Exhibit 99.3
This Agreement (the "AGREEMENT") dated as of October 23, 2005 is entered by
and among Xxxxxxx X. Xxxx ("EXECUTIVE"), AMLI Residential Properties Trust (the
"REIT"), AMLI Residential Properties, L.P. (the "OPERATING PARTNERSHIP") and
Prime Property Fund, LLC ("PURCHASER"), as third party beneficiary.
WHEREAS, concurrently with the execution and delivery of this Agreement,
the REIT, the Operating Partnership, Purchaser, Atom Acquisition LLC and Atom
Acquisition Partners, L.P. are entering into an Agreement and Plan of Merger
(the "MERGER AGREEMENT") pursuant to which the REIT will be merged with and into
Atom Acquisition LLC (the surviving entity in such merger being the "COMPANY")
and Atom Acquisition Partners, L.P. will be merged with and into the Operating
Partnership (the surviving entity in such merger being the "PARTNERSHIP") and
the Company and the Partnership will become wholly-owned by Purchaser
(collectively, the "MERGERS"); and
WHEREAS, upon consummation of the Mergers, Purchaser desires to secure the
continued services and employment of Executive for the Company on the terms and
conditions described herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto agree as follows:
SECTION 1. Effective Date; Status of Existing Employment Agreement. This
Agreement shall become effective upon consummation of the Mergers (the
"EFFECTIVE DATE"). Upon the termination of the Merger Agreement or if the
Mergers do not become effective for any reason, then this Agreement shall become
null and void. Executive's existing employment agreement with the REIT and the
Operating Partnership, as amended and restated dated as of February 2, 2004 (the
"ORIGINAL AGREEMENT"), shall continue to be in full force and effect according
to its terms until the Effective Date and, except to the extent provided herein,
shall terminate at the Effective Date as a result of a Change in Control and
Change in Circumstances as defined therein.
SECTION 2. Term of Employment Services. The term of this Agreement and
Executive's employment with the Company shall commence on the Effective Date and
shall continue until the first anniversary of the Effective Date (such term, the
"EMPLOYMENT TERM") unless Executive's employment is terminated before then.
During the Employment Term, Executive's employment shall be "at-will." At the
end of the Employment Term (or upon termination of employment if before then)
Executive's employment with the Company shall terminate and Executive shall not
be entitled to any payments or benefits in respect of his employment or
termination of employment, other than any earned but unpaid Base Salary (as
defined in Section 4) for the period ending on the date of termination and any
payments due under Section 5 of this Agreement.
SECTION 3. Employment Term Position, Duties and Responsibilities. During
the Employment Term, Executive shall serve as the Chief Executive Officer and as
Chairman of the Board of the Company. Executive shall devote such time and
attention to the business and affairs of the Company and the Partnership as
shall be necessary to discharge his responsibilities hereunder and shall use his
best efforts, skills and abilities to promote the Company's and the
Partnership's interests.
SECTION 4. Base Salary. During the Employment Term, subject to Executive's
continued employment hereunder, Executive shall be paid an annualized base
salary of $375,000 ("BASE SALARY"), payable in accordance with the regular
payroll practices of the Company.
SECTION 5. Annual Incentive Award. During the Employment Term, subject to
Executive's continued employment hereunder, Executive shall be entitled to
receive an annual bonus, which bonus amount shall be paid in the discretion of
the Board of Directors of the Company (the "BOARD"), subject to the achievement
of performance goals established by the Board; provided, however, that, except
as set forth below, Executive's annual bonus hereunder shall not be less than
50% of the annual bonus he receives for 2005 (excluding any special bonus
related to consummation of the Mergers). If Executive's employment is terminated
for any reason within the three-month period beginning on the Effective Date or
if Executive's employment is terminated at any time by the Company for Cause (as
such term is defined in Paragraph 4(b) of the Original Agreement), Executive
shall not be entitled to the payment of any bonus with respect to his employment
hereunder. After such three-month period, if Executive's employment is
terminated during the remainder of the Employment Term by the Company without
Cause, Executive shall be entitled to a pro-rata annual bonus based on the
number of days within the Employment Term that he was employed by the Company.
SECTION 6. Employee Benefit Programs. During the Employment Term, subject
to Executive's continued employment hereunder, Executive shall be entitled to
receive medical, health and other welfare benefits that are substantially
similar to the benefits he was receiving from the REIT and the Operating
Partnership prior to the Effective Date. In addition, Executive shall be
entitled to such other benefits (club, tax preparation reimbursement, etc) as
were in place for Executive prior to the Effective Date.
SECTION 7. Confidentiality; Non-competition; Remedies. Executive
acknowledges and agrees that Paragraphs 5, 6 and 7 of the Original Agreement
("Confidentiality," "Non-competition" and "Remedies") shall be incorporated
herein as if fully stated herein, except that Section 6 ("Non-competition"), as
of and following the Effective Date, shall be amended as provided for herein.
The "Non-competition Period" shall mean the period of time that Executive is
employed by the Company and for one-year following a termination of Executive's
employment for any reason (including termination as a result of the
2
expiration of the Employment Term); provided that (x) if Executive's employment
is terminated for any reason other than for Cause prior to the end of the
Employment Term and the Company continues to pay Executive Base Salary, the
Non-competition Period shall be that period of time that Executive continues to
receive Base Salary following his termination plus the one-year period beginning
on the date that such salary continuation ceases and (y) if Executive's
employment is terminated for Cause during the Employment Term, the
Non-competition Period shall be that period of time that begins on the date of
termination and ends on the two-year anniversary of the Effective Date. In no
event shall the Non-competition Period exceed two years. For the avoidance of
doubt, nothing contained herein shall alter the at-will nature of Executive's
employment.
SECTION 8. Third Party Beneficiary. Executive hereby agrees and
acknowledges that Purchaser shall be a third party beneficiary to this
Agreement.
SECTION 9. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of Illinois without reference to principles of
conflict of laws.
SECTION 10. Withholding. All compensation payable under this Agreement
shall be subject to all applicable withholding and other employment taxes.
SECTION 11. Amendments. No amendment shall be made except in writing with
the approval of all the parties hereto. Prior to the Effective Date, any
approval of an amendment to this Agreement by the REIT or the Operating
Partnership shall require the approval of the Board of Trustees of the REIT.
SECTION 12. Entire Agreement. This Agreement constitutes the full and
complete understanding of the parties hereto, whether oral or written, as to the
subject matter hereof.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts.
3
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
AMLI RESIDENTIAL PROPERTIES, L.P.
By: AMLI Residential Properties Trust,
its general partner
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
PRIME PROPERTY FUND, LLC, as third party
beneficiary
By: Xxxxxx Xxxxxxx Real Estate Advisor,
Inc., its Manager
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
