eVP and CFO Employment Agreement - Richard J. Nadeau, dated September 13, 2006

Exhibit 10.1

EXECUTION COPY

THE MILLS CORPORATION

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (" Agreement" ) is made and entered into on September 13, 2006 and effective as of the 1st day of June 2006 (the " Effective Date" ), by and between THE MILLS CORPORATION, a Delaware corporation (the " Company" ), and RICHARD J. NADEAU (" 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 Executive Vice President and Chief Financial Officer, and has considerable experience and an intimate knowledge of the business and affairs of the Company, its policies, methods, personnel and operations. The Company wishes to continue to employ Executive, and Executive wishes to accept continued employment with the Company, on the terms and conditions set forth herein.

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, 2007 (the " Employment Period" ); provided that, commencing on January 1, 2008, 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. Notwithstanding anything in this Agreement to the contrary, upon a Change in Control (as defined in Section 7.1) of the Company, the term of Executive' s employment under this Agreement shall be the longer of the period commencing on the effective date of such Change in Control and ending on the second anniversary of the effective date of the Change in Control and the term that would otherwise apply pursuant to this Section 1.2, subject in any case to earlier termination of Executive' s employment pursuant to Section 6 hereof.

2. Duties . During the Employment Period, Executive shall be employed by the Company as an executive. Executive shall perform the customary duties of a Chief Financial Officer of a company such as the Company, along with such additional duties and responsibilities as are reasonably assigned to Executive by the Company in its sole discretion during the Employment Period.

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 business of the Company and its subsidiaries 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 Chief Executive Officer or President of the Company, 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. 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 executives of the Company in the same or similar positions to that of Executive. Initially, the Base Salary shall be calculated at the rate of $465,000. The Base Salary shall be reviewed effective as of April 1, 2007 and at least annually thereafter for such adjustments as may be determined by the Executive Compensation Committee of the Board of Directors (the " Executive Compensation Committee" ) to be appropriate; provided, however, that the Base Salary shall not be decreased below the amount set forth in this Section 4.1 except as part of a salary reduction program approved by the Board of Directors that is generally applicable to executives of the Company in the same or similar positions to that of Executive.

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 incentive plan applicable to executives in the same or similar positions to that of Executive, as such plan may exist from time to time (the " PIP" ). The amount of Executive' s target annual bonus under the PIP for each calendar year during the Employment Period (each a " Target Annual Bonus" ) shall be determined by the Executive Compensation Committee in its discretion; provided, however, that Executive' s Target Annual Bonus for the 2006 calendar year shall be at least $209,250. The


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amount of the actual annual bonus, if any, awarded to Executive under the PIP with respect to any calendar year during the Employment Period (each an " Annual Bonus Award" ) shall be determined in accordance with the terms of the PIP as administered by the Executive Compensation Committee. 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. 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.

(b) Each Annual Bonus Award shall be paid to Executive in cash when the Company customarily pays annual bonus awards to other executives in the same or similar positions to that of Executive under the PIP; provided that payment shall in all event be made not later than the end of calendar year immediately following the annual performance period to which the bonus relates.

4.3 Long Term Incentive Plan. Executive will be eligible to participate in the Company' s long term incentive plan applicable to executives in the same or similar positions to that of Executive, as such plan may exist from time to time (the " LTIP" ). Executive' s target LTIP award for any LTIP performance period during the Employment Period (each a " Target LTIP Award" ) shall be determined by the Executive Compensation Committee in its discretion. The amount of the actual LTIP award, if any, made to Executive with respect to any LTIP performance period 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. All decisions regarding the criteria to be used to 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 LTIP performance period 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), and interpretations of the terms of the LTIP shall be made solely and exclusively by the Executive Compensation Committee in its discretion. 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. Payment shall be made as soon as practicable after completion of the performance period; provided that it shall in all events be made not later than the end of the calendar year immediately following the completion of such performance period.

4.4 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 executives in the same or similar positions to that of Executive.

4.5 Special Performance Bonus. Executive shall be entitled to a one-time special performance bonus award of up to $465,000 payable on February 28, 2007 if Executive successfully achieves the performance objectives set forth on Schedule 1 attached hereto and incorporated herein by reference (the " Special Performance Bonus" ). The actual amount of


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Executive' s Special Performance Bonus shall be based on the evaluation of Executive' s performance against the performance objectives set forth on Schedule 1, which evaluation shall be done jointly by the Company' s Chief Executive Officer and the Executive Compensation Committee, with significant input from the Audit Committee. Notwithstanding anything contained hereinto to the contrary, the Special Performance Bonus shall be paid in full if, prior to February 28, 2007, Executive is terminated by the Company without Cause or Executive terminates his employment for Good Reason, with the Special Performance Bonus paid on the day Executive ceases to be employed.

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 executives in the same or similar positions to that of Executive on the same basis as such other executives, as such programs, policies or plans may be interpreted, adopted, revised or terminated from time to time by the Company in its sole discretion. 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 Personnel Policies. Except as otherwise provided herein, Executive' s employment shall be subject to the personnel policies that apply generally to the Company' s executives in the same or similar positions to that of Executive, as the same may be interpreted, adopted, revised or terminated 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 (as defined below):

(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 Effective Date 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 as of the Effective Date of Termination; and

(e) any earned but unpaid LTIP Awards.

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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. In the event of such termination:

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

(b) vesting and all other rights with respect to 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; and

(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.

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 by giving written notice of such termination to Executive, which notice shall specify the Effective Date of Termination and which Effective Date of Termination shall be no less than thirty (30) calendar days after the date of such notice. From and after the Effective Date of 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 program, policy or plan described in Section 5.1 hereof shall be determined in accordance with the provisions of such program, policy or plan;

(ii) vesting and all other rights with respect to 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; and

(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.


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(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 Company due to a disability, as determined by the Company 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 Company 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. With respect to Executive, the foregoing definition of Disability shall supersede the definition of Disability set forth in, and shall be used for purposes of, the Company' s 2004 Stock Incentive Plan, as it has been or may be amended from time to time (the " 2004 Plan" ), the Operating Guidelines for the Administration of Executive Long-Term Incentive Awards (" LTIP Guidelines" ) and the Operating Guidelines for the Administration of Annual Incentive Awards (" PIP Guidelines" ) and any awards or grants under the 2004 Plan, the LTIP Guidelines and the PIP Guidelines.

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 ninety (90) calendar days before the effective date of such termination; provided, however, that the required notice period shall be reduced to forty-five (45) days in the event Executive' s voluntary termination is not for the purpose of taking alternative employment. Such written notice of termination shall state the Effective Date of Termination, which shall not be earlier than the last day of the applicable notice period set forth in the preceding sentence. From and after the Effective Date of 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 program, policy or plan described in Section 5.1 shall be determined in accordance with the provisions of such program, policy or 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.

(a) The Company may terminate Executive' s employment at any time during the Employment Period for reasons other than death, Disability or Cause by giving written notice to Executive, which notice shall specify the Effective Date of Termination and which Effective Date of Termination shall be no less than thirty (30) calendar days after the date of such notice. From and after the Effective Date of 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 Section 6.5(b), contingent upon executing and returning to the Company (and not revoking) a release of claims in substantially the form attached hereto as Exhibit A within the time permitted by the Company (which permitted time period shall not be less than twenty-one (21) days).


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(b) Within the later of (x) fifteen (15) days following the Effective Date of Termination and (y) eight (8) days after Executive provides an executed release of claims which he 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 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 Termination and (B) Executive' s Target Annual Bonus for the year in which the termination occurs and (ii) a pro rata cash payment equal to Executive' s Target Annual Bonus for the year of termination based on service from commencement of the applicable bonus year through the Effective Date of Termination. In addition, vesting and all other rights with respect to 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 program, policy or plan described in Section 5.1 hereof shall be determined in accordance with the provisions of such program, policy or 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 twenty-four (24) months 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 executives of the Company in the same or similar positions to that of Executive. 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 Effective Date of Termination subject to such modifications as shall be established for executives of the Company in the same or similar positions to that of Executive. 6.6 Termination by the Company for Cause.

(a) 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 to, any felony; (iii) Executive commits any act of dishonesty, breach of fiduciary duty or misconduct (whether in connection with Executive' s responsibilities as an employee of the Company or otherwise) that, in the Company' s reasonable judgment, either (A) materially impairs the Company' s business, goodwill or reputation or (B) materially compromises Executive' s ability to perform Executive' s job duties or represent the Company with the public; (iv) Executive fails to substantially perform any of his duties hereunder (other than any such failure resulting from a material breach of this Agreement by the Company or the Disability of Executive) which failure continues for more than thirty (30) days after written notice by the Company; (v) such carelessness, lack of judgment, ineffectiveness


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or inefficiency in performance by Executive of his duties that Executive is determined by the Executive Compensation Committee to be unfit to continue in service; provided that Executive shall be given notice and an opportunity to cure unless the Executive Compensation Committee determines, in its sole discretion, not to provide Executive with notice and an opportunity to cure given the severity or frequency of the carelessness, lack of judgment, ineffectiveness or inefficiency; or (vi) Executive materially violates any provision of this Agreement. With respect to Executive, the foregoing definition of Cause shall supersede the definition of Cause set forth in, and shall be used for purposes of, the 2004 Plan, the LTIP Guidelines and the PIP Guidelines and any awards or grants under the 2004 Plan, the LTIP Guidelines and the PIP Guidelines.

(c) From and after the Effective Date of 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 program, policy or plan described in Section 5.1 shall be determined in accordance with the provisions of such program, policy or plan;

(ii) any unvested equity 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.

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, or should have known, 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 nor more than ninety (90) days after the date of such notice, except in the case of (i) any event described in subparagraph 6.7(b)(ii) below, in which case such termination shall be effective immediately upon delivery of such notice and (ii) any event described in subparagraph 6.7(b)(ix) below, in which case such termination shall be effective ninety (90) days after the date 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 has not occurred within the twenty-four (24) month period preceding the Effective Date of Termination, Executive shall receive the same 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. If Executive terminates his employment under this Section 6.7 for Good Reason and a Change in Control has occurred within the twenty-four (24) month period preceding the Effective Date of Termination, Executive shall receive the payments and benefits described in Section 6.8.

(b) " Good Reason" shall mean the occurrence of any one or more of the following events without the express written consent of Executive; provided, however, that any of the events described in subparagraph 6.7(b)(ii) below shall only constitute Good Reason if 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; and provided further that any of the events described in


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subparagraphs (b)(vii), (b)(viii) and (b)(ix) below shall only be treated as a Good Reason event if such event occurs within twenty-four (24) months following a Change in Control:

(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) ...