EXHIBIT 10.1
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT
THIS EMPLOYMENT AGREEMENT, or "Agreement", is made and entered into as
of this 11th day of October, 2004, or "Agreement Date", by and among MARTIN
HOWLE or "Executive", and POST PROPERTIES, INC., or "Post", POST APARTMENT
HOMES, L.P., or "Post Apartment Homes", and POST SERVICES, INC., or "Post
Services":
WHEREAS, Post, Post Apartment Homes, and Post Services desire
collectively to employ Executive on the terms and conditions set forth in this
Agreement; and
WHEREAS, Executive desires to be employed collectively by Post, Post
Apartment Homes and Post Services on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Post, Post Apartment
Homes, Post Services and Executive, intending to be legally bound, hereby agree
as follows:
SECTION 1. DEFINITIONS.
1.1. Affiliate. The term "Affiliate" for purposes of this Agreement
shall mean (a) Post Apartment Homes, (b) Post Services, (c) Post GP Holdings,
Inc. and any successor to such organization and (d) any other organization if
Post, Post Apartment Homes, Post Services or Post GP Holdings, Inc. (i)
beneficially own more than 20% of the outstanding voting capital stock of such
organization (if such organization is a corporation) or more than 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.
1.2. Agreement Date. The term "Agreement Date" for purposes of this
Agreement shall mean the date this Agreement is made and entered into as set
forth in the preamble to this Agreement.
1.3. Base Salary. The term "Base Salary" for purposes of this
Agreement shall mean Executive's annual base salary under Section 4.1 as in
effect on the date Executive is no longer employed by Post, Post Apartment Homes
or Post Services or, if greater, Executive's average annual base salary under
Section 4.1 for the 3 year period (or, if Executive was employed for less than 3
years, the period of Executive's employment by Post, Post Apartment Homes or
Post Services) which ends on the date Executive is no longer employed by Post,
Post Apartment Homes or Post Services.
1.4. Board. The term "Board" for purposes of this Agreement shall
mean the Board of Directors of Post.
1.5. Cause. The term "Cause" for purposes of this Agreement shall
(subject to Section 1.5(d)) mean:
(a) Executive is convicted of, pleads guilty to, or
confesses or otherwise admits to Post or an Affiliate or a prosecutor,
or otherwise publicly admits, any felony or any act of fraud,
misappropriation, or embezzlement, or Executive 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 Post or an Affiliate to the material detriment of Post or
such Affiliate; 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 Post's belief such act or
omission or event constitutes "Cause" and an opportunity to meet with
the 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 1.5(b) or Section 1.5(c), has had at
least a 30 day period to take corrective action, and (ii) the Committee
after such meeting (if Executive meets with the Committee) and after
the end of such 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 Committee then in office at a meeting
called and held for such purpose that "Cause" does exist under this
Agreement.
1.6. Change in Control. The term "Change in Control" for purposes
of this Agreement shall mean:
(a) a "change in control" of Post 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 Exchange Act as in
effect on the Agreement date;
(b) a "person" (as that term is used in Section 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 Post;
(c) the individuals who at the beginning of any period of
two consecutive years or less (starting on or after the Agreement Date)
constitute Post's Board cease for any reason during such period to
constitute at least a majority of Post'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;
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(d) the shareholders of Post approve any reorganization,
merger, consolidation, or share exchange as a result of which the
common stock of Post shall be changed, converted, or exchanged into or
for securities of another organization (other than a merger with an
Affiliate or a wholly owned subsidiary of Post), or any dissolution or
liquidation of Post, or any sale or the disposition of 50% or more of
the assets or business of Post; or
(e) the shareholders of Post 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 Post 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 1.6(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 Post common stock immediately before the
consummation of such transaction, provided (iii) the percentage
described in Section 1.6(e)(i) of the beneficially owned shares of the
successor or survivor corporation and the number described in Section
1.6(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 Post by the
persons described in Section 1.6(e)(i) immediately before the
consummation of such transaction.
1.7. Code. The term "Code" for purposes of this Agreement shall
mean the Internal Revenue Code of 1986, as amended.
1.8. Committee. The term "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 Post or an
Affiliate (not otherwise included in the definition of Trade Secret in Section
1.22 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 Post or an 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 Post, Post Apartment Homes and Post
Services for any consecutive 180-day period, even with reasonable accommodation,
all as reasonably determined by the 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
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"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.
1.13. Good Reason.
(1) The term "Good Reason" for purposes of Section 5 of this
Agreement shall (subject to 1.13(1)(e)) mean:
(a) There is a change in 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 in compensation and benefits effected with respect to
executives of Post, Post Apartment Homes and Post Services whose status
as an executive is comparable to Executive's then status; or
(b) There is a significant reduction in Executive's level
of responsibility or authority (other than a mere change in Executive's
title) without Executive's express written consent; or
(c) There is a transfer of Executive's primary work site
from the Executive's primary work site on the Agreement Date 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; or
(d) Post fails to agree (other than as a result of Cause
or Executive's refusal to update Appendix A to this Agreement) to an
extension of the term of this Agreement under Section 3 at any time
before Executive reaches age 60; provided, however,
(e) No such act or omission shall be treated as "Good
Reason" under this Section 1.13(1) (other than a failure described in
Section 1.13(1)(d)) unless
(i) (A) Executive delivers to the 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 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 Committee, (C)
Executive gives the Committee a 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 Committee during the 60 day period that
begins immediately
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after the end of such 30 day period if Executive reasonably
and in good faith determines that Good Reason continues to
exist after the end of such 30 day period, or
(ii) Post 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(1) and Executive resigns
during the 60 day period that starts on the date such
statement is actually delivered to Executive.
(2) The term "Good Reason" for purposes of Section 6 of this
Agreement shall (subject to Section 1.13(2)(f)) mean:
(a) There is a reduction after a Change in Control, but
before the end of Executive's Protection Period, in Executive's Base
Salary pursuant to Section 4.1 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 or other compensation
pursuant to Section 4.2, Section 4.3 or Section 4.4 substantially
different from the eligibility of other executives of Post, Post
Apartment Homes and Post Services whose status as an executive is
comparable to Executive's then status to receive such bonuses or
incentive compensation, all without Executive's express written
consent; or
(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 (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 Post, Post Apartment Homes and Post Services following
such Change in Control) without Executive's express written consent; or
(c) There is a transfer at any time after a Change in
Control, but before the end of Executive's Protection Period (without
Executive's express written consent), of 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) There is a failure (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;
(e) Post fails to agree (other than as a result of Cause
or Executive's refusal to update Appendix A to this Agreement) to an
extension of the term of this Agreement under Section 3 at any time
before Executive reaches age 60; provided, however,
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(f) No such act or omission shall be treated as "Good
Reason" under this Section 1.13(2) (other than a failure described in
Section 1.13(2)(e)) unless
(i) (A) Executive delivers to the 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 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)(f)(i)(B) in
writing by Executive and the Chairman of the Committee, (C)
Executive gives the Committee a 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 Committee during the 60 day period that
begins immediately after the end of such 30 day period if
Executive reasonably and in good faith determines that Good
Reason continues to exist after the end of such 30 day period,
or
(ii) Post 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 60 day period that starts on the date such statement is
actually delivered to Executive.
(g) For purposes of this Agreement, if (A) Executive
gives the Committee the statement described in Section 1.13(2)(f)(i)
before the end of the 30 day period that immediately follows the end of
the Protection Period and Executive thereafter resigns within the
period described in Section 1.13(2)(f)(i), or (B) Post provides the
statement to Executive described in Section 1.13(2)(f)(ii) before the
end of the 30 day period that immediately follows the end of the
Protection Period and Executive thereafter resigns within the period
described in Section 1.13(2)(f)(ii), then (C) such resignation shall be
treated under this Agreement as if made during Executive's Protection
Period.
(h) For purposes of this Section 1.13(2), if Executive
consents in writing to any reduction described in Section 1.13(2)(a) or
Section 1.13(2)(b), to any transfer described in Section 1.13(2)(c) or
to any failure described in Section 1.13(2)(d) in lieu of exercising
Executive's right to resign for Good Reason and delivers such consent
to Post, the date such consent is delivered to Post 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 6.2 as a
result of any subsequent reduction described in Section 1.13(2)(a) or
Section 1.13(2)(b), any subsequent transfer described in Section
1.13(2)(c), or any subsequent failure described in Section 1.13(2)(d).
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
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additional taxes on such payment and (c) any interest or penalties assessed by
the 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 extension of
this Agreement.
1.16. Post. The term "Post" for purposes of this Agreement shall
mean Post Properties, Inc. and any successor to Post Properties, Inc.
1.17. Post Apartment Homes. The term "Post Apartment Homes" for
purposes of this Agreement shall mean Post Apartment Homes, L.P. and any
successor to Post Apartment Homes, L.P.
1.18. Post Services. The term "Post Services" for purposes of this
Agreement shall mean Post Services, Inc. and any successor to Post Services,
Inc.
1.19. Protection Period. The term "Protection Period" for purposes
of this Agreement shall (subject to Section 1.13(2)(g)) mean the 2 year period
which begins on the Effective Date for a Change in Control.
1.20. Restricted Period. The term "Restricted Period" for purposes
of this Agreement shall mean the period which starts on the date Executive's
employment by Post 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.
1.21. Shareholder Value Plan. The term "Shareholder Value Plan" for
purposes of this Agreement shall mean the Post Properties, Inc. 2002 Shareholder
Value Plan, as amended, and any successor to such plan.
1.22. Trade Secret. The term "Trade Secret" for purposes of this
Agreement shall mean information in the possession of Post or an Affiliate,
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 Post or an
Affiliate to maintain its secrecy.
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1.23. Value Creation Program. The term "Value Creation Program" for
purposes of this Agreement shall mean the Post Properties, Inc. 2003 Incentive
Stock Plan Value Creation Stock Grant Program, as amended, and any successor to
such program.
SECTION 2. EMPLOYMENT.
2.1. General. Subject to the terms of this Agreement, Post, Post
Apartment Homes and Post Services hereby collectively employ Executive, and
Executive hereby accepts such employment, for the "term" described in Section 3.
2.2. Title and Duties and Responsibilities. Executive's title at
Post Apartment Homes initially shall be Executive Vice President, Regional
Investment Director, and Executive initially shall be responsible for the
investments currently made by Post Apartment Homes in the northern Virginia,
greater Washington, D.C. and greater New York City markets, for recommending an
investment and development strategy for those markets and for implementing the
investment and development strategy adopted for those markets, which
implementation shall include making recommendations on possible acquisitions and
dispositions and developments in such markets based on the investment and
development strategy adopted for those markets. Executive shall have such
additional duties and responsibilities for Post, Post Apartment Homes and Post
Services as shall be assigned to Executive from time to time by Post's Chief
Executive Officer or his or her delegate or Post's Chief Investment Officer or
his or her delegate.
2.3. Full Business Time. Executive shall devote his full business
time, skills, and best efforts to rendering services on behalf of, collectively,
Post, Post Apartment Homes and Post Services and shall exercise such care as is
customarily required by executives undertaking similar duties for entities
similar to Post, Post Apartment Homes and Post Services.
2.4. Post and Post's Chief Executive Officer. Post shall make all
employment related decisions with respect to Executive on behalf of Post, Post
Apartment Homes and Post Services and shall allocate between Post, Post
Apartment Homes and Post Services all compensation and other expenses related to
their collective employment of Executive. Post's Chief Executive Officer or his
delegate shall determine the extent to which Executive performs services for
Post, Post Apartment Homes and Post Services and shall set the priorities for
the performance of such services.
SECTION 3. TERM.
Unless Executive's employment is terminated earlier in accordance with
Section 5 or Section 6, Executive shall be employed for the "term" of this
Agreement, which term shall commence as of the Agreement Date and shall continue
up to, but not including, the first anniversary of such date; provided, however,
that, unless either Post or Executive decides otherwise and so notifies the
other of that decision in writing at least 30 days before an anniversary of the
Agreement Date, the term of this Agreement shall extend for one (1) additional
year on the first anniversary of the Agreement Date and on each successive
anniversary of such Agreement Date.
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SECTION 4. COMPENSATION AND BENEFITS.
4.1. Base Salary. Executive's initial, annual base salary under
this Agreement shall be $190,000.00. Executive's base salary shall be reviewed
by Post no less than on an annual basis, and upon such review and in its sole
discretion, Post may increase Executive's base salary by an amount that Post
deems appropriate in light of Post's and Executive's performance during the
period covered by such review; provided, however, Post reserves the right before
a Change in Control to roll-back Executive's base salary if such roll-back is
effected pursuant to a roll-back program approved by the Board which includes a
majority of the executives and the roll-back for Executive is consistent with
the roll-back for other executives. Executive's base salary, less any required
deductions, shall be paid to Executive in accordance with Post's standard
payroll practices and procedures for salaried employees.
4.2. Bonus. Post shall recommend to the Committee that Executive be
eligible to receive an annual bonus, subject to meeting the employment, personal
and corporate goals established by the Committee as a condition to such bonus
and, further, shall recommend to the Committee that the target for Executive's
first annual bonus be 30% of Executive's initial base salary under Section 4.1.
4.3. Long-Term Incentive Compensation.
(a) Stock Options. Post shall recommend to the Committee
that Executive be eligible during the term of this Agreement which extends
beyond the first anniversary of the Agreement Date for the grant of an option to
purchase shares of Post's common stock each year in a number and at a price to
be determined by the Committee and, further, shall recommend that any options
granted pursuant to this Section 4.3(a) shall vest over a 3 year period in the
following percentage if Executive satisfies the continuous employment
requirement for vesting:
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.
(b) Stock Grants and Shareholder Value Plan. Post shall
recommend to the Committee that Executive be eligible during the term of this
Agreement which extends beyond the first anniversary of the Agreement Date to
receive restricted stock grants and to participate in the Shareholder Value
Plan. The restricted stock grants shall be made at the discretion of the
Committee, and Executive's participation in the Shareholder Value Plan shall be
determined by the Committee.
(c) Recommendation. Post shall recommend to the Committee
that the target value of Executive's long-term incentive compensation package
under this Section 4.3 initially be 30% of Executive's annual base salary and,
further, shall recommend that the stock option component of such package be 25%
of such package, that the restricted stock component be 50% of such package and
that the Shareholder Value Plan component be 25% of such package.
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4.4. Value Creation Program. Executive shall be eligible during the
term of this Agreement to participate in the Value Creation Program, and the
terms and conditions of Executive's participation shall be determined by the
Committee. Post will recommend that Executive initially be awarded a one-fourth
share in the actual bonus pool available for each project in which he is
eligible to participate under the Value Creation Program during the term of this
Agreement.
4.5. Automobile Allowance. Executive shall while employed under
this Agreement receive a monthly automobile allowance of $600.00, less required
deductions, which shall be paid at the same time as Executive's base salary
under Section 4.1. Executive shall have complete discretion with respect to the
expenditure of this allowance. If Executive uses such allowance to lease or
purchase an automobile, neither Post, Post Apartment Homes nor Post Services
shall have any rights or interests or responsibilities or liabilities with
respect to such automobile.
4.6. Comparison With Other REIT's. At regular intervals Post 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, other REITs of a similar size or any combination of
these REITs, all as determined by the Committee.
4.7. Expenses. Executive shall be reimbursed for all reasonable
business-related expenses incurred by Executive at the request of or on behalf
of Post, including, without limitation, first class travel expenses incurred in
connection with the performance of Executive's duties and responsibilities under
this Agreement in accordance with Post's expense reimbursement policy for
executives.
4.8. Vacation. In addition to Post-wide company holidays, Executive
shall be eligible to take up to 15 business days of vacation during each of the
first five calendar years of his employment and up to 20 business days each
calendar year thereafter. Vacation days not taken in the calendar year shall be
forfeited at the end of such calendar year, and Executive shall not receive pay
in lieu of vacation.
4.9. Benefit Plans. Executive shall be entitled to participate in
such (a) medical, dental and vision care plans, policies and programs as are
made available from time to time by Post for the benefit of executives pursuant
to the terms of such plans, policies and programs and (b) such other employee
benefit plans, policies and programs as are made available from time to time by
Post for the benefit of executives pursuant to the terms of such plans, policies
and programs; provided, however, Post shall reimburse Executive for the health
insurance premiums Executive actually pays for the health insurance Executive
has in effect on the Agreement Date for Executive and Executive's immediate
family for the period which starts on the Agreement Date and ends on the date
Executive is first eligible to participate in Post's group medical, dental and
vision care plan.
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SECTION 5. TERMINATION BEFORE A CHANGE IN CONTROL.
5.1 No Cause or Good Reason. If Post terminates Executive's
employment without Cause or Executive resigns for Good Reason, then
(a) Post shall continue to pay Executive pursuant to its standard
payroll practices Executive's Base Salary as if Executive were still
employed for the 15 month period which starts on the date Executive's
employment so terminates;
(b) Post shall continue to provide to Executive the same medical,
dental and vision care coverage under Post's medical, dental and vision
care plans, policies and programs as Executive was provided pursuant to
Section 4.9(a) of this Agreement on the day before Executive's
employment terminated or, if Post cannot provide such coverage under
Post's medical, dental and vision care plans, policies and programs,
Post shall provide such coverage to Executive outside such plans,
policies and programs;
(c) Each outstanding stock option granted to Executive by Post
shall vest and become exercisable immediately to the full extent the
option would have become exercisable if Executive had remained employed
by Post for the 15 month period which starts on the date Executive's
employment terminates, and each such option shall remain exercisable
until the earlier of (i) the expiration of the term of the option or
(ii) the date the option would have expired if Executive's employment
had terminated at the end of the 15 month period which starts on the
date Executive's employment terminates;
(d) Each outstanding restricted stock grant made by Post (whether
pursuant to the Value Creation Program or otherwise) to Executive shall
vest to the full extent Executive would have vested in such restricted
stock if Executive had remained employed by Post for the 15 month
period which starts on the date Executive's employment terminates;
(e) (i) Post shall treat Executive as an "eligible former
employee" under the Value Creation Program if on the date
Executive's employment terminates under this Agreement
Executive has been employed by Post, Post Apartment Homes or
Post Services for at least 6 consecutive years, and such
treatment shall be effected under the terms and conditions of
the Value Creation Program subject to the following 2
exceptions
(ii) when a payment to Executive is made pursuant to
Section 5.1(a), (A) such payment shall cancel (to the extent
provided in Section 5.1(e)(ii)(B)) Executive's right to the
restricted stock grants, if any, which Executive would (but
for this Section 5.1(e)(ii)) be eligible to receive under the
Value Creation Program after the termination of Executive's
employment, (B) (1) such cancellation shall be effected to the
extent of the payments made pursuant to Section 5.1(a), (2)
such cancellation shall be effected on a dollar-for-dollar
basis based on such payments and the value of the stock at the
time the grant would (but for this Section 5.1(e)(ii)) have
been made to Executive under the Value Creation Program and
(3) such cancellation shall be effected until the value of the
restricted stock grants so
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cancelled equals the payments made to Executive pursuant to
Section 5.1(a) and (C) Executive by signing this Agreement
irrevocably waives any rights which Executive might have under
the Value Creation Program to any such restricted stock grant
under the Value Creation Program which is cancelled under this
Section 5.1(e)(ii), and
(iii) Executive will forfeit Executive's interest in any
stock grant made as a result of Executive's treatment as an
"eligible former employee" under the Value Creation Program
only if Executive in the Committee's judgment engages in a
violation of Section 7, Section 8, Section 9 or Section 10 of
this Agreement; provided, however
(f) No compensation or benefits shall be paid or provided under
this Section 5.1 if Executive is eligible for any compensation or
benefits under Section 6.1.
5.2 For Cause or Without Good Reason. If Post terminates
Executive's employment for Cause or Executive resign without Good Reason,
Executive shall forfeit any rights which Executive might then have to any unpaid
compensation and non-vested benefits, including non-vested options, restricted
stock grants and bonuses to the maximum extent permissible under applicable law.
5.3 Death or Disability. If Executive's employment terminates as a
result of Executive's death or Disability, the benefits, if any, payable to or
on behalf of Executive shall be determined under the employee benefit plans,
policies and programs in which Executive was a participant pursuant to Section
4.9 and any other agreements or arrangement independent of this Agreement, such
as stock option agreements and restricted stock agreements.
SECTION 6. TERMINATION AFTER A CHANGE IN CONTROL.
6.1. General Rule. If there is a Change in Control and either (a)
Post during Executive's Protection Period terminates Executive's employment
without Cause or (b) Executive during Executive's Protection Period resigns for
Good Reason, then
(a) Post shall pay Executive 1.5 times Executive's Base Salary in
cash in a lump sum within 30 days after the date Executive's employment
so terminates;
(b) Each outstanding stock option granted to Executive by Post
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 Post for such term or such period
(other than any term or condition which gives Post the right to cancel
any such option);
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(c) Any restrictions on any outstanding restricted stock grants to
Executive by Post immediately shall (notwithstanding the terms under
which such grant was made) expire and Executive's right to such stock
shall be non-forfeitable;
(d) If Executive as a result of Executive's termination of
employment would forfeit any right to receive a bonus for any period
under the Shareholder Value Plan, Executive shall be paid Executive's
target bonus for such period in cash in a lump sum within 30 days after
the date Executive's employment terminates;
(e) Executive with respect to the Value Creation Program shall be
paid in cash in a lump sum within 30 days after the date Executive's
employment terminates 50% of Executive's "Percentage" of the "Proforma
Bonus Pool" for any "Project" in which Executive was a "Team Member"
for which the "Calculation Period" had not expired but for which no
"Stock Grant" had been made, all as such terms are defined in the Value
Creation Program; and
(f) From the date of such termination of Executive's employment
until the end of Executive's Protection Period, Post shall continue to
provide to Executive the same medical, dental and vision care coverage
as Executive was provided under Post's medical, dental and vision care
plans, policies and programs pursuant to Section 4.9(a) of this
Agreement on the day before Executive's employment terminated or, at
Executive's election, on any date in the 1 year period which ends on
the date of such termination of employment; provided, however, if Post
cannot provide such medical, dental and vision care coverage under
Post's medical, dental and vision care plans, policies and programs,
Post either shall provide such coverage 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
for any tax liability for such reimbursements.
6.2. 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:
(a) Executive's employment is terminated by Post without Cause or
Executive resigns for Good Reason,
(b) such termination is effected or such resignation is effective
at any time in the 60 day period which ends on the Effective Date of a Change In
Control, and
(c) there is an Effective Date for such Change In Control.
6.3 No Increase in Other Benefits. If Executive's employment
terminates under the circumstances described in Section 6.1 or Section 6.2,
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 of any kind or
description maintained by Post or an Affiliate.
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SECTION 7. NO SOLICITATION OF CUSTOMERS.
Executive will not during the Restricted Period for purposes of
competing with Post or any 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 Post or any Affiliate with whom
Executive had a personal business interaction at any time during the 2 years
immediately prior to the termination of Executive's employment by Post. However,
this Section 7 shall not prohibit a general solicitation not targeted at Post's
customers or an Affiliate'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 Post or any Affiliate in an executive, managerial, or
supervisory capacity during the term of Executive's employment by Post and with
whom Executive had business dealings during the 2 year period which ends on the
date Executive's employment by Post terminates (whether or not such employee
would commit a breach of contract), and who has not ceased to be employed by
Post or any Affiliate for a period of at least 1 year. However, this Section 8
shall not prohibit a general solicitation not targeted at Post employees or an
Affiliate's 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 Post and each 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 Post 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 Post and each 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 Post.
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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 Fairfax, Loudon, Arlington and Prince William counties in
Virginia, Montgomery, Howard, Anne Arundel, Prince Georges and Charles counties
in Maryland, the island known as Long Island in New York and the U.S. Office of
Management and Budget's metropolitan statistical area for New York City, New
York. Executive agrees that the entities listed on Appendix A are Post's
principal competitors in the markets where Post is currently engaged in business
in such metropolitan statistical areas. Executive further agrees that Executive
and Post will, in return for additional consideration, agree to update Appendix
A in connection with any annual extension of this Agreement in order to fairly
include only Post'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 Section 7, Section 8, Section 9, and
Section 10, are reasonable, fair and equitable in scope, terms, and duration;
are necessary to protect the legitimate business interests of Post; and are a
material inducement to Post 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 Executive
pursuant to this Agreement are unique and that Post 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 Post's right to
specific performance of the terms of this Agreement is essential to protect the
rights and interests of Post. Accordingly, in addition to any other remedies
that Post may have at law or in equity, Post will have the right to have all
obligations, covenants, agreements, and other provisions of this Agreement
specifically performed by Executive, and Post 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 Post or Post'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 Post or an Affiliate, will result in
Executive's being subject to an excise tax under Section 4999 of the
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Code or if such an excise tax is assessed against Executive as a result of any
such payments and other benefits, Post 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 Post reasonably requests
under the circumstances to mitigate or challenge such tax; provided, however, if
Post or Post'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 $10,000.00, Executive shall irrevocably waive Executive's
right to receive such part if an independent accountant or lawyer retained by
Executive and paid by Post agrees with the determination made by Post or Post'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 Post 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, Post
shall provide Executive with such information and such expert advice and
assistance from Post'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 Executive's executor, administrator,
heirs, personal representatives, and assigns, and Post and its successors and
assigns; provided, however, that Executive shall not be entitled to assign or
delegate any of Executive's rights or obligations under this Agreement without
the prior written consent of Post.
14.2. Construction of Agreement. No provision of this Agreement or
any related document shall be construed against or interpreted to the
disadvantage of Post, Post Apartment Homes, Post Services or Executive by any
court or other governmental or judicial authority, including an arbitrator, by
reason of such person 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.
14.4. Survival of Agreements. All covenants and agreements made in
this Agreement shall survive the execution and delivery of this Agreement and
the termination of Executive's employment for any reason.
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14.5. Headings. The 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 under this Agreement 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, to Executive's most recent address provided
to Post:
(b) If to Post:
Post Properties, Inc.
One Riverside
4401 Northside Parkway
Suite 800
Atlanta, GA 30327-3057
Attention: Corporate Secretary
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 Post, Post Apartment Homes, Post Services and Executive with
respect to the subject matter of this Agreement and supersedes and replaces all
prior agreements, written or oral, with respect to such subject matter. This
Agreement may be modified only by a written instrument signed by Post, Post
Apartment Homes, Post Services and Executive.
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 Post, Post Apartment Homes, Post
Services or Executive of any breach by any other party to this Agreement of any
condition or provision set forth 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 Post, as the case may be.
14.11. Reference; Non-Disparagement. In the event of Executive's
termination without Cause or resignation for Good Reason, Post agrees to provide
Executive with a reference. Post agrees not to disparage or demean Executive,
publicly or otherwise, and Executive agrees not to disparage or demean Post or
any Affiliates or any of their officers or directors, or shareholders, publicly
or otherwise.
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IN WITNESS WHEREOF, Post, Post Apartment Homes, Post Services and
Executive have executed this Agreement as of the Agreement Date.
POST PROPERTIES, INC.
By: /s/ David P. Stockert
------------------------------------------
Name: David P. Stockert
Title: President and Chief Executive Officer
Date: September 21, 2004
---------------------------
POST APARTMENT HOMES, L.P.
By: Post GP Holdings, Inc.
By: /s/ David P. Stockert
------------------------------------------
Name: David P. Stockert
Title: President and Chief Executive Officer
Date: September 21, 2004
---------------------------
POST SERVICES, INC.
By: /s/ David P. Stockert
------------------------------------------
Name: David P. Stockert
Title: President and Chief Executive Officer
Date: September 21, 2004
---------------------------
EXECUTIVE
/s/ Martin Howle
------------------------------------------
Name: Martin Howle
Title: Executive Vice President,
Regional Investment Director
Date: September 24, 2004
---------------------------
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APPENDIX A
AMLI Residential Properties Trust
Apartment Investment and Management Company (AIMCO)
Archstone-Smith
Bozzuto & Associates
Camden Property Trust
Cornerstone Realty Income Trust Inc.
Equity Residential
Fairfield Properties, L.P.
Gables Residential Trust
JPI
KSI
Lincoln Property Company
PN Hoffman
Summit Properties Inc.
The Hanover Company
The Related Company's
Trammell Crow Residential
United Dominion Realty Trust
Wood Partners, LLC