Exhibit 10.2


 





EMPLOYMENT AGREEMENT


 


This Employment Agreement
(this “Agreement”), effective as of December 1, 2020 (the “Effective Date”), is entered into
by and between The Howard Hughes Corporation, a Delaware corporation (the “Company”), and L. Jay Cross (the
 “Executive”).


 


RECITALS


 


WHEREAS, the Company
desires to employ the Executive upon and subject to the terms, conditions, rights and obligations set forth in this Agreement;


 


WHEREAS, the Executive
desires to accept such employment upon and subject to the terms, conditions, rights and obligations set forth in this Agreement;
and


 


WHEREAS, the parties
desire to enter into and be bound by this Agreement.


 


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 on 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”). Thereafter, the Employment
Period shall renew automatically for 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.


 


2.               
Terms of Employment.


 


(a)        
Position and Duties.


 


(i)              
During the Employment Period, the Executive shall serve as President of the Company, 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”). The Executive shall report to the Board.


 


(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) consistent with Company governance policies, serve on corporate boards or committees of
businesses that are not competitors of the Company, with prior written approval of the Board or an authorized committee
thereof, (B) serve on civic or charitable boards or committees, (C) manage personal and family investments, and
(D) engage in lectures or teaching, so long as any such activities referenced in Sections 3(a)(ii)(A)-(D) 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. The Company acknowledges that the
Executive’s prior employer will make payments to the Executive through December 31, 2020, but that such payments shall
not constitute a violation of this Section 2(a)(ii); provided, that the Executive does not render any services to or
engage in any activities with such prior employer in violation of this Agreement, it being acknowledged and agreed that the
Executive’s limited transition services to such prior employer as previously disclosed to the Company shall not be
deemed to violate this Agreement.


 






     


     


    

 


(iii)           
Place of Performance. The principal place of employment of the Executive as of the Effective Date will be at the
Company’s corporate headquarters in Houston, Texas and its offices in New York City, New York (the “Principal Location”).
The Executive understands that he shall regularly be required to travel in connection with the performance of his duties hereunder.


 


(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 SEVEN HUNDRED AND FIFTY THOUSAND DOLLARS ($750,000) (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 2021, 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 MILLION NINE
HUNDRED FIFTY THOUSAND DOLLARS ($1,950,000) (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 EIGHTY PERCENT (80%) of the Target Bonus Amount, but not more than ONE-HUNDRED TWENTY PERCENT
(120%) 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.


 






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(iii)           
Annual Equity or Equity-Based Incentive Awards. Commencing in 2022, and continuing during each subsequent calendar
year of the Employment Period, the Executive shall be eligible to receive an annual equity award (the “Annual LTIP Award”),
which shall be awarded each year during the Employment Period by 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 LTIP Award shall be a
long-term equity or equity-based incentive award with an aggregate targeted grant value (with respect to the portion of the Annual
LTIP Award that is subject to performance metrics, based on the achievement of the applicable performance metrics that cause the
award to vest at the level of 100%, and without taking into account the probability of the award vesting at that level on the date
of grant) on the date of grant of ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000) (the “Target LTIP Award Amount”),
with the number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”)
subject to such Annual LTIP Award determined by dividing the aggregate grant value by the closing price per share of the Common
Stock on a nationally recognized exchange or as otherwise provided for in the Incentive Plan on the date of grant, which shall
be awarded each year by the Compensation Committee based on the achievement of the Annual Bonus Performance Metrics for the applicable
year. The determination as to whether the performance goals have been achieved shall be made in the sole discretion of the Compensation
Committee. The Annual LTIP Award shall be granted to the Executive at the same time that other senior executives of the Company
are granted their annual equity or equity-based incentive awards but in no event later than March 15 following the end of the calendar
year to which such Annual LTIP Award relates. Fifty percent (50%) of each Annual LTIP Award granted to the Executive shall provide
for pro rata time vesting over five years in accordance with the terms of the applicable award agreement (the “Time
Vesting LTIP Award”) and the other fifty percent (50%) of such award shall provide for performance-based vesting (the
 “Performance Vesting LTIP Award”). All Annual LTIP Awards shall be subject to the terms and conditions of the
Incentive Plan and any applicable award agreements thereunder. For purposes of this Agreement, “Incentive Plan”
shall mean The Howard Hughes Corporation 2020 Equity Incentive Plan, as in effect from time to time (and any successor plan thereto).


 


(iv)            Initial
Annual LTIP Award. On November 30, 2020, the Company approved the grant to the Executive of an initial Annual LTIP Award
(to be effective as of the Effective Date) with an aggregate targeted grant value of ONE MILLION EIGHT HUNDRED THOUSAND
DOLLARS ($1,800,000), consisting of (i) an award of stock options with a Black-Scholes value of FOUR HUNDRED FIFTY THOUSAND
DOLLARS ($450,000) (based on the closing price of the Common Stock on November 30, 2020), (ii) an award of time-based
restricted stock with a grant date value of SIX HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($675,000) (based on the closing price
of the Common Stock on November 30, 2020), and (iii) an award of performance-based restricted stock with a grant date value
of SIX HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($675,000) (based on the closing price of the Common Stock on November 30, 2020
and the achievement of the applicable performance metrics that cause the award to vest at the level of 100%, and without
taking into account the probability of the award vesting at that level on the date of grant). Each of the foregoing awards
are 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). For the avoidance of doubt, for purposes of Section 4
of this Agreement, the stock options and time-based restricted stock described in the foregoing clauses (i) and (ii),
respectively, shall each be treated as a “Time Vesting LTIP Award” and the performance-based restricted stock
described in clause (iii) shall be treated as a “Performance Vesting LTIP Award.”


 






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(v)           
Indemnification. Simultaneously herewith, or as promptly as practicable hereafter, 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 and/or executive officers prior to the Effective Date.


 


(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.


 






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(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.


 






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(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 the Principal
Location on the date of this Agreement;


 


provided, however, that in each case the
Executive must provide the Company with written notice that an 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.


 






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(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 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) 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”).


 






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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)           
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).


 






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(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 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) 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 A (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.


 






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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.


 


(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.


 






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(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.


 






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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.





 






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(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 the
Company, any of its Affiliates or any of their employees, officers or directors. The Company, in turn, agrees that it will not
make, in any authorized corporate communications to third parties, and it will direct the members of the Board 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).


 






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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 Houston, Texas, 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.


 






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(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


 


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

888 Seventh Avenue, 42nd 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.


 






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(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.


 


(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]





 






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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.


 


	 	EXECUTIVE
	 	 
	 	/s/
    L. Jay Cross
	 	L. Jay Cross
	 	 
	 	THE HOWARD HUGHES CORPORATION
	 	 
	 	By	/s/
    Peter F. Riley
	 	 	Name:	Peter F. Riley
	 	 	Title: 	Senior Executive Vice President,
	 	 	General Counsel & Secretary




 


[Signature
Page to Cross Employment Agreement]


 






     


     


    

 





EXHIBIT
A


 


WAIVER
AND RELEASE AGREEMENT


 


This
Waiver and Release Agreement (hereinafter “Release”) is entered into among L. Jay Cross (hereinafter “Executive”)
and The Howard Hughes Corporation, a Delaware corporation (the “Company”).


 


The
parties previously entered into an employment agreement effective as of December 1, 2020 (the “Employment Agreement”),
pursuant to which Executive is entitled to certain payments and benefits upon termination of employment subject to the execution
and nonrevocation of this Release. Executive has had a termination of employment pursuant to the Employment Agreement.


 


NOW
THEREFORE, in consideration of certain payments and benefits under the Employment Agreement, Executive and the Company agree as
follows:


 


1.                 
Executive expressly waives and releases the Company, its affiliates and related entities, parent corporations and subsidiaries,
and all current and former directors, administrators, supervisors, managers, agents, officers, partners, stockholders, attorneys,
insurers and employees of the Company and its affiliates, related entities, parent corporations and subsidiaries, and their successors
and assigns (the “Company Released Entities”), from any and all claims, actions and causes of action, at law
or in equity, known or unknown, including, without limitation, those directly or indirectly relating to or connected with Executive’s
employment with the Company or termination of such employment, including but not limited to any and all claims under the Texas
Commission on Human Rights Act, the Texas Payday Act, the Employee Retirement Income Security Act of 1974, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, as such Acts have been amended,
and all other forms of employment discrimination whether under federal, state or local statute or ordinance, wrongful termination,
retaliatory discharge, breach of express, implied, or oral contract, interference with contractual relations, defamation, intentional
infliction of emotional distress and any other tort or contract claim under common law of any state or for attorneys’ fees,
based on any act, transaction, circumstance or event arising up to and including the date of Executive’s execution of this
Release; provided, however, that (i) nothing herein shall limit or impede Executive’s right to file or pursue an administrative
charge with, or participate in, any investigation before the Equal Employment Opportunity Commission, or any similar local, state
or federal agency, or to file a claim for unemployment compensation benefits, and/or any causes of action which by law Executive
may not legally waive, (ii) Executive does not release the Company Released Entities from any rights and/or claims (a) Executive
may have that arise after the date Executive signs this Release, (b) that by law cannot be waived by private agreement, (c) to
enforce the Employment Agreement in accordance with its terms (including the severance provisions set forth in the Employment
Agreement), subject to the terms of this Release or (d) to enforce this Release. Executive agrees, however, that if Executive
or anyone acting on Executive’s behalf, brings any action concerning or related to any cause of action or liability released
in this Release, Executive waives any right to, and will not accept, any payments, monies, damages, or other relief, awarded in
connection therewith. Notwithstanding anything to the contrary in this Release, Executive shall not be prohibited from: (i) filing
and, as provided for under Section 21F of the Securities Exchange Act of 1934, 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 Securities Exchange Act of 1934; (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. The Company expressly waives and releases Executive from any
and all claims, actions and causes of action, at law or in equity, known or unknown, arising prior to the Effective Date; provided,
however, the Company does not release Executive from any of the following rights and/or claims: (i) any rights and/or claims the
Company may have that arise after the date Executive signs this Release; (ii) any rights and/or claims that by law cannot be waived
by private agreement; (iii) any rights and/or claims which are based upon any acts or omissions of Executive that involve fraud
or arising out of acts that constitute a violation of criminal laws; (iv) any rights and/or claims to enforce the Employment Agreement
in accordance with its terms (including the restrictive covenants set forth in the Employment Agreement), subject to the terms
of this Release; or (v) any rights and/or claims to enforce this Release.


 






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2.                 
Executive acknowledges: (a) that Executive has been advised in writing hereby to consult with an attorney before signing
this Release, and (b) that Executive has had at least [twenty-one (21)][forty-five (45)] days after receipt of this information
and Release to consider whether to accept or reject this Release. Executive understands that Executive may sign this Release prior
to the end of such [twenty-one (21)][forty-five (45)] day period, but is not required to do so. In addition, Executive has seven
(7) days after Executive signs this Release to revoke it. Such revocation must be in writing and delivered either by hand or mailed
and postmarked within the seven (7) day revocation period. If sent by mail, it is requested that it be sent by certified mail,
return receipt requested to the Company, in care of the office of the General Counsel. If Executive revokes this Release as provided
herein, it shall be null and void. If Executive does not revoke this Release within seven (7) days after signing it, this Release
shall become enforceable and effective on the eighth (8th) day after the Executive signs this Release (the “Effective
Date”).


 


3.                 
Executive and the Company agree that neither this Release nor the performance hereunder constitutes an admission by the
Company or any of its affiliates of any violation of any federal, state or local law, regulation, or common law, or any breach
of any contract or any other wrongdoing of any type.


 


4.                 
This Release shall be construed and enforced pursuant to the laws of the State of Delaware as to substance and procedure,
including all questions of conflicts of laws.


 


5.                 
This Release constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all
prior and contemporaneous agreements, if any, between the parties relating to the subject matter thereof; provided that this Release
does not apply to: (a) any claims under employee benefit plans subject to the Employee Retirement Income Security Act of
1974 in accordance with the terms of the applicable employee benefit plan, or any option agreement or other agreement pursuant
to which Executive may exercise rights after termination of employment to acquire stock or other equity of the Company, (b) any
claim under or based on a breach of this Release or Sections 4 or 8 of the Employment Agreement after the date that Executive
signs this Release; (c) rights or claims that may arise under the Age Discrimination in Employment Act or otherwise after
the date that Executive signs this Release; or (d) any right to indemnification or directors and officers liability insurance
coverage to with Executive is otherwise entitled in accordance with the Employment Agreement.


 






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6.                 
EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS FULLY READ AND FULLY UNDERSTANDS THIS RELEASE; AND THAT EXECUTIVE ENTERED INTO
IT FREELY AND VOLUNTARILY AND WITHOUT COERCION OR PROMISES NOT CONTAINED IN THIS RELEASE.


 


EXECUTIVE


 


	L.
    Jay Cross	 




 


THE HOWARD HUGHES
CORPORATION


 


	By:	 	 






	 	Name:	 	 
	 	Title:	 	 




 






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