Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and
between BNP Residential Properties, Inc. (the "Company"), and D. Xxxxx Xxxxxxxxx
(the "Executive"), effective as of August 1, 2005 (the "Effective Date").
WHEREAS, the Company desires to insure the availability the Executive's
services, and the Executive is willing to render his services, all on the terms
and conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the Company and the Executive agree as follows:
1. Employment. On the terms and conditions set forth in this Agreement,
the Company hereby employs the Executive during the Employment Term (as
defined in Section 2) as the President and Chief Executive Officer of
the Company, and the Executive hereby accepts such employment.
2. Term. This Agreement shall be effective for a term which shall commence
on the Effective Date and shall continue until terminated by either
party by providing at least three (3) years prior written notice (the
"Notice Period") of the effective date of such termination to the other
party (the "Employment Term").
3. Duties of Executive. The Executive agrees to undertake the duties and
responsibilities inherent in the position of President and Chief
Executive Officer, which may encompass different or additional duties
as may, from time to time, be reasonably assigned by the Company's
Board of Directors (the "Board of Directors"), and the duties and
responsibilities undertaken by the Executive may be reasonably altered
or modified from time to time by the Board of Directors, provided,
however, that the Executive's duties and responsibilities shall be no
less than those traditionally inherent in the position of President &
Chief Executive Officer. The Executive agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the
Company and any changes thereof that are applicable to the employees of
the Company in general. During the Employment Term, except as approved
by the Company's Board of Directors (including any approval given
before the date of this Agreement), the Executive will devote his full
business time and efforts to the business of the Company and will not
engage in consulting work or any trade or business for his own account
or for or on behalf of any other person, firm or corporation that
competes, conflicts or materially interferes with the performance of
his duties hereunder in any way. The Executive may engage in
non-competitive personal or charitable activities for reasonable
periods of time each month so long as such activities do not interfere
with the Executive's responsibilities under this Agreement.
123
4. Compensation and Benefits.
4.1. Base Salary. During the Executive's employment under this
Agreement, the Executive shall receive a base salary at an
annual rate of $300,000, payable in cash in accordance with
the Company's payroll practices generally applicable to the
Company's senior executives (the "Base Salary"). The Base
Salary shall be subject to increases, in the sole discretion
of the Board of Directors or a committee appointed by the
Board of Directors, at such times as salary reviews are
conducted generally for the Company's senior executives.
4.2. Annual Bonus. During the Executive's employment under this
Agreement, in the sole discretion of the Board of Directors,
the Company may pay to the Executive an annual bonus (an
"Annual Bonus"). The terms, conditions and amount of an Annual
Bonus, if any, shall be determined by the Board of Directors
or a committee appointed by the Board of Directors in its sole
and absolute discretion.
4.3. Stock-Based Compensation. During the Executive's employment
under this Agreement, the Executive shall be eligible to
participate in such incentive stock plans as may be maintained
by the Company from time to time for senior executives. The
Executive's awards under such plan, if any, shall be
determined by the administrator of the plan. The Executive
shall be granted 70,000 restricted shares of the Company's
common stock, par value $0.01 per share ("Common Stock"),
pursuant to the Company's Amended and Restated 1994 Stock
Option and Incentive Plan, as amended May 19, 2005 (the "Stock
Incentive Plan"), subject to the terms and conditions of the
Restricted Stock Agreement attached hereto as Exhibit A.
4.4. Benefit Plans. During the Employment Term, the Executive shall
be entitled to (i) participation in such employee retirement
and welfare benefit plans, programs, policies and arrangements
as maintained by the Company from time to time, provided,
however, the Company shall pay 100% of the cost of coverage
under the Company's health insurance plan for the Executive
and the eligible family members of the Executive under the
health insurance plan; (ii) reasonable vacation allowed on an
annual basis consistent with the Executive's duties and
responsibilities, provided, however, that any vacation time
accrued but not used during a calendar year shall not carry
forward from year to year; (iii) paid holidays, leave of
absence, leave for illness, funeral leave and temporary
disability leave in accordance with the policies of the
Company; and (iv) perquisites as from time to time provided by
the Company to its senior executives.
4.5. Life Insurance. The Company will pay for an annually renewable
term life insurance policy, based on standard rates, on behalf
of the Executive in the amount of $1,500,000 and the Company
will pay any Federal, state or local income and employment
taxes incurred by the Executive as a result of such payment by
the Company. In the event the Executive does not qualify for a
standard rate life insurance policy, at the Executive's
election either (i) the
124
Company shall reduce the amount of the benefit provided to the
Executive to the extent necessary for the cost of the life
insurance policy to the Company to equal the cost of a
standard rate policy, or (ii) the Executive may pay the
difference between the actual cost of the policy to the
Company and the cost of a standard rate policy. The Company,
in its sole discretion, may review and increase the amount of
such insurance policy upon each anniversary of the Effective
Date.
4.6. Expenses. During the Executive's employment under this
Agreement, the Company shall reimburse the Executive for
ordinary and reasonable out-of-pocket expenses incurred by the
Executive in the performance of the employment duties under
this Agreement, provided that the Executive shall account to
the Company for such expenses in accordance with the employee
business expense policies and practices of the Company.
5. Termination of Employment.
5.1. Dismissal without Cause and Resignation for Good Reason,
During the Employment Term.
5.1.1. Dismissal without Cause. The Company may terminate
the Executive's employment under this Agreement at
any time during the Employment Term without Cause (as
defined in Section 5.1.4) by giving written notice
thereof to the Executive at least 30 days before the
effective date of such termination. Upon such
termination, the Executive shall be entitled to the
compensation as provided in Sections 5.1.3 and 5.3 of
this Agreement.
5.1.2. Resignation for Good Reason. The Executive may
terminate his employment under this Agreement at any
time during the Employment Term for Good Reason (as
defined in Section 5.1.5) by giving written notice
thereof to the Company at least 30 days before the
effective date of such termination. Such notice shall
specify in reasonable detail the Good Reason based
upon which the Executive intends to terminate his
employment. Upon such termination, the Executive
shall be entitled to such compensation as provided in
Sections 5.1.3 and 5.3 of this Agreement.
5.1.3. Payment upon Termination without Cause or for Good
Reason. If the Executive's employment under this
Agreement is terminated during the Employment Term
either by the Company without Cause or by the
Executive for Good Reason, and such termination is
not in connection with a Change in Control, the
Executive shall be entitled to the following:
A. As consideration for the Executive's
obligations under the restrictive covenants
set forth in Section 7, a cash lump sum
payment, paid within 30 days after the
effective date of termination, equal to (1)
the "Severance Period," which shall be
125
equal to the lesser of (x) the number of
whole and fractional years remaining in the
Employment Term, and (y) the Notice Period,
times (2) the sum of (i) the Executive's
Base Salary in effect immediately before the
date written notice of termination was
given, and (ii) the average annual bonus
(whether paid under this Agreement or
otherwise) determined and paid to the
Executive for the three years immediately
preceding the date written notice of
termination was given, or, if as of such
date the Executive has been employed by the
Company for less than three years, such
shorter period as to which the Executive has
been both employed and eligible to receive
an annual bonus.
B. During the Severance Period, or, if earlier,
until the Executive becomes re-employed with
another employer, the Company shall continue
to provide health, dental, life and
disability insurance benefits to the
Executive on terms and conditions at least
equal to those which would have been
provided to the Executive in accordance with
the plans and programs described in Sections
4.4(i) and 4.5 of this Agreement if the
Executive's employment had not been
terminated. In the event that the
Executive's participation in any such plan
or program is barred by applicable law, or
in the Company's discretion such benefits
cannot be provided without adverse income
tax consequences to the Company or the
Executive, the Company shall arrange to
provide the Executive with benefits
substantially similar to those which the
Executive would otherwise have been entitled
to receive under such plans and programs
from which continued participation is
barred.
C. Accelerated vesting of the outstanding but
unvested restricted shares evidenced by the
Restricted Stock Agreement attached hereto
as Exhibit A, as provided therein.
D. Accelerated vesting of any outstanding but
unvested Company stock options and shares of
restricted stock of the Company issued to
the Executive during the Employment Term
(other than those evidenced by the
Restricted Stock Agreement attached hereto
as Exhibit A), such that the number of
restricted shares that would have become
vested and the number of option shares that
would have become vested and exercisable
during the Severance Period if the Executive
had been continuously employed during that
period shall become vested as of the
effective date of the Executive's
termination.
E. With respect to each dividend record date
occurring during the Severance Period, a
cash payment equal to the ordinary dividend
126
that would have been payable to Executive
with respect to any share of restricted
stock of the Company granted to the
Executive that is forfeited upon Executive's
termination of employment. Subject to
Section 8 hereof, such cash payment will be
made on the same day, or as soon as
practicable after, the corresponding
dividend is paid to shareholders.
5.1.4. Definition of "Cause." "Cause" means:
A. a deliberate or intentional material
misrepresentation by the Executive in the
Executive's relations with the Company;
B. the commission of a crime by the Executive
which constitutes a felony or a misdemeanor
which involves moral turpitude or which has
a material adverse effect on the Company,
its business, reputation or interests;
C. a material breach of any contract or
agreement between the Executive and the
Company (including this Agreement) or a
material breach by the Executive of a
fiduciary duty or responsibility to the
Company, which has not been cured within the
time periods (if any) specified by the Board
of Directors;
D. the Executive's abuse of drugs or alcohol
which affects the Executive's ability to
perform the Executive's duties under this
Agreement or otherwise; or
E. the willful, negligent or wanton misconduct
of the Executive which results in material
damage to the Company, its business,
reputation or interests.
5.1.5. Definition of "Good Reason." "Good Reason" means any
of the following if implemented by the Company
without the Executive's written consent and not cured
or corrected by the Company within 30 days after
notice thereof by the Executive to the Company under
Section 5.1.2:
A. an assignment to the Executive of any
duties, responsibilities or status
materially and adversely inconsistent with,
or which constitute a material adverse
change in, the Executive's current position,
duties, responsibilities or status with the
Company;
B. a material adverse change in the Executive's
current reporting responsibilities, title or
office;
C. a reduction by the Company of the
Executive's Base Salary;
127
D. a material violation of the provisions of
Sections 4.3, 4.4 or 4.5 of this Agreement;
or
E. a change in the Executive's principal work
location by more than 50 miles.
The determination of the amount of any compensation
and benefits or other payments to be paid or provided
to or in respect of the Executive under this
Agreement shall be made without regard to any
reduction therein constituting Good Reason.
5.2. Death, Disability, Termination for Cause or without Good
Reason or Termination at the End of the Employment Term.
5.2.1. Dismissal for Cause. The Company may terminate the
Executive's employment under this Agreement for Cause
at any time during the Employment Term by (i) giving
written notice thereof to the Executive specifying in
reasonable detail the basis for the Cause upon which
the Company intends to terminate the Executive's
employment, and (ii) effecting such termination by a
majority vote of the non-management members of the
Board of Directors. The effect of such termination is
provided in Section 5.2.4.
5.2.2. Resignation without Good Reason. The Executive may
terminate the Executive's employment under this
Agreement without Good Reason at any time during the
Employment Term by giving written notice thereof to
the Company at least 30 days before the effective
date of such termination, which notice may be waived
in whole or in part by the Company in its sole
discretion. The effect of such termination is
provided in Section 5.2.4.
5.2.3. Termination upon Death or Disability. This Agreement
shall terminate automatically upon the Executive's
death. If the Company determines in good faith that
the Executive has a Disability as defined in this
Section, the Company may terminate his employment
under this Agreement by notifying the Executive
thereof at least 30 days before the effective date of
termination. For purposes of this Agreement,
"Disability" shall mean any medically determinable
physical or mental impairment which has lasted for a
continuous period of not less than 180 days and which
renders the Executive unable to perform the
Executive's material duties under this Agreement. If
there is any dispute between the parties as to the
Executive's Disability, the Company shall select or
approve a physician whose determination as to the
Executive's Disability shall bind the parties hereto.
The effect of a termination due to the Executive's
death or Disability is provided in Section 5.2.4.
128
5.2.4. Effect of Dismissal for Cause, Resignation without
Good Reason, Termination upon Death or Disability or
Termination at the End of the Employment Term. If the
Executive's employment under this Agreement is
terminated at any time during the Employment Term by
the Company for Cause, by the Executive without Good
Reason, or due to the Executive's death or Disability
as provided in this Agreement, or if the Executive's
employment terminates at the end of the Employment
Term, the Executive shall be entitled to receive
compensation only as provided in Section 5.3 of this
Agreement.
5.3. Payment of Base Salary upon Termination. Upon a termination of
the Executive's employment under this Agreement for any
reason, the Company shall pay or cause to be paid to the
Executive his Base Salary earned but unpaid as of the
effective date of termination, payable in cash on or before
the day on which the Executive would have been paid such
amount if his employment hereunder had not been terminated,
but in no event later than the date as required by law.
5.4. No Duty to Mitigate. The Executive shall not be obligated to
seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any
of the provisions of this Agreement, and except as provided in
Section 5.1.3.B, such amounts shall not be reduced whether or
not the Executive obtains other employment.
6. Change in Control.
6.1. Benefits upon Change in Control or Termination of the
Executive's Employment without Cause in Contemplation of a
Change in Control. In the event (i) a Change in Control occurs
while the Executive is employed by the Company under this
Agreement, or (ii) the Executive's employment during the
Employment Term is terminated by the Company without Cause in
contemplation of a Change in Control, the Executive shall be
entitled to the following:
A. As consideration for the Executive's
obligations under the restrictive covenants
set forth in Section 7., a lump sum cash
payment, paid immediately before the
effective date of the Change in Control,
equal to the product of (i) the number of
whole and fractional years remaining in the
Employment Term as of either the effective
date of the Change in Control or the
termination of employment, as applicable,
times (ii) the Executive's Base Salary at
the rate in effect immediately before the
effective date of the Change in Control or
the termination of employment, as
applicable, provided, however, that the
Executive shall not be entitled to such lump
sum payment if, prior to the effective date
of the Change in Control, the Executive is
offered and accepts employment by the
Company, the successor to the Company or the
129
person or entity effecting the Change in
Control, following the Change in Control;
B. A lump sum cash payment, paid immediately
before the effective date of the Change in
Control, equal to the "Fair Market Value"
(as defined in the Stock Incentive Plan and
determined immediately before the Change in
Control) of 150,000 shares of Common Stock
(as adjusted in the manner provided in
Section 3(c) of the Stock Incentive Plan in
the event of any stock dividend, stock split
or similar change in capitalization
affecting the Common Stock which occurs
after the Effective Date and before a Change
in Control);
C. A lump sum cash payment, paid immediately
before the effective date of the Change in
Control, equal to the sum of each "Special
Dividend Amount" (as defined below) with
respect to any Special Dividend (as defined
below) paid while the Executive is employed
under this Agreement and before a Change in
Control;
D. Full and immediate vesting, immediately
before the Change in Control, of all Company
stock options and shares of restricted stock
of the Company issued to the Executive and
outstanding but not vested as of the
effective date of the Change in Control or
the effective date of termination of
employment by the Company without Cause in
contemplation of a Change in Control, as
applicable.
For purposes of this Section 6.1, any termination of the
Executive's employment by the Company without Cause during the
Employment Term within 90 days before a Change in Control
shall be presumed to be a termination in contemplation of a
Change in Control.
For purposes of Section 6.1.C., a Special Dividend shall mean
a dividend that (i) exceeds previous customary amounts, (ii)
exceeds cash flow from operations for the period and (iii)
follows a significant asset disposition or refinancing. The
Special Dividend Amount shall be the product of (x) the per
share amount of a Special Dividend designated as being in
excess of an ordinary dividend and as being related to
proceeds from a significant asset disposition or refinancing
and (y) 150,000 shares of Common Stock (as adjusted in the
manner provided in Section 3(c) of the Stock Incentive Plan in
the event of any stock dividend, stock split or similar change
in capitalization affecting the Common Stock which occurs
after the Effective Date and before any Special Dividend
payment date). The designation referred to in the preceding
sentence shall be made at the time of a Special Dividend
declaration and shall be made by the non-management members of
the Board of Directors of the Company. Such designation shall
be in the sole discretion of the non-management members of the
Board of Directors of the Company so long as they determine
the amount in good faith.
130
6.2. Definition of "Change in Control." A "Change in Control"
means, consistent with section 409A of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations and
guidance issued thereunder:
A. The acquisition by any person other than the Company
or any employee benefit plan of the Company, or more
than one person acting as a group, together with
stock held by such person or group, of beneficial
ownership of more than 50% of the total fair market
value or total voting power of the Company's then
outstanding voting securities;
B. Any person or more than one person acting as a group
acquires, or has acquired during the 12-month period
ending on the date of the most recent acquisition by
such person or group, beneficial ownership of 35% or
more of the total voting power of the Company's then
outstanding voting securities;
C. A majority of the members of the Board of Directors
is replaced during any 12-month period by directors
whose appointment or election is not endorsed or
approved by a majority of the members of the Board of
Directors who were members of the Board of Directors
prior to the initiation of the replacement; or
D. Any one person or more than one person acting as a
group acquires, or has acquired during the 12-month
period ending on the date of the most recent
acquisition by such person or group, assets of the
Company that have a total gross fair market value of
40% or more of the total gross fair market value of
all of the assets of the Company immediately prior to
the initiation of the acquisition.
6.3. Non-Duplication of Benefits. Notwithstanding the foregoing, in
the event the Executive's employment during the Employment
Term is terminated by the Company without Cause in
contemplation of a Change in Control and prior to the Change
in Control the Executive has received the cash lump sum
payment described in Section 5.1.3.A of this Agreement, the
aggregate of the cash lump sum payments described in Section
6.1.A, B and C shall be reduced, but not below zero, by the
amount of the cash lump sum payment received by the Executive
pursuant to Section 5.1.3.A. The Executive hereby irrevocably
waives the right to receive benefits under any severance or
similar plan or policy of the Company if the Executive is
entitled to receive a payment under Section 5.1. or Section
6.1.
6.4. Tax on Excess Parachute Payments. Notwithstanding anything in
this Agreement to the contrary, the Executive shall be
responsible for payment of any and all taxes imposed with
respect to any and all payments and other benefits the
Executive receives under this Agreement, including but not
limited to any excise tax imposed by Section 4999 of the Code.
131
7. Restrictive Covenants.
7.1. Competition. During the Employment Term and, if the
Executive's employment under this Agreement is terminated for
any reason other than the termination of the Employment Term
or death, for one year after the effective date of such
termination, the Executive shall not: (i) own, manage,
operate, join, control or participate in the ownership,
management, operation or control of a Competitor (as defined
in Section 7.5.); (ii) become a director, officer, employee,
consultant or lender of, or be compensated by, a Competitor;
or (iii) solicit any client of the Company on behalf of or for
the benefit of a Competitor. Notwithstanding the foregoing,
the Executive may own up to 1% of a publicly-traded
Competitor.
7.2. Confidential Information. The Executive shall at all times
hold in a fiduciary capacity for the benefit of the Company
all secret, confidential or proprietary information, knowledge
or data relating to the Company, and all of its businesses,
which shall have been obtained by the Executive during his
employment by the Company and which shall not be or become
public knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement) including, but
not limited to, information regarding clients and agents of
the Company ("Confidential Information"). During the
Executive's employment with the Company and after the
termination of such employment, the Executive shall not,
without the prior written consent of the Company, communicate
or divulge any Confidential Information to any Person other
than the Company and those designated by it or use any
Confidential Information except for the benefit of the
Company, provided that the Executive may make disclosures to
comply with the law or legal process. Immediately upon
termination of the Executive's employment with the Company at
any time and for any reason, the Executive shall return to the
Company all Confidential Information, including, but not
limited to, any and all copies, reproductions, notes or
extracts of Confidential Information.
7.3. Solicitation of Employees. During the Employment Term and, if
the Executive's employment under this Agreement is terminated
for any reason other than the expiration of the Employment
Term or death, for one year after the effective date of such
termination, the Executive shall not: (i) solicit, participate
in or promote the solicitation of any person who was employed
by the Company at any time during the six-month period prior
to the Executive's termination of employment under this
Agreement to leave the employ of the Company; or (ii) on
behalf of himself or any other Person, hire, employ or engage
any such person. The Executive further agrees that, during
such time, if an employee of the Company contacts the
Executive about prospective employment, the Executive will
inform such employee that he cannot discuss the matter further
without informing the Company.
7.4. Remedies for Breach. The Executive agrees that damages in the
event of any breach of Sections 7.1. through 7.3. by the
Executive would be difficult to ascertain. The Executive
therefore agrees that, notwithstanding anything in this
132
Agreement to the contrary, including but not limited to the
provisions of Section 15, the Company, in addition to and
without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in
any court of competent jurisdiction, enjoining any such
breach. The Executive hereby waives any and all defenses he
may have on the ground of lack of jurisdiction or competence
of the court to grant such an injunction or other equitable
relief. The existence of this right shall not preclude any
other rights and remedies at law or in equity which the
Company may have.
7.5. Definitions.
7.5.1. Competitor. For purposes of Section 7, "Competitor"
means any Person that sells goods, provides services
or is engaged in any business which is directly
competitive with those sold, provided or engaged in
by the Company at the relevant time.
7.5.2. Company. For purposes of Section 7, "Company" means
BNP Residential Properties, Inc., its subsidiaries
and affiliates and the successors thereof.
7.5.3. Person. For purposes of Section 7, "Person" means any
individual or entity, including but not limited to
any corporation, trust, sole proprietorship, joint
venture or partnership.
7.6. Survival of Section 7. The Executive agrees that the
non-competition agreements, non-disclosure agreements and
non-employment agreements in this Section 7 each constitute
separate agreements independently supported by good and
adequate consideration and, notwithstanding anything in this
Agreement to the contrary, shall be severable from the other
provisions of, and shall survive, this Agreement.
8. Section 409A of the Code. Notwithstanding anything in this Agreement to
the contrary, in no event shall the Company be obligated to commence
payment or distribution to the Executive of any amount that constitutes
nonqualified deferred compensation within the meaning of section 409A
of the Code earlier than the earliest permissible date under section
409A of the Code that such amount could be paid without additional
taxes or interest being imposed under section 409A of the Code. The
Company and the Executive agree that they will execute any and all
amendments to this Agreement as may be necessary to ensure compliance
with the distribution provisions of section 409A of the Code.
9. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if
hand-delivered or sent by registered or certified mail to the Executive
at the last address he has filed in writing with the Company or, in the
case of notice to the Company, if hand-delivered to the Chairman of
133
the Board or sent by registered or certified mail to the Company's
principal executive offices addressed to the Chairman of the Board.
10. Withholding Taxes. The Company shall have the right, to the extent
permitted by law, to withhold from any payment of any kind due to the
Executive under this Agreement to satisfy the tax withholding
obligations of the Company under applicable law.
11. Successors and Assigns. The rights, duties and obligations of a party
hereunder may not be assigned, delegated or assumed without the prior
written consent of the other party, provided that the Company may
assign this Agreement to any parent or subsidiary thereof, without the
Executive's consent, and such assignment shall not constitute, a
termination of the Executive's employment hereunder. Nothing herein
shall cause a termination of this Agreement upon the acquisition,
reorganization, or merger of the Company. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors or permitted assigns. Nothing herein shall
be construed to confer upon any person not a party hereto any right,
remedy or claim under or by reason of this Agreement.
12. Entire Agreement. This Agreement constitutes the entire understanding
of the Executive and the Company with respect to the subject matter
hereof and supersedes and voids any and all prior agreements or
understandings, written or oral, regarding the subject matter hereof,
including but not limited to that Executive Employment Contract between
Company and Executive dated July 15, 1997, which agreement is hereby
terminated and cancelled.
13. Amendment and Waiver. This Agreement may not be changed, modified, or
discharged orally, but only by an instrument in writing signed by the
parties. No waiver of any term or condition of this Agreement shall be
effective unless agreed to in writing between the parties.
14. Governing Law and Severability. This Agreement shall be governed by the
laws of the State of North Carolina (without giving effect to choice of
law principles or rules thereof that would cause the application of the
laws of any jurisdiction other than the State of North Carolina) and
the invalidity or unenforceability of any provisions hereof shall in no
way affect the validity or enforceability of any other provision. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating or
affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. Arbitration. Disputes regarding the Executive's employment with the
Company, including, without limitation, any dispute under this
Agreement which cannot be resolved by negotiations between the Company
and the Executive, but excluding any disputes regarding the Executive's
compliance with Section 7, shall be submitted to, and solely determined
by, final and binding arbitration conducted by Jams/Endispute, Inc.'s
134
arbitration rules applicable to employment disputes, and the parties
agree to be bound by the final award of the arbitrator in any such
proceeding. The arbitrator shall apply the laws of the State of North
Carolina with respect to the interpretation or enforcement of any
matter relating to this Agreement; in all other cases the arbitrator
shall apply the laws of the state specified in the Company's
alternative dispute resolution policy as in effect from time to time
(if any). Arbitration may be held in North Carolina, or such other
place as the parties may mutually agree, and shall be conducted only by
a former judge. Judgment upon the award by the arbitrator may be
entered in any court having jurisdiction thereof.
16. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed and
delivered this Agreement.
ATTEST/WITNESS BNP RESIDENTIAL PROPERTIES, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- --------------------------
Title: Chairman
-------------------------
Date: November 11, 2005
EXECUTIVE
/s/ Xxxxxx Xxxxx /s/ D. Xxxxx Xxxxxxxxx
----------------------------------- -------------------------------
D. Xxxxx Xxxxxxxxx
Date: November 11, 2005
135
EXHIBIT A
RESTRICTED STOCK AGREEMENT
===============================================================================
BNP RESIDENTIAL PROPERTIES, INC.
AMENDED AND RESTATED 1994 STOCK OPTION AND
INCENTIVE PLAN
GRANTEE: D. XXXXX XXXXXXXXX
NO. OF SHARES: 70,000
===============================================================================
This Agreement (the "Agreement") evidences the award of 70,000
restricted shares (each, an "Award Share," and collectively, the "Award Shares")
of the Common Stock of BNP Residential Properties, Inc. (the "Company"), granted
to you, D. Xxxxx Xxxxxxxxx, on August 1, 2005 (the "Grant Date"), pursuant to
the BNP Residential Properties, Inc. Amended and Restated 1994 Stock Option and
Incentive Plan (the "Plan") and conditioned upon your agreement to the terms
described below. All of the provisions of the Plan are expressly incorporated
into this Agreement.
1. Terminology. Capitalized words used in this Agreement not defined
above are defined in the Glossary at the end of the Agreement.
2. Vesting. All of the Award Shares are nonvested and forfeitable as of
the Grant Date.
(a) Vesting Schedule. So long as your employment with the
Company is continuous from the Grant Date through the applicable date upon which
vesting is scheduled to occur, 10% of the Award Shares will vest and become
nonforfeitable on August 1, 2006, and 10% of the Award Shares will vest and
become nonforfeitable on each anniversary thereafter, such that 100% of the
Award Shares will be vested and nonforfeitable as of August 1, 2015.
(b) Vesting Upon a Change in Control. Upon a Change in Control
of the Company, all of the Award Shares that remain nonvested and forfeitable as
of the effective date of the Change in Control shall become vested and
nonforfeitable immediately before the effective date of the Change in Control.
(c) Vesting Upon Termination without Cause or for Good Reason.
Upon termination of your employment by the Company without Cause or your
termination of employment for Good Reason, in addition to the Award Shares
vested under Section 2(a) of this Agreement, as of the effective date of your
termination, the number of Award Shares that would have become vested and
nonforfeitable during the Severance Period had you remained continuously
employed during the Severance Period shall become vested and nonforfeitable.
(d) Anticipatory Termination. If your employment with the
Company ceases due to an Anticipatory Termination, all of the Award Shares that
remain nonvested and forfeitable as of the effective date of such termination
shall become vested and nonforfeitable immediately before the effective date of
the Change in Control.
3. Termination of Employment. Except as provided in Section 2 of this
Agreement, if your employment with the Company ceases for any reason, all Award
Shares that are not then vested and nonforfeitable will be immediately forfeited
to the Company upon such cessation for no consideration.
136
4. Restrictions on Transfer.
(a) Until an Award Share becomes vested and nonforfeitable, it
may not be assigned, transferred, pledged, hypothecated or disposed of in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.
(b) The Company shall not be required to (i) transfer on its
books any Award Shares that have been sold or transferred in contravention of
this Agreement or (ii) treat as the owner of Award Shares, or otherwise accord
voting, dividend or liquidation rights to, any transferee to whom Award Shares
have been transferred in contravention of this Agreement.
5. Stock Certificates. You are reflected as the owner of record of the
Award Shares as of the Grant Date on the Company's books. The Company will hold
the share certificates for safekeeping, or otherwise retain the Award Shares in
uncertificated book entry form, until the Award Shares become vested and
nonforfeitable. Until the Award Shares become vested and nonforfeitable, any
share certificates representing such shares will include a legend to the effect
that you may not sell, assign, transfer, pledge, or hypothecate the Award
Shares. All regular cash dividends on the Award Shares held by the Company will
be paid directly to you. As soon as practicable after vesting of the Award
Shares, the Company will deliver a share certificate to you, or deliver shares
electronically or in certificate form to your designated broker on your behalf,
for such vested Award Shares.
6. Tax Election and Tax Withholding.
(a) The Company shall have the right to deduct from any
compensation or any other payment of any kind (including withholding the
issuance of shares of Common Stock) due you the amount of any federal, state,
local or foreign taxes required by law to be withheld as a result of the grant
or vesting of the Award Shares in whole or in part; provided, however, that the
value of the shares of Common Stock withheld may not exceed the statutory
minimum withholding amount required by law. In lieu of such deduction, the
Company may require you to make a cash payment to the Company equal to the
amount required to be withheld. If you do not make such payment when requested,
the Company may refuse to issue any Common Stock certificate under this
Agreement until arrangements satisfactory to the Administrator for such payment
have been made.
(b) You hereby acknowledge that you have been advised by the
Company to seek independent tax advice from your own advisors regarding the
availability and advisability of making an election under Section 83(b) of the
Internal Revenue Code of 1986, as amended, and that any such election, if made,
must be made within 30 days of the Grant Date. You expressly acknowledge that
you are solely responsible for filing any such Section 83(b) election with the
appropriate governmental authorities, irrespective of the fact that such
election is also delivered to the Company. You may not rely on the Company or
any of its officers, directors or employees for tax or legal advice regarding
this award. You acknowledge that you have sought tax and legal advice from your
own advisors regarding this award or have voluntarily and knowingly foregone
such consultation.
7. Adjustments for Corporate Transactions and Other Events.
(a) Stock Dividend, Mergers, Etc. As provided in Section 3(c)
of the Plan, the provisions of which are expressly incorporated into this
Agreement, in the event of a stock dividend, stock split or similar change in
capitalization affecting the Common Stock of the Company, the Administrator
shall make appropriate adjustments in the number of Award Shares and the number
of such Award Shares that are nonvested and forfeitable shall, without further
action of the Administrator, be adjusted to reflect such event. The
Administrator may make adjustments, in its discretion, to address the treatment
of fractional shares with respect to the Award Shares as a result of such an
event. Adjustments under this Section 7 will be made by the Administrator, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional Award Shares will
result from any such adjustments.
(b) Binding Nature of Agreement. The terms and conditions of
this Agreement shall apply with equal force to any additional and/or substitute
securities received by you in exchange for, or by virtue of your ownership of,
the Award Shares, as a result of any event described in Section 3(c) of the
137
Plan, except as otherwise determined by the Administrator. If the Award Shares
are converted into or exchanged for, or stockholders of the Company receive by
reason of any distribution in total or partial liquidation or pursuant to any
merger of the Company or acquisition of its assets, securities of another
entity, or other property (including cash), then the rights of the Company under
this Agreement shall inure to the benefit of the Company's successor, and this
Agreement shall apply to the securities or other property received upon such
conversion, exchange or distribution in the same manner and to the same extent
as the Award Shares.
8. Non-Guarantee of Employment. Nothing in the Plan or this Agreement
shall alter your employment status with the Company, nor be construed as a
contract of employment between the Company and you, or as a contractual right of
you to continue in the employ of the Company for any period of time, or as a
limitation of the right of the Company to discharge you at any time with or
without cause or notice and whether or not such discharge results in the
forfeiture of any Award Shares or any other adverse effect on your interests
under the Plan.
9. Rights as Stockholder. Except as otherwise provided in this
Agreement with respect to the nonvested and forfeitable Award Shares, you are
entitled to all rights of a stockholder of the Company, including the right to
vote the Award Shares and receive dividends and/or other distributions declared
on the Award Shares.
10. Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. In the event of any ambiguity in this
Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is available upon request to the Administrator.
11. Headings. The headings in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
12. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
138
GLOSSARY
(a) "Administrator" means the Board of Directors of BNP
Residential Properties, Inc. or such committee or committees appointed by the
Board to administer the Plan.
(b) "Affiliate" means any entity, whether now or hereafter
existing, which controls, is controlled by, or is under common control with BNP
Residential Properties, Inc. (including but not limited to joint ventures,
limited liability companies and partnerships). For this purpose, "control" means
ownership of 50% or more of the total combined voting power or value of all
classes of stock or interests of the entity.
(c) "Anticipatory Termination" means the termination of your
employment by the Company without Cause during the Employment Term in
contemplation of a Change in Control. Any termination of your employment by the
Company without Cause during the Employment Term and within 90 days before a
Change in Control shall be presumed to be a termination in contemplation of a
Change in Control, as described in the Employment Agreement.
(d) "Cause" has the meaning set forth in the Employment
Agreement.
(e) "Change in Control" has the meaning set forth in the
Employment Agreement.
(f) "Company" means BNP Residential Properties, Inc. and its
Affiliates, except where the context otherwise requires. For purposes of
determining whether a Change in Control has occurred, Company shall mean only
BNP Residential Properties, Inc.
(g) "Employment Agreement" means the employment agreement
between the Company and the Grantee, effective August 1, 2005.
(h) "Employment Term" has the meaning set forth in the
Employment Agreement.
(i) "Good Reason" has the meaning set forth in the Employment
Agreement.
(j) "Severance Period" has the meaning set forth in the
Employment Agreement.
(k) "You"; "Your". You means the recipient of the Award Shares
as reflected in the first paragraph of this Agreement. Whenever the word "you"
or "your" is used in any provision of this Agreement under circumstances where
the provision should logically be construed, as determined by the Administrator,
to apply to the estate, personal representative, or beneficiary to whom the
Award Shares may be transferred by will or by the laws of descent and
distribution, the words "you" and "your" shall be deemed to include such person.
139
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer.
BNP RESIDENTIAL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Date: November 11, 2005
The undersigned hereby acknowledges that he/she has carefully read this
Agreement and agrees to be bound by all of the provisions set forth herein.
WITNESS: GRANTEE
/s/ Xxxxxx Xxxxx /s/ D. Xxxxx Xxxxxxxxx
---------------------------------- ----------------------------------
Date: November 11, 2005
Enclosure: Prospectus for the BNP Residential Properties, Inc. Amended and
Restated 1994 Stock Option and Incentive Plan
140
