**Exhibit 10.45**

 

**EMPLOYMENT AGREEMENT**

 

AGREEMENT (**“Agreement”**), dated as of July 23,2007 (**“EffectiveDate”**) by and among Centro Watt Management Joint Venture 2 LP, (**“CWMJV”**),Centro Properties Group, an entity listed on the Australian Securities Exchange(**“Centro”**)(collectively referred to as **“Company”**) and Michael Carroll (**“Executive”**).

 

**RECITAL**

 

CWMJV desires to employ Executive as of theEffective Date, on the terms and conditions set forth in this Agreement, andExecutive desires to be so employed.

 

**AGREEMENT**

 

IN CONSIDERATION of the premises and themutual covenants set forth below, the parties hereby agree as follows:

 

1.            Employment.  CWMJV hereby agrees to employ Executive andExecutive hereby agrees to accept such employment, on the terms and conditionshereinafter set forth.

 

2.            Prior Agreements.  The Parties hereby agree that this Agreementterminates and supersedes the Employment Agreement between Executive and NewPlan Realty Trust, Inc.  dated as ofMarch 15, 2005 (**“Prior Employment Agreement”**) and that any provisions of thePrior Employment Agreement that specifically survive closing are hereby waivedand deemed to be null and void and no force or effect.  Accordingly, as of the Effective Date,neither the Company (or Centro NP LLC, the corporate successor to New PlanExcel Realty Trust, Inc.) nor the Executive shall have any rights orobligations pursuant to the Prior Employment Agreement; provided, however, thatprior service with New Plan Realty Trust, Inc will be recognized for all relevantpurposes including, without limitation, Sections 6(e) and (f) of thisAgreement.

 

3.            Term.  Executive’s employment by CWMJV hereundershall commence on the Effective Date and shall continue for one (1) year (**“Original Term”**).  The term of employment hereunder shallthereafter be automatically extended for an unlimited number of additionalone-year periods (each, an **“Additional Term,”** and together with the Original Term andany Additional Terms, the **“Term”**) unless, at least 180 days prior to the expiration ofthe Term, either the Executive or the Company gives written notice to the otherthat it is electing not to so extend the Term. Notwithstanding the foregoing, the Term may be earlier terminated instrict accordance with the provisions of Section 7 hereof, but subject tothe provisions of Section 9 hereof. At the time Executive ceases to be a full-time employee of CWMJV, theExecutive agrees that he shall resign from any office he holds with Company andits subsidiaries and any entity in control of, controlled by or under commoncontrol with the Company or in which the Company owns any common or preferredstock or any ownership interest or any entity in control of, controlled by orunder common control with such entity (**“Affiliate”**).

 

----

 

4.            Positionand Duties.

 

Executive Vice President and Chief OperatingOfficer.  Duringthe Term, the Executive shall serve as the Executive Vice President and ChiefOperating Officer of all United States operations of Centro and its Affiliates(**“Centro US”**);shall have all authorities, duties and responsibilities customarily exercisedby an individual serving as the Executive Vice President and Chief OperatingOfficer of an entity of the size and nature of Centro US; shall have such otherduties, authorities and responsibilities as the Centro Chief Executive Officermay from time to time reasonably designate, consistent with the foregoing; andshall report directly to the Centro Chief Executive Officer.  Executive will comply with the Company’spolicies including, but not limited to, the Code of Conduct and the EmployeeTrading in Securities Policy.  During theTerm, the Executive shall devote substantially all of his business time andefforts to the business and affairs of Centro US (unless otherwise directed bythe Centro US CEO); however, nothing shall preclude the Executive from thefollowing:  (i) serving on theboards of a reasonable number of non-competing business entities, tradeassociations and charitable organizations, (ii) engaging in charitableactivities and community affairs, (iii) accepting and fulfilling areasonable number of speaking engagements, and (iv) managing his personalfinancial and legal affairs provided that such activities do not eitherindividually or in the aggregate interfere with the proper performance of hisduties and responsibilities hereunder and are not likely to be contrary to theCompany’s interests.  The Executive hasdisclosed to the Company a list of boards of which he is currently a member,and the Company has consented to his continued membership on such boards.  The Executive shall give prior written noticebefore joining any new business board on or after the Effective Date.

 

5.            Place ofPerformance.  The principal place ofemployment of Executive shall be at the Company’s US corporate offices in NewYork, New York.

 

6.            Compensation andRelated Matters.

 

(a)           *Salary*.  During the Term, CWMJV shall pay Executive anannual base salary of not less than US$390,000 (**“Base Salary”**).  Executive’s Base Salary shall be paid inapproximately equal installments in accordance with CWMJV’s customary payrollpractices.  If Executive’s Base Salary isincreased, such increased Base Salary shall then constitute the Base Salary forall purposes of this Agreement.

 

(b)           *Short Term Incentive-Bonus*.  Executive shall be eligible for an annualshort term incentive-bonus (**“STI”**) based on the achievement of certain financialgoals.  For the financial year ending June 30,2008, fifty percent of the STI will be based on achievement of CentroDistributions per Security target and maximum goals (as defined by the CentroBoard) and fifty percent of the STI will be based on achievement of Centro USFunds from Operations target and maximum goals (as defined by the Centro CEOand the Centro US CEO).  The target andmaximum goals for the financial year ending June 30, 2008 shall beestablished prior to July 31, 2007. If a target goal is achieved, Executive shall receive a STI of 35% ofBase Salary for that STI measure.  If amaximum goal is achieved, Executive shall receive a STI of 50% of Base Salaryfor that STI measure.  If performance fora measure between target goal and maximum goal is achieved, Executive shallreceive a pro rata STI between 35% and 50% of Base Salary for thatmeasure.  Any payment of a prorated STI,if target for a measure is not achieved, shall be 

 

2

----

 

subjectto the discretion of the Centro Board. For the financial year ending June, 30, 2007, Executive shall beeligible for a guaranteed STI payment (the **“Stub STI Payment”**) betweenUS$70,000 and US$ 100,000, the amount of such guaranteed STI within such rangeto be at the discretion of the Centro Board payable by July 31, 2007.  For financial years commencing after June 30,2008, the Centro Board may change the basis upon which STI may be calculated,but if the target is achieved the Executive shall continue to receive an STIpayout of a total of 70% of Base Salary and if the maximum goal is achieved thepayout.  shall be a total of 100% of BaseSalary (the **“STIRange”**).  If Executive’semployment is terminated for any reason prior to the end of a financial year,he shall not be entitled to a prorated STI unless otherwise specifically agreedby the Centro Board.  Notwithstandinganything contained herein to the contrary, a change in the basis upon which STImay be calculated after June 30, 2008 (but not a reduction to the STIRange) shall not constitute a breach or violation of this Agreement by theCompany or constitute Good Reason for Executive to terminate hisemployment.  With the exception of theSTI for the financial year ending June 30, 2007, all STI amounts will bepaid at the first appropriate opportunity after June 30 of that financialyear, but not later than July 31 of that same calendar year.

 

(c)           *Long Term Incentive Compensation*.  Executive shall from time to time be invitedto participate in the Centro Employee Security Plan, the Centro ExecutiveOption Plan or other stock or option related plans that may be developed in thefuture.  The Centro Board shallperiodically review the nature and extent of such plans in line with comparablemarket practice.

 

(i)         Attached hereto as Exhibit A is aninvitation from the Centro Board with respect to a grant of stock options ofCentro securities to the value of US$400,000. Upon submission of the invitation by the Executive to the Company,Executive shall be granted such options and receive a written grant of stockoptions consistent with the terms of Exhibit A (the **“Option Invitation”**).

 

(ii)        Attached hereto as Exhibit B is aninvitation from the Centro Board with respect to a grant of restricted sharesof Centro to the value of US$400,000. Upon submission of the invitation by the Executive to the Company,Executive shall be granted such restricted shares and receive a written grantof restricted shares consistent with the terms of Exhibit B (the **“Stock Invitation”**).

 

(d)          *Expenses*.  CWMJV shall promptly reimburse Executive forall reasonable business expenses upon the presentation of reasonably itemizedstatements of such expenses in accordance with CWMJV’s policies and proceduresnow in force or as such policies and procedures may be modified with respect toall senior executive officers of CWMJV.

 

(e)           *Vacation*.  Executive shall be entitled to the number ofweeks of vacation per year provided to the CWMJV’s senior executive officers,but in no event less than four (4) weeks annually.

 

(f)           *Welfare, Pension and Incentive Benefit Plans*.  During the Term, the Executive shall beentitled to participate in all employee benefit plans, programs andarrangements made available to other CWMJV senior executives generally,including, without limitation, pension, income deferral, savings, 401(k), andother retirement plans or programs, 

 

3

----

 

medical,dental, vision, prescription drug, hospitalization, short-term and long-termdisability and life insurance plans and programs, accidental death anddismemberment protection, travel accident insurance, and any other employee benefitplan,  program  or arrangement that may from time to time bemade available to other CWMJV senior executives generally, including any plans,programs or arrangements that supplement the above-listed types of plans,programs or arrangements, whether funded or unfunded, subject to the terms ofthe applicable plan documents and generally applicable CWMJV policies, in eachcase on terms and conditions that are no less favorable to him than thoseapplying to other CWMJV senior executives generally.  To the extent that post-retirement welfareand other benefits then exist, the Executive shall be entitled topost-retirement welfare and other benefits on terms and conditions that are noless favorable to him than those applying to other CWMJV senior executivesgenerally.  Nothing in this Section 6(f) shallbe construed to require CWMJV to establish or maintain any particular employeeor post-retirement benefit plan, program or arrangement except as expressly setforth elsewhere in this Agreement.  CWMJVmay, to the extent consistent with the foregoing, alter, modify, supplement ordelete its employee and post-retirement benefit plans at any time as it seesfit without recourse by the Executive, subject to the terms of this Section 6(f).

 

(g)          *No Hedging*:  During the Term, Executive will not in anyway attempt to limit the financial risk with respect to stock options orrestricted stock which are not vested by means of any hedging (includingwithout limitation, selling short) or other techniques.

 

7.            Termination.  Notwithstanding the foregoing, Executive’semployment hereunder may be terminated during the Term under the followingcircumstances:

 

(a)          *Death*.  Executive’s employment hereunder shallterminate upon his death.

 

(b)          *Disability*.  If, as a result of Executive’s incapacity dueto physical or mental illness, Executive shall have been substantially unableto perform his duties hereunder for an entire period of one hundred twenty(120) consecutive days, and within thirty (30) days after written Notice ofTermination (as defined in Section 8(a)) is given after such one hundredtwenty (120) day consecutive period, Executive shall not have returned to thesubstantial performance of his duties on a full-time basis, CWMJV shall havethe right to terminate Executive’s employment hereunder for “Disability,” andsuch termination in and of itself shall not be, nor shall it be deemed to be, abreach of this Agreement, but shall be subject to the terms of Section 9(c).

 

(c)          *Cause*.  CWMJV shall have the right to terminate Executive’semployment for Cause, and such termination in and of itself shall not be, norshall it be deemed to be, a breach of this Agreement; provided that notermination of the Executive’s employment hereunder for Cause shall beeffective as a termination for Cause unless the provisions of this Section shallfirst have been complied with.  TheExecutive shall be given written notice by the Centro Chief Executive Officerof the intention to terminate him for Cause (the **“Notice of Intention”**). TheNotice of Intention shall state in reasonable detail the particularcircumstances that constitute the grounds on which the proposed termination forCause is based.  The Executive shall have10 days after receiving the Notice of Intention in which to cure the purportedgrounds for termination asserted therein. Termination for Cause shall be effective immediately upon the CentroChief Executive Officer’s issuance to Executive of a written 

 

4

----

 

Terminationfor Cause Notice in the event that Executive fails to cure the purportedgrounds for termination within such 10 day period.  Any allegation that Cause existed, or thatcure was not achieved, shall be subject to review, at the Executive’s election,through arbitration in accordance with Section 14 hereof.

 

For purposes of this Agreement, CWMJV shallhave “Cause” to terminate Executive’s employment upon Executive’s:

 

(i)         conviction of, or plea of guilty ornolo contenders to, a felony; or

 

(ii)        willful and continued failure to usereasonable best efforts to substantially perform his duties hereunder (otherthan such failure resulting from Executive’s incapacity due to physical ormental illness or subsequent to the issuance of a Notice of Termination byExecutive for Good Reason (as defined in Section 7(d)) after demand forsubstantial performance is delivered by CWMJV in writing that specificallyidentifies the manner in which CWMJV believes Executive has willfully andcontinually failed to use reasonable best efforts to substantially perform hisduties hereunder; or

 

(iii)       willful misconduct that has a materiallyadverse effect on the Company or to any Affiliate.

 

For purposes of this Section 7(c), noact, or failure to act, by Executive shall be considered “willful” unless committedin bad faith and without a reasonable belief that the act or omission was inthe best interests of the Company or any Affiliates thereof; provided, however,that the willful requirement outlined in paragraphs (ii) or (iii) aboveshall be deemed to have occurred if the Executive’s action or non-actioncontinues for more than ten (10) days after Executive has received writtennotice of the inappropriate action or non-action.

 

(d)          *Good Reason*.  Executive may terminate his employment for “GoodReason” within thirty (30) days after Executive has actual knowledge of theoccurrence, without the written consent of Executive, of one of the followingevents that has not been cured within thirty (30) days after written noticethereof has been given by Executive to the Company; provided, however, that anyallegation that Good Reason existed, or that cure was not achieved, shall besubject to review, at CWMJV’s election, through arbitration in accordance with Section 14hereof:

 

(i)         the assignment to Executive of dutiesmaterially and adversely inconsistent with Executive’s status as Centro USChief Executive Officer or a material and adverse alteration in the nature ofthe following:  Executive’s duties and/orresponsibilities, reporting obligations, titles or authority as Chief ExecutiveOfficer;

 

(ii)        a reduction in Executive’s Base Salaryor a failure to pay any such amounts when due;

 

(iii)       a failure by the Company to pay the StubSTI Payment due June 30, 2007 as described in Section 6(b) by July 31, 2007;

 

5

----

 

(iv)       a failure by the Company to pay eitherthe First Payment or the Second Payment pursuant to Section 10 when due:

 

(v)        the relocation of Executive’s own officelocation to a location that is more than fifty (50) miles from New York, NewYork;

 

(vi)       any purported termination of Executive’semployment for Cause which is not effected pursuant to the procedures of Section 7(c) (andfor purposes of this Agreement, no such purported termination shall be effective);

 

(vii)      CWMJV’s failure to pay or provide anymaterial employee benefits due to be provided to Executive under this Agreementincluding, but not limited to, a failure to allow the Executive to participatein all employee benefit plans, programs and arrangements contemplated under Section 6(t);

 

(viii)     CWMJV’s failure to provide in all materialrespects the indemnification set forth in Section 13 of this Agreement, orto require any successor to assume and agree to perform this Agreement as setforth in Section 15 of this Agreement;

 

(ix)       a Change in Control (as defined below);

 

(x)        a reduction in the STI Range as providedfor in Section 6(b);

 

(xi)       a failure by Centro and/or the CentroBoard to accept the Option Invitation application and/or the Stock Invitationapplication (if properly submitted by the Executive) and a failure thereafterto provide Executive with written documentation evidencing the grant of thestock options and restricted shares as provided for in Section 6(c) consistentwith the Option Invitation and the Stock Invitation; or

 

(xii)      the issuance of a notice by CWMJV toExecutive indicating that CWMJV has elected not to renew or extend the Term foran Additional Period.

 

Executive’s right to terminate his employmenthereunder for Good Reason shall not be affected by his incapacity due tophysical or mental illness.  Executive’scontinued employment during the thirty (30) day cure period referred to abovein this paragraph (d) shall not constitute consent to, or a waiver ofrights with respect to, any act or failure to act constituting Good Reasonhereunder.

 

If Executive terminates employment hereunderfor Good Reason and thereafter accepts reemployment by CWMJV or any successoror Affiliate within six months of such termination of employment, Executive’stermination of employment shall retroactively not be considered a terminationfor Good Reason and Executive shall have no entitlement to any payments orbenefits pursuant to Section 9(a). To the extent Executive has already received payments or benefitspursuant to Section 9(a), Executive shall repay to such payments orbenefits or make other equitable restitution, as the Centro Board shalldetermine.  It is the express intent ofthe parties that the provisions of this paragraph survive termination of thisAgreement.

 

6

----

 

As provided in Section 2 of thisAgreement, any similar provision contained in the Prior Employment Agreement isspecifically waived and notwithstanding the terms thereof shall not survive thetermination of the Prior Employment Agreement.

 

In furtherance of clause (xii) above, theissuance of a notice by the Executive, indicating that the Executive haselected not to renew or extend the Term for an Additional Period shall notconstitute Good Reason.

 

For purposes of this Agreement, a “Change inControl” means the occurrence of one of the following events:

 

(1)        any person or party not currentlyaffiliated with Centro gains control of fifty percent plus one share of Centro’sissued Stapled Securities; however, that an event described in this paragraph (1) shallnot be deemed to be a Change in Control if any of following becomes such abeneficial owner:  (A) the Companyor any majority-owned entity (provided, that this exclusion applies solely tothe ownership levels of the Company or the majority-owned entity), (B) anytax-qualified, broad-based employee benefit plan sponsored or maintained by theCompany or any majority-owned entity, (C) any underwriter temporarilyholding securities pursuant to an offering of such securities, or (D) Executiveor any group of persons including Executive (or any entity controlled byExecutive or any group of persons including Executive);

 

(2)        Centro sells, transfers or otherwisedisposes of more than a fifty percent share of CWMJV or any Centro Affiliatethen employing Executive or more than 50% of the assets of or aggregateinterests in Centro US provided that the acquisition of ownership or suchassets by another entity within Centro or affiliated with Centro or theassignment of Executive to work for such entity or Affiliate shall not beconsidered a Change in Control, but shall. still be subject to the other provisions of Section 7(d) above.

 

If a Change in Control occurs, regardless ofwhether Executive elects to terminate his employment for Good Reason, allunvested stock options and restricted stock grants received by Executive,regardless of any vesting conditions or performance and/or time hurdles, shallautomatically vest 100% upon the occurrence of such Change in Control.  In addition, in the event that Executive’semployment is terminated by CWMJV without Cause in contemplation of a Change inControl, then notwithstanding any other provision of this Agreement regardingthe vesting of stock options and restricted stock grants, then all unvestedstock options and restricted stock grants received by Executive, regardless ofany vesting conditions or performance and/or time hurdles, shall automaticallyvest 100% upon such employment termination.

 

(e)          *Without Goad Reason*.  Executive shall have the right to terminatehis employment hereunder without Good Reason by providing CWMJV with a Noticeof Termination, and such termination shall not in and of itself be, nor shallit be deemed to be, a breach of this Agreement.

 

7

----

 

8.            TerminationProcedure.

 

(a)          *Notice of Termination*.  Any termination of Executive’s employment byCWMJV or by Executive during the Term (other than termination pursuant to Section 7(a))shall be communicated by written Notice of Termination to the other partyhereto in accordance with Section 16. For purposes of this Agreement, a “Notice of Termination” shall mean anotice which shall indicate the specific termination provision in thisAgreement relied upon and shall set forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated.

 

(b)          *Date of Termination*.  “Date of Termination” shall mean (i) ifExecutive’s employment is terminated by his death, the date of his death, (ii) ifExecutive’s employment is terminated pursuant to Section 7(b), thirty (30)days after Notice of Termination (provided that Executive shall not havereturned to the substantial performance of his duties on a full-time basisduring such thirty (30) day period), or (iii) if Executive’s employment isterminated for any other reason (other than for Cause), the date on which aNotice of Termination is given or any later date (within thirty (30) days afterthe giving of such notice) set forth in such Notice of Termination.

 

9.            Compensation UponTermination or During Disability.  Inthe event Executive is disabled or his employment terminates during the Term,CWMJV shall provide Executive with the payments and benefits set forth below;provided, however, as a specific condition to being entitled to any payments orbenefits under this Section 9, Executive must have resigned all officesand positions with Centro and all of its subsidiaries and Affiliates and musthave joined CWMJV in having executed a mutual release of Centro, CWMJV andtheir respective Affiliates, in the form attached hereto as Exhibit C.  Executive acknowledges and agrees that thepayments set forth in this Section 9 constitute liquidated damages fortermination of his employment during the Term.

 

(a)          *Termination ByCWMJV Without Cause or By Executivefor Good Reason. *IfExecutive’s employment is terminated by CWMJV without Cause or by Executive forGood Reason:

 

(i)        CWMJV shall pay to Executive his BaseSalary and accrued vacation pay through the Date of Termination, as soon aspracticable following the Date of Termination; and

 

(ii)        CWMJV shall pay to Executive as soon aspracticable following the Date of Termination, a lump-sum payment equal totwelve months of his Base Salary and the average STI received by Executive forthe two (2) preceding fiscal years ending on or prior to termination or,where necessary to calculate the average due to a termination prior to thecompletion of two (2) fiscal years with CWMJV, those bonus paymentsreceived by Executive from New Plan Excel Realty Trust, Inc. during therelevant period required to permit a two (2) year average calculation;

 

8

----

 

(iii)       CWMJV shall reimburse Executive pursuantto Section 6(d) for reasonable expenses incurred, but not paid priorto such termination of employment;

 

(iv)       Executive shall be entitled to any otherrights, compensation and/or benefits as may be due to Executive in accordancewith the terms and provisions of any agreements, plans or programs of CWMJV;

 

(v)        Unless otherwise provided herein,unvested stock options and restricted stock granted to Executive that vestbased on performance shall be forfeited immediately unless the Centro Boarddecides otherwise;

 

(vi)       CWMJV shall maintain in full force andeffect, for the continued benefit of Executive, his spouse and his dependentsfor a period of one (1) year following the Date of Termination the medical,hospitalization, dental, and life insurance programs in which Executive, hisspouse and his dependents were participating immediately prior to the Date ofTermination at the level in effect and upon substantially the same terms andconditions (including without limitation contributions required by Executivefor such benefits) as existed immediately prior to the Date of Termination;provided, that if Executive, his spouse or his dependents cannot continue toparticipate in the CWMJV programs providing such benefits, CWMJV shall arrangeto provide Executive, his spouse and his dependents with the economicequivalent of such benefits which they otherwise would have been entitled toreceive under such plans and programs (“Continued Benefits”), provided, thatsuch Continued Benefits shall terminate on the date or dates Executive receivessubstantially equivalent coverage and benefits, without waiting period orpre-existing condition limitations, under the plans and programs of asubsequent employer (such coverage and benefits to be determine on acoverage-by-coverage, or benefit-by-benefit, basis);

 

(vii)      CWMJV shall pay to Executive as soon aspracticable following the Date of Termination the First Payment and the SecondPayment to the extent either has not already been received by the Executive.

 

The foregoing notwithstanding, the total ofthe severance payments payable under this Section 9(a) shall bereduced to the extent the payment of such amounts would cause Executive’s totaltermination benefits (as determined by Executive’s tax advisor) to constitutean “excess” parachute payment under Section 280G of the Internal RevenueCode of 1986, as amended (the “Code”) and by reason of such excess parachutepayment Executive would be subject to an excise tax under Section 4999(a) ofthe Code, but only if Executive determines that the after-tax value of thetermination benefits calculated with the foregoing restriction exceed thosecalculated without the foregoing restriction.

 

(b)          *Cause or By Executive Without Good Reason*.  If Executive’s employment is terminated byCWMJV for Cause or by Executive (other than for Good Reason):

 

9

----

 

(i)         CWMJV shall pay Executive his BaseSalary and, to the extent required by law or CWMJV vacation policy, his accruedvacation pay through the Date of Termination, as soon as practicable followingthe Date of Termination; and

 

(ii)        CWMJV shall reimburse Executive pursuantto Section 6(d) for reasonable expenses incurred, but not paid priorto such termination of employment, unless such termination resulted from amisappropriation of funds; and

 

(iii)       Executive shall be entitled to any otherrights, compensation and/or benefits as may be due to Executive in accordancewith the terms and provisions of any agreements, plans or programs of CWMJV;

 

(c)           *Disability*.  During any period that Executive fails toperform his duties hereunder as a result of incapacity due to physical ormental illness (**“DisabilityPeriod”**), Executive shall continue to receive his full Base Salaryset forth in Section 6(a) until his employment is terminated pursuant to Section 7(b).  In the event Executive’s employment isterminated for Disability pursuant to Section 7(b):

 

(i)        CWMJV shall pay to Executive his BaseSalary and accrued vacation pay through the Date of Termination, as soon aspracticable following the Date of Termination, and continued Base Salary (asprovided for in Section 6(a)) for six (6) months; and

 

(ii)        CWMJV shall reimburse Executive pursuantto Section 6(d) for reasonable expenses incurred, but not paid priorto such termination of employment;

 

(iii)       Unvested stock options and restrictedstock granted to Executive that vest based on performance shall be forfeitedimmediately unless the Centro Board decides otherwise;

 

(iv)       Executive shall be entitled to any otherrights, compensation and/or benefits as may be due to Executive in accordancewith the terms and provisions of any agreements, plans or programs of theCWMJV;

 

(v)        CWMJV shall pay to Executive the FirstPayment and the Second Payment-to the extent either has not already beenreceived by the Executive.

 

(d)          *Death*.  If Executive’s employment is terminated by hisdeath:

 

(i)         CWMJV shall pay in a lump sum toExecutive’s beneficiary, legal representatives or estate, as the case may be,Executive’s Base Salary through the Date of Termination and one (1) timesExecutive’s annual rate of Base Salary;

 

(ii)        CWMJV shall reimburse Executive’sbeneficiary, legal representatives, or estate, as the case may be, pursuant to Section 6(d) for

 

10

----

 

reasonable expensesincurred, but not paid prior to such termination of employment;

 

(iii)       Unvested stock options and restrictedstock granted to Executive that vest based on performance shall be forfeitedimmediately unless the Centro Board decides otherwise;

 

(iv)       Executive’s beneficiary, legalrepresentatives or estate, as the case may be, shall be entitled to any otherrights, compensation and benefits as may be due to any such persons or estatein accordance with the terms and provisions of any agreements, plans orprograms of CWMJV;

 

(v)        CWMJV shall pay to Executive the FirstPayment and the Second Payment-to the extent either has not already beenreceived by the Executive.

 

10.          Retention Bonus.  CWMJV agrees to pay the Executive $990,000(Nine Hundred and Ninety Thousand Dollars) in consideration of Executiveentering into this Agreement (the **“Retention Bonus”**). The Retention Bonus shall be payable in two parts; (i) fiftypercent (50%) of the Retention Bonus shall be paid within 5 business days ofthe date of execution of this Agreement (the **“First Payment”**), subject to theforfeiture rule described in the next sentence, and (ii) except forsuch earlier payment as may be required by Sections 9(a), 9(c) or 9(d),the remaining fifty percent (50%) of the Retention Bonus shall be paid on April 20,2009 (the **“SecondPayment”**).  If Executiveterminates his employment under Section 9(b) prior to October 19,2007, Executive promptly shall repay the amount of the First Payment (andprovided Executive has not terminated his employment under Section 9(b) priorto October 19, 2007, the First Payment shall be irrevocable and notsubject to any repayment after October 19, 2007).  In addition, if Executive terminatesemployment under Section 9(b) prior to April 20, 2009, Executiveshall forfeit the Second Payment.  Inaddition, in the event that CWMJV issues a notice to Executive indicating thatCWMJV has elected not to renew or extend the Term for an Additional Period suchthat this Agreement will expire upon the one year anniversary of the date ofthis Agreement, then, in addition to the other rights and benefits affordedExecutive pursuant to Section 9(a), the Second Payment shall be due andpayable simultaneously with CWMJV providing such non-renewal/non-extensionnotice.

 

11.          Mitigation.  Executive shall not be required to mitigateamounts payable under this Agreement by seeking other employment or otherwise,and there shall be no offset against amounts due Executive under this Agreementon account of subsequent employment.  Additionally, amounts owed to Executive under this Agreement shall notbe offset by any claims CWMJV may have against Executive, and CWMJV’sobligation to make the payments provided for in this Agreement and otherwise toperform its obligations hereunder shall not be affected by any othercircumstances, including, without limitation, any counterclaim, recoupment,defense or other right which CWMJV may have against Executive or others.

 

12.          ConfidentialInformation; Ownership of Documents; Non-Competition.

 

(a)           *Confidential Information*.  Executive shall hold in a fiduciary capacityfor the benefit of the Company all trade secrets and confidential information,knowledge or data 

 

11

----

 

relatingto the Company and its businesses and investments, which shall have beenobtained by Executive during Executive’s employment by CWMJV and which is notgenerally available public knowledge (other than by acts by Executive inviolation of this Agreement).  Except asmay be required or appropriate in connection with his carrying out his dutiesunder this Agreement, Executive shall not, without the prior written consent ofCWMJV or as may otherwise be required by law or any legal process, or as isnecessary in connection with any adversarial proceeding against the Company (inwhich case Executive shall use his reasonable best efforts in cooperating withthe Company in obtaining a protective order against disclosure by a court ofcompetent jurisdiction), communicate or divulge any such trade secrets,information, knowledge or data to anyone other than the Company and thosedesignated by the Company or on behalf of the Company in the furtherance of itsbusiness or to perform duties hereunder.

 

(b)           *Removal of Documents; Rights to Products*.  All records, files, drawings, documents,models, equipment, and the like relating to the Company’s business, whichExecutive has control over shall not be removed .from the Company’s premiseswithout its written consent, unless such removal is in the furtherance of theCompany’s business or is in connection with Executive’s carrying out his dutiesunder this Agreement and, if so removed, shall be returned to the Companypromptly after termination of Executive’s employment hereunder, or otherwisepromptly after removal if such removal occurs following termination of employment.  Executive shall assign to the Company allrights to trade secrets and other products relating to the Company’s businessdeveloped by him alone or in conjunction with others at any time while employedby the Company.

 

(c)           *Injunctive Relief*.  In the event of a breach or threatened breachof this Section 12, Executive agrees that CWMJV shall be entitled toinjunctive relief in a court of appropriate jurisdiction to remedy any suchbreach or threatened breach, Executive acknowledging that damages would beinadequate and insufficient.

 

(d)           *Continuing Operation*.  Except as specifically provided in this Section 12,the termination of Executive’s employment or of this Agreement shall have noeffect on the continuing operation of this Section 12.

 

13.           Indemnification.

 

(a)           *General*.  CWMJV agrees that if Executive is made aparty or a threatened to be made a party to any action, suit or proceeding,whether civil, criminal, administrative or investigative (a **“Proceeding”**),by reason of the fact that Executive is or was a trustee, director or officerof the Company or any subsidiary of the Company or is or was serving at therequest of the Company or any subsidiary as a trustee, director, officer,member, employee or agent of another corporation or a partnership, jointventure, trust or other enterprise, including, without limitation, service withrespect to employee benefit plans, whether or not the basis of such Proceedingis alleged action in an official capacity as a trustee, director, officer,member, employee or agent while, serving as a trustee, director, officer,member, employee or agent, Executive shall be indemnified and held harmless bythe Company to the same extent as other officers and directors, as in effectfrom time to time, against all Expenses incurred or suffered by Executive inconnection therewith, and such indemnification shall continue as to Executiveeven 

 

12

----

 

ifExecutive has ceased to be an officer, director, trustee or agent, or is no longeremployed by the Company and shall inure to the benefit of his heirs, executorsand administrators.

 

(b)         *Expenses*.  As used in this Agreement, the term “Expenses”shall include, without limitation, damages, losses, judgments, liabilities,fines, penalties, excise taxes, settlements, and costs, attorneys’ fees,accountants’ fees, and disbursements and costs of attachment or similar bonds,investigations, and any expenses of establishing a fight to indemnificationunder this Agreement.

 

(c)          *Enforcement*.  If a claim or request under this Agreement isnot paid by CWMJV or on its behalf, within thirty (30) days after a writtenclaim or request has been received by CWMJV, Executive may at any timethereafter bring suit against CWMJV to recover the unpaid amount of the claimor request and, if Executive prevails in respect to the material issues,Executive shall be entitled to be paid also the Expenses of prosecuting suchsuit.  All obligations forindemnification hereunder shall be subject to, and paid in accordance with,applicable New York law.

 

(d)         *Partial Indemnification*.  If Executive is entitled under any provisionof this Agreement to indemnification by CWMJV for some or a portion of anyExpenses, but not, however, for the total amount thereof, CWMJV, shallnevertheless indemnify Executive for the portion of such Expenses to whichExecutive is entitled.

 

(e)          *Advances of Expenses*.  Expenses incurred by Executive in connectionwith any Proceeding shall be paid by CWMJV in advance upon request of Executivethat CWMJV pay such Expenses; but only in the event that Executive shall havedelivered in writing to CWMJV (i) an undertaking to reimburse CWMJV forExpenses with respect to which Executive is not entitled to indemnification and(ii) an affirmation of his good faith belief that the standard of conductnecessary for indemnification by CWMJV has been met.

 

(f)          *Notice of Claim*.  Executive shall give to CWMJV notice of anyclaim made against him for which indemnification will or could be sought underthis Agreement.  In addition, Executiveshall give CWMJV such information and cooperation as it may reasonably requireand as shall be within Executive’s power and at such times and places as areconvenient for Executive.

 

(g)         *Defense of Claim*.  With respect to any Proceeding as to whichExecutive notifies CWMJV of the commencement thereof:

 

(i)          CWMJV will be entitled to participatetherein at its own expense; and

 

(ii)         Except as otherwise provided below, tothe extent that it may wish, CWMJV will be entitled to assume the defensethereof, with counsel reasonably satisfactory to Executive, which in CWMJV’ssole discretion may be regular counsel to CWMJV and may be counsel to otherofficers and directors of CWMJV or any subsidiary. Executive also shall havethe right to employ his own counsel in such action, suit or proceeding if hereasonably concludes that failure to do so would involve a conflict of interestbetween CWMJV and Executive, and 

 

13

----

 

under suchcircumstances the fees and expenses of such counsel shall be at the expense ofCWMJV.

 

(iii)       CWMJV shall not be liable to indemnifyExecutive under this Agreement for any amounts paid in settlement of any actionor claim effected without its written consent. CWMJV shall not settle any action or claim in any manner which wouldimpose any penalty or limitation on Executive without Executive’s writtenconsent.  Neither CWMJV nor Executivewill unreasonably withhold or delay their consent to any proposed settlement.

 

(h)           *Non-exclusivity*.  The right to indemnification and the paymentof expenses incurred in defending a Proceeding in advance of its finaldisposition conferred in this Section 13 shall not be exclusive of anyother right which Executive may have or hereafter may acquire under anystatute, provision of the declaration of trust or certificate of incorporationor by-laws of CWMJV or any subsidiary, agreement, vote of shareholders ordisinterested directors or trustees or otherwise.

 

14.           Disputes.

 

Any claim arising out of or relating to thisAgreement, any other agreement between the Executive and Company or itsAffiliates, the Executive’s employment with or any termination thereof(collectively, **“CoveredClaims”**) shall (except to the extent otherwise provided in Section 12(c) hereofwith respect to certain requests for injunctive relief) be resolved by bindingconfidential arbitration, to be held in New York, New York in accordance withthe Commercial Arbitration Rules (and not the National Rules forResolution of Employment Disputes) of the American Arbitration Association andthis Section 14 and each of CMWMJV, Centro and Executive submits tojurisdiction in New York, New York for such arbitration.  Judgment upon the award rendered by thearbitrator(s) may be entered in any court having jurisdiction thereof.  CWMJV shall reimburse Executive for all legalfees and expenses reasonably incurred by Executive in connection with suchcontest or dispute, but only if Executive prevails in respect of the materialissues in dispute of Executive’s claims brought and pursued in connection withsuch contest or dispute.  Suchreimbursement shall be made as soon as practicable following the finalresolution of such contest or dispute to the extent CWMJV receives reasonablewritten evidence of such fees and expenses.

 

15.           Successors; Binding Agreement.

 

(a)           *Company’s Successors*.  No rights or obligations of CWMJV under thisAgreement may be assigned or transferred except that CWMJV will require anysuccessor (whether direct or indirect, by purchase, merger, consolidation orotherwise) to all or substantially all of the business and/or assets of CWMJVor Centro to expressly assume and agree to perform this Agreement in the samemanner and to the same extent that CWMJV and/or Centro would be required toperform it if no such succession had taken place.  As used in this Agreement, “Company” or “CWMJV”shall mean the Company or CWMJV, respectively, as herein before defined and anysuccessor to its business and/or assets (by merger, purchase or otherwise)which executes and delivers the agreement provided for in this Section 15or which otherwise becomes bound by all the terms and provisions of thisAgreement by operation of law.

 

14

----

 

(b)           *Executive’s Successors*.  No rights or obligations of Executive underthis Agreement may be assigned or transferred by Executive other than hisrights to payments or benefits hereunder, which may be transferred only by willor the laws of descent and distribution. Upon Executive’s death, this Agreement, and all rights of Executivehereunder shall inure to the benefit of and be enforceable by Executive’sbeneficiary or beneficiaries, personal or legal representatives, or estate, tothe extent any such person succeeds to Executive’s interests under thisAgreement.  Executive shall be entitledto select and change a beneficiary or beneficiaries to receive any benefit orcompensation payable hereunder following Executive’s death by giving CWMJVwritten notice thereof.  In the event ofExecutive’s death or a judicial determination of his incompetence, reference inthis Agreement to Executive shall be deemed, where appropriate, to refer to hisbeneficiary(ies), estate or other legal representative(s).  If Executive should the following his Date ofTermination while any amounts would still be payable to him hereunder if he hadcontinued to live; all such amounts unless otherwise provided herein shall bepaid in accordance with the terms of this Agreement to such person or personsso appointed in writing by Executive, or otherwise to his legal representativesor estate.

 

16.          Notice.  All notices or other communications which arerequired or permitted hereunder shall be in writing and sufficient if deliveredpersonally, or sent by nationally-recognized, overnight courier or byregistered or certified mail, return receipt requested and postage prepaid,addressed as follows:

 

If to Executive:

 

Mr.  Michael Carrollv

c/o Centro Watt Management Joint Venture 2 LP

420 Lexington Avenue

7th Floor

New York, NY 10070

 

If to Centro:

 

Centro Properties Group

Level 3, 235 Springvale Road

Glen Waverley, VIC 3150

AUSTRALIA

Attention:  Andrew T.  Scott

 

If to CWMJV:

 

Centro Watt Management Joint Venture 2 LP

420 Lexington Avenue

7th Floor

New York, NY 10070

Attention:  Steven F.  Siegel

 

or to such other address as any party mayhave furnished to the others in writing in accordance herewith.  All such notices and other communicationsshall be deemed to have been received (a) in the case of personaldelivery, on the date of such delivery, (b) in the case of delivery by 

 

15

----

 

nationally-recognized, overnight courier, onthe business day following dispatch and (c) in the case of mailing, on thethird business day following such mailing.

 

17.          Miscellaneous.  No provisions of this Agreement may beamended, modified, or waived unless such amendment or modification is agreed toin writing signed by Executive and by a duly authorized officer of CWMJV, and suchwaiver is set forth in writing and signed by the party to be charged.  No waiver by either party hereto at any timeof any breach by the other party hereto of any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.  No agreements orrepresentations, oral or otherwise, express or implied, with respect to thesubject matter hereof have been made by either party which are not set forthexpressly in this Agreement.  Therespective rights and obligations of the parties hereunder of this Agreementshall survive Executive’s termination of employment and the termination of thisAgreement to the extent necessary for the intended preservation of such rightsand obligations.  The validity,interpretation, construction and performance of this Agreement shall begoverned by the laws of the State of New York without regard to its conflictsof law principles.

 

18.          Jurisdiction.  Subject to the obligations with respect toarbitration as provided in Section 14 hereof, CWMJV, Centro and Executiveeach submits to the jurisdiction of any New York State Court or Federal Courtof the United States of America sitting in the borough of Manhattan, and anyappellate court from any such court, in any suit, action or proceeding arisingout of or relating to this Agreement, or for recognition or enforcement of anyjudgment, and each hereby agrees that all claims in respect of any such suit,action or proceeding shall be brought in and may be heard and determined insuch New York State Court or, to the extent permitted by law, in such FederalCourt.  CWMJV, Centro and Executive eachwaives, to the fullest extent it may legally and effectively do so, anyobjection which it may now or hereafter have to the laying of venue of anysuit, action or proceeding arising out of or relating to this Agreement in anyNew York State Court or Federal Court sitting in the borough of Manhattan.

 

19.          Validity.  The invalidity or unenforceability of anyprovision or provisions of this Agreement shall not affect the validity orenforceability of any other provision of this Agreement, which shall remain infull force and effect.

 

20.          Counterparts.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

21.          Entire Agreement.  This Agreement sets forth the entireagreement of the parties hereto in respect of the subject matter containedherein and supersede all prior agreements, promises, covenants, arrangements,communications, representations or warranties, whether oral or written, by anyofficer, director, employee or representative of any party hereto in respect ofsuch subject matter.  Any prior agreementof the parties hereto in respect of the subject matter contained herein ishereby terminated and canceled.

 

22.          Withholding.  All payments hereunder shall be subject toany required withholding of Federal, state and local taxes pursuant to anyapplicable law or regulation.

 

16

----

 

23.          Noncontravention.  CWMJV represents that CWMJV is not preventedfrom entering into, or performing this Agreement by the terms of any law,order, rule or regulation, its by-laws or certificate of incorporation, orany agreement to which it is a party, other than which would not have amaterial adverse effect on CWMJV’s ability to enter into or perform thisAgreement.  Executive represents to CWMJVthat he is not a party to any contract that would preclude him from acceptingemployment as Chief Executive Officer of Centro US and he has no reason tobelieve that accepting employment as Chief Executive Officer of Centro US wouldresult in a disclosure of any confidential information of any prior employer.

 

24.          Section Headings.  The section headings in this Agreement arefor convenience of reference only, and they form no part of this Agreement andshall not affect its interpretation.

 

25.          Centro PropertiesGroup.  Centro is executing thisAgreement as a guarantor of all obligations of CWMJV hereunder and by itsexecution hereof agrees to all of the terms and conditions of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement on the date first above written.

 

 
|   | CENTRO  PROPERTIES GROUP                    |
|--------|---------------------------------------------|
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/ Andrew  T. Scott |
|   |                                        | Name: | Andrew T.  Scott |
|   |                                        | Title: | Chief  Executive Officer |
|   |                                        |   |   |
|   |                                        |   |
|   | CENTRO WATT  MANAGEMENT JOINT  VENTURE 2 LP |
|   |                                        |   |
|   |                                        |   |
|   | By:                                         | /s/ Andrew  T. Scott |
|   |                                        | Name: | Andrew T.  Scott |
|   |                                        | Title: | Chief  Executive Officer |
|   |                                        |   | Centro  Properties Group |
|   |                                        |   |   |
|   |                                        |   |
|   | /s/ Michael  Carroll                        |
|   | MICHAEL  CARROLL                            |

 

17

----