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EXHIBIT 10.3
[IAC
IRVINE APARTMENT COMMUNITIES
LETTERHEAD]
February 26, 1998
Mr. Xxxxx Xxxx
1979 Port Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Dear Xxx:
This letter confirms the terms of your employment as approved by the Board of
Directors on February 6, 1998. To ensure our mutual understanding, the basic
provisions are:
Time Frame: The terms of this employment agreement extend from January
1, 1998 to December 31, 2002.
Base Salary: $20,833/month ($250,000 annual equivalency). During the five
year term, you will be eligible for salary increases as
approved by the Compensation Committee.
Cash Bonus: You will be eligible to earn an annual payment of 0-100% of
your base salary, based upon your performance and the
Company's performance.
Stock Options: You have been awarded 38,000 stock options on February 6,
1998 at an exercise price equivalent to the closing price of
the stock on February 6, 1998 ($31.625 per share). In
addition, you will be awarded 25,000 stock options in 1999
and 20,000 stock options in 2000, assuming your continued
employment with the Company. All of these options will
vest at the rate of one third each year over a three year
period following their grant date.
Restricted Stock: You have been awarded 20,000 shares of restricted stock in
1998, which will become eligible for vesting over a five
year period at the rate of 0%, 20%, 20%, 20%, 40%, based on
IAC's performance in achieving FAD per share targets as
determined by the Compensation Committee for 1998 awards.
In addition, you will be awarded 10,000 shares of restricted
stock in 1999, assuming continued employment. This award
shall be eligible for vesting over a four year period at the
rate of 0%, 20%, 20% 60% based upon achievement of FAD per
share targets as determined by the Compensation Committee
for 1999 awards.
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February 26, 1998
In addition, you will be awarded 10,000 shares of restricted
stock in 2000, assuming continued employment. This award
shall be eligible for vesting over a three year period at
the rate of 0%, 20%, 80% based upon achievement of FAD per
share targets as determined by the Compensation Committee
for 2000 awards.
Despite the accelerated vesting schedule of the 1999 and
2000 restricted stock awards, both of these awards will
retain the normal five year opportunity for "catch-up"
vesting of previously unearned shares. Specifically, all of
the shares of the 1999 award may be earned by 2002; but any
shares that are not earned by 2002 may still be earned by
applying the FAD achieved in 2003 to the previous FAD
targets for each vesting date. Similarly, all of the shares
from the 2000 award that are still unearned by 2002, may
still be earned by applying the FAD achieved in 2003 and
2004 to the previous FAD targets for each vesting date.
Dividend
Equivalents: You will receive quarterly dividend equivalent payments on
the shares of restricted stock in amounts, and at such
times, as shareholders receive dividends on IAC shares.
Severance: You will be provided with a payment of 24 months salary if
your employment is terminated involuntarily prior to
December 31, 2000. You will be provided with 18 months
salary if your employment is terminated involuntarily
between January 1, 2001 and December 31, 2002. However,
severance will not be provided if your termination is for
"just cause". A "just cause" employment termination shall
exist in the following circumstances: (1) dishonesty, fraud
or breach of trust, or (2) willful engagement in any
misconduct in the performance of duties that materially
injures the Company, or (3) willful and substantial
non-performance of assigned duties, provided that such
nonperformance has continued for more than ten days after
the Company has given notice of such nonperformance and of
its intention to terminate your employment because of such
nonperformance.
Auto Allowance: $700 per month.
Benefits: You will continue to participate in corporate fringe
benefits programs (health, life insurance, etc.) as
established by Company policy.
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February 26, 1998
Your confirmation that the terms of your employment are accurately described
above will be indicated by signing and returning the duplicate of this letter
to me. If you have any questions, please do not hesitate to ask.
Sincerely,
[SIG]
Xxxxxxx XxXxxxxxx
President
I understand and accept that the terms of this employment letter are all
inclusive and supersede all other verbal or written discussions of my terms of
employment.
Signature: [SIG] Date: 03/20/98
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Xxxxx Xxxx
