February 10, 1998
Mr. William M. Hammond
1225 Bent Creek Dr.
Southlake, TX 76092
Dear Bill:
In light of various changes in the operations of Gables Residential Trust
(the "Company"), the Company accepts your resignation effective March 27, 1998.
Based on our review of the facts surrounding your resignation, it has been
determined that the Company will provide you with the separation package
described below. In return for your agreements contained herein, including your
release of certain claims as described below, and subject to your performance of
your obligations under this agreement, the Company agrees, upon execution of
this letter to the following:
(1) The Company will pay you Two Hundred Thirty Thousand and No/100 Dollars
($230,000.00), in one lump sum, which amount represents your 1997 bonus as
well as severance. Such payment will be made to you prior to March 27,
1998. The Company will withhold applicable deductions for state and federal
taxes from this payment.
(2) The Company will continue your car allowance at the current rate through
March 27, 1998.
(3) The Company will continue to make contributions to your 401(k) plan at the
current rate through March 27, 1998.
(4) The Company will continue to provide you all benefits at the current level
through March 27, 1998. Subsequent to March 27, 1998, you will be eligible
to continue to participate in the Company's group health plan pursuant to
COBRA. Such COBRA premiums, to the extent you choose to participate, will
be your financial responsibility.
(5) All stock options issued to you that have not already vested by March 27,
1998 will become vested on March 27, 1998, with the exception of 1,700
unvested stock grants received in 1997 that will expire. You will have
until January 1, 2000 to exercise the following stock options:
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- 13,332 incentive share options dated January 26, 1994 at the exercise
price of $22.50.
- 20,334 non-qualified stock options dated January 26, 1994 at the
exercise price of $22.50. (You were originally granted 33,668 options,
and exercised 13,334 in 1997).
- 3,334 non-qualified stock options dated May 16, 1995 at the exercise
price of $20.375. (You were originally granted 10,000 options, and
exercised 6,666 in 1997).
(6) The Company agrees to sell you the office furniture in your office for an
amount to be agreed upon between you and the Company. In the event you
elect to purchase such furniture, you agree that the Company is authorized
to set off such amount against payments due you pursuant to this agreement.
(7) The Company agrees to release you from the terms of the non-competition
provision set forth in Section 9 of the Employment Agreement you entered
into with the Company on January 1, 1997, with the following exceptions:
For a period of one year, beginning March 27, 1998 through March 27,
1999, you agree not to solicitant the following:
Gables' personnel,
Gables' current third party fee clients, and
Gables' Corporate Housing client base.
However, the partial release of the non-competition provision in no way
releases you from your confidentiality obligations as set forth below.
(8) The Company agrees to reimburse you for your reasonable out-of-pocket
expenses associated with your continued work on behalf of the Company
through March 27, 1998.
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(9) The Company agrees that should you be sued in your capacity as a former
senior vice president for the Company, that you will be entitled to
coverage under the Director's and Officer's errors and omissions insurance
to the extent applicable and the Company agrees to indemnify you for all
reasonable expenses incurred and any judgments against you in your capacity
as a former director/officer to the extent that the Company, in its
discretion, determines that your actions as a senior vice president were
proper.
In consideration for the Company's agreement to provide you with the
benefits set forth in provisions (1) through (9) above, which you acknowledge to
be good and valid consideration, you voluntarily and knowingly agree as follows:
(a) You agree to cooperate with the Company in the transitioning of
your duties and responsibilities. Beginning February 27, 1998,
you agree that your property management responsibilities will
transition to John Rippel who will assume the direct reporting
responsibility for Vice Presidents Cathy Cabell and Marty Page.
Your Corporate Accommodations responsibilities will transition to
Dennis Rainosek who will assume the direct reporting
responsibility for Pam Wade, Sandra Barfield, Carol Cadriel, and
Lisa Waters. You further agree that you will continue to be
available for work and consultation through March 27, 1998 and
agree to continue to assist in the complete transitioning of your
duties and responsibilities within the Company.
(b) You further agree to cooperate with the Company subsequent to
March 27, 1998 with respect to any ongoing projects that remain
uncompleted at the time of your departure. You further agree to
cooperate with, assist, and provide testimony at the request of
the Company or its attorneys in any currently pending or future
litigation involving the Company.
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(c) For all times hereafter, you agree to protect and preserve the
confidentiality of and safeguard the Company's proprietary and/or
confidential information and to not use, directly or indirectly,
for your benefit or for the benefit of another, or disclose to
another, any of the Company's proprietary and/or confidential
information unless disclosures that are deemed confidential to
the Company are required by or pursuant to a court order or the
demands of a public agency. Confidential information will
include, without limitation, information concerning the Company's
financial affairs, strategic plans and objectives, business
plans, proprietary statistics, reports, pricing information,
customer data and contracts except to the extent that the
information is available to the public.
(d) Prior to March 27, 1998, you agree to deliver to the Company all
documents embodying any of the Company's proprietary and/or
confidential information.
(e) Prior to March 27, 1998, you agree to deliver to the Company all
property owned by the Company and in your possession.
As further consideration for the Company's obligations set forth herein,
you voluntarily and knowingly, fully and completely and forever release the
Company and its current or former directors, officers, stockholders, employees,
agents, attorneys and affiliates from any and all claims, actions, demands and
causes of action of whatever kind or character, whether now known or unknown,
that you may have or that you may claim to have against the Company or its
current or former directors, officers, stockholders, employees, agents,
attorneys or affiliates that are in any way connected with your employment with
the Company, your resignation from your position with the Company, or otherwise,
including without limitation any contractual claims of employment or tort claims
you may have or that you may claim to have, wrongful discharge or discrimination
in employment on the basis of race, color, sex, national origin, religion, age
under the Age Discrimination in Employment Act and related laws prohibiting age
discrimination, or disability, if any, you may have, and attorneys fees and
costs, if any, and any and all acts or failure to act in contravention of the
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Constitution, statutes or regulations of the United States or the constitution
or regulations of any state or local government including, but not limited to
state or federal securities laws, claims of fraud, breach of fiduciary duty, the
Texas Deceptive Trade Practices Act (or any similar act in any other state), or
the Racketeer Influenced and Corrupt Organizations Act occurring on or before
the effective date of this agreement and release.
In addition, you covenant and agree to keep the terms, conditions and
circumstances of your resignation from the Company, including this letter,
confidential and to not aid, abet, assist or render assistance in any form to
any person or entity pursuing, or that may in the future pursue, any claim
against the Company or its directors, officers, stockholders, employees, agents,
attorneys or affiliates of any nature unless required to do by law.
This letter is intended by you and the Company to be a legally valid and
binding agreement, to be construed in accordance with the laws of the State of
Texas. You and we agree that this letter is not to be construed as an admission
of liability by the Company in any respect, and the Company expressly denies any
liability to you whatsoever. You and we agree that any legal proceedings
instituted hereunder shall be conducted and litigated in the State of Texas and
the parties hereto consent to the jurisdiction and venue in the courts of Dallas
County, Texas. Nothing herein shall in any way limit or abridge the Company's
right to seek injunctive or similar equitable relief for the enforcement of its
rights hereunder. This letter sets forth the entire agreement between you and
the Company and its directors, officers, employees, agents, attorneys and
representatives relating to the separation of your employment from the Company
and fully supersedes any and all prior agreements or understandings between the
parties hereto, including the January 1, 1997 Employment Agreement executed by
you and the Company, pertaining to the subject matter hereof.
Very truly yours,
Gables Residential Trust
By: /s/ John Rippel
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John Rippel
President and COO
The law requires that you be advised and you are hereby advised to consult
with an attorney prior to executing this agreement and release. If you accept
the terms of this agreement and release, it must be signed by you and returned
to Mary Cheddie on or before twenty-one (21) days from your receipt of this
agreement and release. After the execution of this agreement and release, you
have a period of seven (7) days in which you may revoke this agreement and
release. Notification of revocation should be in writing and returned to Mary
Cheddie. The effective date of this agreement and release is eight (8) days
after you execute this agreement and release.
I have read and understood the forgoing agreement and release, have been
advised to and have had the opportunity to discuss it with anyone I desire,
including an attorney of my own choice, agree to its terms, acknowledge receipt
of a copy of same, and the sufficiency of the payments recited therein, and sign
this agreement and release voluntarily.
By: /s/ William M. Hammond
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Dated: 2/16/98
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