EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into
on this 18th day of July, 2003, by and among DAVID P. STOCKERT, an individual
resident of the State of Georgia (the "Executive"), and POST PROPERTIES, INC., a
Georgia corporation (the "Company"):
REASONS FOR THIS AGREEMENT. The Company has identified Executive as an
individual with significant skills and experience critical to the business of
the Company. In view of the significant and growing demand for executive talent,
the potential impact on the Company's executives of the transformational changes
occurring within our industry and company, and the need to ensure continuity of
the Company's senior management team, the Company desires to provide Executive
through this Agreement with certain incentives to remain in the Company's
employment. This Agreement is also designed to provide additional motivation for
meeting the Company's goals and objectives, to address potential long term
employment concerns of Executive, and to impose certain reasonable restrictions
on Executive's activities designed to protect the Company's interests should
Executive's employment terminate.
Executive acknowledges that the Company and Company Affiliates shall
disclose or make available Confidential Information and Trade Secrets to
Executive that could be used by Executive to the Company's or Affiliated
Companies' detriment. In addition, in connection with his employment, Executive
shall develop important relationships and contacts with employees valuable to
the Company and Affiliated Companies.
Executive further acknowledges that Sections 7, 8, 9, and 10 of this
Agreement are fair and reasonable, enforcement of the provisions of this
Agreement will not cause him undue hardship, and the provisions of this
Agreement are reasonably necessary and commensurate with the need to protect the
Company and Affiliated Companies and their business interests and property from
irreparable harm.
WHEREAS, the Company desires to employ Executive, and Executive desires
to be employed by the Company on the terms and conditions contained in this
Agreement, and in consideration of the mutual promises and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement, intending to be
legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1. Board. The term "Board" for purposes of this Agreement shall
mean the Board of Directors of the Company.
1.2 Cash Compensation. The term "Cash Compensation" for purposes
of this Agreement shall mean the sum of
(a) Executive's combined annual salary (as determined
without regard to any salary deferral election) from the Company
pursuant to Section 5.1 in effect on the day before Executive's
employment terminates under Section 4 or Section 6(a)(1) or, if
greater, Executive's average annualized combined annual salary (as
determined without regard to any salary deferral election) from the
Company pursuant to Section 5.1 over the three (3) consecutive year
period (or, if less, Executive's period of employment by the Company)
which ends on the date that Executive's employment so terminates, and
(b) the average annual bonuses which have been paid by
the Company beginning with the year 2003 pursuant to Section 5.2 or
which would have been paid pursuant to Section 5.2 but for a bonus
deferral election with respect to Executive's performance over the
three (3) consecutive year period which ends on the date that
Executive's employment so terminates (or, if less, Executive's period
of employment by the Company beginning with the year 2003) whether such
bonuses are paid (or would have been paid but for a bonus deferral
election) in cash, in property, or in any combination of cash and
property; provided, however,
(c) neither the value of any stock option or restricted
stock grants made by the Company to Executive in any calendar year, nor
any income which Executive realizes in any calendar year from the
exercise of any such stock options or the lapse of any restrictions on
such restricted stock grants, nor any payments under the Company's
Shareholder Value Plan or stock granted under Section 5.4 shall be
treated as part of Executive's salary under Section 1.2(a) or as part
of Executive's bonuses under Section 1.2(b).
1.3 Cause. The term "Cause" for purposes of this Agreement shall
(subject to Section 1.3(d)) mean:
(a) Executive is convicted of, pleads guilty to, or
confesses or otherwise admits to the Company, a prosecutor, or
otherwise publicly admits, any felony or any act of fraud,
misappropriation, or embezzlement, or Executive otherwise engages in a
fraudulent act or course of conduct;
(b) There is any material act or omission by Executive
involving malfeasance or negligence in the performance of Executive's
duties to the Company to the material detriment of the Company; or
(c) Executive breaches in any material respect any of the
covenants set forth in Section 7, Section 8, Section 9 or Section 10 of
this Agreement; provided, however,
(d) No such act or omission or event shall be treated as
"Cause" under this Agreement unless (i) Executive has been provided a
detailed, written statement of the basis for the Company's belief such
act or omission or event constitutes "Cause" and an opportunity to meet
with the Compensation Committee (together with Executive's counsel if
Executive chooses to have Executive's counsel present at such meeting)
after Executive has had a reasonable period in which to review such
statement and, if the allegation is under Section 1.3(b) or Section
1.3(c), has had at least a thirty (30) day period to take corrective
action, and (ii) the Compensation Committee after such meeting (if
Executive meets with the Compensation Committee) and after the end of
such thirty (30) day correction period (if applicable) determines
reasonably and in good faith and by the affirmative vote of at least a
majority of the members of the Compensation Committee then in office at
a meeting called and held for such purpose that "Cause" does exist
under this Agreement.
1.4. Change in Control. The term "Change in Control" for purposes
of this Agreement shall mean:
(a) a "change in control" of the Company of a nature that
would be required to be reported in response to Item 6(e) of Schedule
14A for a proxy statement filed under Section 14(a) of the Securities
Exchange Act as in effect on the date of this Agreement;
(b) a "person" (as that term is used in 14(d)(2) of the
Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly of securities
representing 45% or more of the combined voting power for election of
directors of the then outstanding securities of the Company;
(c) the individuals who at the beginning of any period of
two consecutive years or less (starting on or after the date of this
Agreement) constitute the Company's Board cease for any reason during
such period to constitute at least a majority of the Company's Board,
unless the election or nomination for election of each new member of
the Board was approved by vote of at least two-thirds of the members of
such Board then still in office who were members of such Board at the
beginning of such period;
(d) the shareholders of the Company approve any
reorganization, merger, consolidation, or share exchange as a result of
which the common stock of the Company shall be changed, converted, or
exchanged into or for securities of another organization (other than a
merger with a Company Affiliate identified in Section 1.7(a), (b) or
(c) of this Agreement or a wholly-owned subsidiary of the Company), or
any dissolution or liquidation of the Company, or any sale or the
disposition of 50% or more of the assets or business of the Company; or
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(e) the shareholders of the Company approve any
reorganization, merger, consolidation, or share exchange with another
corporation unless (i) the persons who were the beneficial owners of
the outstanding shares of the common stock of the Company immediately
before the consummation of such transaction beneficially own more than
60% of the outstanding shares of the common stock of the successor or
survivor corporation in such transaction immediately following the
consummation of such transaction and (ii) the number of shares of the
common stock of such successor or survivor corporation beneficially
owned by the persons described in Section 1.4(e)(i) immediately
following the consummation of such transaction is beneficially owned by
each such person in substantially the same proportion that each such
person had beneficially owned shares of Company common stock
immediately before the consummation of such transaction, provided (iii)
the percentage described in Section 1.4(e)(i) of the beneficially owned
shares of the successor or survivor corporation and the number
described in Section 1.4(e)(ii) of the beneficially owned shares of the
successor or survivor corporation shall be determined exclusively by
reference to the shares of the successor or survivor corporation which
result from the beneficial ownership of shares of common stock of the
Company by the persons described in Section 1.4(e)(i) immediately
before the consummation of such transaction.
1.5 Code. The term "Code" for purposes of this Agreement shall
mean the Internal Revenue Code of 1986, as amended.
1.6 Company. The term "Company" for purposes of this Agreement
shall mean the Company and any successor to the Company.
1.7 Company Affiliate. The term "Company Affiliate" for purposes
of this Agreement shall mean (a) Post Apartment Homes, L.P. and any successor to
such organization, (b) Post Services, Inc. and any successor to such
organization, (c) Post GP Holdings, Inc. and any successor to such organization
and (d) any other organization if the Company, Post Apartment Homes, L.P., Post
Services, Inc. or Post GP Holdings, Inc. (i) beneficially own more than twenty
percent (20%) of the outstanding voting capital stock of such organization (if
such organization is a corporation) or more than twenty percent (20%) of the
beneficial interests of such organization (if such organization is not a
corporation) as of the date of this Agreement and (ii) possess the power to
direct or cause the direction of the day to day operations and affairs of such
organization, whether through ownership of voting securities, by contract, in
the capacity of general partner, manager or managing member or otherwise as of
the date of this Agreement.
1.8 Compensation Committee. The term "Compensation Committee" for
purposes of this Agreement shall mean the Executive Compensation and Management
Development Committee of the Board.
1.9 Confidential or Proprietary Information. The term
"Confidential or Proprietary Information" for purposes of this Agreement shall
mean any secret, confidential, or proprietary information of the Company or a
Company Affiliate (not otherwise included in the definition of Trade Secret in
Section 1.18 of this Agreement) that has not become generally available to the
public by the act of one who has the right to disclose such information without
violating any right of the Company or a Company Affiliate.
1.10 Disability. The term "Disability" for purposes of this
Agreement shall mean that Executive, as a result of a mental or physical
condition or illness affecting a major life activity, is unable to perform the
essential functions of Executive's job at the Company for any consecutive
180-day period, even with reasonable accommodation, all as reasonably determined
by the Compensation Committee.
1.11 Effective Date. The term "Effective Date" for purposes of this
Agreement shall mean either the date which includes the "closing" of the
transaction which makes a Change in Control effective, if the Change in Control
is made effective through a transaction which has a "closing", or the date a
Change in Control is reported in accordance with applicable law as effective to
the Securities and Exchange Commission, if the Change in Control is made
effective other than through a transaction which has a "closing".
1.12 Exchange Act. The term "Exchange Act" for purposes of this
Agreement shall mean the Securities Exchange Act of 1934, as amended.
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1.13 Good Reason.
(1) The term "Good Reason" for purposes of Section 6 of this
Agreement shall (subject to Section 1.13(e)) mean:
(a) there is a reduction after a Change in Control, but
before the end of Executive's Protection Period, in Executive's salary
from the Company pursuant to Section 5.1 or there is a reduction after
a Change in Control, but before the end of Executive's Protection
Period, in Executive's eligibility to receive any bonuses from the
Company pursuant to Section 5.2 or incentive compensation from the
Company pursuant to Section 5.3 or Section 5.4 substantially different
from the eligibility of other senior Company executives to receive such
bonuses or incentive compensation, all without Executive's express
written consent;
(b) there is a reduction after a Change in Control, but
before the end of Executive's Protection Period, in the scope,
importance, or prestige of Executive's duties, responsibilities, or
authority at the Company (other than as a result of a mere change in
Executive's title, if such change in title is consistent with the
organizational structure of the Company following such Change in
Control) without Executive's express written consent;
(c) the Company at any time after a Change in Control,
but before the end of Executive's Protection Period (without
Executive's express written consent), transfers Executive's primary
work site from Executive's primary work site on the date of such Change
in Control or, if Executive subsequently consents in writing to such a
transfer under this Agreement, from the primary work site that was the
subject of such consent, to a new primary work site that is more than
35 miles from Executive's then current primary work site, unless such
new primary work site is closer to Executive's primary residence than
Executive's then current primary work site; or
(d) the Company fails (without Executive's express
written consent) after a Change in Control, but before the end of
Executive's Protection Period, to continue to provide to Executive
health and welfare benefits, deferred compensation benefits, executive
perquisites (other than the use of a company airplane for personal
purposes), and stock option and restricted stock grants that are in the
aggregate comparable in value to those provided to Executive
immediately prior to the Change in Control Date; provided, however,
(e) No such act or omission shall be treated as "Good
Reason" under Section 1.13(1) unless
(i) (A) Executive delivers to the Compensation
Committee a detailed, written statement of the basis for
Executive's belief that such act or omission constitutes Good
Reason, (B) Executive delivers such statement before the later
of (1) the end of the ninety (90) day period that starts on
the date there is an act or omission which forms the basis for
Executive's belief that Good Reason exists, or (2) the end of
the period mutually agreed upon for purposes of this Section
1.13(1)(e)(i)(B) in writing by Executive and the Chairman of
the Compensation Committee, (C) Executive gives the
Compensation Committee a thirty (30) day period after the
delivery of such statement to cure the basis for such belief,
and (D) Executive actually submits Executive's written
resignation to the Compensation Committee during the sixty
(60) day period that begins immediately after the end of such
thirty (30) day period if Executive reasonably and in good
faith determines that Good Reason continues to exist after the
end of such thirty (30) day period, or
(ii) the Company states in writing to Executive
that Executive has the right to treat any such act or omission
as Good Reason under this Agreement and Executive resigns
during the sixty (60) day period that starts on the date such
statement is actually delivered to Executive;
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(f) If (A) Executive gives the Compensation Committee the
statement described in Section 1.13(1)(e)(i) before the end of the
thirty (30) day period that immediately follows the end of the
Protection Period and Executive thereafter resigns within the period
described in Section 1.13(1)(e)(i), or (B) Post provides the statement
to Executive described in Section 1.13(1)(e)(ii) before the end of the
thirty (30) day period that immediately follows the end of the
Protection Period and Executive thereafter resigns within the period
described in Section 1.13(1)(e)(ii), then (C) such resignation shall be
treated under this Agreement as if made in Executive's Protection
Period; and
(g) If Executive consents in writing to any reduction
described in Section 1.13(1)(a) or Section 1.13(1)(b), to any transfer
described in Section 1.13(1)(c) or to any failure described in Section
1.13(1)(d) in lieu of exercising Executive's right to resign for Good
Reason and delivers such consent to the Company, the date such consent
is delivered to the Company thereafter shall be treated under this
definition as the date of a Change in Control for purposes of
determining whether Executive subsequently has Good Reason under this
Agreement to resign under Section 6.1 or Section 6.3 as a result of any
subsequent reduction described in Section 1.13(1)(a) or Section
1.13(1)(b), any subsequent transfer described in Section 1.13(1)(c), or
any subsequent failure described in Section 1.13(1)(d).
(2) The term "Good Reason" for purposes of Section 4 of this
Agreement shall mean:
(a) the Company changes Executive's eligibility for
compensation and benefits in a manner that results in Executive's compensation
and benefits being reduced five percent (5%) more than the reduction of other
senior Company executives' compensation and benefits; or
(b) there is a significant reduction in Executive's level
of responsibility or authority at the Company (other than a mere change in
Executive's title) without Executive's express written consent; or
(c) the Company transfers Executive's primary work site
from the Executive's primary work site on the date of this Agreement or, if the
Executive subsequently consents in writing to such a transfer under this
Agreement, from the primary work site that was the subject of such consent, to a
new primary work site that is more than 35 miles from Executive's then current
primary work site, unless such new primary work site is closer to Executive's
primary residence than Executive's then current primary work site or unless
Executive provides his express written consent.
(d) No such act or omission shall be treated as "Good
Reason" under Section 1.13(2) unless
(i) (A) Executive delivers to the Compensation Committee
a detailed, written statement of the basis for Executive's belief that such act
or omission constitutes Good Reason, (B) Executive delivers such statement
before the later of (1) the end of the ninety (90) day period that starts on the
date there is an act or omission which forms the basis for Executive's belief
that Good Reason exists, or (2) the end of the period mutually agreed upon for
purposes of this Section 1.13(2)(d)(i)(B) in writing by Executive and the
Chairman of the Compensation Committee, (C) Executive gives the Compensation
Committee a thirty (30) day period after the delivery of such statement to cure
the basis for such belief, and (D) Executive actually submits Executive's
written resignation to the Compensation Committee during the sixty (60) day
period that begins immediately after the end of such thirty (30) day period if
Executive reasonably and in good faith determines that Good Reason continues to
exist after the end of such thirty (30) day period, or
(ii) the Company states in writing to Executive that
Executive has the right to treat any such act or omission as Good Reason under
this Section 1.13(2) and Executive resigns during the sixty (60) day period that
starts on the date such statement is actually delivered to Executive.
1.14 Gross Up Payment. The term "Gross Up Payment" for purposes of
this Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (a) any excise tax described in Section 13 in full, (b) any
federal, state and local income tax and social security and other employment tax
on the payment made to pay such excise tax as well as any additional taxes on
such payment and (c) any interest or penalties assessed by the
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Internal Revenue Service on Executive which are related to the payment of such
excise tax unless such interest or penalties are attributable to Executive's
willful misconduct or gross negligence.
1.15 Multifamily Property. The term "Multifamily Property" for
purposes of this Agreement and any renewal of this Agreement shall mean any real
property on which an upscale multifamily residential-use development has been
constructed or is under construction as of the date of this or any renewal of
this Agreement.
1.16 Protection Period. The term "Protection Period" for purposes
of this Agreement shall (subject to Section 1.13(1)(f)) mean the three (3) year
period which begins on the Effective Date for a Change in Control.
1.17 Restricted Period. The term "Restricted Period" for purposes
of this Agreement shall mean the period which starts on the date Executive's
employment by the Company terminates for any reason or no reason and which ends
(i) on the first anniversary of such termination date for purposes of Section 9
and Section 10 and (ii) on the second anniversary of such termination date for
purposes of Section 7 and Section 8.
1.18 Trade Secret. The term "Trade Secret" for purposes of this
Agreement shall mean information, including, but not limited to, technical or
nontechnical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers that:
(a) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
disclosure or use, and
(b) is the subject of reasonable efforts by the Company
or a Company Affiliate to maintain its secrecy.
SECTION 2. EMPLOYMENT.
Subject to the terms of this Agreement, the Company hereby employs
Executive, and Executive hereby accepts such employment with the Company.
Executive shall initially serve as the President and Chief Executive Officer of
the Company and initially shall have the duties, rights, and responsibilities
normally associated with such positions, including oversight of the Company's
operations, development and execution of the Company's strategy, and management
of the Company's executive management team, as well as such other comparable
duties as assigned by the Company. Executive shall devote his full business
time, skills, and best efforts to rendering services on behalf of the Company
and shall exercise such care as is customarily required by executives
undertaking similar duties for entities similar to the Company.
SECTION 3. TERM.
Unless earlier terminated in accordance with Section 4, the employment
of Executive under this Agreement shall commence as of the date of this
Agreement and shall continue up to, but not including, the third anniversary of
such date; provided, however, that, unless the Board or Executive decides
otherwise, and notifies the other party of that decision in writing before an
anniversary of the date of this Agreement, the three year term of this Agreement
shall renew on the first anniversary of each successive anniversary of the date
of this Agreement so that the term of Executive's employment under this
Agreement shall never be less than two (2) years.
SECTION 4. TERMINATION.
4.1. General Rule. The Company may terminate this Agreement at any
time; provided, that if termination is without Cause or Executive resigns for
Good Reason, the Company shall continue to pay Executive pursuant to its
standard payroll practices all Cash Compensation owed to Executive under the
remaining term of this Agreement as if he were still employed. In addition, if
termination is without Cause or Executive resigns for Good Reason, the Company
shall, to the extent permitted, continue to provide to Executive for the
remaining term of the Agreement the same coverage and benefits as Executive was
provided under the Company's benefit plans pursuant
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to Section 5.9 of this Agreement on the day before Executive's employment
terminated. If the Company cannot provide such coverage and benefits under the
Company's employee benefit plans, the Company shall either provide such coverage
and benefits to Executive outside such plans at no additional expense or tax
liability to Executive or shall reimburse Executive for Executive's cost to
purchase such coverage and benefits and for any tax liability for such
reimbursements. In addition, notwithstanding anything contained herein to the
contrary, in the event that Executive is terminated without Cause or resigns for
Good Reason, Executive's options and restricted stock, and any compensation
owing under the Shareholder Value Plan shall continue to vest through the
remainder of the term of this Agreement as if Executive were still employed.
4.2 Company Loans. Executive currently has outstanding two loans
from the Company which were made to enable Executive to purchase shares of
Company stock. ("Loan A" and "Loan B"). The Company has previously agreed to
forgive the principal of one of Executive's loans ("Loan A") in the amount of
$100,000.00 per year ("Principal Reduction"). In the event Executive is
terminated without cause or resigns for Good Reason, the Company shall pay to
Executive within 30 days of the date of termination an amount equal to the
Principal Reduction that would have occurred if Executive had remained employed
by the Company or a Company Affiliate for the remainder of the Term under
Section 3 of this Agreement. If Executive receives a payment equal to the
Principal Reduction pursuant to this Section 4.2, Executive shall use that
payment to reduce the principal amount of Loan A. In the event Executive is
terminated without Cause or resigns for Good Reason, the Company shall also pay
Executive within thirty (30) days after the date Executive's employment so
terminates 140% (one hundred forty percent) of the excess, if any, of the then
principal and interest outstanding on each loan (as to Loan A, the principal
amount will be determined after it has been reduced by an amount equal to the
Principal Reduction) over the "total market value" of any shares of Company
stock purchased with the proceeds of that loan or, if such Company stock has
been converted into shares of stock in a successor corporation, the "total
market value" of such shares of stock in such successor corporation, where such
"total market value" shall be determined by multiplying the number of such
shares of stock by (1) the closing price for such shares on such termination
date as reported in The Wall Street Journal or, if there is no closing price on
such termination date, (2) the closing price for such shares of stock as
reported in The Wall Street Journal for the first date which immediately
precedes such termination date for which there is a closing price for such
shares of stock or, if The Wall Street Journal no longer reports a closing price
for such shares, (3) the fair market value of a share of such stock as
determined in any manner which is acceptable to Executive.
4.3. Termination for Cause. Notwithstanding anything contained
herein to the contrary, Executive further agrees that termination for Cause
shall result in the immediate termination and forfeiture of all rights to
compensation and benefits, including any options to purchase Company stock which
have not vested, as provided herein.
SECTION 5. COMPENSATION.
5.1. Base Salary. Commencing on the date of this Agreement, the
Company shall pay Executive during the term of Executive's employment under this
Agreement, an annual base salary of $375,000.00, less required deductions. The
Compensation Committee shall review Executive's Base Salary on an annual basis,
and the Compensation Committee, upon such review and in its sole discretion, may
increase or decrease Executive's Base Salary by an amount which the Compensation
Committee deems appropriate in light of the Company's and Executive's
performance during the period covered by such review; provided, however, that
Executive's Base Salary shall not be reduced below $375,000.00 per annum. The
Base Salary, less any required deductions, shall be paid to Executive in
accordance with the Company's standard payroll practices and procedures for
salaried employees.
5.2. Bonus. In addition to the annual Base Salary, Executive shall
be eligible to receive an annual bonus, provided that certain personal and
corporate goals to be established by the Compensation Committee are met or
exceeded. In the event that Executive is paid a bonus under Section 5.2 for any
period of time less than one year, Executive's bonus shall be a pro rata share
of the annual bonus.
5.3. Incentive Compensation. In addition to the annual Base Salary
and Bonus awarded under Section 5.1 and Section 5.2, Executive shall be eligible
to receive an option to purchase shares of the Company's common stock each year
in a number and at a price to be determined by the Compensation Committee.
Unless decided otherwise by the
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Compensation Committee in a manner consistent with the Company's practice with
respect to other senior Company executives, any options awarded pursuant to
Section 5.3 shall vest over a three-year period in the following manner:
One year after options granted: 33% of options vest
Two years after options granted: 33% of options vest
Three years after options granted: 34% of options vest.
In the event Executive is granted an option for any period of time less than one
year, Executive shall receive a pro rata share of the annual option grant.
5.4. Restricted Stock Awards And Shareholder Value Plan. In
addition to any other compensation provided in Sections 5.1, 5.2, and 5.3 of
this Agreement, Executive shall be eligible during the term of this Agreement to
receive an award of Restricted Stock and a Target Bonus under the Shareholder
Value Plan (the "Plan").
5.5 Automobile Allowance. In addition to any other compensation
provided in Sections 5.1, 5.2, 5.3, and 5.4 of this Agreement, Executive shall
receive an annual automobile allowance of $7,200.00 (Seven Thousand Two Hundred
Dollars). Executive shall have complete discretion with respect to the
expenditure of the Automobile Allowance.
5.6. Comparison With Other REIT's. At regular intervals the Company
shall continue to retain Compensation Consultants to assure that the total
compensation paid to Executive is comparable to that being paid to executives at
comparable Apartment REITs, and/or other REITs of a similar size, all as
determined by the Compensation Committee.
5.7. Expenses. Executive shall be reimbursed for all reasonable
business-related expenses incurred by Executive at the request of or on behalf
of the Company, including, without limitation, first class travel expenses
incurred in connection with the performance of Executive's duties and
responsibilities hereunder.
5.8. Vacation. In addition to Company holidays, Executive shall be
eligible to take up to four (4) weeks (20 business days) of vacation during each
calendar year. Vacation days not taken are forfeited and Executive will not
receive pay in lieu of vacation.
5.9. Benefit Plans. Executive shall be entitled to participate in
such medical, dental, disability, hospitalization, life insurance, and other
employee benefit plans as are maintained by the Company for the benefit of
senior executive officers.
SECTION 6. CHANGE IN CONTROL.
6.1. General Rule.
(1) If there is a Change in Control and either (a) the Company
during Executive's Protection Period terminates Executive's employment without
Cause, (b) Executive during Executive's Protection Period resigns for Good
Reason, or (c) Executive resigns for any or no reason whatsoever at any time
during the 90 day period that starts on the first anniversary of the Effective
Date, then the Company shall pay Executive three (3) times Executive's then Cash
Compensation in cash in a lump sum within thirty (30) days after the date
Executive's employment so terminates;
(2)(a) Each outstanding stock option granted to Executive by the
Company shall (notwithstanding the terms under which such option was granted)
become fully vested and exercisable on the date Executive's employment so
terminates and shall (notwithstanding the terms under which such option was
granted) remain exercisable for the remaining term of each such option (as
determined as if there had been no such termination of Executive's employment),
subject to the same terms and conditions as if Executive had remained employed
by the Company or a Company Affiliate for such term or such period (other than
any term or condition which gives the Company the right to cancel any such
option) and (b) any restrictions on any outstanding restricted stock grants to
Executive by the Company immediately shall (notwithstanding the terms under
which such grant was made) expire and Executive's right to such stock shall be
non-forfeitable; and
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(3) The Company from the date of such termination of Executive's
employment until the end of Executive's Protection Period shall continue to
provide to Executive (i) the same coverage and benefits as Executive was
provided under the Company's employee benefit plans pursuant to Section 5.9 of
this Agreement on the day before Executive's employment terminated or, at
Executive's election, on any date in the one (1) year period which ends on the
date of such termination of employment and (ii) the same executive perquisites
(other than use of a company airplane for personal purposes) as Executive
enjoyed on the day before Executive's employment terminated or, at Executive's
election, on any date in the one (1) year period which ends on the date of such
termination; provided, however, if the Company cannot provide such coverage and
benefits under the Company's employee benefit plans, the Company either shall
provide such coverage and benefits to Executive outside such plans at no
additional expense or tax liability to Executive or shall reimburse Executive
for Executive's cost to purchase such coverage and benefits and for any tax
liability for such reimbursements.
(4) The Company shall pay to Executive within 30 days of the date
of termination an amount equal to the Principal Reduction (as defined in Section
4.2 of this Agreement) that would have occurred if Executive had remained
employed by the Company or a Company Affiliate for the Protection Period. If
Executive receives a payment equal to the Principal Reduction pursuant to this
Section 6.1(4), Executive shall use that payment to reduce the principal amount
of Loan A (as defined in Section 4.2 of this Agreement). The Company shall also
pay Executive within thirty (30) days after the date Executive's employment so
terminates 140% (one hundred forty percent) of the excess, if any, of the then
principal and interest outstanding on each of Loan A and Loan B (as to Loan A,
the principal amount will be determined after it has been reduced by an amount
equal to the Principal Reduction) over the "total market value" of any shares of
Company stock purchased with the proceeds of the respective Loan A or Loan B (as
defined in Section 4.2 of this Agreement) or, if such Company stock has been
converted into shares of stock in a successor corporation, the "total market
value" of such shares of stock in such successor corporation, where such "total
market value" shall be determined by multiplying the number of such shares of
stock by (1) the closing price for such shares on such termination date as
reported in The Wall Street Journal or, if there is no closing price on such
termination date, (2) the closing price for such shares of stock as reported in
The Wall Street Journal for the first date which immediately precedes such
termination date for which there is a closing price for such shares of stock or,
if The Wall Street Journal no longer reports a closing price for such shares,
(3) the fair market value of a share of such stock as determined in any manner
which is acceptable to Executive.
(5) If Executive is entitled to and accepts benefits under Section
6 of this Agreement, Executive shall not be entitled to and shall not receive
any benefits under Section 4 of this Agreement.
6.2 No Increase In Other Benefits.
If Executive's employment terminates under the circumstances described
in Section 6.1(1) or Section 6.3, Executive expressly waives Executive's right,
if any, to have any payment made under Section 6.1 taken into account to
increase the benefits otherwise payable to, or on behalf of, Executive under any
employee benefit plan, whether qualified or unqualified, maintained by the
Company or a Company Affiliate.
6.3. Termination In Anticipation Of A Change In Control.
Executive shall be treated under Section 6.1 as if Executive's
employment had been terminated without Cause or Executive had resigned for Good
Reason during Executive's Protection Period if:
(1) Executive's employment is terminated by the Company
without Cause or Executive resigns for Good Reason,
(2) such termination is effected or such resignation is
effective at any time in the sixty (60) day period which ends on the
Effective Date of a Change In Control, and
(3) there is an Effective Date for such Change In
Control.
9
6.4. Death Or Disability.
Executive agrees that the Company will have no obligation to Executive
under this Section 6 if Executive's employment terminates exclusively as a
result of Executive's death or a Disability.
SECTION 7. NO SOLICITATION OF CUSTOMERS.
Executive will not, during the Restricted Period, for purposes of
competing with the Company or any Company Affiliate, solicit on Executive's own
behalf or on behalf of any other person, firm, or corporation which engages,
directly or indirectly, in the development, operation, management, leasing or
landscaping of a Multifamily Property, any customer of the Company or any
Company Affiliate with whom Executive had a personal business interaction at any
time during the two (2) years immediately prior to the termination of
Executive's employment by the Company. Section 7 shall not prohibit a general
solicitation not targeted at Company's customers and in which Executive has no
participation or involvement.
SECTION 8. ANTIPIRATING OF EMPLOYEES.
Executive will not during the Restricted Period employ or seek to
employ on Executive's own behalf or on behalf of any other person, firm or
corporation that engages, directly or indirectly, in the development, operation,
management, leasing, or landscaping of a Multifamily Property, any person who
was employed by the Company or any Company Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
the Company and with whom Executive had business dealings during the two (2)
year period which ends on the date Executive's employment by the Company
terminates (whether or not such employee would commit a breach of contract), and
who has not ceased to be employed by the Company or any Company Affiliate for a
period of at least one (1) year. Section 8 shall not prohibit a general
solicitation not targeted at Company employees and in which Executive has no
participation or involvement.
SECTION 9. TRADE SECRETS AND CONFIDENTIAL OR PROPRIETARY INFORMATION.
Executive hereby agrees to hold in a fiduciary capacity for the benefit
of the Company and each Company Affiliate, and will not directly or indirectly
use or disclose, any Trade Secret that Executive may have acquired during the
term of Executive's employment by the Company for so long as such information
remains a Trade Secret even if such information remains a Trade Secret after the
expiration of the Restricted Period.
In addition, Executive agrees during the Restricted Period to hold in a
fiduciary capacity for the benefit of the Company and each Company Affiliate,
and not to directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of Executive's employment by the Company.
SECTION 10. COVENANT NOT TO COMPETE.
During the Restricted Period, Executive shall not serve as an employee,
independent contractor, or otherwise render any advice or services similar to
those listed in Section 2 of this Agreement, directly or indirectly, to any
person, firm, or corporation listed on Appendix A of this Agreement with respect
to its operations in markets where the Company is currently engaged in business
Section Executive agrees that the entities listed on Appendix A are the
Company's principal competitors in the markets where the Company is currently
engaged in business Section Executive further agrees that Executive and the
Company will, in return for additional consideration, agree to update Appendix A
in connection with the annual renewal of this Agreement in order to fairly
include only the Company's principal competitors.
SECTION 11. REASONABLE AND NECESSARY RESTRICTIONS.
Executive acknowledges that the restrictions, prohibitions, and other
provisions set forth in this Agreement, including without limitation the
Restricted Period and those set forth in Sections 7, 8, 9, and 10, are
reasonable, fair and equitable in scope, terms, and duration; are necessary to
protect the legitimate business interests of the Company;
10
and are a material inducement to the Company to enter into this Agreement.
Executive covenants that Executive will not challenge the enforceability of this
Agreement nor will Executive raise any equitable defense to its enforcement.
SECTION 12. SPECIFIC PERFORMANCE.
Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that the Company likely will have no adequate
remedy at law if Executive shall fail to perform any of Executive's obligations
under this Agreement, and Executive therefore confirms that the Company's right
to specific performance of the terms of this Agreement is essential to protect
the rights and interests of the Company. Accordingly, in addition to any other
remedies that the Company may have at law or in equity, the Company will have
the right to have all obligations, covenants, agreements, and other provisions
of this Agreement specifically performed by Executive, and the Company will have
the right to obtain preliminary and permanent injunctive relief to secure
specific performance and to prevent a breach or contemplated breach of this
Agreement by Executive, and Executive submits to the jurisdiction of the courts
of the State of Georgia for this purpose.
SECTION 13. TAX PROTECTION.
If the Company or the Company's independent accountants (which shall
consider such issue upon the reasonable request of the Executive) determine that
any payments and benefits called for under this Agreement, together with any
other payments and benefits made available to Executive by the Company or a
Company Affiliate, will result in Executive's being subject to an excise tax
under Section 4999 of the Code or if such an excise tax is assessed against
Executive as a result of any such payments and other benefits, the Company shall
make a Gross Up Payment to or on behalf of Executive as and when any such
determination or assessment is made, provided Executive takes such action (other
than waiving Executive's right to any payments or benefits in excess of the
payments or benefits which Executive has expressly agreed to waive under this
Section 13) as the Company reasonably requests under the circumstances to
mitigate or challenge such tax; provided, however, if the Company or the
Company's independent accountants make such a determination and, further,
determine that Executive will not be subject to any such excise tax if Executive
waives Executive's right to receive a part of such payments or benefits and such
part does not exceed $25,000, Executive shall irrevocably waive Executive's
right to receive such part if an independent accountant or lawyer retained by
Executive and paid by the Company agrees with the determination made by the
Company or the Company's independent accountants with respect to the effect of
such reduction in payments or benefits. Any determinations under this Section 13
shall be made in accordance with Section 280G of the Code and any applicable
related regulations (whether proposed, temporary, or final) and any related
Internal Revenue Service rulings and any related case law and, if the Company
reasonably requests that Executive take action to mitigate or challenge, or to
mitigate and challenge, any such tax or assessment (other than waiving
Executive's right to any payments or benefits in excess of the payments or
benefits which Executive has expressly agreed to waive under this Section 13)
and Executive complies with such request, the Company shall provide Executive
with such information and such expert advice and assistance from the Company's
independent accountants, lawyers, and other advisors as Executive may reasonably
request and shall pay for all expenses incurred in effecting such compliance and
any related fines, penalties, interest, and other assessments.
SECTION 14. MISCELLANEOUS.
14.1. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon Executive and his executor, administrator, heirs,
personal representatives, and assigns, and the Company and its successors and
assigns; provided, however, that Executive shall not be entitled to assign or
delegate any of his rights or obligations hereunder without the prior written
consent of the Company.
14.2. Construction of Agreement. No provision of this Agreement or
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority, including an arbitrator, by reason of such party having or being
deemed to have structured or drafted such provision.
14.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
11
14.4. Survival of Agreements. All covenants and agreements made
herein shall survive the execution and delivery of this Agreement and the
termination of Executive's employment hereunder for any reason.
14.5. Headings. The paragraph and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
14.6. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:
(a) If to Executive:
Mr. David P. Stockert
1595 Lazy River Lane
Atlanta, GA 30350
(b) If to the Company:
Post Properties, Inc.
One Riverside
4401 Northside Parkway
Suite 800
Atlanta, GA 30327-3057
Attention: Corporate Secretary
with a copy to:
William A. Clineburg, Jr.
King & Spalding
191 Peachtree Street
Atlanta, GA 30303-1763
14.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
14.8. Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and, upon the
Effective Date, will supersede and replace all prior agreements, written or
oral, between the parties hereto or with respect to the subject matter hereof,
including the Change in Control Agreement between Executive and the Company
dated September, 2001, as amended, as in effect immediately before the date of
this Agreement. This Agreement may be modified only by a written instrument
signed by each of the parties hereto.
14.9 Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
14.10 No Waiver. No waiver by either party of any breach by the
other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Executive or an authorized officer
of the Company, as the case may be.
14.11 Reference; Non-Disparagement. In the event of Executive's
termination without Cause or resignation for Good Reason, the Company agrees to
provide Executive with a reference. The Company agrees not to disparage or
demean Executive, publicly or otherwise. Executive also agrees not to disparage
or demean the Company, Company Affiliates, Company officers or directors, or
Company shareholders, publicly or otherwise.
12
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
POST PROPERTIES, INC.
By: /s/ Robert C. Goddard, III
-----------------------------
Name: Robert C. Goddard, III
Title: Chairman of the Board
EXECUTIVE
/s/ David P. Stockert
---------------------------------
David P. Stockert
13
APPENDIX A
AMLI Residential Properties Trust
Apartment Investment and Management Company (AIMCO)
Archstone-Smith
AvalonBay Communities, Inc.
Camden Property Trust
Cornerstone Realty Income Trust Inc.
Equity Residential
Fairfield Properties, L.P.
Gables Residential Trust
Harold A. Dawson Company Inc.
JPI
Julian LeCraw & Co., Inc.
Lane Company
Lincoln Property Company
Mid-America Apartment Communities, Inc.
Summit Properties Inc.
The Finger Companies
The Hanover Company
Trammell Crow Residential
United Dominion Realty Trust
Wood Partners, LLC
14