Document:

Exhibit 10.5

 

EXHIBIT A

INCENTIVE COMPENSATION SCHEDULE

CFO BONUS COMPENSATION

	
  PART I — BONUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2004/05

  	
   

  	
  For 2004 and 2005 (and any
  Renewal Term), Executive shall be entitled to a bonus equal to .20% of EBITDA
  if Company’s ROA is in the top 1/2 of public homebuilders having revenues of
  $500 million or more per year, and an additional .20% of EBITDA if the
  Company’s ROA is in the top one-half of these public builders.  If either measurement falls within the 33%
  to 49% percentile, the bonus shall be .13% of EBITDA for the applicable
  measurement.  If either measurement
  falls below the 33% threshold, then there will not be any formula bonus paid
  with respect to such measurement.Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of the 1st day of April, 2004 (the
“Effective Date”), by and between THE MILLS CORPORATION, a Delaware corporation
(the “Company”), and Laurence C. Siegel (“Executive”).

 

Recitals

 

R-1                              The
Company is engaged directly and indirectly in the business of developing,
constructing, leasing, financing and managing super regional value-oriented
retail and entertainment-based shopping centers, malls, strip centers and other
commercial properties.

 

R-2                              Executive
currently is employed by the Company in the capacity of Chief Executive Officer
and Chairman of the Company’s Board of Directors pursuant to an employment
agreement dated April 1, 2000 (the “Prior Agreement”), and has
considerable experience and an intimate knowledge of the business and affairs
of the Company, its policies, methods, personnel and operations.

 

Agreement

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive, intending to be legally and equitably
bound, hereby agree as follows:

 

1.                                       Employment;
employment Period.

 

1.1                                 Employment.  The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, all upon the terms and
conditions set forth in this Agreement.

 

1.2                                 Employment
Period.  The term of
Executive’s employment under this Agreement shall be the period commencing on
the Effective Date and ending on December 31, 2008 (the “Employment
Period”); provided that, commencing on January 1, 2009, and on each
January 1 thereafter, the Employment Period shall automatically be
extended for one (1) year unless either party has given written notice of
non-renewal to the other party at least ninety (90) days prior to the then
scheduled expiration of the Employment Period, and each such extension shall, ipso
facto, become part of (and incorporated into) the Employment Period for
all purposes of this Agreement; and provided, further, that Executive’s
employment hereunder may be terminated prior to the end of the Employment
Period as provided in Section 6 hereof.

 

2.                                      Duties.  During the Employment Period, Executive
shall hold the position of Chief Executive Officer and Chairman of the Board of
Directors of the Company.  In such
capacity, Executive shall perform the duties and responsibilities normally
inherent in such capacities in corporations of the size and nature of the
Company, the duties and responsibilities in effect for Executive’s position as
of the Effective Date, and such other

 

 

duties, not inconsistent with Executive’s position as Chief Executive
Officer and Chairman of the Board of Directors of the Company, as may
reasonably be assigned during the Employment Period by the Company’s Board of
Directors (the “Board of Directors”).

 

3.                                      Performance
of Duties/Standard of Care. 
During the Employment Period, Executive shall act at all times in the
best interests of the Company and diligently discharge his duties and
responsibilities to the Company under this Agreement.  Without limiting the generality of the foregoing, Executive shall
at all times abide strictly by the policies of the Company including, without
limitation, The Mills Corporation Code of Business Conduct and Ethics as it may
be amended from time to time in the Company’s sole discretion (the “Code of
Conduct”).  Such duties shall be
rendered at the principal office of the Company and Executive shall travel to
other places as the interests, needs, business or opportunity of the Company
shall require.  During the Employment
Period, Executive agrees to devote his full business time, attention and
energies to the Company’s business and not to engage in any other business
activity, whether or not such business activity is pursued for gain, profit or
other economic or financial advantage, except that Executive may serve in
charitable or philanthropic capacities or positions and serve as a director of
other companies which do not directly or indirectly compete with the Company
with the prior consent of the Board of Directors (which consent shall not be
unreasonably withheld), in each case so long as such activities comply with the
Code of Conduct, are not injurious to the Company and do not interfere with the
performance of Executive’s duties hereunder. 
Schedule 1 attached hereto and made a part hereof contains a list
of directorships to which the Board of Directors has consented.  In connection with the performance of his
duties hereunder, Executive shall at all times seek to exercise the highest
degree of loyalty to the Company and shall comply with the highest standards of
conduct in the performance of his duties. 
Subject to compliance with the Code of Conduct and the provisions of
this Agreement, this Section 3 shall not be construed to prevent or
prohibit Executive from managing his personal assets or investments as long as
such activities do not interfere with the performance of Executive’s duties
hereunder.

 

4.                                      Compensation
and Expenses.

 

4.1                               Base
Salary.  The Company shall pay to
Executive, during the Employment Period, an annual base salary (the “Base
Salary”) in accordance with the Company’s normal payroll practice applicable to
senior executives.  The Base Salary
shall be calculated at the rate of One Million Six Hundred Fifty Thousand
Dollars ($1,650,000) in 2004, One Million Seven Hundred Thousand Dollars
($1,700,000) in 2005, One Million Seven Hundred Fifty Thousand Dollars
($1,750,000) in 2006, One Million Eight Hundred Thousand Dollars ($1,800,000)
in 2007 and One Million Eight Hundred Fifty Thousand Dollars ($1,850,000) in
2008.

 

4.2                               Annual
Bonus Program.

 

(a)                                  During
each calendar year of the Employment Period, Executive will be eligible to
participate in the Company’s annual short-term performance 

 

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incentive plan applicable to senior executives, as
such plan may exist from time to time (the “PIP”).  Executive’s target annual bonus award under the PIP for each
calendar year of the Employment Period will be equal to Executive’s Base Salary
for such calendar year (each, a “Target Annual Bonus”).  The amount of the actual annual bonus, if
any, awarded to Executive under the PIP with respect to any calendar year
during the term (each an “Annual Bonus Award”) shall be determined in
accordance with the terms of the PIP as administered by the Committee of the
Board of Directors having responsibility for executive compensation matters
(the “Executive Compensation Committee”) after considering any input received
from Executive as part of Executive’s annual review.  All decisions regarding the criteria to be used to determine
awards under the PIP (which may consist of both corporate and individual
performance factors and metrics), the amount, if any, to be awarded to
Executive under the PIP with respect to any calendar year during the Employment
Period and interpretations of the terms of the PIP shall be made solely and
exclusively by the Executive Compensation Committee in its discretion;
provided, however, that in determining Executive’s Annual Bonus Award, if any,
with respect to any calendar year during the Employment Period, the corporate
(as opposed to individual) performance factors and metrics that are taken into
account and the percentage of the award that is based on corporate and
individual performance factors shall be the same for Executive as those applied
to other senior executives of the Company. 
The Company reserves the right to change, alter, or terminate the PIP at
any time in its sole discretion; provided, that no such change, alteration or
termination shall adversely affect Executive’s rights under this Agreement, or
with respect to any Annual Bonus Award made prior to the date of such change,
alteration or termination, without Executive’s prior written consent; and provided,
further, that if no PIP is
in place with respect to any calendar year during the Employment Period, then a
substitute target annual short-term
performance incentive award shall be
established for Executive with respect to such calendar year, with a value
equal to Executive’s annualized Base Salary for such year, having terms
conforming with this Section 4.2(a) and otherwise having substantially
similar vesting, performance and payment terms to those applicable under the
then most recent Annual Bonus Award made to Executive.  If earned, such substitute short-term
compensation award shall be payable in cash.

 

(b)                                 Each
Annual Bonus Award shall be paid to Executive in cash when the Company
customarily pays annual bonus awards to other senior executives under the PIP,
but no later than June 30 of the year following the calendar year with
respect to which the Annual Bonus Award relates.

 

4.3                               Long
Term Incentive Plan.  Executive will
be eligible to participate in the Company’s long term incentive plan applicable
to senior executives, as such plan may exist from time to time (the
“LTIP”).  Executive’s target annual
award under the LTIP with respect to each calendar year during the Employment
Period (each, a “Target LTIP Award”) will be equal to two (2) times Executive’s
Base Salary for such calendar year.  The
amount of the actual LTIP Award, if any, made to Executive with respect to any
calendar year during the Employment Period (each an “LTIP Award”) shall be
determined in accordance with the terms of the LTIP as administered by the
Executive Compensation Committee after considering any input received from
Executive as part of Executive’s annual review.  All decisions regarding the criteria to be used to 

 

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determine LTIP
Awards (which may consist of both corporate and individual performance factors
and metrics), the actual amount of the LTIP Award, if any, with respect to any
calendar year during the Employment Period, the form of payment of such awards
(which may be in cash, shares of Company Stock or a combination thereof, or any
other medium chosen by the Executive Compensation Committee after considering
any input received from Executive as part of Executive’s annual review), and
interpretations of the terms of the LTIP shall be made solely and exclusively
by the Executive Compensation Committee in its discretion; provided, however,
that in determining the amount of Executive’s LTIP Award with respect to any
given calendar year during the Employment Period (i) the corporate (as opposed
to individual) performance factors and metrics that are taken into account, and
(ii) the percentage of the award that is based on individual performance
factors shall be the same for Executive as those applied to the LTIP awards
made to other senior executives for the same calendar year.  The Company reserves the right to change,
alter or terminate
the LTIP at any time in its sole discretion; provided, that no such change,
alteration or termination shall adversely affect Executive’s rights under this
Agreement or under any LTIP Award made prior to the date of such change,
alteration or termination; and provided, further, that if no LTIP is in place with respect to any
calendar year during the Employment Period, then a substitute target
performance-based long-term compensation award with a value equal to two (2)
times Executive’s Base Salary for such year shall be established for Executive
with respect to such calendar year, with terms conforming to the provisions of
this Section 4.3 and otherwise having substantially similar vesting and
performance terms to those applicable under the then most recent LTIP Award
made to Executive.  If earned, such
substitute long-term compensation award shall be payable in cash.

 

4.4                               Intentionally
Omitted.

 

4.5                               Expense
Reimbursement Policy.  During the
Employment Period, the Company shall reimburse Executive for all ordinary and
reasonable business expenses paid by Executive in connection with the
performance of his duties under this Agreement in accordance with and subject
to the Company’s expense reimbursement policies then in effect for senior
executives.

 

4.6                               Grantor
Trust.  The Company shall establish
a grantor (or “rabbi”) trust for the benefit of Executive (the “Trust”) into
which Executive may elect to have the Company deposit, not later than the
vesting date applicable to such compensation, 
all or any portion of any cash compensation paid to Executive under the
terms of this Agreement, including without limitation any Base Salary, Annual
Bonus Awards, LTIP Awards payable in cash, or cash-settled equity awards
provided to Executive under the terms of this Agreement; provided, however,
that Executive has made a timely election to have the income attributable to
any such compensation deferred until a later date in accordance with applicable
tax rules.  Upon the making of any
deferral election, Executive shall specify the payment schedule for
distribution to him of such cash compensation that has been earned or vested in
accordance with the provisions of this Agreement and the Company shall promptly
deliver such payment schedule to the trustee under the Trust.  The Trust shall be established by the
Company prior to the Effective Date and shall contain terms substantially
similar to those set forth in Exhibit A

 

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attached
hereto, except that the Company may make any changes to the terms of the Trust
reasonably necessary for its proper administration, including, but not limited
to, changes to ensure the appropriate tax consequences to Executive and the
Company, provided such changes do not affect the rights of Executive thereunder
in any materially adverse manner.

 

5.                                      Personnel
Policies and Benefits.

 

5.1                               Benefits
Generally.  During the Employment
Period, Executive shall be entitled to participate in all benefit programs,
policies or plans adopted by the Company and applicable to senior executives on
the same basis as the other senior executives of the Company, as such programs,
policies or plans may be interpreted, adopted, revised or deleted from time to
time by the Company in its sole discretion; provided, however, that health care
and hospitalization benefits for Executive shall include spouse and dependent
care coverage. All matters of eligibility for coverage or benefits under any
such benefit programs, policies or plans shall be determined in accordance with
the provisions of the applicable program, policy or plan.  The Company reserves the right to change, alter,
interpret or terminate any such programs, policies or plans at any time in its
sole discretion.

 

5.2                               Additional
Benefits.  In addition to the
benefits provided pursuant to Section 5.1:

 

(a)                                  Subject
to Executive satisfying applicable underwriting criteria imposed by the
insurance carrier, the Company shall pay for life insurance coverage on
Executive’s life with a minimum benefit of Five Million Dollars ($5,000,000),
provided the Company is able to obtain a life insurance policy at reasonable
rates, using commercially reasonable efforts, that fully insures this minimum
benefit to Executive; and

 

(b)                                 Executive
shall also be entitled to receive from the Company, during the Employment
Period, benefits in addition to those provided pursuant to the Company
programs, policies and plans described in Section 5.1 above, having a
value of up to Fifty Thousand Dollars ($50,000) per annum, including co-pays
and other non-covered medical or dental benefits, hospitalization benefits,
disability benefits, club memberships or unreimbursed transportation expenses
or any other benefits or perquisites reasonably selected by Executive and
approved by the Executive Compensation Committee; provided, however, that, if
the benefits provided pursuant to this Section 5.2(b) in any full calendar
year have been less than the annual limitation in this Section 5.2(b),
then additional benefits in the amount of any such excess shall carry forward
during the Employment Period and may be provided to Executive during any
subsequent calendar year of the Employment Period.

 

5.3                               Personnel
Policies.  Except as otherwise
provided herein, Executive’s employment shall be subject to the personnel
policies that apply generally to the Company’s senior executives, as the same
may be interpreted, adopted, revised or

 

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deleted from
time to time during the Employment Period by the Company in its sole
discretion.

 

6.                                      Termination.

 

6.1                               Payment
of Accrued But Unpaid Amounts Upon Termination.  Notwithstanding any provision in this Agreement to the contrary,
in the event of termination of Executive’s employment for any reason during the
Employment Period, Executive or his beneficiaries or estate (as provided in
Section 10.2) shall be entitled to receive, in addition to any other
payments or benefits required to be made or provided under the remaining
provisions of this Article 6, within fourteen (14) days after the
effective date of termination:

 

(a)                                  any
accrued but unpaid Base Salary for services rendered by Executive to the
Company prior to the effective date of termination;

 

(b)                                 any
earned but unpaid Annual Bonus Awards for calendar years that have ended prior
to the year of termination;

 

(c)                                  reimbursement
of any accrued but unpaid expenses required to be reimbursed under this
Agreement that were incurred by Executive prior to the effective date of
termination;

 

(d)                                 payment
for any accrued but unpaid vacation time to the extent consistent with Company
policy in effect at the time of termination;

 

(e)                                  any
amounts deposited in the Trust on behalf of Executive at Executive’s election;
and

 

(f)                                    any
earned but unpaid LTIP Awards.

 

Except as specifically provided in this
Agreement and under the terms of any incentive compensation and benefit plans
in effect and applicable to Executive on the effective date of termination,
Executive shall have no right to receive any other compensation, or to
participate in any other plan, arrangement or benefit of the Company after such
termination and all other obligations of the Company and rights of Executive
under this Agreement shall terminate effective as of the effective date of
termination.

 

6.2                               Termination
Due to Death.  Executive’s
employment with the Company shall automatically terminate upon Executive’s
death.  From and after the date of
death, the Company shall have no further obligation to pay any Base Salary to
Executive.  Notwithstanding the
foregoing, in the event of such termination:

 

(a)                                  the
entitlement of any beneficiary of Executive to benefits under any benefit plan
described in Section 5.1 or 5.2 hereof shall be determined in accordance
with the provisions of such plan;

 

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(b)                                 vesting
of stock options and any other equity-based compensation awards not covered by
Section 6.1 above (other than LTIP Awards) will be treated in accordance
with the equity incentive plan under which the relevant grant was made and any
applicable grant documents; provided, however, that Executive shall be
considered for such purpose to have been employed at the end of the calendar year
in which the termination occurred;

 

(c)                                  any
LTIP Awards that are not covered by Section 6.1 above will be treated in
accordance with the LTIP as then in effect; and

 

(d)                                 the
Company shall pay to Executive’s beneficiary or estate (as provided in
Section 10.2), within ninety (90) days after the effective date of
termination, a lump sum cash payment equal to (i) Executive’s Base Salary in
effect as of the date of Executive’s death and (ii) Executive’s Target Annual
Bonus for the year in which the termination occurs.

 

6.3                               Termination
by the Company Due to Disability.

 

(a)                                  If
Executive becomes “Disabled” (as defined below) during the Employment Period,
the Company shall have the right to terminate Executive’s employment, which
termination shall become effective upon a date not less than thirty (30)
calendar days following the date that written notice of such termination is
given to Executive.  From and after the
effective date of such termination, the Company shall have no further
obligation to pay any Base Salary to Executive.  Notwithstanding the foregoing, in the event of such termination:

 

(i)                                     the
entitlement of Executive to benefits under any benefit plan described in
Section 5.1 or 5.2 hereof shall be determined in accordance with the
provisions of such plan;

 

(ii)                                  vesting
of stock options and any other equity-based compensation awards not covered by
Section 6.1 above (other than LTIP Awards) will be treated in accordance
with the equity incentive plan under which the relevant grant was made and any
applicable grant documents; provided, however that Executive shall be
considered for such purpose to have been employed at the end of the calendar
year in which the termination occurred;

 

(iii)                               any
LTIP Awards that are not covered by Section 6.1 above will be treated in
accordance with the LTIP as then in effect; and

 

(iv)                              the
Company shall pay to Executive, within ninety (90) days after the effective
date of termination, a lump sum cash payment equal to the sum of (i)
Executive’s Base Salary in effect as of the effective date of termination and
(ii) Executive’s Target Annual Bonus for the year in which the termination
occurs.

 

(b)                                 The
term “Disabled” or “Disability” shall mean that (i) Executive has been unable, notwithstanding such
reasonable accommodations as may be required by applicable law, to engage in
the essential functions of his position with the

 

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Company due to
a disability, as determined by the Executive Compensation Committee upon
receipt of and in reliance on independent competent medical advice, for more
than one hundred eighty (180) total calendar days during any period of twelve
(12) consecutive months, or (ii) the Executive Compensation Committee has
reasonably determined, upon receipt of and in reliance on independent competent
medical advice, that Executive is unlikely to be able, notwithstanding such
reasonable accommodations as may be required by applicable law, to engage in
the essential functions of his position with the Company due to a disability
for more than one hundred eighty (180) total calendar days during any period of
twelve (12) consecutive months.

 

6.4                               Voluntary
Termination by Executive.  Executive
may terminate his employment at any time during the Employment Period without
Good Reason (as defined in Section 6.7) by giving the Company written
notice of Executive’s intent to terminate not less than one hundred and twenty
(120) calendar days before the effective date of such termination; provided,
however, that the required notice period shall be reduced to sixty (60) days in
the event Executive’s voluntary termination is not for the purpose of taking
alternative employment.  From and after
the effective date of such termination, the Company shall have no further
obligation to pay any Base Salary to Executive.  In the event of such termination:

 

(a)                                  the
entitlement of Executive to benefits under any benefit plan described in
Section 5.1 or 5.2 shall be determined in accordance with the provisions
of such plan;

 

(b)                                 all
unvested equity or equity-based compensation awards shall be forfeited by
Executive; and

 

(c)                                  any
LTIP Awards that are not covered by Section 6.1 or Section 6.4(b)
above will be treated in accordance with the LTIP as then in effect.

 

6.5                               Termination
by the Company without Cause. The Board of Directors may terminate
Executive’s employment at any time during the Employment Period for reasons
other than death, Disability or Cause upon written notice to Executive, which
notice shall specify the effective date of termination and which effective date
shall be no less than thirty (30) calendar days after the date of such
notice.  Subject to satisfaction by the
Company of its obligations set forth in this Section 6.5, from and after
the effective date of such termination, the Company shall have no further
obligation to pay any Base Salary to Executive.  In the event of such termination, except as provided in
Section 6.8 with respect to termination within twenty-four (24) months
after a Change in Control, Executive shall be entitled to the payments and
benefits described in the following paragraph, contingent upon executing and
returning to the Company (and not revoking) a release of claims in
substantially the form attached hereto as Exhibit B within the time permitted
by the Company (which permitted time period shall not be less than twenty-one
(21) days).

 

Within fifteen
(15) days following the effective date of such termination (or if later, eight
(8) days after Executive provides an executed release of claims which he 

 

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is obligated to deliver as
described above, and as long as such release of claims is not revoked by
Executive during the seven (7)-day period following its execution by
Executive), the Company shall pay to Executive (a) a lump sum cash payment
equal to (i) two (2) times the sum of (A) Executive’s Base Salary in effect as
of the effective date of such termination, (B) Executive’s Target Annual Bonus
for the year in which the termination occurs and (C) Executive’s Longevity
Bonus, and (ii) a pro rata cash payment of Executive’s Target Annual Bonus for
the year of termination based on service from commencement of the applicable
bonus year through the date of termination. 
For purposes of this Section 6.5 and Sections 6.7 and 6.8 below,
the term “Longevity Bonus” shall mean the amount set forth in Part A of
Schedule 2 attached hereto opposite the calendar year in which termination
occurs, which amount is designed to reward Executive for his cumulative years
of service as Chief Executive Officer of the Company, as reflected in Part B of
Schedule 2; provided, that, if Executive’s employment is terminated on any
date other than January 1 of any given calendar year, the Longevity Bonus
shall include a pro rata amount for the year of termination based on service
from commencement of such year through the date of termination.  In addition, the vesting of stock options
and other equity-based compensation awards not covered under Section 6.1
above (other than LTIP Awards) will be treated in accordance with the equity
incentive plan under which the relevant grant was made and any applicable grant
documents; provided, however, that Executive shall be considered for such
purpose to have been employed at the end of the calendar year in which the
termination occurred.  Any LTIP Awards
not covered by Section 6.1 above will be treated in accordance with the
LTIP as then in effect.  The entitlement
of Executive to benefits under any benefit plan described in Section 5.1
or 5.2 hereof shall be determined in accordance with the provisions of such
plan; provided, however, that, subject to the last sentence of this
Section 6.5, the Company shall provide, at its expense, continued
participation in any medical insurance and dental insurance plans in which
Executive or his dependents participated as of the effective date of
termination for two (2) years following the effective date of termination at
the same coverage level as in effect as of the effective date of termination,
but subject to such modifications as shall be established for senior executives
of the Company.  As a condition to
receiving such continued coverage, Executive may be required to elect
continuation coverage under “COBRA” under the terms of the applicable plans, in
which case the Company shall reimburse Executive for the cost of such continued
coverage at the same coverage level as in effect as of the date of termination
subject to such modifications as shall be established for senior executives of
the Company.

 

6.6                               Termination
by the Company for Cause.

 

(a)                                  Subject
to Section 6.6(d), the Board of Directors of the Company may terminate
Executive’s employment at any time during the Employment Period for “Cause”,
which termination shall be effective immediately upon written notice to Executive.

 

(b)                                 For
purposes of this Agreement and notwithstanding any other provision of this
Agreement, “Cause” shall mean any of the following:  (i) Executive commits an act of fraud or embezzlement with
respect to the Company or any of its affiliates; (ii) Executive is convicted
of, or enters a plea of guilty or nolo  contendere  

 

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to, any felony; (iii)
Executive is grossly negligent in carrying out his duties hereunder and such
gross negligence has a material adverse effect on the Company, provided that,
if such gross negligence is curable, such gross negligence shall not constitute
“Cause” unless and until Executive fails to cure such gross negligence within
thirty (30) days after written notice is given to Executive by the Company,
specifying in reasonable detail the claimed gross negligence of Executive; or
(iv) Executive willfully fails to perform his duties under this Agreement
(other than as a result of incapacity due to physical or mental illness), provided
that, if such failure is curable, such failure shall not constitute “Cause”
unless and until Executive fails to cure such failure within thirty (30) days
after written notice is given to Executive by the Company specifying in
reasonable detail the claimed failure of Executive; and provided, further, that
an act or failure to act will be considered “willful” only if done or omitted
to be done in good faith and without reasonable belief that such act or
omission was in the best interests of the Company.

 

(c)                                  From
and after the effective date of such termination, the Company shall have no
further obligation to pay any Base Salary to Executive.  In the event of such termination:

 

(i)                                     the
entitlement of Executive to benefits under any benefit plan described in
Section 5.1 or 5.2 shall be determined in accordance with the provisions
of such plan;

 

(ii)                                  any
unvested stock options or equity-based compensation awards shall be forfeited
by Executive; and

 

(iii)                               any
LTIP Awards that are not covered by Section 6.1 or Section 6.6(c)(ii)
above will be treated in accordance with the LTIP as then in effect.

 

(d)                                 Any
determination of Cause under this Agreement shall be based on Executive’s
efforts, not his quality of performance, and shall be made by a resolution duly
adopted by the affirmative vote of at least two-thirds (2/3)
of the members of the Board of Directors (not including Executive if Executive
is a member of the Board of Directors) at a meeting of the Board of Directors
called and held for that purpose; provided that Executive shall have been given
written notice of such meeting by certified mail at least ten (10) business
days prior to the meeting and shall have been given the opportunity to be heard
by the Board of Directors before such resolution is passed.  Any failure by the Company to follow the
procedures set forth in this Section 6.6(d) in connection with a
termination of Executive’s employment shall result in such termination being
deemed to be a termination by the Company without Cause under Section 6.5;
provided, however, that neither the provision of notice to Executive that a
Board meeting will be held to determine whether there is grounds for a “Cause”
termination, nor the holding of such meeting, shall be construed as a notice of
termination pursuant to Section 6.5 or Section 6.6(a).

 

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6.7                               Termination
by Executive for Good Reason.

 

(a)                                  Executive
may terminate his employment hereunder at any time during the Employment Period
for “Good Reason” (as hereinafter defined) by providing the Company with
written notice of termination within ninety (90) days after Executive knows
that an event constituting “Good Reason” has occurred.  Such notice of termination shall state the
effective date of termination, which effective date shall not be less than
thirty (30) days from the date of such notice, except in the case of any event
described in subparagraph 6.7(b)(ii) below, in which case such termination
shall be effective immediately upon delivery of such notice.  If Executive terminates his employment under
this Section 6.7 for Good Reason (a “Termination for Good Reason”), and a
Change in Control (as defined in Section 7.1) has not occurred within the
twenty-four (24)-month period preceding the effective date of termination,
Executive shall be entitled to receive the payments and benefits Executive
would be entitled to receive under Section 6.5 following a termination of
employment by the Company without Cause, subject to providing a release of
claims as described therein.

 

(b)                                 “Good
Reason” shall mean the occurrence of any one or more of the following events
without the express written consent of Executive, if, in the case of the events
described in subparagraph 6.7(b)(ii) below, the Company shall have failed to
correct or remedy such event within thirty (30) days following receipt of
written notice from Executive describing in reasonable detail such event and
demanding correction or remedy:

 

(i)                                     The
relocation of Executive’s principal office to a location that is more than
fifty (50) miles from the Company’s current or future Washington, D.C. area
headquarters;

 

(ii)                                  A
reduction by the Company in, or failure by the Company to pay, any Base Salary
required to be paid hereunder, or failure by the Company to pay or provide for
any earned Annual Bonus or any other material earned compensation or benefits
required to be paid or provided for under this Agreement, in each case when
due;

 

(iii)                               A
change in Executive’s responsibilities or titles or any other action by the
Company which represents a material diminution of Executive’s position, status
or authority except in connection with or as a result of a termination of
Executive’s employment pursuant to any provision of this Section 6; or

 

(iv)                              The
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and perform the obligations of the Company hereunder, as
contemplated by Section 11.1.

 

Executive shall also be
entitled to voluntarily terminate his employment with the Company for any
reason by giving not less than five (5) days’ advance written notice to the
Company of his intention to terminate his employment within the thirty (30)-day
period commencing on the first anniversary of a Change in Control of the
Company (as 

 

11

 

defined in
Section 7.1 hereof) and any such termination shall be considered a
termination for Good Reason for purposes of this Agreement.  The continued employment of Executive after
an event constituting Good Reason shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason, until the
passage of ninety (90) days after Executive knew that an event constituting
Good Reason has occurred without delivery by Executive of a written notice of
termination for Good Reason, as provided above.

 

6.8                               Termination
after a Change in Control.  If the
Company terminates Executive’s employment for reasons other than death,
Disability or Cause or Executive timely terminates his employment for Good
Reason, and such termination occurs during the Employment Period and within
twenty-four (24) months after a Change in Control, then, from and after the
effective date of such termination, the Company shall have no further obligation
to pay any Base Salary to Executive and, in lieu of any severance amounts
payable under Section 6.5 or 6.7, whichever would otherwise apply,
Executive shall be entitled to the payments and benefits described in the
following paragraph, contingent upon executing and returning to the Company
(and not revoking) a release of claims in substantially the form attached
hereto as Exhibit B within the time permitted by the Company (which permitted
time period shall not be less than twenty-one (21) days).

 

Within fifteen (15) days
following the effective date of such termination (or if later, eight (8) days
after Executive provides an executed release of claims as described above, as
long as such release of claims is not revoked by Executive during the seven (7)-day
period following its execution by Executive), the Company shall pay to
Executive:  (a) a lump sum cash payment
equal to (i) two (2) times the sum of (A) Executive’s Base Salary in effect as
of the effective date of such termination, (B) Executive’s Target Annual Bonus
for the year in which the termination occurs and (C) Executive’s Longevity
Bonus and (ii) a pro rata cash payment of Executive’s Target Annual Bonus for
the year of termination based on service from commencement of the applicable
bonus year through the date of termination. 
In addition, the vesting of stock options and other equity-based
compensation awards not covered by Section 6.1 above (other than LTIP
Awards) will be treated in accordance with the equity incentive plan under
which the relevant grant was made and any applicable grant agreements;
provided, however, that Executive shall be considered for such purpose to have
been employed at the end of the calendar year in which the termination
occurred.  Any LTIP Awards not covered
by Section 6.1 hereof will be treated in accordance with the LTIP as then
in effect.  The entitlement of Executive
to benefits under any benefit plan described in Section 5.1 or 5.2 shall
be determined in accordance with the provisions of such plan; provided, however,
that, subject to the last sentence of Section 6.5, the Company shall
provide, at its expense, continued participation in any medical insurance and
dental insurance plans in which Executive or his dependents participated as of
the effective date of termination for two (2) years following the effective
date of termination, as described in Section 6.5.

 

12

 

6.9                               Termination
by Mutual Consent; Expiration of Term.  If
at any time during the Employment Period, the parties by mutual consent
decide to terminate Executive’s employment or this Agreement on a basis other
than that set forth in this Agreement, they shall do so only by separate
written agreement setting forth the terms and conditions of such termination.

 

6.10                        Cooperation
with the Company after Termination of Employment.  Following termination of Executive’s employment for any
reason, Executive shall cooperate with the Company in all matters relating to
any litigation in which the Company is or becomes involved, and in the winding
up of his pending work on behalf of the Company, including, but not limited to,
the orderly transfer of any such pending work to other employees of the Company
as may be designated by the Company. 
The Company agrees to reimburse Executive for any time and reasonable
out-of-pocket expenses he incurs in performing any work on behalf of the
Company following the termination of his employment.

 

7.                                      Change
in Control.

 

7.1                               Definition
of “Change in Control.”  A “Change
in Control” of the Company shall be deemed to have occurred as of the first day
on which any one or more of the following conditions shall have been satisfied:

 

(a)                                  The
acquisition of beneficial ownership, as such term is defined in the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), in a single transaction
or series of related transactions (by tender offer or otherwise), of more than
fifty percent (50%) of the voting securities of the Company by a single person
or entity (other than the Company or any direct or indirect wholly-owned
subsidiary of the Company, any employee benefit plan of the Company or any
trustee or other fiduciary or committee thereof, or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the stock of the Company prior to such
acquisition) or “group” within the meaning of Section 13(d)(3) of the
Exchange Act, whether through the acquisition of previously issued and
outstanding voting securities, or of voting securities that have not been
previously issued, or any combination thereof; or

 

(b)                                 There
shall be consummated any consolidation, merger,  business combination or reorganization involving the Company or
the securities of the Company in which holders of voting securities of the
Company immediately prior to such consummation own, as a group, immediately
after such consummation, voting securities of the Company (or, if the Company
does not survive such transaction, voting securities of the corporation
surviving such transaction) having less than fifty percent (50%) of the total
voting power in an election of directors of the Company (or such other
surviving corporation); or

 

(c)                                  The
individuals who constituted the Company’s Board of Directors as of the date
hereof (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the directors of the Company; provided, however, that individuals 

 

13

 

whose election, or whose nomination for
election by the Company’s shareholders, was approved by a vote of at least
two-thirds (2/3) of the Incumbent Board shall be considered, for purposes of
this Agreement, members of the Incumbent Board; and provided, further, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened “election contest” (as described in Rule 14a-11 promulgated under
the Exchange Act) (an “Election Contest”) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or entity other
than the Company’s Board of Directors (a “Proxy Contest”), including by reason
of any agreement intended to avoid or settle any Election Contest or Proxy
Contest; or

 

(d)                                 There
shall be consummated any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company (on a consolidated basis) to a party which is not a
direct or indirect wholly-owned subsidiary of the Company, including, without
limitation, any sale, lease, exchange or other transfer of all or substantially
all of the assets of the Company (on a consolidated basis) that includes the
assets of The Mills Limited Partnership, a Delaware limited partnership (the
“Operating Partnership”); or

 

(e)                                  The
Company (or its successor) no longer serves as the sole general partner of the
Operating Partnership other than as a result of (i) the merger of the Operating
Partnership with the Company or a subsidiary of the Company, (ii) the
redemption of all limited partnership interests in the Operating Partnership by
the Operating Partnership or the purchase of all such limited partnership
interests by the Company,  or (iii) the
liquidation, dissolution or winding up of the Operating Partnership.

 

Notwithstanding anything in this Agreement to the contrary, a Change in
Control shall be deemed not to have occurred with respect to Executive (a) if
Executive is involved as an officer, director, employee, agent, finder,
consultant, partner, investor, creditor or principal, or in any other
individual or representative capacity whatsoever, with an entity that acquires
an interest in the Company in a transaction that otherwise would constitute a
Change in Control and, pursuant to a written or unwritten agreement or
understanding with such entity entered into prior to or in connection with such
transaction (a “Change in Control Agreement”), Executive receives or has the
right to receive a material economic benefit as a result of or in connection
with such transaction (other than compensation granted or awarded to Executive
by the Company in the ordinary course of business consistent with past practice
pursuant to this Agreement or solely as a result of his then-current ownership
interest in the Company), or (b) if any of the foregoing transactions occurs
with any employee benefit plan of the Company, any affiliate of the Company, or
any entity owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company
prior to the event that would otherwise constitute a Change in Control.  For purposes of this Section 7.1, a
“material economic benefit” shall mean any compensation, payment, beneficial
ownership interest in the Company or another entity that is party to any of the
foregoing transactions, or other economic benefit, that has a value equal to or
greater than forty percent (40%) of Executive’s Base Salary in effect as of the
effective date of the Change in Control; provided, however, that if this
Agreement is terminated as a result of

 

14

 

or in connection with such transaction, the amount of compensation paid
or payable pursuant to this Agreement shall be deducted from any compensation
paid or payable pursuant to a Change in Control Agreement in calculating
whether Executive receives or has the right to receive a material economic
benefit as a result of or in connection with such transaction.

 

8.                                      Confidentiality
and Non-competition.

 

8.1                               Post-Employment
Obligations.  Unless Executive
obtains the prior written approval of the Company:

 

(a)                                  Executive
shall not, at any time during the Employment Period and for a period of twenty
four (24) months following the termination of Executive’s employment with the
Company for any reason, whether voluntary or involuntary, or whether due to the
expiration, non-renewal or termination of this Agreement, directly or
indirectly:

 

(i)                                     engage
either individually or as an officer, director, employee, agent, consultant,
partner, investor (excluding passive investments in voting securities of a
publicly traded entity aggregating less than five percent (5%) of any such
entity’s total outstanding voting securities), creditor, principal or
otherwise, in the predevelopment, development, redevelopment, operation,
management or leasing of any type of retail or entertainment-based shopping
centers, malls, strip centers or other commercial properties, the provision of
related services or in any other businesses then carried on by the Company in
any way that would compete with the business activities then carried on by the
Company anywhere in the world; provided, however, that ownership of the
interests referred to in Exhibit C hereto shall not be deemed to violate this
Section 8.1(a)(i); and provided, further, that retail or
entertainment-based shopping centers, malls, strip centers or other commercial
properties with an aggregate square footage of less than 250,000 square feet
shall be deemed not to compete with the business activities of the Company for
purposes of this Section 8.1(a)(i).

 

(ii)                                  cause,
solicit, entice or induce any employee of the Company or any employee of any
affiliate of the Company to leave the employ of the Company or such affiliate,
to interfere in any manner with the business of the Company or any such
affiliate or to accept employment with, or compensation from, Executive or any
person, entity or business with which Executive is associated or affiliated or
by whom Executive is employed; or

 

(iii)                               use
any Proprietary Property (as defined below) of the Company or any of its
affiliates or any other information obtained from the Company or any of its
affiliates for any purpose other than in connection with the performance of
Executive’s duties for the Company under this Agreement.

 

(b)                                 Executive
shall not, at any time during or after the Employment Period, make or publish
any derogatory, unfavorable, negative, disparaging, false, damaging or
deleterious written or oral statements or remarks (including without 

 

15

 

limitation, the repetition or distribution of
derogatory rumors, allegations, or negative or unfavorable reports or comments)
regarding the Company or any of its affiliates or any members of their
respective managements or the business affairs or performance of the Company or
any of its affiliates or any of the respective managements.  The Company shall not at any time during or
after the Employment Period make or publish any derogatory, unfavorable,
negative, disparaging, false, damaging or deleterious written or oral
statements or remarks regarding Executive or his performance to anyone who is
not an officer, director or employee of the Company or any of its
affiliates.  For purposes of this
Section 8.1(b), a statement or remark shall be deemed to have been made by
the Company only if it is made or authorized by a member of the Board of Directors
or executive management of the Company. 
Nothing in this Section 8.1(b) shall be construed to limit any
person’s ability to give truthful testimony pursuant to valid legal process,
including but not limited to, a subpoena or court order.

 

8.2                               Confidentiality
Covenants.  Executive acknowledges
that, in the course of his employment with the Company, the Company has
provided and will provide Executive with, and Executive has had and will have
access to, material, non-public information and other materials and information
that constitute trade secrets or other intellectual property or proprietary
material of the Company (“Proprietary Property”).  Such Proprietary Property includes, but is not limited to,
information (regardless of the form or medium in which such information is
stored or contained) not generally known in the retail shopping center industry
regarding the operations, market, structure, processes, techniques, marketing
plans, strategies, forecasts, new products or services, systems, financial
information, budgets, projections, plans, drawings, specifications, licenses,
prices, costs, or employees of the Company and/or its clients, tenants,
prospective clients or prospective tenants or the identity of, or the Company’s
relationship with, its clients, tenants, prospective clients or prospective
tenants and all other information and materials developed by Executive or other
employees of the Company in connection with their activities for or on behalf
of the Company and/or developed through the use of the Company’s resources,
including trademarks, copyrights and other intellectual property.  Such Proprietary Property shall be the sole
and exclusive property of the Company. 
Executive shall have no right, title or interest in and to the
Proprietary Property.  Executive
covenants and agrees that, during the Employment Period and for a period of
thirty-six (36) months thereafter, Executive shall not, directly or indirectly,
communicate, disclose or divulge to, or use for the benefit of Executive or any
other person (other than the Company), or to the disadvantage of the Company,
the Proprietary Property or any information in any way relating to the
Proprietary Property, without the prior written consent of the Company.  Executive further covenants and agrees that
he shall not, at any time, including any time after expiration of the 36-month
period following termination of his employment, directly or indirectly,
communicate, disclose or divulge to, or use for the benefit of Executive or any
other person (other than the Company), or to the disadvantage of the Company,
any Proprietary Property that then constitutes material, non-public information
without the prior written consent of the Company.  Notwithstanding anything herein to the contrary, (i) any disclosure
of Proprietary Property made by Executive pursuant to valid legal process
(including, but not limited to, a subpoena or court order) shall not be
considered a violation of this Section 8.2 so long as Executive has
promptly notified the Company of his receipt of 

 

16

 

such process and provided the Company with an
opportunity to contest the validity of the process; and (ii) the term
“Proprietary Property” shall not include any information that becomes public by
any means other than a breach by Executive of this Agreement or is rightfully
disclosed to Executive by a third party without restriction and not in
violation of any duty of confidentiality owed to the Company.

 

8.3                               Covenants
Concerning Return of Company Property.  Upon
demand by the Company and/or upon termination of Executive’s employment with
the Company for any reason, whether voluntary or involuntary or whether due to
the expiration, non-renewal or termination of this Agreement, Executive shall
promptly deliver to the Company all Proprietary Property and all other property
and materials, belonging to the Company, including, without limitation, all
lists of and information pertaining to the Company’s clients, tenants,
prospective clients or prospective tenants, but excluding materials distributed
to employees of the Company generally and relating to Executive’s rights and
obligations as an employee of the Company.

 

8.4                               Certain
Acknowledgments.  Executive
acknowledges and agrees that:

 

(a)                                  As
a key management person, Executive is involved, on a high level, in the
development, implementation and management of the Company’s development
strategies and plans.  By virtue of
Executive’s unique and sensitive position and special background, employment of
Executive by a competitor of the Company at any time while the covenants set
forth in Section 8.1 are in effect represents a serious competitive danger
to the Company, and the use of Executive’s talent and knowledge and information
about the Company’s business strategies can and would constitute a valuable
competitive advantage over the Company;

 

(b)                                 Enforcement
of the covenants set forth in this Section 8 hereof will not prevent
Executive from earning a living in the real estate industry;

 

(c)                                  The
Company has made a substantial investment in Executive and the Company’s
business;

 

(d)                                 The
restrictions provided in this Section 8 are reasonable, proper and
necessary for the Company’s protection; and

 

(e)                                  This
Agreement is not intended to restrict Executive from performing work in a role
that does not compete with the then-current business of the Company.

 

8.5                               Enforcement
and Remedies.

 

(a)                                  If
a court of competent jurisdiction finds Section 8, or any of its
restrictions, to be ambiguous, unenforceable and/or invalid, Executive and the
Company agree that such court shall (i) in the case of ambiguity, read
Section 8 as a whole and interpret the restriction(s) at issue to be
enforceable and valid to the maximum extent allowed by law for the protection
of the Company’s business interests; and (ii) in 

 

17

 

the case of
unenforceability or invalidity, eliminate such enforceable or invalid
provisions from this Agreement to the extent necessary to permit the remaining
provisions to be enforced to the maximum extent permitted for the protection of
the Company’s business interests.

 

(b)                                 Executive
acknowledges that it may be impossible to assess the monetary damages incurred
by his violation of this Section 8, or any of its terms, and that any
threatened or actual violation or breach of this Section 8, or any of its
terms, will constitute immediate and irreparable injury to the Company.  Executive expressly agrees that, in addition
to any and all other damages and remedies available to the Company as a result
of Executive’s breach of Section 8, the Company shall be entitled to an
injunction restraining Executive from violating or breaching Section 8 or
any of its terms.

 

8.6                               Publication
of this Agreement to Subsequent Employers or Business Associates.  Executive agrees that, if Executive is
offered employment or the opportunity to enter into any business venture as an
owner, partner, consultant or in any other capacity in the businesses or
industries covered by Section 8 of this Agreement while the restrictions
described in Section 8 of this Agreement are in effect, Executive will
inform the offeror of the existence of Section 8 of this Agreement and
provide the offeror with a copy thereof. 
Executive authorizes the Company to provide a copy of relevant
provisions of this Agreement to any of the persons or entities described herein
and to make such persons aware of Executive’s obligations under this
Section 8.

 

9.                                      Director’s
and Officer’s Liability Insurance.  The
Company shall, at its sole cost and expense, provide Executive with director’s
and officer’s liability insurance coverage with respect to services rendered
during the Employment Period in an amount not less than $10,000,000.

 

10.                               Assignment.

 

10.1                        Assignment
by the Company.  This Agreement may,
and shall be, assigned or transferred to, and shall be binding upon and shall
inure to the benefit of, any successor of the Company, and any such successor
shall be deemed substituted for all purposes for the “Company” under the terms
of this Agreement (other than for the purpose of determining whether a Change
in Control has occurred under Section 7.1).  Notwithstanding such assignment, the Company (if it survives)
shall remain, with such successor, jointly and severally liable for all its
obligations hereunder.  Except as herein
provided, this Agreement may not otherwise be assigned by the Company.

 

10.2                        Assignment
by Executive.  The services to be
provided by Executive to the Company pursuant to this Agreement are personal to
Executive, and Executive’s duties may not be assigned by Executive; provided,
however, that this Agreement shall inure to the benefit of and shall be
enforceable by Executive’s personal or legal representatives, executors and
administrators, heirs, distributees, devisees and legatees.  Unless otherwise required by law, if
Executive dies while any amounts payable to Executive hereunder remain
outstanding, all such amounts shall be paid in accordance with the terms of
this Agreement to the beneficiary designated in writing to the Company 

 

18

 

prior to his death or, if Executive has not
designated a beneficiary or the designated beneficiary does not survive
Executive, to Executive’s estate.  

 

11.                               General
Provisions.

 

11.1                        Notice.  Any notice required or permitted hereunder
shall be made in writing (a) by actual delivery of the notice into the hands of
the party thereunder entitled, (b) by the mailing of the notice in the United
States first class mail, certified or registered mail, return receipt
requested, all postage prepaid or (c) by nationally recognized overnight
delivery service and addressed to the party to whom the notice is to be given
at the party’s respective address set forth below, or such other address as the
parties may from time to time designate by written notice as herein provided.

 

To the
Company:                                                                                                    The
Mills Corporation

1300 Wilson Boulevard, Suite
400

Arlington, Virginia 22209

Attn: President & Chief
Operating Officer

 

with copies
to:                                                                                                                  The
Mills Corporation

1300 Wilson Boulevard, Suite
400

Arlington, Virginia 22209

Attn: General Counsel

 

and

 

Karen A. Dewis, Esquire

McDermott, Will & Emery

600 13th Street, NW

Washington, DC  20005

 

To Executive:                                                                                                                        Laurence
C. Siegel

10017 Bentcross Drive

Potomac, Maryland  20854

 

With a copy
to:                                                                                                             Stefan
F. Tucker, Esquire

Venable LLP

575 7th Street, NW

Washington, DC  20004

 

The notice shall be deemed to
be received in case (a) on the date of its actual receipt by the party entitled
thereto, in case (b) on the third business day following the date of its
mailing and in case (c) on the next business day following the date of its
delivery to such nationally recognized overnight delivery service.

 

11.2                        Amendment
and Waiver.  No amendment or
modification of this Agreement shall be valid or binding upon (a) the Company
unless made in writing and signed by an officer of the Company duly authorized
by the Board of Directors of the Company or (b) Executive unless made in
writing and signed by him.

 

19

 

11.3                        Non-Waiver
of Breach.  No failure by either
party to declare a default due to any breach of any obligation under this
Agreement by the other, nor failure by either party to act quickly with regard
thereto, shall be considered to be a waiver of any such obligation, or of any
future breach.

 

11.4                        Severability.  If any provision or portion of this
Agreement, with the exception of Sections 1, 2 and 4, shall be determined to be
invalid or unenforceable for any reason, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and
effect.

 

11.5                        Tax
Withholding.  The Company may
withhold from any payments to Executive under this Agreement all Federal,
state, city, or other taxes as may be required pursuant to any law or
governmental regulation or ruling.

 

11.6                        Governing
Law.  To the extent not preempted by
Federal law, the validity and effect of this Agreement and the rights and
obligations of the parties hereto shall be construed and determined in
accordance with the internal substantive laws of the State of Delaware, without
regard to its conflict-of-laws or choice-of-law principles.

 

11.7                        Effect
on Prior Agreement.  As of the
Effective Date, the Prior Agreement shall be deemed terminated and of no
further force or effect without any consequence to Executive or the Company of
any kind and the Prior Agreement shall be deemed superseded and replaced for
all purposes by this Agreement; provided, however, that the Company’s
obligations to make payments to Executive pursuant to Section 3 of the Prior
Agreement with respect to the 2003 calendar year, including, but not limited
to, (a) the payment of Executive’s Annual Bonus for calendar year 2003 if and
to the extent earned, (b) Executive’s eligibility to receive certain LTIP
Awards with respect to his performance during calendar year 2003 or prior
calendar years, if and to the extent such LTIP Awards are earned, and (c)
Executive’s right to carry over certain benefits pursuant to
Section 3(d)(iii) of the Prior Agreement, shall remain in full force and
effect.

 

11.8                        Entire
Agreement.  This Agreement,
including the Exhibits and Schedules hereto, along with the Indemnification
Agreement dated as of April 24, 1994 between the Company and Executive,
contain all of the terms agreed upon by the Company and Executive with respect
to the subject matter hereof and, as of the Effective Date, supersedes all
prior agreements, arrangements and communications between the parties dealing
with such subject matter hereof, whether oral or written.  To the extent this Agreement conflicts with
any terms, conditions or agreements set forth in any Company plan, policy or
manual, the terms of this Agreement shall govern.

 

11.9                        Headings.  Numbers and titles to paragraphs and
sections hereof are for information purposes only and, where inconsistent with
the text, are to be disregarded.

 

11.10                 Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which, when taken together, shall be and constitute one and the same
instrument.

 

20

 

11.11                 Survival
beyond Termination.  Notwithstanding
anything in this Agreement to the contrary, the restrictions and obligations
contained in Sections 6, 8 and 11.5 shall survive termination of Executive’s
employment, whether voluntary or involuntary and whether due to the expiration,
non-renewal or termination of this Agreement, and be binding regardless of the
reason for termination of employment. 
Executive covenants that if Executive should ever seek to avoid his
obligations under Section 6.10, Section 8 or Section 11.5
because Executive contends that such restrictions are unenforceable as written
for any reason, Executive shall provide notice to the Company in accordance
with the provisions of Section 11.1 of this Agreement setting forth in
detail the reasons that Executive believes such restrictions to be
unenforceable.

 

11.12                 Knowing
and Voluntary Execution.  Each of
the parties hereto has carefully read and considered all of the terms of this
Agreement, including Section 8 and the restrictions contained in it.  Each of the parties has freely, willing and
knowingly entered into this Agreement with the intent to be bound by it.

 

11.13                 Prevailing
Parties.  In the event that either
the Company or Executive is successful in whole or in part in any legal or
equitable action against the other party under this Agreement (either as
determined by a court of competent jurisdiction pursuant to a final,
non-appealable order or as agreed to by the parties pursuant to a duly executed
settlement agreement), the prevailing party in any such dispute shall be
entitled to receive a reimbursement of his or its reasonable attorneys’ fees
and related costs associated with resolving such dispute.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed on the date and
year first written above.

 

 

	
  The Company:

  	
  THE MILLS CORPORATION

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles R. Black, Jr.

  	
   

  
	
   

  	
   

  	
  Charles R. Black, Jr.

  
	
   

  	
   

  	
  Chairman, Executive
  Compensation

  Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executive:

  	
   

  	
   

  	
  LAURENCE C. SIEGEL

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Laurence C. Siegel

  	
   

  

 

21

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