EXHIBIT 10.2
This Retirement and Transition Services Agreement (this “Agreement”) is entered into as of October 19, 2022, by and between Thomas L. Grimes, Jr. (“Executive”), on the one hand, and MID-AMERICA APARTMENT COMMUNITIES, INC. and MID-AMERICA APARTMENTS, L.P., on behalf of each entity and all of their respective affiliates (individually and collectively, as the context requires, “MAA”).
WHEREAS, Executive is employed by MAA, most recently as Executive Vice-President and Chief Operating Officer;
WHEREAS, Executive understands that his employment with MAA will be terminated effective December 31, 2022 (the “Retirement Date”); and
WHEREAS, Executive wishes to accept the payments described in this Agreement pursuant to the terms and conditions set forth herein (the “Payments”).
NOW, THEREFORE, in consideration of each party’s execution of this Agreement, other good and valuable consideration, the receipt and sufficiency of which is hereby irrevocably acknowledged by each party, and the mutual recitals, declarations and representations of the parties as set forth in this Agreement, the parties to this Agreement hereby stipulate and agree as follows:
(a) To pay Executive a lump sum severance payment representing Twelve (12) months of Executive’s base salary in the amount of Five Hundred Fifty-Eight Thousand Three Hundred Seventy-Three and 00/100 Dollars ($558,373.00) within thirty (30) days following the Retirement Date.
(b) To pay Executive a lump sum payment equal to the annual bonus to which Executive would have been entitled under the 2022 annual incentive plan but for the termination of Executive’s employment as of the Retirement Date as soon as reasonably practicable after MAA’s financial results for 2022 are determined but in no event later than March 15, 2023.
(c) In accordance with and pursuant to MAA’s medical, dental, and vision plans, Executive’s coverage will cease as of the Retirement Date. Executive may elect to continue medical, dental, and vision coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) by completing the COBRA election notice. Within thirty days of the Retirement Date, MAA will pay Executive a lump sum in the amount of $18,074.64. If Executive decides to elect COBRA coverage, (i) Executive will be solely responsible for making timely premium payments for such COBRA coverage, and (ii) Executive will pay the applicable full COBRA premium and the 2% administrative fee to the COBRA Administrator, WEX Health, to continue coverage.
(d) Executive’s annual premiums for the Supplemental Individual Disability Insurance policies through Unum and Lloyd’s of London have been paid by MAA through April 30, 2023. The total annual premium for both policies in the amount of $29,107.72 will be reported as taxable income.
(e) In addition to tax withholdings, if required pursuant to MAA’s 401(k) or Non-Qualified Deferred Compensation plan, amounts may be deducted from payments described in this Agreement and treated as contributions under the respective plan document. Executive will remain eligible for the total vested value of Executive’s account under each plan. Questions regarding either account should be directed to Empower at (844) 465-4455.
(f) Executive will continue to have access to the Executive Assistance Program at MAA’s expense through June 30, 2024 for EAP support as needed. The EAP can be reached at (888) 371-1125.
(g) To provide career transition services through Lee Hecht Harrison for a period of up to six (6) months from the Retirement Date or until employment is obtained, whichever occurs first. Career transition services under this subsection will terminate and forever lapse if Executive is employed by MAA or an affiliate of MAA or in the event of Executive’s breach of this Agreement. Executive will not receive the cash equivalent cost of the career transition services should Executive choose not to use it.
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(a) No payment or benefits to be paid to the Executive, if any, under this Agreement or otherwise, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until the Executive has a separation from service within the meaning of Section 409A.
(b) If, at the time of the Executive’s termination of employment, the Executive is a specified employee within the meaning of Section 409A, then the payment of the Deferred Payments will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that the Executive will receive payment on the first payroll date that occurs on or after the date that is six (6) months and one (1) day following the Executive’s termination of employment.
(c) MAA reserves the right to amend this Agreement as it considers necessary or advisable, in its sole discretion and without the consent of the Executive or any other individual, to comply with any provision required to avoid the imposition of the additional tax imposed under Section 409A or to otherwise avoid income recognition under Section 409A prior to the actual payment of any benefits or imposition of any additional tax.
(d) Each payment, installment, and benefit payable under this Agreement is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2). In no event will MAA reimburse, indemnify, or hold harmless the Executive for any taxes, penalties and interest that may be imposed, or other costs that may be incurred, as a result of Section 409A.
Any reimbursements or in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during the period of time specified in the Agreement, (B) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (D) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
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THIS AGREEMENT IS EXECUTED BY EXECUTIVE WITHOUT RELIANCE ON ANY REPRESENTATIONS BY MAA, OR ANY OF ITS REPRESENTATIVES, AND EXECUTIVE FURTHER STATES THAT HE HAS CAREFULLY READ THE FOREGOING RELEASE, HAS BEEN ADVISED OF ITS MEANING AND CONSEQUENCES, HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, IS AWARE THAT BY SIGNING THIS AGREEMENT HE IS GIVING UP AND WAIVING LEGAL RIGHTS, KNOWS AND UNDERSTANDS THE CONTENTS THEREOF AND SIGNS THE SAME AS HIS OWN FREE ACT.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates written below:
/s/ Thomas L. Grimes, Jr.
Thomas L. Grimes, Jr.
Date: October 19, 2022
Mid-America Apartment Communities, Inc., on behalf of itself and all its affiliates
By: /s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr.
Chief Executive Officer
Date: October 19, 2022
Mid-America Apartments, L.P., on behalf of itself and its affiliates
By: Mid-America Apartment Communities, Inc.
Its: General Partner
By: /s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr.
Chief Executive Officer
Date: October 19, 2022
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EXHIBIT A
This Release (this “Release”) is entered into as of December 31, 2022, by and between Thomas L. Grimes, Jr. (“Executive”), on the one hand, and MID-AMERICA APARTMENT COMMUNITIES, INC. and MID-AMERICA APARTMENTS, L.P., on behalf of each entity and all of their respective affiliates (individually and collectively, as the context requires, “MAA”).
WHEREAS, pursuant that certain Retirement and Transition Services Agreement between Executive and MAA dated October 19, 2022 (the “Agreement”), Executive is required to execute and deliver this Release as a condition to receipt of the Payments (as defined in the Agreement).
NOW, THEREFORE, in consideration of Executive’s execution of this Release, other good and valuable consideration, the receipt and sufficiency of which is hereby irrevocably acknowledged Executive agrees as follows:
In consideration for the payment by MAA of the Payments (as defined in the Agreement) to Executive and other good and valuable consideration described herein, and with the exception of claims that cannot be released as a matter of law, Executive hereby releases MAA (including its parents, subsidiaries, affiliates, and merged and/or affiliated corporations or entities) and its directors, officers, agents and employees, of all causes of action, claims, debts, contracts and agreements which Executive or his heirs may have for any cause known or unknown, including any and all claims relating to my employment and termination of employment; including but not limited to those under federal, state and local laws prohibiting employment discrimination, including but not limited to, any claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act; the Equal Pay Act, the Americans With Disabilities Act, the Americans With Disabilities Amendment Act, the Family and Medical Leave Act, the Pregnancy Discrimination Act, Section 1981 of the Civil Rights Act of 1866, Employee Retirement Income Security Act of 1974, any similar state statutes (including the Tennessee Human Rights Act, Tennessee Public Protection Act, Tennessee Disability Act), and any tort (including, but not limited to, wrongful discharge) or contract claims. This Agreement does not waive or release any claims that may arise after the date of the signing of the Agreement, nor does it waive any vested rights which accrued on the Executive’s behalf as a result of his participation in any benefit plan or plans of MAA, under the terms and conditions set forth in such plan or plans as of the date of Executive’s termination. Executive acknowledges he has been paid all compensation due and owing to him and has no claims for compensation under the Fair Labor Standards Act. Executive further acknowledges that he has received all time entitled under the Family and Medical Leave Act and that he has no workers’ compensation claims that have not been reported to MAA.
IN WITNESS WHEREOF, the parties hereto have executed this Release as of the dates written below:
/s/ Thomas L. Grimes, Jr. October 19, 2022
Thomas L. Grimes, Jr. DATE
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