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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made as of the ___ day of
_________ , 199__ by and between ______________ residing at ________________
(hereinafter referred to as "Employee") and Gables Residential Trust, a Maryland
business trust, with a principal place of business at 0000 Xxxxx Xxxxx Xxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as the "Company").
1. Term. The term of this Agreement shall commence on January 1,
1997 (the "Effective Date") and, unless earlier terminated as provided in
Paragraph 8 below, shall terminate one (1) year from the Effective Date (the
"Original Term"). The Original Term shall be extended automatically for
additional one-year periods (each a "Renewal Term"), unless notice that this
Agreement will not be extended is given by either party to the other three (3)
months prior to the expiration of the Original Term or any Renewal Term. (The
period of Employee's employment hereunder within the Original Term and any
Renewal Terms is herein referred to as the "Employment Period".)
2. Employment/Duties.
(a) During the Employment Period, Employee shall be employed
in the business of the Company and its affiliates. Employee shall serve as a
corporate officer with the title _________. Employee's duties and authority
shall be commensurate with his title and position with the Company.
(b) Employee agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his working time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Trustees; provided that, nothing herein shall
be interpreted to preclude Employee from (i) retaining any preexisting
consulting fee contracts relating to and/or minority interests in multifamily
residential apartment properties or (ii) participating as an officer or director
of, or advisor to, any charitable or other tax exempt organization.
(c) In performing his duties hereunder, Employee shall be
available for reasonable travel as the needs of the business require. Employee
shall be based in the greater Atlanta metropolitan area.
3. Compensation/Benefits. In consideration of Employee's
services hereunder, the Company shall provide Employee the following:
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(a) Base Salary. The Company shall pay Employee an annual
salary of $__ during the Employment Period ("Base Salary"). Base Salary shall be
payable in accordance with the Company's normal business practices, but in no
event less frequently than monthly. Employee's Base Salary shall be reviewed no
less frequently than annually by the Company and may be increased but not
decreased during the Employment Period.
(b) Bonuses. At the close of each fiscal year, the Company
shall review the performance of the Company and of Employee during the prior
fiscal year, and the Company may provide Employee with additional compensation
as a bonus if the Board of Trustees, or any compensation committee thereof, in
its discretion, determines that Employee's contribution to the Company warrants
such additional payment and the Company's anticipated financial performance for
the present period permits such payment. The bonuses hereunder shall be paid as
a lump sum not later than thirty (30) days after completion of the audit of the
Company's books for the fiscal year, subject to the Employee's right to defer in
his sole discretion pursuant to separate written agreement with the Company. For
purposes of Paragraph 8(c), the bonus paid in respect of any year (x) shall
include cash bonuses paid in respect of such year, unrestricted share grants
made in respect of such year (valued as of the date of grant) and any restricted
shares, whenever granted, which vested entirely or substantially in respect of
service during such year (including, without limitation, restricted shares which
vested on January 1 of the following year) (valued as of the date of vesting)
but (y) shall not include any restricted share grants made in respect of such
year (unless subsequently vested in respect of such year in accordance with the
preceding clause (x)), option grants made in respect of such year or the
exercise of any options during such year.
(c) Medical Insurance/Physical. During the Employment Period,
the Company shall provide to Employee and Employee's immediate family a
comprehensive policy of health insurance. During the Employment Period, Employee
shall be entitled to a comprehensive annual physical performed, at the expense
of the Company, by the physician or medical group of Employee's choosing.
(d) Life Insurance/Disability Insurance. During the Employment
Period, the Company shall, to the extent reasonably available on customary terms
and rates, (i) provide Employee with term life insurance in a face amount equal
to $1,000,000, and (ii) have Employee covered by reasonably comprehensive
disability insurance policy or, at Employee's election, otherwise reimburse
Employee for the cost of such a policy in an amount not to exceed $5,000 per
year; provided that, such $5,000 amount shall be increased, as the age of the
Employee increases, for any year during the Employment Period as may be
necessary to maintain the same level of insurance as in effect during the first
year of the Employment Period. Employee agrees to submit to such medical
examinations as may be required in order to secure or maintain such policies of
insurance.
(e) Vacations. Employee shall be entitled to reasonable paid
vacations in accordance with the then regular procedures of the Company
governing executives, not to exceed four weeks per annum, in the aggregate.
(f) Office/Secretary, etc. During the Employment Period,
Employee shall be
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entitled to secretarial services and a private office commensurate with his
title and duties.
(g) Stock Options. Employee shall be entitled to stock
options in an amount to be determined by the Board of Trustees, or any
compensation committee thereof, in its discretion.
(h) Fringe Benefits. During the Employment Period, the Company
shall provide Employee with professional assistance in tax return preparation
and financial planning, provided that the cost of such assistance shall not
exceed $1,000 per year (adjusted annually for inflation by the CPI Adjustment).
(i) Other Benefits. During the Employment Period, the Company
shall provide to Employee such other benefits, including the right to
participate in such retirement or pension plans, as are made generally available
to employees of the Company from time to time.
4. Automobile. The Company shall provide Employee with a monthly
car allowance of not less than $500 per month (adjusted annually for inflation
by the CPI Adjustment), provided that, the Company may instead purchase or
lease, and maintain insurance on, an automobile of comparable value for use by
Employee during the Employment Period, which automobile Employee shall operate
and maintain, at his own expense, with the same standard of care Employee
applies to his own property and as may be required under any applicable lease
agreement.
5. Expenses/Indemnification.
(a) During the Employment Period, the Company shall reimburse
Employee for the reasonable business expenses incurred by Employee in the course
of performing his duties for the Company hereunder, including but not limited to
expenses incurred in connection with out-of-town business travels, upon
submission of invoices, vouchers or other appropriate documentation, as may be
required in accordance with the policies in effect from time to time for
executive employees of the Company.
(b) To the full extent permitted by law and subject to the
Company's Amended and Restated Declaration of Trust, as amended from time to
time, and Second Amended and Restated By-Laws, as amended from time to time, the
Company shall indemnify Employee with respect to any actions commenced against
Employee in his capacity as an officer or trustee or former officer or trustee
of the Company, or any affiliate thereof for which he may serve in such
capacity, and the Company shall advance on a timely basis any expenses incurred
in defending such actions. The obligation to indemnify hereunder shall survive
the termination of this Agreement. The Company agrees to use its best efforts to
secure and maintain officers and trustees insurance with respect to Employee.
6. Employer's Authority/Policies. Employee agrees to observe and
comply with the rules and regulations of the Company as adopted by its Board
respecting the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from
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time to time by the Board. Employee agrees to abide by the Company's xxxxxxx
xxxxxxx policies and procedures and the Company's Code of Ethics, and agrees to
make annual certifications or affirmations to such effect if requested by the
Company.
7. Records/Nondisclosure/Company Policies.
(a) General. All records, financial statements and similar
documents obtained, reviewed or compiled by Employee in the course of the
performance by him of services for the Company, whether or not confidential
information or trade secrets, shall be the exclusive property of the Company.
Employee shall have no rights in such documents upon any termination of this
Agreement.
(b) Confidential Information. Employee will not disclose to
any person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Company obtained by him
incident to his employment with the Company. The term "confidential information"
includes, without limitation, financial information, business plans, prospects
and opportunities which have been discussed or considered by the management of
the Company but does not include any information which has become part of the
public domain by means other than the Employee's non-observance of his
obligations hereunder. This paragraph shall survive the termination of this
Agreement.
8. Termination/Severance.
(a) At-Will Employment. Employee's employment hereunder is "at
will" and, therefore, may be terminated at any time, with or without cause, at
the option of the Company, subject only to the severance obligations under this
Paragraph 8. Upon any termination hereunder, the Employment Period shall expire.
(b) Termination For Good Reason. If (A) Employee is terminated
for Good Reason (as defined in Paragraph 8(d) below) or (B) if Employee shall
voluntarily terminate his employment hereunder (but other than by reason of a
Force Out (as defined in Paragraph 8(d) below), and other than pursuant to a
Change of Control Event (as defined in Paragraph 8(d) below)), then the
Employment Period shall end and Employee shall be entitled to receive his Base
Salary at the rate provided pursuant to Section 3(a) for the period up to and
including the date on which such termination shall take effect.
(c) Other Terminations. If (A) Employee's employment is
terminated by the Company without Employee's consent and other than for Good
Reason, or (B) Employee terminates his employment by reason of or at any time
following a Force Out, or (C) Employee's employment is terminated by reason of
his death, or (D) Employee's employment is terminated pursuant to a Change of
Control Event, Employee, or his estate, as the case may be, shall be entitled:
(i) to immediately vest in any outstanding stock options;
and
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(ii) to the payment of an amount (the "Severance Amount"),
equal to one times the sum of (x) his Base Salary
under Paragraph 3(a) and (y) the amount of his bonus
received in respect of the immediately preceding
fiscal year under Paragraph 3(b)(i).
The Severance Amount shall be paid as a lump sum within fifteen (15) days of
such termination. In the event that any stock option plan or option agreement of
the Company provides terms for the acceleration and/or exercise of options
following a termination of employment that vary from or are otherwise
inconsistent with the foregoing, the Company shall take such actions as may be
necessary to amend such plan or option agreement. Notwithstanding the foregoing,
in the event of a termination by reason of Employee's death, the Severance
Amount shall be zero if the life insurance proceeds payable under Paragraph
3(d)(i) equal or exceed $1,000,000. During the remaining term of the Employment
Period (or what would have been the remaining term if Employee's employment had
not been terminated), Employee shall be entitled to the benefits described in
Paragraphs 3(c) and (f).
(d) Definitions. For purposes of this Paragraph 8, the
following terms shall have the indicated definitions:
(1) "Change of Control" shall mean the
occurrence of any one of the following events:
(A) any "person," as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Act") (other than the Company, any of its Subsidiaries
(as defined below), any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan of the Company or
any of its Subsidiaries), together with all "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 under the Act)
of such person, shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 40% or more of either (i) the
combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board of
Trustees ("Voting Securities") or (ii) the then outstanding common
shares of beneficial interest, par value $.01 per share, of the
Company ("Shares") (in either such case other than as a result of
acquisition of securities directly from the Company); or
(B) persons who, as of the date hereof,
constitute the Company's Board of Trustees (the "Incumbent Trustees")
cease for any reason, including, without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any person
becoming a trustee of the Company subsequent to the date hereof whose
election or nomination for election was approved by a vote of at least
a majority of the Incumbent Trustees or was approved by a nominating
committee of the Board shall, for purposes of this Agreement, be
considered an Incumbent Trustee; or
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(C) the shareholders of the Company
shall approve (i) any consolidation or merger of the Company or any
Subsidiary where the shareholders of the Company, immediately prior to
the consolidation or merger, would not, immediately after the
consolidation or merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly, shares representing
in the aggregate 50% of the voting shares of the corporation issuing
cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any), (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated
or arranged by any party as a single plan) of all or substantially all
of the assets of the Company or (iii) any plan or proposal for the
liquidation or dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (A) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of Shares or other Voting Securities outstanding, increases (x) the
proportionate number of Shares beneficially owned by any person to 40% or more
of the Shares then outstanding or (y) the proportionate voting power represented
by the Voting Securities beneficially owned by any person to 40% or more of the
combined voting power of all then outstanding Voting Securities; provided,
however, that if any person referred to in clause (x) or (y) of this sentence
shall thereafter become the beneficial owner of any additional Shares or other
Voting Securities (other than pursuant to a share split, stock dividend, or
similar transaction), then a "Change of Control" shall be deemed to have
occurred for purposes of the foregoing clause (A).
As used in this definition of "Change of Control," the term
"Subsidiary" means Gables Realty Limited Partnership, Central Apartment
Management, Inc., East Apartment Management, Inc., Gables Central Construction,
Inc., and Gables East Construction, Inc., and any corporation or other entity
(other than the Company) in any unbroken chain of corporations or other
entities, beginning with the Company if each of the corporations or entities
(other than the last corporation or entity in the unbroken chain) owns stock or
other interests possessing 50% or more of the economic interest or the total
combined voting power of all classes of stock or other interests in one of the
other corporations or entities in the chain.
(2) A "Change of Control Event" shall mean any
voluntary or involuntary termination of Employee's employment occurring within
six (6) months following a Change of Control.
(3) A "Force Out" shall be deemed to have
occurred in the event of a material breach by the Company of any obligation
under this Agreement, including but not limited to those under Paragraphs 2 and
3 hereof, or in the event of a substantial diminution in the duties or
responsibilities of Employee.
(4) "Good Reason" shall mean a finding by the
Board of Trustees, that the Employee has (a) acted with gross negligence or
willful misconduct in connection with the performance of his material duties
hereunder, (b) defaulted in the performance of his material duties hereunder and
has not corrected such action within 15 days of receipt of written notice
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thereof; (c) acted against the best interests of the Company or committed a
material act of common law fraud against the Company or its employees, which act
in either event has had a material and adverse impact on the financial affairs
of the Company; (d) been convicted of a felony and such conviction has a
material adverse affect on the interests of the Company; or (e) the continuing
disability of Employee following the expiration of the Disability Period (as
defined in Paragraph 8(e)) under circumstances where Employee is entitled to
benefits payable under the disability insurance policy of the Company.
(e) Disability. If Employee shall become unable to efficiently
perform his duties hereunder because of any physical or mental disability or
illness, he shall be entitled to his regular compensation until (i) the period
of disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) the Employee
has become eligible to receive benefits under the applicable disability
insurance policy referred to in Paragraph 3(d)(ii) (the "Disability Period").
This Agreement thereafter may be terminated by the Company as provided in
Paragraph 8(b), provided that, Employee shall immediately vest in any
outstanding options to the same extent as if the termination had been pursuant
to Paragraph 8(c).
(f) Arbitration in the Event of a Dispute Regarding the Nature
of Termination. In the event that the Company terminates Employee's employment
for Good Reason (as defined above), and Employee contends that Good Reason did
not exist, the Company's only obligation shall be to submit such claim to
arbitration before the American Arbitration Association ("AAA"). In such a
proceeding, the only issue before the arbitrator will be whether Employee was in
fact terminated for Good Reason. If the arbitrator determines that Employee was
not terminated for Good Reason, the only remedy that the arbitrator may award is
an amount equal to the Severance Payment specified in Paragraph 8(c), the costs
of arbitration, and Employee's attorneys' fees. If the arbitrator finds that
Employee was terminated for Good Reason, the arbitrator will be without
authority to award Employee anything, and the parties will each be responsible
for their own attorneys' fees, and they will divide the costs of arbitration
equally.
(g) No Mitigation. Without regard to the reason for the
termination of Employee's employment hereunder, Employee shall be under no
obligation to mitigate damages with respect to such termination under any
circumstances and in the event Employee is employed or receives income from any
other source, there shall be no offset against the amounts due from the Company
hereunder.
9. Non-Competition. Because Employee's services to the Company
are special and because the Employee has access to the Company's confidential
information, Employee covenants and agrees that if, during the Original Term or
any Renewal Term, his employment is terminated for Good Reason or if he
voluntarily terminates his employment (other than by reason of a Force Out or
pursuant to a Change of Control Event), for a period of twelve months from the
date of such termination he will not, directly or indirectly, either on his own
behalf or on behalf of any person, partnership, corporation or otherwise engage
in any business or undertaking directly competitive with the businesses being
carried on by the Company (a) in respect of any multifamily residential real
estate project undertaken or being considered by the Company at the time of
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termination or (b) in any multifamily residential rental real estate project
within 30 miles of any such project, in either case, without the prior written
consent of the Board. Restricted activities under this Paragraph 9 include, but
are not limited to, the acquisition, development, construction, operation,
management or leasing of any multifamily residential real estate project,
including contracting or agreeing to do any of the foregoing or advising or
consulting with any person regarding the foregoing. This Paragraph 9 shall not
be interpreted to prevent the Employee from retaining any interests in
multifamily residential apartment properties permitted under Paragraph 2(b)(i).
This Paragraph 9 shall survive the termination of this Agreement.
10. Conflicting Agreements. Employee hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder. The parties agree that this agreement supersedes and
replaces any prior written employment agreement between the Company and Employee
of similar scope and nature.
11. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand or by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Company or
Employee, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
12. Miscellaneous. This Agreement (i) constitutes the entire agreement
between the parties concerning the subjects hereof and supersedes any and all
prior agreements or understandings, (ii) may not be assigned by Employee without
the prior written consent of the Company, and (iii) may be assigned by the
Company and shall be binding upon, and inure to the benefit of, the Company's
successors and assigns. Headings herein are for convenience of reference only
and shall not define, limit or interpret the contents hereof.
13. Amendment. This Agreement may be amended, modified or
supplemented by the mutual consent of the parties in writing, but no oral
amendment, modification or supplement shall be effective.
14. Specific Enforcement. The provisions of this Agreement are to be
specifically enforced if not performed according to their terms. Without
limiting the generality of the foregoing, the parties acknowledge that the
Company would be irreparably damaged and there would be no adequate remedy at
law for Employee's breach of Paragraphs 7 and 9 of this Agreement and,
accordingly, Employee hereby consents to the entry of any temporary restraining
order or preliminary or ex parte injunction, in addition to any other remedies
available at law or in equity, to enforce the provisions thereof. This Paragraph
14 shall survive the termination of this Agreement.
15. Severability. The provisions of this Agreement are severable.
The invalidity of any provision shall not affect the validity of any other
provision.
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16. Governing Law . This Agreement shall be construed and
regulated in all respects under the laws of the State of Maryland.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
GABLES RESIDENTIAL TRUST
By:
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Xxxxxx X. Xxxxxxx, Chief Executive Officer
By:
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Name:
