 4(b)(ii), 4(b)(iii), 4(c)(ii), 4(c)(iii),
4(d)(ii), 4(d)(iii) or 4(d)(iv) hereof, as applicable.
(f) Resignation
from Certain Directorships. Following the Employment Period or the termination of the Executive’s employment for any reason,
if and to the extent requested by the Board, the Executive agrees to resign from the Board, all fiduciary positions (including as trustee)
and from all other offices and positions he holds with the Company and any of its Affiliates; provided, however, that if the Executive
refuses to tender his resignation after the Board has made such request, then the Board shall be empowered to tender the Executive’s
resignation from such offices and positions.
5. Certain
Definitions.
(a) For
purposes of this Agreement, “Change in Control” shall mean a “Change of Control,” as defined in the Incentive
Plan; provided, that notwithstanding anything to the contrary in the Incentive Plan or this Agreement, any transaction with Pershing
Square Capital Management, L.P. or any of its Affiliates shall not be deemed to be a Change in Control, unless otherwise determined by
the Board. For the avoidance of doubt, and notwithstanding anything to the contrary in the Incentive Plan or this Agreement, a transaction
or series of transactions in which Seaport becomes a separate and independently traded company on a nationally recognized exchange shall
not constitute a Change in Control for purposes of this Agreement.
(b) For
purposes of this Agreement, “Affiliate” means, with respect to any Person, (A) if such Person is not an individual,
any Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person, where “control”
means the possession, directly or indirectly, of the power to direct the management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise or any entity in which such Person has a substantial equity interest, and (B) if
such Person is an individual, a spouse of such Person, or any child or parent of such Person. For purposes of this Agreement, “Person”
means any individual, partnership, corporation, limited liability company, association, business trust, joint venture, business entity
or other entity of any kind or nature, including any business unit of such Person.
6. No
Mitigation. In no event shall the Executive be obligated to seek or obtain other employment after the date of termination, or take
any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such
amounts shall not be reduced, whether or not the Executive obtains other employment. The Company may offset any amounts that it owes
to the Executive by any amounts that the Executive owes to the Company or its Affiliates; provided that, in no event, shall any payment
under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Code
be subject to offset by any amount unless such offset is expressly permitted under Section 409A of the Code.
7. Potential
Reductions.
(a) Notwithstanding
any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Executive (including,
without limitation, any payment or benefit received in connection with a Change in Control or the termination of the Executive’s
employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments
and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under
Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account
any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement,
the Company will reduce the Executive’s payments and/or benefits under this Agreement, to the extent necessary so that no portion
of the Total Payments is subject to the Excise Tax (but in no event to less than zero), in the following order: (i) any cash severance
amount, as described in Sections 4(d)(ii) and 4(d)(iii); and (ii) any acceleration of outstanding equity compensation,
as described in Section 4(d)(iv) hereof (the payments and benefits set forth in clauses (i) through (ii) of
this Section 7(a), together, the “Potential Payments”); provided, however, that the Potential Payments
shall only be reduced if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal,
state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal
exemptions attributable to such reduced Total Payments), is greater than or equal to (B) the net amount of such Total Payments without
such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of
Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase
out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). For purposes of determining whether
and the extent to which the Total Payments will be subject to the Excise Tax: (i) no portion of the Total Payments the receipt or
enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within
the meaning of Section 280G(b) of the Code shall be taken into account; (ii) no portion of the Total Payments shall be
taken into account which does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Code (including, without limitation, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax,
no portion of such Total Payments shall be taken into account which constitutes reasonable compensation for services actually rendered,
within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of
the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment
or benefit included in the Total Payments shall be determined by in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.
(b) All
determinations required to be made under this Section 7, including whether an Excise Tax would otherwise be imposed, whether
the Total Payments shall be reduced, the amount of any such reduction and the assumptions to be utilized in arriving at such determinations
not expressly provided for herein, shall be made by an independent, nationally recognized accounting firm or compensation consulting
firm mutually acceptable to the Company and Executive (the “Determination Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within 15 business days of the receipt of notice from the Company that a payment is due
to be made hereunder, or such earlier time as is requested by the Executive. All reasonable fees and expenses of the Determination Firm
shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and Executive, absent
manifest error. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination
by the Determination Firm hereunder, it is possible that payments which Executive was entitled to, but did not receive as a result of
application of Section 7, could have been made without the imposition of the Excise Tax (“Underpayment”),
consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive but
no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding
right to such Underpayment arises.
(c) The
fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 7
shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.
8. Restrictive
Covenants.
(a) Non-Solicit.
During the Employment Period, and for a twelve (12) month period after the Executive’s employment is terminated for any reason,
the Executive shall not (except in connection with the performance of his duties for the Company) in any manner, directly or indirectly
(without the prior written consent of the Company) Solicit (as defined below) anyone who is then an employee or independent contractor
of the Company or its Affiliates or who was an employee or independent contractor of the Company or its Affiliates within the prior twelve
(12) months to resign from the Company or its Affiliates or to apply for or accept employment with any other business or enterprise.
For purposes of this Agreement, “Solicit” means any direct or indirect communication of any kind, regardless of who
initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.
(b) Confidential
Information. The Executive hereby acknowledges that, as an employee of the Company, he will be making use of, acquiring and adding
to confidential information of a special and unique nature and value relating to the Company and its Affiliates and their strategic plan
and financial operations. The Executive further recognizes and acknowledges that all confidential information is the exclusive property
of the Company and its Affiliates, is material and confidential, and is critical to the successful conduct of the business of the Company
and its Affiliates. Accordingly, the Executive hereby covenants and agrees that he will use confidential information for the benefit
of the Company and its Affiliates only and shall not at any time, directly or indirectly, during the term of this Agreement and thereafter
divulge, reveal or communicate any confidential information to any person, firm, corporation or entity whatsoever, or use any confidential
information for his own benefit or for the benefit of others. Notwithstanding the foregoing, the Executive shall be authorized to disclose
confidential information (i) as may be required by law or legal process after providing the Company with prior written notice and
an opportunity to respond to such disclosure (unless such notice is prohibited by law), or (ii) with the prior written consent of
the Company. Notwithstanding anything to the contrary in this Agreement, the Executive shall not be prohibited from: (i) filing
and, as provided for under Section 21F of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (ii) providing confidential
information to the extent required by law or legal process or permitted by Section 21F of the Exchange Act; (iii) cooperating,
participating or assisting in any government or regulatory entity investigation or proceeding; or (iv) receiving an award for information
provided to any government agency that is responsible for enforcing the law.
(c) Non-Competition.
During the Employment Period, and for a twelve (12) month period after the Executive’s employment is terminated for any reason,
the Executive shall not directly or indirectly (whether for compensation or otherwise) own or hold any interest in, manage, operate,
control, consult with, render services for, or in any manner participate in any business that is directly competitive with the business
of the Company, either as a general or limited partner, proprietor, shareholder, officer, director, agent, employee, consultant, trustee,
Affiliate or otherwise. Nothing herein shall prohibit the Executive from being a passive owner of not more than 2% of the outstanding
securities of any publicly traded company engaged in the business of the Company.
(d) Survival.
Any termination of the Executive’s employment or of this Agreement shall have no effect on the continuing operation of this Section 8.
(e) Non-Disparagement.
During the Employment Period and thereafter, the Executive shall not, in any manner, directly or indirectly through another person or
entity, knowingly make any false or any disparaging or derogatory statements about HHH or Seaport, any of their Affiliates or any of
their employees, officers or directors. HHH and Seaport, in turn, agrees that they will not make, in any authorized corporate communications
to third parties, and they will direct the members of the respective Boards and the executive officers of the Company, not to in any
manner, directly or indirectly through another person or entity, knowingly make any false or any disparaging or derogatory statements
about the Executive; provided, however, that nothing herein shall prevent either party from giving truthful testimony or from otherwise
making good faith statements in connection with legal investigations or other proceedings.
(f) Enforcement.
If, at the time of enforcement of this Section 8, a court of competent jurisdiction holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope or area. Because the Executive’s services are unique
and because the Executive has access to confidential information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Section 8. Therefore, in the event of a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions
hereof.
9. Successors.
(a) This
Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession had taken place. Upon the occurrence of a Change in
Control, the Company will similarly require the acquiring entity to assume the Company’s obligations under this Agreement. As used
in this Agreement, “Company” shall mean the Company as defined above and any successor to its business and/or assets
(or the acquiring entity upon the occurrence of a Change in Control as described and defined above).
(d) The
Company may assign this Agreement to Seaport effective as of the date Seaport begins trading on a nationally recognized exchange without
the consent of the Executive.
10. Disputes.
(a) Jurisdiction
and Choice of Forum. Except as set forth in Section 8(f), all disputes directly or indirectly arising under or related
to the employment of the Executive or the provisions of this Agreement shall be settled by final and binding arbitration under the rules of
the American Arbitration Association (“AAA”) then in effect, such arbitration shall be held in New York, New York,
as the sole and exclusive remedy of the parties. The arbitration shall be heard by one (1) AAA arbitrator who shall be selected
by AAA. The arbitrator shall have the authority to order expedited discovery and shall set a hearing within ninety (90) days following
the arbitrator’s appointment as arbitrator by the AAA. The arbitrator shall render an award and decision not later than thirty
(30) days following the closing of arbitration hearing. Judgment on any arbitration award may be entered in any court of competent jurisdiction.
The prevailing party in any arbitration hearing shall also be entitled to recover his/its costs and attorneys’ fees.
(b) Governing
Law. This Agreement and any disputes, claims or defenses arising under it will be governed by and construed in accordance with the
law of the State of Delaware applicable to contracts made and to be performed entirely within that State.
11. Section 409A
of the Code.
(a) Compliance.
The intent of the parties is that payments and benefits under this Agreement are either exempt from or comply with Section 409A
of the Code (“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted
to that end. The parties acknowledge and agree that the interpretation of Section 409A and its application to the terms of this
Agreement is uncertain and may be subject to change as additional guidance and interpretations become available. In no event whatsoever
shall the Company be liable for any tax, interest or penalties that may be imposed on the Executive by Section 409A or any damages
for failing to comply with Section 409A.
(b) Six
Month Delay for Specified Employees. If any payment, compensation or other benefit provided to the Executive in connection with his
employment termination is determined, in whole or in part, to constitute “nonqualified deferred compensation” within
the meaning of Section 409A and the Executive is a “specified employee” as defined in Section 409A, no part
of such payments shall be paid before the day that is six months plus one day after the Executive’s date of termination or, if
earlier, the Executive’s death (the “New Payment Date”). The aggregate of any payments that otherwise would
have been paid to the Executive during the period between the date of termination and the New Payment Date shall be paid to the Executive
in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New
Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement.
(c) Termination
as a Separation from Service. A termination of employment shall not be deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment
until such termination is also a “separation from service” within the meaning of Section 409A and for purposes
of any such provision of this Agreement, references to a “resignation,” “termination,” “terminate,”
“termination of employment” or like terms shall mean separation from service.
(d) Payments
for Reimbursements and In-Kind Benefits. All reimbursements for costs and expenses under this Agreement shall be paid in no event
later than the end of the calendar year following the calendar year in which the Executive incurs such expense. With regard to any provision
herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the
right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (ii) the amount
of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for
reimbursement or in-kind benefits to be provided in any other taxable year.
(e) Payments
within Specified Number of Days. Whenever a payment under this Agreement specifies a payment period with reference to a number of
days (e.g., “payment shall be made within 30 days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of the Company.
(f) Installments
as Separate Payment. If under this Agreement, an amount is paid in two or more installments, for purposes of Section 409A, each
installment shall be treated as a separate payment.
12. Miscellaneous.
(a) Amendment.
This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) Notices.
Whenever any notice is required or permitted hereunder, such notice must be in writing and personally delivered, mailed by certified
or registered mail, return receipt requested, or by email transmission. The parties agree that any notices shall be given at the following
addresses; provided that the parties may change, at any time and from time to time, by written notice to the other, the address which
it or he had previously specified for receiving notices:
If to the Executive:
at the Executive’s primary residential address
as shown on the records of the Company
Email: antonnikodemus@gmail.com
If to the Company:
at the Company’s corporate headquarters
Attention: Office of the General Counsel
with a copy to:
William A. Ackman, Chairman of the Board
787 11th Avenue, 9th Floor
New York, NY 10019
or to such other address as either party shall
have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by
the addressee.
(c) Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) Tax
Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
(e) Compliance
with Dodd-Frank. All payments under this Agreement, if and to the extent they are subject to the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”), shall be subject to any incentive compensation policy established
from time to time by the Company to comply with the Dodd-Frank Act. The Executive acknowledges and agrees that the Company may from time
to time establish incentive compensation policies that may apply to this Agreement and the awards contemplated hereunder and that applicable
sections of this Agreement and any related documents shall be deemed superseded by and subject to the terms and conditions of any such
incentive compensation policies from and after the effective date thereof to the extent required by securities and/or exchange rules and
regulations.
(f) No
Waiver. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement
or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the Company’s
right to terminate the Executive for Cause pursuant to Section 3 (subject to Executive’s right to challenge such determination
in accordance with the provisions set forth in Section 3), shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.
(g) No
Strict Construction. It is the parties’ intention that this Agreement not be construed more strictly with regard to the Executive
or the Company.
(h) Entire
Agreement. This Agreement shall supersede any other employment or severance agreement or similar arrangements between the parties,
and shall supersede any prior understandings, agreements or representations by or among the parties, written or oral, whether in term
sheets, presentations or otherwise, relating to the subject matter hereof. In the event of any inconsistency or conflict between any
terms, definitions or conditions of this Agreement and the terms, definitions or conditions of any other agreement, the terms, definitions
and conditions of this Agreement shall govern and control.
(i) Counterparts.
This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
(j) Section References;
Captions. Any reference to a “Section” herein is a reference to a section of this Agreement unless otherwise stated.
The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF, the Executive
has hereunto set the Executive’s hand and, pursuant to the authorization from the Board or other duly authorized governing body,
the Company has caused these presents to be executed in its name on its behalf, all effective as of the Effective Date.
[Remainder of page intentionally left blank]
| |
EXECUTIVE: |
| |
|
|
| |
By |
/s/ Anton Nikodemus |
| |
|
Anton Nikodemus |
| |
|
|
| |
HOWARD HUGHES HOLDINGS INC.: |
| |
|
|
| |
By |
/s/ David R. O’Reilly |
| |
|
Name: |
David R. O’Reilly |
| |
|
Title: |
Chief Executive Officer |
Exhibit A
The Effective Date of the
Employment Agreement, dated __________________, 2023, entered into by and between Howard Hughes Holdings Inc., a Delaware corporation
(“HHH”), and Anton Nikodemus shall be _________, 202__.
