EXECUTIVE RETENTION AGREEMENT
THIS
EXECUTIVE RETENTION AGREEMENT (the “Agreement”), made and entered into as of the
1st day of July, 2007, by and between American Community Properties Trust,
a
Maryland real estate investment trust (together with its subsidiaries, the
“Company”), American Rental Management Company, a Delaware corporation (“ARMC”),
and Xxxxx X. Xxxxx (the “Executive”), a resident of Maryland.
WHEREAS,
ARMC is a wholly owned subsidiary of the Company, and provides management and
other services to the Company and its other subsidiaries;
WHEREAS,
Executive has been a senior executive officer of the Company and its affiliates,
including ARMC, for many years and therefore possesses unique and valuable
experience and expertise relating to the Company;
WHEREAS,
Executive has served as President of the Company pursuant to an employment
agreement dated August 25, 1998 (the “Executive Employment
Agreement”);
WHEREAS,
in order to provide continuity of management and to take advantage of
Executive’s expertise, the Company wishes to secure the services of Executive as
a Vice-Chair of the Company (“Vice Chair”) and continue his service as
President and Chief Operating Officer (“COO”), and Executive wishes to provide
such services, in accordance with the terms and subject to the considerations
provided herein; and
WHEREAS,
the parties desire to amend and restate the Executive Employment
Agreement.
NOW,
THEREFORE, in consideration of the promises and mutual covenants contained
herein, and each intending to be legally bound hereby, the parties agree as
follows:
1. Employment. Executive
shall serve as Vice Chair, President and COO of the Company and, in that
capacity, shall have primary responsibility for managing the combined operations
and day-to-day affairs of the Company and its consolidated subsidiaries
(including ARMC). In addition, Executive shall have such other powers
and duties as may from time to time be prescribed by the Company’s Board of
Trustees (the “Board”). Executive shall report to the Chairman of the
Board. Executive shall devote substantially all of his working time
and efforts to the business and affairs of the Company and its subsidiaries
(including ARMC) and the advancement of the business and the affairs of the
Company and its subsidiaries (including ARMC). Except in connection
with the outside activities disclosed in writing to the Board prior to the
execution of this Agreement, Executive further agrees not to engage in any
outside for-profit business, employment or commercial activity without first
obtaining approval in writing from the Chairman of the Board, and to observe
and
comply with the policies and rules of the Company, unless such compliance is
inconsistent with the terms of the Agreement.
2. Term. Executive’s
employment under this Agreement shall continue until December 31, 2010, unless
sooner terminated in accordance with the terms of this
Agreement. Executive’s employment under this Agreement shall
thereafter automatically renew for successive one year periods unless Executive
or the Company gives the other notice of his/its intent not to renew employment
at least ninety (90) days prior to the date on which employment would otherwise
renew for a successive one year period under this Agreement.
3. Compensation. The
Company agrees to pay Executive, and Executive agrees to accept from the
Company, in full payment for Executive’s services, compensation consisting of
the following:
(a) Base
Salary. A minimum base salary at an annual rate of $500,000,
payable on a semi-monthly basis or on such other basis the Company may adopt
as
its regular payroll practice. Executive will receive annual cost of
living salary increases, as determined by the Board, and Executive may receive
salary increases at the discretion of the Board. All payments shall
be less applicable withholding and deductions, as determined by the
Company;
(b) Benefits. The
standard benefits the Company makes available from time to time to its senior
executive employees, including eligibility for bonuses and other incentive
awards as may be determined in the discretion of the Board or the compensation
committee thereof, on the same terms as may be applicable to such other senior
executive officers and to the extent Executive is eligible under the terms
of
the applicable plans, programs or policies;
(c) Vacation. Executive
is entitled to the number of paid vacation days determined by the Company
generally for its senior executive officers, but not less than twenty-five
(25)
days per year. Executive is also entitled to all paid holidays given
to the Company’s senior executive officers; and
(d) Certain
Specified Benefits. In addition to the benefits for which
Executive is eligible under subparagraph 2(b), during the term of his
employment, the Company shall provide Executive with an appropriate car, the
Company shall pay Executive’s membership fees and dues in the country club of
his choice, and the Company shall pay membership dues and semiannual meeting
expenses for Executive’s participation in the Urban Land Institute.
4. Expenses. The
Company will reimburse Executive for such of his out-of-pocket expenses as
are
reasonably necessary in connection with services rendered by Executive pursuant
to this Agreement, as provided in the business expense policies adopted by
the
Company from time to time.
5. Termination. Executive’s
employment may be terminated before the end of the term of this Agreement or
at
the end of the term of this Agreement as follows:
(a) By
the
Company, at any time, for Cause after providing Executive with at least four
(4)
weeks written notice that specifies the circumstance amounting to Cause and,
if
requested by Executive, providing an opportunity for Executive and his counsel
to appear before the Board to address such circumstances. “Cause”
means (1) Executive’s conviction of, or plea of nolo contendere to, a
felony involving dishonesty, disloyalty, fraud, or moral turpitude; (2)
Executive’s material breach of any material obligation in this Agreement; or (3)
Executive’s engaging in conduct constituting a material breach of any fiduciary
duty to the Company;
(b) Automatically
on the date of Executive’s death;
(c) Automatically
if Executive becomes disabled or otherwise incapacitated so that Executive
cannot perform the essential functions of his job with or without reasonable
accommodation for a continuous period of more one hundred twenty (120) days
or
for more than one hundred twenty (120) cumulative days in any one (1) year
period (“Permanent Disability”). Any question as to the existence of
Permanent Disability upon which Executive and the Company cannot agree shall
be
determined by a qualified independent physician selected by Executive (or,
if
Executive is unable to make such selection, such selection shall be made by
any
adult member of Executive’s immediate family or Executive’s legal
representative) and approved by the Company, with approval not to be
unreasonably withheld. The determination of such physician shall be
communicated in writing to the Company and to Executive and shall be final
and
conclusive for all purposes of this Agreement. Until the date of
termination by reason of Permanent Disability, Executive shall continue to
receive the compensation and benefits as set forth in paragraph 3 of this
Agreement. No termination of employment for Permanent Disability
shall impair any rights of Executive to collect benefits according to the terms
of any disability policy maintained by the Company for that Permanent
Disability;
(d) By
the
Company, at any time, for other than Cause upon thirty (30) days written notice
to Executive;
(e) By
Executive’s voluntary resignation (before the end of the term) for other than
Good Reason upon not less than thirty (30) days prior written notice to the
Company;
(f) By
Executive’s voluntary resignation upon thirty (30) days prior written notice to
the Company for Good Reason. “Good Reason” means: (1) a
material diminution in any of Executive’s base compensation, authority (which
includes but is not limited to a change in the reporting structure identified
in
paragraph 1), duties or responsibilities without his agreement; (2) Executive
being required to relocate his office to executive offices outside of an area
within a fifty (50) mile radius of the Company’s existing executive offices; (3)
there being a material reduction in the overall value of the employee benefits
being provided to Executive, unless the reduction is effective for all senior
executive employees; or (4) a material breach by the Company of any of its
obligations to Executive under this Agreement, and in each case, so long as
Executive gives such notice within sixty (60) days of the circumstances believed
by Executive to constitute Good Reason and the Company fails to remedy those
circumstances within thirty (30) days of its receipt of such
notice;
(g) By
Executive’s voluntary resignation following a Change of Control of the Company,
upon not less than thirty (30) days prior written notice to the
Company. For purposes of this Agreement, a “Change of Control” shall
mean any one or more of the following:
(1) The
consummation by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of a transaction or series of transactions as a
result of which (i) a Person acquires beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of not less than 50% of the
then-outstanding common shares or other voting securities of the Company or
any
successor (collectively, “Voting Securities”)
(2) The
consummation by any Person of a transaction or series of transactions as a
result of which (i) a Person either (a) acquires beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of not less than
65% of the then-outstanding common shares or other voting securities of the
Company or any successor (collectively, “Voting Securities”) not beneficially
owned by J. Xxxxxxx Xxxxxx and his affiliates and family members (“Xxxxxx Family
Shares”), and (ii) (ii) such Voting Securities shall cease to be registered
under Section 12 of the Exchange Act and be delisted from the American Stock
Exchange (“AMEX”) or any such other national securities exchange, automated
quotation system or over-the-counter bulletin board as such securities were
listed for trading or included immediately prior to consummation of such
transaction or transactions; provided, however, that in the absence of any
other
transaction relating to the acquisition by a Person of Voting Securities other
than Xxxxxx Family Shares, neither (x) the mere act of filing a Form 15 and
taking actions to delist ACPT’s common shares from the AMEX or such other
national securities exchange, automated quotation system or over-the-counter
bulletin board as such securities were listed for trading or included, nor
(y) a
reverse stock split shall constitute a Change of Control under this subparagraph
(1); or
(3) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a trustee subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the disinterested, non-employee
trustees then comprising the Incumbent Board shall be considered as though
such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Incumbent Board; or
(4) Approval
by the holders of a majority of the Voting Securities of a reorganization,
merger or consolidation involving the Company, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 75% of,
respectively, the then outstanding shares of Voting Securities or interests
of
the corporation, trust or other entity resulting from such reorganization,
merger or consolidation and the combined voting power of the then outstanding
voting securities of such corporation, trust or other entity entitled to vote
generally in the election of directors, trustees or other managers is then
beneficially owned, directly or indirectly, by all or substantially all of
the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Voting Securities immediately prior to such reorganization, merger
or consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
outstanding Voting Securities, as the case may be, (ii) no Person (excluding
the
Company and its affiliates, any employee benefit plan (or related trust) of
the
Company or such corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 20% or more
of
the outstanding Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of voting securities of the corporation, trust or other entity resulting
from such reorganization, merger or consolidation entitled to vote generally
in
the election of directors, trustees or other managers, and (iii) at least a
majority of the members of the board of directors, trustees or other managers
of
the corporation, trust or other entity resulting from such reorganization,
merger or consolidation were members of the Incumbent Board at the time of
the
execution of the initial agreement providing for such reorganization, merger
or
consolidation; or
(5) Approval
by the holders of Voting Securities of (i) a complete liquidation or dissolution
of the Company or (ii) the sale or other disposition of all or substantially
all
of the consolidated assets of the Company, other than to a corporation, trust
or
other entity with respect to which, following such sale or other disposition,
(I) more than 60% of, respectively, the then outstanding voting securities
of
such corporation, trust or other entity entitled to vote generally in the
election of directors, trustees or other managers is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the outstanding Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Voting Securities, as the case may be, (II)
no
Person (excluding the Company and its affiliates, any employee benefit plan
(or
related trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly
or
indirectly, 20% or more of the outstanding Voting Securities, as the case may
be) beneficially owns, directly or indirectly, 20% or more of, respectively,
the
then outstanding shares of voting securities of the corporation, trust or other
entity resulting from such reorganization, merger or consolidation entitled
to
vote generally in the election of directors, trustees or other managers, and
(III) at least a majority of the members of the board of directors, trustees
or
other managers of the corporation, trust or other entity were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of
assets;
(h) By
the
Company or Executive giving notice pursuant to paragraph 2 of its intent not
to
renew employment pursuant to the Agreement at least ninety (90) days prior
to
the date on which employment would have otherwise renewed pursuant to the
Agreement.
6. Incidents
of Termination.
(a) If
Executive’s employment is terminated under subparagraph 5(a), (b), (c), or
(e), then the Company shall have no further obligation under this Agreement,
except as provided under paragraph 13 and except the obligation to: (1) pay
Executive an amount equal to the portion of his compensation and out-of-pocket
business expenses, as defined in paragraph 4, as may be accrued and unpaid
on
the date of termination, minus any appropriate withholding and deductions,
as
determined by the Company, and (2) provide all benefits set forth pursuant
to the benefit, medical, pension or other plans and programs provided by the
Company for which Executive qualifies as are due under the terms of the benefits
plans and programs, recognizing that Executive’s employment has
terminated. In the event of Executive’s death, any sums and benefits
due to Executive under any provision of this Agreement shall be paid to his
estate or heirs, as applicable.
(b) If
Executive’s employment is terminated under subparagraph 5(d) or (f) , then the
Company will provide the payments and benefits set forth in subparagraphs
6(b)(1) and 6(b)(2), subject to subparagraph 6(b)(3).
(1) The
Company will, in addition to providing the payments and benefits set forth
in
subparagraph 6(a), pay Executive an amount as provided in the following
schedule, minus any appropriate withholding and deductions, as determined by
the
Company, without regard to whether Executive obtains another position with
a new
employer:
Termination
prior to the 1st
anniversary of the
Agreement: 48
months Base Salary;
Termination
prior to the 2nd anniversary of the
Agreement: 36
months Base Salary;
Termination
prior to the 3rd anniversary of the
Agreement: 30
months Base Salary; or
Termination
at any time
thereafter: 24
months Base Salary.
These
severance payments will be made in one lump sum payment within thirty (30)
days
of the date Executive’s employment terminates.
(2) Further,
if Executive elects to continue his health insurance benefits under COBRA,
the
Company will continue to pay the same monthly subsidy of the premiums for such
insurance as was being paid by the Company as of the date Executive’s employment
terminated through the earlier of eighteen (18) months or the date Executive
obtains alternative health insurance coverage. It is intended that
this provision of continuation health coverage shall run concurrently with
any
period of continuation coverage required under COBRA.
(3) The
Company’s obligation to provide the severance pay and benefits provided in
subparagraphs 6(b)(1) and 6(b)(2) is conditioned upon Executive’s signing and
not revoking a valid general release agreement in the form attached hereto
as
Exhibit A, and is further conditioned upon Executive’s continued
compliance with his obligations in this Agreement, including those obligations
set forth in paragraphs 8 through 11.
(c) If
Executive’s employment is terminated under subparagraph 5(h), then the Company
will provide the payments and benefits set forth in subparagraphs 6(c)(1) and
6(c)(2), subject to subparagraph 6(c)(3).
(1) The
Company will, in addition to providing the payments and benefits set forth
in
subparagraph 6(a), pay Executive an amount equal to twenty-four (24) months
of
Base Salary, minus any appropriate withholding and deductions, as determined
by
the Company, without regard to whether Executive obtains another position with
a
new employer. The severance payment will be made in one lump sum
payment within thirty (30) days of the date Executive’s employment
terminates.
(2) Further,
if Executive elects to continue his health insurance benefits under COBRA,
the
Company will continue to pay the same monthly subsidy of the premiums for such
insurance as was being paid by the Company as of the date Executive’s employment
terminated through the earlier of eighteen (18) months or the date Executive
obtains alternative health insurance coverage. It is intended that
this provision of continuation health coverage shall run concurrently with
any
period of continuation coverage required under COBRA.
(3) The
Company’s obligation to provide the severance pay and benefits provided in
subparagraphs 6(c)1 and 6(c)(2) is conditioned upon Executive signing and not
revoking a valid general release agreement in the form attached hereto as
Exhibit A, and is further conditioned upon Executive’s continued
compliance with his obligations in this Agreement, including those obligations
set forth in paragraphs 8 through 11.
(d) Upon
any
termination of employment, Executive shall be deemed to have automatically
resigned from the Board and as an officer of the Company and each of its
affiliates, including ARMC.
(e) Anything
in this Agreement to the contrary notwithstanding, if on the date of the
termination of Executive's employment with the Company (1) any of the Company’s
stock is 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”)) and (2) Executive is a “specified employee” within the
meaning of Code section 409A(a)(2)(B)(i), then payments to be made in accordance
with subparagraphs 6(b) and 6(c) shall be paid on the date which is six (6)
months after the date Executive’s employment terminates.
(f) If
Executive terminates his employment under subparagraph 5(g), then the Company
will provide the payments and benefits set forth in subparagraphs 6(f)(1) and
6(f)(2), subject to subparagraph 6(f)(3).
(1) If
Executive terminates his employment under subparagraph 5(g) prior to the first
anniversary of the applicable Change of Control, the Company will provide the
payments and benefits set forth in subparagraph 6(a). If Executive
terminates his employment under subparagraph 5(g) on the first anniversary
of
the applicable Change of Control by giving notice of intent to terminate his
employment due to a Change of Control at least 30 days prior to the first
anniversary date of a Change of Control, the Company will, in addition to
providing the payments and benefits set forth in subparagraph 6(a), pay
Executive an amount equal to forty-eight (48) months of Base Salary, minus
any
appropriate withholding and deductions, as determined by the Company, without
regard to whether Executive obtains another position with a new
employer. The severance payment will be made in one lump sum payment
within thirty (30) days of the date Executive’s employment
terminates.
(2) Further,
if Executive terminates his employment under subparagraph 5(g) on the first
anniversary of the applicable Change of Control and if Executive elects to
continue his health insurance benefits under COBRA, the Company will continue
to
pay the same monthly subsidy of the premiums for such insurance as was being
paid by the Company as of the date Executive’s employment terminated through the
earlier of eighteen (18) months or the date Executive obtains alternative health
insurance coverage. It is intended that this provision of
continuation health coverage shall run concurrently with any period of
continuation coverage required under COBRA.
(3) The
Company’s obligation to provide the severance pay and benefits provided in
subparagraphs 6(f)1 and 6(f)(2) is conditioned upon Executive signing and not
revoking a valid general release agreement in the form attached hereto as
Exhibit A, and is further conditioned upon Executive’s continued
compliance with his obligations in this Agreement, including those obligations
set forth in paragraphs 8 through 11.
7. Excise
Taxes. If the value of any compensation (in whatever form)
provided pursuant to this Agreement is counted as a “parachute payment” within
the meaning of Code section 280G, and the value of all such parachute payments
would be subject to the excise tax imposed by section 4999 of the Code (the
“4999 Excise Tax”) (the “Penalties”), then Executive shall be entitled to
receive from the Company an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by Executive of all taxes (but not including
any
interest or penalties imposed with respect to such taxes), including any Penalty
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Penalties imposed upon such payment. The
Gross-Up Payment shall be paid to Executive by the end of the calendar year
in
which the 4999 Excise Tax would be incurred.
8. Trade
Secrets and Confidential Information. Executive shall not
disclose or use at any time, either during or after his employment hereunder
(regardless of how employment ends), any Confidential Information (as defined
below) of which he becomes aware, whether or not any such information is
developed by him, except to the extent that such disclosure or use during
employment is required or appropriate in the performance of the duties assigned
to him by the Company or if Executive is required to testify under subpoena
or
court order after Executive gives sufficient advance written notice of such
requirement to the Company so that it may seek to limit or otherwise protect
such testimony from public disclosure. Executive shall follow all
procedures established by the Company to safeguard Confidential Information
and
to protect it against disclosure, misuse, espionage, loss or
theft. “Confidential Information” means information that is not
generally known or available to the public, which is used, developed or obtained
by the Company and its affiliates, including ARMC, relating to its business
and
the businesses of its clients, vendors, agents, brokers or customers, including,
but not limited to: business and marketing strategies; distribution
channels; products or services; fees, costs and pricing structures; marketing
information; advertising and pricing strategies; analyses; reports; computer
software, including operating systems, applications and program listings; flow
charts; manuals and documentation; data bases; accounting and business methods;
inventions and new developments and methods, whether patentable or unpatentable
and whether or not reduced to practice; all copyrightable works; information
relating to the Company’s existing and prospective clients, vendors, agents,
brokers or customers and their confidential information; existing and
prospective client, vendor, agent, broker or customer lists and other data
related thereto; information relating to the Company’s employees; all trade
secret information protected by the federal Economic Espionage Act of 1996,
18
U.S.C. §1831 et seq.; and all similar and related information in
whatever form. Confidential Information shall not include any
information that has been published in a form generally available to the public
(through no wrong doing of Executive or anyone else) prior to the date upon
which Executive proposes to disclose such information.
9. Creative
Works and Other Property.
(a) Executive
will promptly disclose to the Company all inventions, concepts, processes,
improvements, methodologies and other creative works, including without
limitation, insurance products, whether or not they can be patented or
copyrighted, that during his employment were or were caused to be conceived
or
developed by him, either solely or jointly with others, relating to the business
of the Company and its affiliates, including ARMC business (collectively
“Creative Works”), and Executive agrees that all Creative Works are the sole
property of the Company. Upon the request and at the expense of the
Company, Executive will at any time (whether during his employment or after
its
termination for any reason) assist the Company and fully cooperate with it
to
protect the Company’s interest in Creative Works and to obtain, for the
Company’s benefit, patents or copyrights for any Creative Works in the United
States and in any foreign countries. This subparagraph does not apply
to any Creative Work that Executive develops entirely on his own time and for
which no equipment, supplies, facility or Confidential Information of the
Company was used, unless: (1) the Creative Work relates to the
Company’s business or to the actual or anticipated research or development
activities of the Company; or (2) the Creative Work results from any work
Executive performs for the Company.
(b) Upon
the
termination of Executive’s employment for the Company for any reason or at any
other time upon request by the Company, Executive shall immediately, and without
request, deliver to the Company all copies and embodiments, in whatever form,
of
all Confidential Information and all other documents, materials or property
belonging to the Company even if they do not contain Confidential Information,
including, but not limited to: written records, notes, photographs,
manuals, computers and computer equipment, cell phones, notebooks, reports,
keys, credit cards, documentation, flow charts and all magnetic media such
as
tapes, disks or diskettes, wherever located, and, if requested by the Company,
Executive shall provide the Company with written confirmation that all such
materials have been returned. Executive has no claim or right to the
continued use, possession or custody of such information, documents, materials
or property following the termination of his employment with the
Company.
10. Noncompetition
and Nonsolicitation.
(a) Noncompetition
and NonSolicitation. During Executive’s employment hereunder and
for one year thereafter (the “Restriction Period”) regardless of how Executive’s
employment ends, Executive will not, directly or indirectly (whether as an
officer, director, employee, consultant, agent, advisor, stockholder, partner,
joint venturer, proprietor or otherwise): (1) engage or otherwise become
interested (in a capacity that is the same as or similar to any of his
capacities for the Company while employed by it) in any business or activity
that directly competes in a significant and material manner with any business
of
the Company (or any of its successors) 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 and ARMC, as
conducted during his last three years of employment with the Company, except
that notwithstanding any of the terms of this paragraph, Executive may continue
to engage in any outside for-profit business, employment or commercial activity
similar in scope, size and nature to any activity disclosed to the Company
under
the terms of paragraph 1 of this agreement; (2) solicit for employment, hire
as
an employee, consultant or independent contractor or induce the termination
of
employment of, any employee or other personnel who is, or was, within the six
month period prior to the date of such solicitation, hiring or inducement,
providing service to the Company, or (3) take any action intended to cause
any
vendor, customer or business associate of the Company or to terminate, sever,
reduce or otherwise adversely alter its relationship with the
Company.
(b) Reasonable
and Necessary Restrictions. Executive acknowledges that the
restrictions, prohibitions and other provisions hereof, including, without
limitation, the Restriction Period, are reasonable, fair and equitable in terms
of duration, scope and geographic area; are necessary to protect the legitimate
business interests of the Company; and are a material inducement to the Company
to enter into this Agreement.
(c) Forfeiture
of Severance Payments. In the event Executive breaches any
provision of this paragraph 10, as determined in any arbitration or court of
competent jurisdiction, in addition to any other remedies that the Company
may
have at law or in equity, Executive shall promptly reimburse the Company for
any
severance payments received from, or payable by, the Company, provided that
Company has provided written notice to Executive that it believes that he is
in
breach of the provisions of this paragraph and has provided him with at least
a
thirty (30) day period to cure such breach.
(d) Enforcement. Executive
acknowledges that in the event of any breach or threatened breach by Executive
of any of the covenants in paragraphs 8 through 11, the business interests
of
the Company will be irreparably injured, the full extent of the damages to
the
Company will be impossible to ascertain, monetary damages may not be an adequate
remedy for the Company, and the Company will be entitled to enforce such
covenants by temporary, preliminary, or permanent injunctive relief or other
equitable relief.
(e) Modification;
Severability. If any of the restrictions contained in paragraphs
8 through 11 are determined by any court of competent jurisdiction or other
adjudicator to be unenforceable by reason of their extending for too great
a
period of time or over too great a geographical area or by reason of their
being
too extensive in any other respect, then the court or adjudicator shall
interpret and modify such restriction(s) to be effective for the maximum period
of time for which it/they may be enforceable and over the maximum geographical
area as to which it/they may be enforceable and to the maximum extent in all
other respects as to which it/they may be enforceable. Such modified
restriction(s) shall be enforced by the court or adjudicator. In the
event that modification is not possible, then, because each of Executive’s
obligations in paragraphs 8 through 11 is a separate and independent covenant,
any unenforceable obligation shall be severed and all remaining obligations
shall be enforced.
11. Cooperation. At
all times during the term of this Agreement and for a period of three (3) years
thereafter (regardless of how employment ends), Executive will reasonably
cooperate with the Company in any litigation or administrative proceedings
involving any matters with which Executive was involved during his employment
by
the Company; provided that, following the term of this Agreement, such
activities will be scheduled at such times and locations as the Company and
Executive may mutually agree. The Company will reimburse Executive
for his reasonable out-of-pocket expenses, if any, incurred in providing such
assistance. In addition, if such assistance is provided by Executive
after his employment has terminated and at a time when he is not receiving
severance payments from the Company and not providing consulting services to
the
Company or ARMC, he shall be paid $350 per hour for his assistance.
12. Assignment. Neither
the Company nor Executive shall have the right to assign this Agreement or
any
obligation hereunder without the written consent of the other, except that,
subject to Executive’s rights under paragraph 5(g) above, if there is a Change
of Control, the Company may assign this Agreement to a successor or assignee
in
connection with a merger, consolidation, sale or transfer of assets of the
Company; provided, however, that such successor or assignee expressly assumes
all obligations of the Company under this Agreement.
13. Indemnification. The
Company shall indemnify Executive or his estate to the full extent provided
in
its articles of incorporation and/or its bylaws as of the date of this
Agreement.
14. No
Mitigation. Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Agreement or the Company’s
benefits plans by seeking other employment or otherwise, nor shall the amount
of
any payment or benefit provided for in this Agreement or the Company’s benefits
plans be reduced by any compensation or benefits earned by Executive either
as a
result of his engaging in business or his employment by another employer, or
by
retirement benefits payable after the termination of this
Agreement.
15. Indulgences. The
failure of the Company or Executive at any time or times to enforce its or
his
rights under this Agreement strictly in accordance with the same shall not
be
construed as having created a custom in any way or manner contrary to the
specific provisions of this Agreement or as having in any way or manner modified
or waived the same.
16. Notices. Any
notice required or permitted to be given by this Agreement shall be in writing
and shall be sufficiently given to the parties if delivered in person or sent
by
United States registered or certified mail or nationally recognized overnight
courier (return receipt requested) or by telefax (with evidence of successful
transmission) addressed to the respective parties at the following addresses
or
at such other addresses as may from time to time
be
designated in writing by the parties:
|
If
to the Company:
American
Rental Management Company
000
Xxxxxxxxx Xxxxxxx Xxxxxx
Xx.
Xxxxxxx Xxxxxxxx 00000
If
to the Executive:
Xx.
Xxxxx X. Xxxxx
c/o
American Rental Management Company
000
Xxxxxxxxx Xxxxxxx Xxxxxx
Xx.
Xxxxxxx, Xxxxxxxx 00000
|
17. Entire
Agreement. This Agreement, together with the attachments hereto,
sets forth the entire agreement between the parties with respect to the matters
covered herein, and supersedes all other agreements and
understandings. No waiver or amendment to this Agreement shall be
effective unless reduced to writing and executed by the parties
hereto.
18. Arbitration. All
disputes between Executive and the Company (except those relating to
unemployment compensation and workers’ compensation and except for disputes
arising under paragraphs 8 through 11 of this Agreement) arising out of
Executive’s employment or concerning the interpretation or application of this
Agreement or its subject matter (including without limitation those relating
to
any claimed violation of any federal, state or local law, regulation or
ordinance, such as Title VII of the Civil Rights Act, the Age Discrimination
in
Employment Act, the Americans with Disabilities Act and their state and local
counterparts, if any) shall be resolved exclusively by binding arbitration
in
Washington, D.C. pursuant to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association. Each party shall
bear its own attorneys’ fees and costs; provided, however, that the arbitrator
may award reasonable attorneys’ fees and costs to the prevailing
party. Any award of attorney’s fees and costs to Executive shall be
paid in a manner that does not violate section 409A of the
Code. The parties expressly waive their rights to have any
such claims resolved by jury trial. The arbitration opinion and award
shall be final, binding and enforceable by any court under the Federal
Arbitration Act.
19. Controlling
Law and Dispute Resolution. This Agreement shall be construed and
applied in accordance with the laws of Maryland without giving effect to the
principles of conflicts of law under Maryland law. The parties agree
to submit to the jurisdiction and venue of the state and federal courts located
in Maryland in the event that there is any claim that this Agreement has been
breached and that any such claim is not subject to arbitration as provided
in
paragraph 18 of this Agreement.
20. 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 Code Section 409A. To the extent such potential
payments or benefits could become subject to Code Section 409A, the parties
shall cooperate to amend this Agreement with the goal of giving Executive the
economic benefits described herein in a manner that does not result in such
tax
being imposed.
IN
WITNESS WHEREOF, this Agreement has been duly executed by and on behalf of
the
parties hereto as of the day and year first above written.
AMERICAN
RENTAL MANAGEMENT COMPANY
|
|
By:
|
/s/
J. Xxxxxxx Xxxxxx
|
|
|
Name:
|
J.
Xxxxxxx Xxxxxx
|
|
|
Title:
|
Chairman
|
|
|
Dated:
|
July
30, 2007
|
|
|
By:
|
/s/
J. Xxxxxxx Xxxxxx
|
|
|
Name:
|
J.
Xxxxxxx Xxxxxx
|
|
|
Title:
|
Chairman
|
|
|
Dated:
|
July
30, 2007
|
XXXXX
X.
XXXXX
By: /s/
Xxxxx X. Xxxxx
Xxxxx
X. Xxxxx
Dated: August
6,
2007
DMEAST
-
#9782859-v7
EXHIBIT
A
General
Release Agreement
THIS
GENERAL RELEASE AGREEMENT (the “Release”) is made and entered into as of this
____ day of _______________, 20__, by and among American Community Properties
Trust, a Maryland real estate investment trust (together with its subsidiaries,
the “Company”) and American Rental Management Company (“ARMC”), on the one hand,
and Xxxxx X. Xxxxx (the “Executive”) on the other hand.
WHEREAS,
the Company, ARMC and Executive entered into the Amended and Restated Executive
Employment Agreement (the “Employment Agreement”) effective as of June ____,
2007;
WHEREAS,
under the terms of the Employment Agreement, Executive is entitled to severance
payments as provided therein; and
WHEREAS,
the Employment Agreement conditions receipt of the severance payments upon
Executive’s signing and not revoking a valid General Release
Agreement.
NOW,
THEREFORE, intending to be legally bound hereby and in consideration of receipt
of the severance payments provided for in the Employment Agreement and for
other
good and valuable consideration, Executive, for himself, and his executors,
administrators, heirs and assigns, agrees as follows:
1. Executive
fully waives, releases, and forever discharges the Company and each and all
of
its past and present subsidiaries, parent and related corporations, companies
and divisions, and their past and present respective officers, directors,
shareholders, trustees, employees, attorneys, agents and affiliates, and their
predecessors, successors and assigns (collectively, the “Releasees”) of and from
any and all rights, debts, claims, actions, liabilities, agreements, damages,
or
causes of action (collectively, the “claims”), of whatever kind or nature,
whether in law or equity, whether known or unknown, that Executive ever had
or
now has in any capacity, either individually, or on behalf of another person
or
entity against any or all of the Releasees, for, upon, or by reason of any
cause, matter, thing or event whatsoever occurring at any time up to and
including the date Executive signs this Release. Executive
acknowledges and understands that the claims and rights being released in this
paragraph include, but are not limited to, all claims and rights arising from
or
in connection with any agreement of any kind Executive may have had with any
of
the Releasees, or in connection with Executive’s employment or termination of
employment, all claims and rights for wrongful discharge, breach of contract,
either express or implied, interference with contract, emotional distress,
back
pay, front pay, benefits, fraud, misrepresentation, defamation, claims and
rights arising under the Civil Rights Acts of 1964 and 1991, as amended (which
prohibit discrimination in employment based on race, color, national origin,
religion or sex), the Americans with Disabilities Act (ADA), as amended (which
prohibits discrimination in employment based on disability), the Age
Discrimination in Employment Act (ADEA), as amended (which prohibits age
discrimination in employment), Worker Adjustment and Retraining Notification
Act
(WARN), the National Labor Relations Act, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974 (ERISA), as amended, the Family
and Medical Leave Act (FMLA), as amended, the Health Insurance Portability
and
Accountability Act (HIPPA), Article 49B of the Maryland Code, and any and all
other claims or rights, whether arising under federal, state, or local law,
rule, regulation, constitution, ordinance or public policy. Executive
agrees that he will not initiate any civil complaint or institute any civil
lawsuit or file any arbitration against Releasees, or any one of them, based
on
any fact, action, event or circumstance occurring up to and including the date
of the execution by Executive of this Release. This Release and the
foregoing covenant not to xxx do not cover claims relating to: (i) Executive’s
right to indemnification under paragraph 13 of the Employment Agreement, or
pursuant to the Company’s articles of incorporation or bylaws as they may exist
from time to time, or pursuant to applicable law; (ii) Executive’s right to
benefits under the Company’s benefits plans due after termination of employment;
(iii) Executive’s right to payments under the Employment Agreement due after
termination of employment; or (iv) the validity or enforcement of this
Release.
2. Executive
waives any provision of state or federal law that explicitly or implicitly
would
prevent the application of this Release to claims of which Executive does not
know or expects to exist in Executive’s favor at the time of executing this
Release. In addition, Executive waives any provisions of state or
federal law which might require a more detailed specification of the claims
being released pursuant to the provisions of this Release.
3. Executive
acknowledges that he has carefully read and understands the provisions of this
Release, that he has had twenty-one (21) days from the date he received a copy
of this Release to consider entering into this Release and accepting the
severance payments set forth in the Employment Agreement, that if he signs
and
returns this Release before the end of the 21-day period, he will have
voluntarily waived his right to consider this Release for the full twenty-one
(21) days and that he has executed this Release voluntarily and with full
knowledge of its significance, meaning and binding effect. Executive
also acknowledges that the Company has advised him in writing to consult with
an
attorney of his own choosing with regard to entering into this Release and
accepting the severance payments set forth in the Employment
Agreement. Finally, Executive acknowledges that his decision to sign
this Release has not been influenced in any way by fraud, duress, coercion,
mistake or misleading information and that he has not relied on any information
except what is set forth in this Release and the Employment
Agreement.
4. Executive
acknowledges that he may revoke this Release within seven (7) days of his
execution of this document by submitting written notice of his revocation to
___________________________________________. Executive also
understands that this Release shall not become effective or enforceable until
the expiration of that 7-day period.
5. Executive
agrees that if any provision of this Release is declared invalid or
unenforceable by a court of competent jurisdiction, then such provision will
be
modified only to the extent necessary to cure such invalidity and with a view to
enforcing the parties’ intention as set forth in this Release to the extent
permissible and the remaining provisions of this Release shall not be affected
thereby and shall remain in full force and effect.
Dated: ________________ XXXXX
X.
XXXXX ____________________________________
