STEPHEN K. GRIESSEL AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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X. XXXXXXXX
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated May 14,
2009, is entered into between American Rental Management Company, a Delaware
corporation (the “Company”) American Community Properties Trust, a Maryland real
estate investment trust (the “Parent”), and Xxxxxxx X.
Xxxxxxxx (the “Executive”). Certain
capitalized terms used herein shall have the respective meanings ascribed to
them in Section 6 and Section 11 hereof. This Agreement amends and
restates that certain Employment Agreement, dated as of October 1, 2008, by and
between the Parent and Executive (the “Old Agreement”).
WHEREAS,
the Parent and Executive previously entered into the Old Agreement;
and
WHEREAS,
the Company is a wholly owned subsidiary of the Parent; and
WHEREAS,
the Parent is a holding company that does not itself have employees, and, when
the Parent and Executive entered into the Old Agreement, the Parent and
Executive intended that the Company also be a party to the Old Agreement, and
serve as the employer of Executive thereunder; and
WHEREAS,
the Parent, Executive and the Company now wish to amend and restate the Old
Agreement to reflect the actual intent of the parties regarding the Company’s
capacity as employer of Executive.
Accordingly,
the parties hereto agree as follows:
1. Term. The
Company hereby employs Executive, and Executive hereby accepts such employment
for an initial term commencing on the date hereof and ending on October 1, 2011,
unless sooner terminated in accordance with the provisions of Section 4 or
Section 5 hereof (the period during which the Executive is employed hereunder
being hereinafter referred to as the “Term”). If either
the Company or Executive does not wish to renew this Agreement when it expires
at the end of the initial or any renewal Term hereof as hereinafter provided, or
if either the Company or Executive wishes to renew this Agreement on different
terms than those contained herein, it or he shall give written notice in
accordance with Section 9.4 below of such intent to the other party at least
ninety (90) days prior to the then-current expiration date. In the
absence of such notice, this Agreement shall be renewed automatically on the
same terms and conditions contained herein for a term of one (1) year following
such expiration date. The parties expressly agree that the designation of a Term
and the renewal provisions in this Agreement do not in any way limit the right
of the parties to terminate this Agreement at any time as hereinafter
provided.
2. Duties. Executive
shall faithfully perform for the Company the duties of Chief Executive Officer
and shall perform such other duties consistent with his position of an
executive, managerial or administrative nature as shall be specified and
designated from time to time by the Parent’s Board of Trustees (the “Board”) (including the
performance of services for, and serving on the Board of Directors of, any
subsidiary or affiliate of the Parent or the Company without any additional
compensation). In addition, for so long as Executive remains Chief
Executive Officer of the Company, the Board shall appoint him to serve as the
Chief Executive Officer of the Parent and shall nominate him as a member of the
Board and shall use its best efforts to cause his election as a member of the
Board. Executive shall devote substantially all of the Executive’s
business time and effort to the performance of the Executive’s duties hereunder,
provided that in no event shall this sentence prohibit Executive from performing
such personal, investment and charitable activities as do not materially and
adversely interfere with the Executive’s performance of his duties for the
Company and the Parent. The Board may delegate its authority to take
any action under this Agreement to the Compensation Committee of the Board (the
“Compensation
Committee”).
3. Compensation.
3.1 Salary. The
Company shall pay the Executive during the Term an Annual Salary at the rate of
five hundred fifty thousand dollars ($550,000) per annum (the “Annual Salary”), payable
semi-monthly and subject to regular deductions and withholdings as required by
law. The Annual Salary may be increased by an amount as may be
approved by the Compensation Committee. Upon any increase, the
increased amount shall thereafter be deemed to be the Annual Salary for purposes
of this Agreement.
3.2 Annual Cash
Incentive. Executive shall be provided by the Company with an
opportunity to earn an Annual Cash Incentive, subject to regular deductions and
withholdings as required by law, based upon the achievement of individual and
objective annual performance criteria established by the Compensation Committee,
subject to approval by the Board. The threshold amount of such Annual
Cash Incentive shall be twenty percent (20%) of the Executive’s Annual Salary;
the base amount of such Annual Cash Incentive shall be forty percent (40%) of
the Executive’s Annual Salary; and the maximum amount of such Annual Cash
Incentive shall be sixty percent (60%) of the Executive’s Annual
Salary. The Annual Cash Incentive will be paid within two and
one-half (2½) months after the end of the calendar year to which the Annual Cash
Incentive relates.
3.3 Relocation
Bonus. To the extent not already paid under the Old Agreement,
the Company shall pay the Executive two hundred forty four thousand dollars
($244,000), payable in monthly installments through October 2009 and subject to
regular deductions and withholdings as required by law, with such monthly
installments to commence within thirty days of his execution of this
Agreement. If the Executive’s house located at 0 Xxxxxxxx Xxxxx, Xxxx
Xxxxx, XX 00000 (the “Property”) has not been sold
by October 1, 2009, the Company shall pay the Executive fifteen thousand four
hundred sixteen dollars and sixty six cents ($15,416.66) each month thereafter,
for a period not to exceed twelve (12) months, if during such month the
Executive has not sold the Property, subject to regular deductions
and withholdings as required by law. The Executive shall not be
eligible for any Annual Cash Incentive for a period as to which he receives a
Relocation Bonus.
3.4 Benefits – In
General. Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans,
health programs, pension and profit sharing plans and similar benefits that may
be available to other senior executives of the Company and the Parent generally,
on the same terms as may be applicable to such other executives, in each case to
the extent that Executive is eligible under the terms of such plans or
programs. In addition thereto, the Company shall reimburse Executive
for all premiums paid by him pursuant to life and disability insurance policies
maintained by Executive immediately prior to the effective date hereof,
maintained in substantially the same form as of the effective date hereof, for
so long as Executive maintains such policies (the “Executive Specific
Benefits”).
3.5 Vacation. During
the Term, Executive shall be entitled to vacation of twenty five (25) working
days per year. Unused vacation will carry over from year-to-year in
accordance with the terms of any Company policy.
3.6 Membership
Dues. The Company shall pay or reimburse Executive for his
dues to the Young Presidents Organization.
3.7 Vehicle
Allowance. The Company shall pay or reimburse the Executive
for an aggregate amount of one thousand dollars ($1,000) per month for all
reasonable expenses incurred in the operation and maintenance of an
automobile.
3.8 Legal
Fees. To the extent not already paid under the Old Agreement,
the Company shall pay or reimburse the Executive for an aggregate amount of up
to fourteen thousand dollars ($14,000) for all attorney’s fees incurred by the
Executive in connection with the negotiation and execution of this
Agreement.
3.9 Expenses. The
Company shall pay or reimburse the Executive for all ordinary and reasonable
out-of-pocket business expenses, determined in accordance with the policies
applicable to senior executives of the Company and the Parent generally,
actually incurred (and, in the case of reimbursement, paid) by the Executive
during the Term in the performance of the Executive’s services under this
Agreement, provided that the Executive submits such expenses in accordance with
the policies applicable to senior executives of the Company and the Parent
generally.
3.10 Equity
Awards. To the extent not already granted under the Old
Agreement, the Parent to grant Executive an award of three hundred sixty three
thousand seven hundred forty three (363,743) restricted common shares of
beneficial interest. Such shares shall be awarded pursuant to, and
shall vest in accordance with, an award agreement granted under the Parent’s
equity incentive plan and approved by the Compensation Committee, subject to
approval by the Board, with such award remaining subject to approval by the
Company’s shareholders at the Company’s annual meeting; provided, however, that
fifty percent (50%) of any such award will be subject to time vesting, vesting
twenty percent (20%) on each anniversary of the date of grant, and fifty percent
(50%) of any such award shall be subject to performance vesting over a period
not to exceed five years.
4. Termination Due to Death or
Disability.
4.1 Death. In
the event of Executive’s death which results in the termination of Executive’s
employment, the Term will terminate, all obligations of the Company, the Parent
and Executive under Sections 1 through 3 hereof will immediately cease except
for obligations which expressly continue after death, and the Company will pay
Executive’s beneficiary or estate, and Executive’s beneficiary or estate will be
entitled to receive, the following:
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(i)
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Executive’s
Compensation Accrued at
Termination;
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(ii)
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All
equity awards that provide for the vesting of such awards solely on the
basis of time that are held by Executive at termination shall become
vested and all other terms of such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
awards were granted; and
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(iii)
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All
other rights under any other compensatory or benefit plan shall be
governed by such plan.
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4.2 Disability. The
Company may terminate the employment of Executive hereunder due to the
Disability (as defined in Section 6.4 hereof) of Executive. Upon
termination of employment, the Term will terminate, all obligations of the
Company and Executive under Sections 1 through 3 hereof will immediately cease
except for obligations which expressly continue after termination of employment
due to Disability, and the Company will pay Executive, and Executive will be
entitled to receive, the following:
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(i)
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Executive’s
Compensation Accrued at
Termination;
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(ii)
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All
equity awards that provide for the vesting of such awards solely on the
basis of time that are held by Executive at termination shall become
vested and all other terms of such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
awards were granted;
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(iii)
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Disability
benefits shall be payable in accordance with the Company’s plans, programs
and policies; and
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(iv)
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All
other rights under any other compensatory or benefit plan shall be
governed by such plan.
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4.3 Other Terms of Payment
Following Death or Disability. Nothing
in this Section 4 shall limit the benefits payable or provided in the event
Executive’s employment terminates due to death or Disability under the terms of
plans or programs of the Company more favorable to Executive (or his
beneficiaries) than the benefits payable or provided under this Section 4,
including plans and programs adopted after the date of this
Agreement. Subject to Section 5.6 hereof, amounts payable under this
Section 4 following Executive’s termination of employment will be paid as
promptly as practicable after such termination of employment, and, in any event,
within 2 ½ months after the end of the year in which employment
terminates.
5. Termination of Employment
For Reasons Other Than Death or Disability.
5.1 Termination by the Company
for Cause. The
Company may terminate the employment of Executive hereunder for Cause (as
defined in Section 6.1 hereof) at any time. At the time Executive’s
employment is terminated for Cause, the Term will terminate, all obligations of
the Company and Executive under Sections 1 through 3 hereof will immediately
cease, and the Company will pay Executive, and Executive will be entitled to
receive, the following:
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(i)
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Executive’s
Compensation Accrued at Termination;
and
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(ii)
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All
other rights under any other compensatory or benefit plan shall be
governed by such plan.
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5.2 Termination by Executive
Other Than For Good Reason. Executive
may terminate his employment hereunder voluntarily for reasons other than Good
Reason (as defined in Section 6.5 hereof) at any time upon at least 30 days
written notice to the Company. An election by Executive not to extend
the Term pursuant to Section 1 hereof shall be deemed to be a termination of
employment by Executive for reasons other than Good Reason at the date of
expiration of the Term. At the time Executive’s employment is
terminated by Executive other than for Good Reason, the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 3 hereof will
immediately cease, and the Company will pay Executive, and Executive will be
entitled to the same compensation and rights specified in Section 5.1
hereof.
5.3 Termination by the Company
Without Cause. The
Company may terminate the employment of Executive hereunder without Cause upon
at least 30 days written notice to Executive. An election by the
Company not to extend the Term pursuant to Section 1 hereof shall be deemed to
be a termination of employment by the Company without Cause at the expiration of
the then-current Term. At the time Executive’s employment is
terminated by the Company (i.e., at the expiration of such notice period), the
Term will terminate, all remaining obligations of the Company, the Parent and
Executive under Sections 1 through 3 hereof will immediately cease (except as
expressly provided below), and the Company will pay Executive, and Executive
will be entitled to receive, the following:
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(i)
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Executive’s
Compensation Accrued at
Termination;
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(ii)
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Continuation
of (a) the Executive’s Annual Salary, determined as of the date of the
Executive’s termination, and (b) reimbursements to the Executive for the
Executive Specific Benefits for a period of twelve (12) months, commencing
as of the date of the Executive’s
termination;
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(iii)
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For
a period of twelve (12) months, commencing as of the date of the
Executive’s termination, the Company will provide for the Executive’s
continued participation in the Company group life, hospitalization,
medical and disability benefit plans in which the Executive was enrolled
immediately prior to his termination. Continued participation
in such plans will be on the same terms as applicable to other executives
of the Company and will be in accordance with the terms of such
plans. The continuation of benefits provided for herein will be
concurrent with the Executive’s COBRA continuation rights;
and
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(iv)
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All
other rights under any other compensatory or benefit plan shall be
governed by such plan.
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Payments
and benefits under this Section 5.3 are subject to Section 5.6
hereof.
5.4 Termination by Executive for
Good Reason. Executive
may terminate his employment hereunder for Good Reason upon 30 days written
notice to the Company which notice must be given within 90 days of the
occurrence of the condition that is the basis for such Good Reason; provided,
however, that, if the basis for such Good Reason is correctible and the Company
has corrected the basis for such Good Reason within 30 days after receipt of
such notice, Executive may not then terminate his employment for Good Reason
with respect to the matters addressed in the written notice, and therefore
Executive’s notice of termination will automatically become null and
void. At the time Executive’s employment is terminated by Executive
for Good Reason (i.e., at the expiration of such notice period), the Term will
terminate, all obligations of the Company and Executive under Sections 1 through
3 will immediately cease (except as expressly provided below), and the Company
will pay Executive, and Executive will be entitled to receive, the
following:
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(i)
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Executive’s
Compensation Accrued at
Termination;
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(ii)
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Continuation
of (a) the Executive’s Annual Salary, determined as of the date of the
Executive’s termination, and (b) reimbursements to the Executive for the
Executive Specific Benefits for a period of twelve months, commencing as
of the date of the Executive’s
termination;
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(iii)
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For
a period of twelve (12) months, commencing as of the date of the
Executive’s termination, the Company will provide for the Executive’s
continued participation in the Company group life, hospitalization,
medical and disability benefit plans in which the Executive was enrolled
immediately prior to his termination. Continued participation
in such plans will be on the same terms as applicable to other executives
of the Company and will be in accordance with the terms of such
plans. The continuation of benefits provided for herein will be
concurrent with the Executive’s COBRA continuation
rights;
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(iv)
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All
equity awards held by Executive at termination shall become vested and all
other terms of such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were
granted; and
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(v)
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All
other rights under any other compensatory or benefit plan shall be
governed by such plan.
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Payments
and benefits under this Section 5.4 are subject to Section 5.6
hereof.
If any payment or benefit under this
Section 5.4 is based on Annual Salary or other level of compensation or benefits
at the time of Executive’s termination and if a reduction in such Annual Salary
or other level of compensation or benefit was the basis for Executive’s
termination for Good Reason, then the Annual Salary or other level of
compensation in effect before such reduction shall be used to calculate payments
or benefits under this Section 5.4.
5.5 Other Terms Relating to
Certain Terminations of Employment. In
the event Executive’s employment terminates for any reason set forth in Section
5.2 through 5.4 hereof, Executive will be entitled to the benefit of any terms
of plans or agreements applicable to Executive which are more favorable than
those specified in this Section 5 (except without duplication of payments or
benefits, including in the case of the Annual Cash Incentive in lieu of which
amounts are paid hereunder). Except as otherwise provided under
Section 5.6 hereof, amounts payable under this Section 5 following Executive’s
termination of employment will be paid in a single lump sum as promptly as
practicable after the Executive’s execution of the release provided in
accordance with Section 7.6 hereof and the lapse of the any revocation period of
such release and, in any event, within 2 ½ months after the end of the year in
which employment terminates.
5.6 Limitations Under Code
Section 409A. Anything
in this Agreement to the contrary notwithstanding, if (i) on the date of
termination of Executive's employment with the Company or a Subsidiary, any of
the Company’s shares of beneficial interest are publicly traded on an
established securities market or otherwise (within the meaning of Section
409A(a)(2)(B)(i) of the Internal Revenue Code, as amended (the “Code”)), (ii) if Executive is
determined to be a “specified employee” within the meaning of Section
409A(a)(2)(B) of the Code, (iii) the payments exceed the amounts permitted to be
paid pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii) and (iv) such
delay is required to avoid the imposition of the tax set forth in Section
409A(a)(1) of the Code, as a result of such termination, the Executive would
receive any payment that, absent the application of this Section 5.6, would be
subject to interest and additional tax imposed pursuant to Section 409A(a) of
the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
then no such payment shall be payable prior to the date that is the earliest of
(1) six (6) months and one day after the Executive's termination date, (2) the
Executive's death or (3) such other date as will cause such payment not to be
subject to such interest and additional tax (with a catch-up payment equal to
the sum of all amounts that have been delayed to be made as of the date of the
initial payment). Each continuation payment of the Executive’s Annual
Salary, as described in Sections 5.3 and 5.4, shall constitute a separate,
individual payment for purposes of Code Section 409A.
It is the intention of the parties that
payments or benefits payable under this Agreement not be subject to the
additional tax imposed pursuant to Section 409A of the Code. To the
extent such potential payments or benefits could become subject to such Section,
the parties shall cooperate to amend this Agreement with the goal of giving the
Executive the economic benefits described herein in a manner that does not
result in such tax being imposed.
6. Definitions Relating to
Termination Events.
6.1 “Cause”. For
purposes of this Agreement, “Cause” shall mean Executive’s:
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(i)
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commission
of a felony or a crime involving moral
turpitude;
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(ii)
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commission
of any act of theft, fraud, embezzlement or misappropriation against the
Company or its subsidiaries or
affiliates;
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(iii)
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continued
failure to substantially perform Executive’s duties hereunder (other than
such failure resulting from Executive’s incapacity due to physical or
mental illness) or any material violation of Company policy, which failure
is not remedied within 30 calendar days after written demand for
substantial performance is delivered by the Company which specifically
identifies the manner in which the Company believes that Executive has not
substantially performed Executive’s duties or violated Company policy;
or
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(iv)
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a
material breach of this Agreement.
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Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
(i) Executive shall have been given notice within 90 days of the occurrence of
the condition that is the basis for such Cause and (ii) there shall have been
delivered to Executive a copy of the resolution duly adopted by a majority vote
of the independent members of the Board at a meeting of the Board (after
reasonable notice to Executive and an opportunity for Executive, together with
Executive’s counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, Executive was guilty of conduct set forth above in
this definition and specifying the particulars thereof in detail.
6.2 “Company policy” means any
written policy of the Company or any of its affiliates, including but not
limited to the Parent.
6.3 “Compensation Accrued at
Termination”. For purposes of this Agreement, “Compensation
Accrued at Termination” means the following:
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(i)
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The
unpaid portion of Annual Salary at the rate payable, in accordance with
Section 3.1 hereof, at the date of Executive’s termination of employment,
pro rated through such date of termination, payable in accordance with the
Company’s regular pay schedule;
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(ii)
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Except
as otherwise provided in this Agreement, all earned and unpaid and/or
vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans,
programs, and arrangements (including any earned and vested Annual Cash
Incentive and accrued but unused vacation) in which Executive theretofore
participated, payable in accordance with the terms and conditions of the
plans, programs, and arrangements (and agreements and documents
thereunder) pursuant to which such compensation and benefits were granted
or accrued; and
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(iii)
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Reasonable
business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as
authorized under Section 3.7 hereof, in accordance the Company’s
reimbursement policies as in effect at the date of such
termination.
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6.4 “Disability”. For
purposes of this Agreement, “Disability” means the Executive is unable due to a
physical or mental condition to perform the essential functions of his position
with or without reasonable accommodation for six (6) months in the aggregate
during any twelve (12) month period or based on the written certification by two
licensed physicians of the likely continuation of such condition for such
period. This definition shall be interpreted and applied consistent
with the Americans with Disabilities Act, the Family and Medical Leave Act,
Section 409A of the Code and other applicable law.
6.5 “Good Reason”. For
purposes of this Agreement, “Good Reason” shall mean, without Executive’s
express written consent, the occurrence of any of the following circumstances
unless, if correctable, such circumstances are fully corrected within 30 days of
the notice of termination given in respect thereof:
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(i)
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The
assignment to Executive of duties materially inconsistent with Executive’s
position and status hereunder, or an alteration, materially adverse to
Executive, in the nature of Executive’s duties, responsibilities, and
authorities, Executive’s positions or the conditions of Executive’s
employment from those specified in Section 2 or otherwise hereunder (other
than inadvertent actions which are promptly remedied); except the
foregoing shall not constitute Good Reason if occurring in connection with
the termination of Executive’s employment for Cause, Disability, as a
result of Executive’s death, or as a result of action by or with the
consent of Executive;
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(ii)
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a
material reduction by the Company in Executive’s Annual Salary or the
payment of earned Annual Incentives in amounts materially less than
specified under or otherwise not in conformity with Section 3 hereof;
or
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(iii)
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the
relocation of Executive’s principal office to a location that is more than
fifty (50) miles from the Company’s current office in Orlando,
Florida.
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7. Discoveries and Works;
Confidentiality; Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement.
7.1 Discoveries and
Works. The Executive understands
and agrees that any and all Confidential Information (as hereinafter defined) of
the Company and its affiliates which he has access to, uses or creates during his employment with the Company is
and shall at all times remain the sole and exclusive property of the
Company, and the
Executive further agrees to assign to the Company any right,
title or interest he may have in such Confidential Information. The Executive also agrees that, if he is
asked by the Company (at its expense), he will do all things and sign all
necessary documents reasonably necessary in the opinion of the Company to
eliminate any ambiguity as to the right of the Company in such
Confidential Information including but not limited to providing his full
cooperation to the Company in the event
of any litigation to protect, establish or obtain such rights of the
Company.
The Executive understands that this Section 7.1 does
not waive or transfer his rights to any
invention for which no equipment, supplies, facility or trade secret or
Confidential Information was used and which was developed entirely on his own
time, unless the invention relates to the business of the Company,
or to the Company's actual demonstratively
anticipated research or development, or the invention results from any work that
he performed for the Company during the
term of his employment relationship with the Company.
The Executive hereby assigns and transfers to the Company, its successors, legal
representatives and assigns, his entire right, title, and interest in and to any
and all present and future works of authorship, inventions, know-how,
confidential information, proprietary information, or trade secrets resulting
from work done by him on behalf of the Company and its affiliates
(collectively, the “Intellectual Property”). The
Executive agrees to waive all moral rights relating to the Intellectual Property
developed or produced, including without limitation any and all rights of identification of
authorship, any and all rights of approval, restriction or limitation on use or
subsequent modifications and any and all rights to prevent any changes
prejudicial to his honor or reputation. The Executive further agrees to
provide all assistance reasonably
requested by the Company in the
establishment, preservation and enforcement of its rights in the Intellectual
Property, such assistance to be provided at the Company’s expense, but
without any additional compensation to the
Executive.
7.2 Confidential
Information. The Executive acknowledges that, during the
course of his employment with the Company, the Executive may receive special
training and/or may be given access to or may become acquainted with
Confidential Information (as hereinafter defined) of the Company. As used in
this Section 7, “Confidential
Information” of the Company means all trade practices, business plans,
price lists, supplier lists, customer lists, marketing plans, financial
information, software and all other compilations of information which relate to
the business of the Company, or to any of its subsidiaries or affiliates, and
which have not been disclosed by the Company to the public, or which are not
otherwise generally available to the public.
The
Executive acknowledges that the Confidential Information of the Company, as such
may exist from time to time, are valuable, confidential, special and unique
assets of the Company and its subsidiaries and affiliates, expensive to produce
and maintain and essential for the profitable operation of their respective
businesses. The Executive agrees that, during the course of his employment with
the Company, or at any time thereafter, he shall not, directly or indirectly,
communicate, disclose or divulge to any Person (as such term is hereinafter
defined), or use for his benefit or the benefit of any Person, in any manner,
any Confidential Information of the Company or its subsidiaries or affiliates
acquired during his employment with the Company or any other confidential
information concerning the conduct and details of the businesses of the Company
and its subsidiaries and affiliates, except as required in the course of his
employment with the Company or as otherwise may be required by
law. Solely for purposes of this Section 7, “Person” shall mean any
individual, partnership, corporation, trust, unincorporated association, joint
venture, limited liability company or other entity or any government,
governmental agency or political subdivision and “the Company” shall mean the
Company, the Parent and all of the direct and indirect subsidiaries of the
Parent.
All
documents relating to the businesses of the Company and its affiliates
including, without limitation, Confidential Information of the Company and its
affiliates, whether prepared by the Executive or otherwise coming into the
Executive's possession, are the exclusive property of the Company and such
respective subsidiaries, and must not be removed from the premises of the
Company, except as required in the course of the Executive's employment with the
Company. The Executive shall return all such documents (including any copies
thereof) to the Company when the Executive ceases to be employed by the Company
or upon the earlier request of the Company or the Board.
7.3 Noncompetition. During
the Term of this Agreement (including any extensions thereof) and for a period
of one (1) year following the termination of the Executive's employment under
this Agreement for any reason, the Executive shall not, except with the
Company's express prior written consent, directly or indirectly, in any
capacity, for the benefit of any entity or person (including the
Executive):
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(i)
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Become
employed by, own, operate, manage, direct, invest in (except through a
mutual fund), or otherwise, directly or indirectly, engage in, or be
employed by, any entity or person (in a capacity that is the same as or
similar to any of his capacities for the Company while employed by it)
which competes with the Business (as hereinafter defined). For
purposes of this Agreement, “Business” shall mean any
business or activity that directly competes with any business of the
Company (or any of its successors) in a significant and material manner at
any location within any Standard Metropolitan Statistical Area (as
determined by the Census Bureau, Department of Commerce, United States
Government) in which is located any office of the
Company.
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(ii)
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Divert
or take away any customer or client of the Company, or any of its
subsidiaries, or solicit, service, or promote a competing service that
competes with the Business to any customer, client or employee of the
Company, its subsidiaries or any of its respective
businesses.
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(iii)
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Solicit
or hire any employee of the Company, or any of its
subsidiaries.
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7.4 Cooperation With Regard to
Litigation. Executive
agrees to cooperate with the Company, during the Term and thereafter (including
following Executive’s termination of employment for any reason), by making
himself available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to assist the Company, or any
subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
subsidiary or affiliate of the Company, as may be reasonably requested and after
taking into account Executive’s post-termination responsibilities and
obligations. The Company agrees to reimburse Executive, on an
after-tax basis, for all reasonable expenses actually incurred in connection
with his provision of testimony or assistance and if such cooperation is
provided more than one (1) year after Executive’s termination of
employment.
7.5 Non-Disparagement. Executive
shall not, at any time during the Term and thereafter make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the Company, its subsidiaries or affiliates or their
respective officers, directors, employees, advisors, businesses or reputations,
nor shall members of the Board or Executive’s successor in office, or other
executive officers of the Company, make any such statements or representations
regarding Executive. Notwithstanding the foregoing, nothing in this
Agreement shall preclude Executive or his successor or members of the Board or
other executive officers of the Company from making truthful statements that are
required by applicable law, regulation or legal process.
7.6 Release of Employment
Claims. Executive
agrees, as a condition to receipt of any termination payments and benefits
provided for in Sections 4 and 5 herein (other than Compensation Accrued at
Termination), that he will execute a general release in substantially the form
attached hereto as Exhibit A within
thirty (30) days after termination of employment.
7.7 Forfeiture of Outstanding
Restricted Shares and Other Equity Awards. The provisions of
Sections 4 and 5 notwithstanding, if Executive fails to comply with the
restrictive covenants under Sections 7.1 – 7.3 hereof, all equity awards granted
by the Company at and after the Effective Date and then held by Executive or a
transferee of Executive shall be immediately forfeited and thereupon such equity
awards shall be cancelled. Notwithstanding the foregoing, Executive
shall not forfeit any equity award unless and until there shall have been
delivered to him, within six months after the Board (i) had knowledge of conduct
or an event allegedly constituting grounds for such forfeiture and (ii) had
reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote
of the membership of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than 30
days to correct the acts or omissions complained of, if correctable, and
affording Executive the opportunity, together with his counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
Executive has engaged in conduct set forth in this Section 7.7 which constitutes
grounds for forfeiture of Executive’s options and equity awards; provided,
however, that if any option is exercised or equity award is settled after
delivery of such notice and the Board subsequently makes the determination
described in this sentence, Executive shall be required to pay to the Company an
amount equal to the difference between the aggregate value of the shares
acquired upon exercise of the award at the date of the Board determination and
the aggregate exercise price paid by Executive and an amount equal to the fair
market value of the shares delivered in settlement of the equity award at the
date of such determination (net of any cash payment for the shares by
Executive). Any such forfeiture shall apply to such awards
notwithstanding any term or provision of any agreement. In addition,
equity awards granted to Executive on or after the Effective Date, and gains
resulting from the exercise of such equity awards and settlement of such equity
awards, shall be subject to forfeiture in accordance with the Company’s standard
policies relating to such forfeitures and clawbacks, as such policies are in
effect at the time of grant of such equity awards.
7.8 Survival. The
provisions of this Section 7 shall survive the termination of the Term and any
termination or expiration of this Agreement.
7.9 Remedies. Executive
agrees that any breach of the terms of this Section 7 would result in
irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; Executive therefore also agrees that in the event of
said breach or any threat of breach and notwithstanding Section 8 hereof the
Company shall be entitled to an immediate injunction and restraining order from
a court of competent jurisdiction to prevent such breach and/or threatened
breach and/or continued breach by Executive and/or any and all persons and/or
entities acting for and/or with Executive, without having to prove damages. The
availability of injunctive relief shall be in addition to any other remedies to
which the Company may be entitled at law or in equity, but remedies other than
injunctive relief may only be pursued in an arbitration brought in accordance
with Section 8 hereof. The terms of this paragraph shall not prevent the Company
from pursuing in an arbitration any other available remedies for any breach or
threatened breach of this Section 7, including but not limited to the recovery
of damages from Executive. Executive hereby further agrees that, if
it is ever determined, in an arbitration brought in accordance with Section 8
hereof, that willful actions by Executive have constituted wrongdoing that
contributed to any material misstatement or omission from any report or
statement filed by the Company with the U.S. Securities and Exchange Commission
or material fraud against the Company, then the Company, or its successor, as
appropriate, may recover all of any award or payment made to Executive, less the
amount of any net tax owed by Executive with respect to such award or payment
over the tax benefit to Executive from the repayment or return of the award or
payment and Executive agrees to repay and return such awards and amounts to the
Company within 30 calendar days of receiving notice from the Company that the
Board has made the determination referenced above and accordingly the Company is
demanding repayment pursuant to this Section 7.9. The Company or its successor
may, in its sole discretion, affect any such recovery by (i) obtaining repayment
directly from Executive; (ii) setting off the amount owed to it against any
amount or award that would otherwise be payable by the Company to Executive; or
(iii) any combination of (i) and (ii) above.
8. Governing Law; Disputes;
Arbitration.
8.1 Governing
Law. This
Agreement is governed by and is to be construed, administered, and enforced in
accordance with the laws of the State of Maryland without regard to conflicts of
law principles. If under the governing law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation, ordinance, or other principle of law, such portion shall be
deemed to be modified or altered to the extent necessary to conform thereto or,
if that is not possible, to be omitted from this Agreement. The
invalidity of any such portion shall not affect the force, effect, and validity
of the remaining portion hereof. If any court determines that any
provision of this Agreement is unenforceable because of the duration or
geographic scope of such provision, it is the parties’ intent that such court
shall have the power to modify the duration or geographic scope of such
provision, as the case may be, to the extent necessary to render the provision
enforceable and, in its modified form, such provision shall be
enforced.
8.2 Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in the State of Florida by three
arbitrators in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect at the
time of submission to arbitration. Judgment may be entered on the
arbitrators’ award in any court having jurisdiction. For purposes of
entering any judgment upon an award rendered by the arbitrators, the Company and
Executive hereby consent to the jurisdiction of any or all of the following
courts: (i) the United States District Court for the Southern District of
Florida, (ii) any of the courts of the State of Florida, or (iii) any other
court having jurisdiction. The Company and Executive further agree
that any service of process or notice requirements in any such proceeding shall
be satisfied if the rules of such court relating thereto have been substantially
satisfied. The Company and Executive hereby waive, to the fullest
extent permitted by applicable law, any objection which it may now or hereafter
have to such jurisdiction and any defense of inconvenient forum. The
Company and Executive hereby agree that a judgment upon an award rendered by the
arbitrators may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Each party shall bear its or his
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 8. Notwithstanding any provision in this
Section 8, Executive shall be paid compensation due and owing under this
Agreement during the pendency of any dispute or controversy arising under or in
connection with this Agreement.
8.3 Interest on Unpaid
Amounts. Any
amount which has become payable pursuant to the terms of this Agreement or any
decision by arbitrators or judgment by a court of law pursuant to this Section 8
but which has not been timely paid shall bear interest at the prime rate in
effect at the time such amount first becomes payable, as quoted by the Company’s
principal bank.
8.4 LIMITATION ON
LIABILITIES. IF
EITHER EXECUTIVE OR THE COMPANY IS AWARDED ANY DAMAGES AS COMPENSATION FOR ANY
BREACH OR ACTION RELATED TO THIS AGREEMENT, A BREACH OF ANY COVENANT CONTAINED
IN THIS AGREEMENT (WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT), OR ANY
OTHER CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY PROVISION
OF THIS AGREEMENT, SUCH DAMAGES SHALL BE LIMITED TO CONTRACTUAL DAMAGES PLUS
INTEREST ON ANY DELAYED PAYMENT AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY
APPLICABLE LAW FROM AND AFTER THE DATE(S) THAT SUCH PAYMENTS WERE DUE AND SHALL
EXCLUDE CONSEQUENTIAL DAMAGES AND PUNITIVE DAMAGES EVEN IF THE RULES REFERRED TO
IN THIS SECTION 8 WOULD PROVIDE OTHERWISE.
8.5 WAIVER OF JURY
TRIAL. TO
THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. This provision is
subject to Section 8.2 hereof, requiring arbitration of disputes
hereunder.
9.
Miscellaneous.
9.1 Integration. This
Agreement cancels and supersedes any and all prior agreements and understandings
between the parties hereto with respect to the employment of Executive by the
Company, any parent or predecessor company, and the Company’s subsidiaries
during the Term, including, but not limited to, the Consulting
Agreement. This Agreement constitutes the entire agreement among the
parties with respect to the matters herein provided, and no modification or
waiver of any provision hereof shall be effective unless in writing and signed
by the parties hereto. Executive shall not be entitled to any payment
or benefit under this Agreement which duplicates a payment or benefit received
or receivable by Executive under such prior agreements and understandings or
under any benefit or compensation plan of the Company.
9.2 Successors;
Transferability. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise, and whether or not the corporate existence
of the Company continues) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this
Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise and, in the case of an acquisition of the Company
in which the corporate existence of the Company continues, the ultimate parent
company following such acquisition. Subject to the foregoing, the
Company may transfer and assign this Agreement and the Company’s rights and
obligations hereunder to another entity that is substantially comparable to the
Company in its financial strength and ability to perform the Company’s
obligations under this Agreement. Neither this Agreement nor the
rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and
distribution or as specified in Section 9.3 hereof.
9.3 Beneficiaries. Executive
shall be entitled to designate (and change, to the extent permitted under
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits provided hereunder following Executive’s death.
9.4 Notices. Whenever
under this Agreement it becomes necessary to give notice, such notice shall be
in writing, signed by the party or parties giving or making the same, and shall
be served on the person or persons for whom it is intended or who should be
advised or notified, by Federal Express or other similar overnight service or by
certified or registered mail, return receipt requested, postage prepaid and
addressed to such party at the address set forth below or at such other address
as may be designated by such party by like notice:
If to the
Company:
American
Rental Management Company
000
Xxxxxxxxx Xxxxxxx Xxxxxx
Xx.
Xxxxxxx, XX 00000
With a
copy to:
Xxxxxx X.
XxXxx, Esquire
Hunton
& Xxxxxxxx LLP
Riverfront
Plaza, East Tower
000 Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx 00000
If to
Executive:
Xxxxxxx
X. Xxxxxxxx
At the
address on file with the Company
If the
parties by mutual agreement supply each other with fax numbers or e-mail
addresses for the purposes of providing notice by facsimile or e-mail,
respectively, such notice shall also be proper notice under this
Agreement. In the case of Federal Express or other similar overnight
service, such notice or advice shall be effective when sent, and, in the cases
of certified or registered mail, shall be effective two days after deposit into
the mails by delivery to the U.S. Post Office.
9.5 Reformation. The
invalidity of any portion of this Agreement shall not be deemed to render the
remainder of this Agreement invalid.
9.6 Headings. The
headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.
9.7 No General
Waivers. The
failure of any party at any time to require performance by any other party of
any provision hereof or to resort to any remedy provided herein or at law or in
equity shall in no way affect the right of such party to require such
performance or to resort to such remedy at any time thereafter, nor shall the
waiver by any party of a breach of any of the provisions hereof be deemed to be
a waiver of any subsequent breach of such provisions. No such waiver
shall be effective unless in writing and signed by the party against whom such
waiver is sought to be enforced.
9.8 Offsets;
Withholding. The
amounts required to be paid by the Company to Executive pursuant to this
Agreement shall not be subject to offset other than with respect to any amounts
that are owed to the Company by Executive due to his receipt of funds as a
result of his fraudulent activity. The foregoing and other provisions
of this Agreement notwithstanding, all payments to be made to Executive under
this Agreement, including under Sections 4 and 5, or otherwise by the Company,
will be subject to withholding to satisfy required withholding taxes and other
required deductions.
9.9 Successors and
Assigns. This
Agreement shall be binding upon and shall inure to the benefit of Executive, his
heirs, executors, administrators and beneficiaries, and shall be binding upon
and inure to the benefit of the Company and its successors and
assigns.
9.10 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same
instrument.
9.11 Due Authority and
Execution. The
execution, delivery and performance of this Agreement have been duly authorized
by the Company and this Agreement represents the valid, legal and binding
obligation of the Company, enforceable against the Company according to its
terms.
9.12 Representations of
Executive. Executive
represents and warrants to the Company that he has the legal right to enter into
this Agreement and to perform all of the obligations on his part to be performed
hereunder in accordance with its terms and that he is not a party to any
agreement or understanding, written or oral, which prevents him from entering
into this Agreement or performing all of his obligations
hereunder. In the event of a breach of such representation or
warranty on Executive’s part or if there is any other legal impediment which
prevents him from entering into this Agreement or performing all of his
obligations hereunder, the Company shall have the right to terminate this
Agreement forthwith in accordance with the same notice and hearing procedures
specified above in respect of a termination by the Company for Cause pursuant to
Section 5.1 hereof and shall have no further obligations to Executive
hereunder. Notwithstanding a termination by the Company under this
Section 9.12, Executive’s obligations under Sections 7 and 8 shall survive such
termination.
10. D&O Insurance and
Indemnification.
The Company will maintain directors’
and officers’ liability insurance during the Term and for a period of six years
thereafter, covering acts and omissions of Executive during the Term, on terms
substantially no less favorable than those in effect on the Effective
Date. To the fullest extent permitted under applicable law, the
Company shall indemnify, defend and hold the Executive harmless from and against
any and all causes of action, claims, demands, liabilities, damages, costs and
expenses of any nature whatsoever (collectively, “Damages”) directly or
indirectly arising out of or relating to the Executive discharging the
Executive’s duties hereunder on behalf of the Company and/or its respective
subsidiaries and affiliates, so long as the Executive acted in good faith within
the course and scope of the Executive’s duties with respect to the matter giving
rise to the claim or Damages for which the Executive seeks
indemnification. The Company also shall advance expenses for which
indemnification may be ultimately claimed as such expenses are incurred to the
fullest extent permitted under applicable law, subject to any requirement that
Executive provide an undertaking to repay such advances if it is ultimately
determined that Executive is not entitled to indemnification; provided, however,
that any determination required to be made with respect to whether Executive’s
conduct complies with the standards required to be met as a condition of
indemnification or advancement of expenses under applicable law and the
Company’s governing documents or other agreement shall be made by independent
counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). This Section 10 shall survive the
termination of the Term and any termination of the Agreement until such time as
no indemnifiable liability can be lawfully asserted against
Executive. For purposes of this Section 10, “the Company” shall mean the
Company, the Parent and all of the direct and indirect subsidiaries of the
Parent
11. Certain
Definitions. For purposes of this Agreement:
(a) an
“affiliate” of any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person, and includes subsidiaries.
(b) A
“subsidiary” of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its board of directors or other governing body (or, if there
are no such voting interests or no board of directors or other governing body,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person.
IN
WITNESS WHEREOF, the parties hereto have signed their names as of the day and
year first above written.
AMERICAN
RENTAL MANAGEMENT COMPANY
By: /s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Chief Financial Officer
By: /s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Chief Financial Officer
By:
/s/ Xxxxxxx X. Xxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxx
EXHIBIT A 1
GENERAL
RELEASE
For and in consideration of the
payments and other benefits due to Xxxxxxx X. Xxxxxxxx (the “Executive”) pursuant to the
Amended and Restated Employment Agreement dated as of April 30, 2009
(the “Employment
Agreement”), by and among American Rental Management Company, a Delaware
corporation (the “Company”), American Community
Properties Trust, a Maryland real estate investment trust (the “Parent”) and the Executive,
and for other good and valuable consideration, the Executive hereby agrees, for
the Executive, the Executive’s spouse and child or children (if any), the
Executive’s heirs, beneficiaries, devisees, executors, administrators,
attorneys, personal representatives, successors and assigns, to forever release,
discharge and covenant not to xxx the Company, the Parent or any of their
respective divisions, affiliates, subsidiaries, parents, branches, predecessors,
successors, assigns, and, with respect to such entities, their officers,
directors, trustees, employees, agents, shareholders, administrators, general or
limited partners, representatives, attorneys, insurers and fiduciaries, past,
present and future (the “Released Parties”) from any
and all claims of any kind arising out of, or related to, his employment with
the Company, its affiliates and subsidiaries (collectively, with the Company,
the “Affiliated
Entities”) or the Executive’s separation from employment with the
Affiliated Entities, which the Executive now has or may have against the
Released Parties, whether known or unknown to the Executive, by reason of facts
which have occurred on or prior to the date that the Executive has signed this
Release. Such released claims include, without limitation, any and
all claims relating to the foregoing under federal, state or local laws
pertaining to employment, including, without limitation, the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. Section 2000e et. seq., the Fair Labor Standards Act, as amended, 29
U.S.C. Section 201 et. seq., the Americans with Disabilities Act, as amended, 42
U.S.C. Section 12101 et. seq. the Reconstruction Era Civil Rights Act, as
amended, 42 U.S.C. Section 1981 et. seq., the Rehabilitation Act of 1973, as
amended, 29 U.S.C. Section 701 et. seq., the Family and Medical Leave Act of
1992, 29 U.S.C. Section 2601 et. seq., and any and all state or local laws
regarding employment discrimination and/or federal, state or local laws of any
type or description regarding employment, including but not limited to any
claims arising from or derivative of the Executive’s employment with the
Affiliated Entities, as well as any and all such claims under state contract or
tort law.
The Executive has read this Release
carefully, acknowledges that the Executive has been given at least 21 days to
consider all of its terms and has been advised to consult with any attorney and
any other advisors of the Executive’s choice prior to executing this Release,
and the Executive fully understands that by signing below the Executive is
voluntarily giving up any right which the Executive may have to xxx or bring any
other claims against the Released Parties, including any rights and claims under
the Age Discrimination in Employment Act. The Executive also
understands that the Executive has a period of seven days after signing this
Release within which to revoke his agreement, and that neither the Company nor
any other person is obligated to make any payments or provide any other benefits
to the Executive pursuant to the Agreement until eight days have passed since
the Executive’s signing of this Release without the Executive’s signature having
been revoked other than any accrued obligations or other benefits payable
pursuant to the terms of the Company’s normal payroll practices or employee
benefit plans. Finally, the Executive has not been forced or
pressured in any manner whatsoever to sign this Release, and the Executive
agrees to all of its terms voluntarily.
Notwithstanding anything else herein to
the contrary, this Release shall not affect: (i) the Company’s obligations under
any compensation or employee benefit plan, program or arrangement (including,
without limitation, obligations to the Executive under the Employment Agreement,
any share option, share award or agreements or obligations under any pension,
deferred compensation or retention plan) provided by the Affiliated Entities
where the Executive’s compensation or benefits are intended to continue or the
Executive is to be provided with compensation or benefits, in accordance with
the express written terms of such plan, program or arrangement, beyond the date
of the Executive’s termination; (ii) rights to indemnification the Executive may
have under the Employment Agreement or a separate agreement entered into with
the Company; or (iii) rights Executive may have as a shareholder, unit holder or
prior member of the operating partnership.
This Release is final and binding and
may not be changed or modified except in a writing signed by both
parties. Section 8 of the Employment Agreement shall apply to this
Release.
Date: May
14,
2009 By: /s/
Xxxxxxx X. Xxxxxxxx
Date: May
14,
2009 By: /s/ Xxxxxxx X.
Xxxxxx
American Rental Management Company
Date: May
14,
2009 By: /s/ Xxxxxxx X. Xxxxxx
