form8_k.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
Date
of Report (Date of earliest event reported)
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August
6, 2007
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AMERICAN
COMMUNITY PROPERTIES TRUST
(Exact
name of registrant as specified in its charter)
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MARYLAND
(State
or other jurisdiction
of
incorporation)
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1-14369
(Commission
File
Number)
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52-2058165
(I.R.S.
Employer
Identification
No.)
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222
Smallwood Village Center
St.
Charles, Maryland 20602
(Address
of principal executive offices)(Zip Code)
(301)
843-8600
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain
Officers
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(a)
Executive Retention Agreement with Edwin L. Kelly
On
August 6, 2007, American Community Properties Trust (“ACPT” or the “Company”)
and its wholly owned subsidiary, American Rental Management Company, entered
into an executive retention agreement with Edwin L. Kelly (the “Kelly
Agreement”). The Kelly Agreement supersedes Mr. Kelly’s prior
employment contract with the Company and is retroactively effective as of July
1, 2007. The Kelly Agreement provides for Mr. Kelly to serve as Vice
Chair, President and Chief Operating Officer of the Company, reporting to the
Chairman of the Board of Trustees of the Company, for a term expiring December
31, 2010 unless earlier terminated. The Kelly Agreement automatically
will be renewed for successive one-year periods following December 31, 2010
unless either the Company or Mr. Kelly notifies the other of
non-renewal.
During
the term of the Kelly Agreement, Mr. Kelly will receive an annual base salary
of
$500,000, subject to annual inflationary adjustments and discretionary increases
determined by the Company’s Board of Trustees. In addition, under his
agreement, Mr. Kelly will be entitled to participate in the Company’s standard
benefits, five weeks of paid vacation annually, the use of a company-owned
car
and membership fees and dues at his country club, among other
perquisites.
The
Kelly
Agreement will terminate prior to the stated term upon Mr. Kelly’s death or
disability. In addition, the Company may terminate Mr. Kelly’s
employment under the Kelly Agreement for “cause” or for any other
reason. Mr. Kelly may terminate his employment under the Kelly
Agreement for “good reason” or for any other reason, as well as upon a change of
control of the Company or the first anniversary thereafter. If Mr.
Kelly’s employment is terminated by the Company other than for “cause” or by him
for “good reason,” Mr. Kelly will be entitled to receive the following amounts,
subject to customary withholding and deductions, without regard to whether
Mr.
Kelly obtains a position with another employer:
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·
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Termination
prior to the 1st anniversary of the
Agreement: 48
months of his then-current base
salary;
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·
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Termination
prior to the 2nd anniversary of the
Agreement: 36
months of his then-current base
salary;
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|
·
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Termination
prior to the 3rd anniversary of the
Agreement: 30
months of his then-current base salary;
or
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|
·
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Termination
at any time
thereafter: 24
months of his then-current base
salary.
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In
addition, upon termination of the Kelly Agreement upon delivery by a party
of a
notice of non-renewal, Mr. Kelly shall be entitled to receive severance in
the
amount of 24 months of his then-current base salary.
If
Mr.
Kelly terminates his employment at any time effective upon the first anniversary
of a change of control of the Company, Mr. Kelly will be entitled to receive
severance in the amount of 48 months of his then-current base
salary. Under certain circumstances related to a change of control,
Mr. Kelly will be entitled to receive a gross-up of such severance amount in
an
amount necessary to make him whole for any excise taxes payable by him in
connection with such severance.
“Cause”
is defined in the Kelly Agreement to mean the executive’s conviction of, or plea
of nolo contendere to, a felony involving dishonesty, disloyalty, fraud, or
moral turpitude; (2) the executive’s material breach of any material obligation
in the Kelly Agreement; or (3) the executive’s engaging in conduct constituting
a material breach of any fiduciary duty to the Company.
“Good
reason” is defined in the Kelly Agreement to mean (1) a material diminution in
any of the executive’s base compensation, authority (which includes but is not
limited to a change in the identity of the person to whom the executive
reports), duties or responsibilities without his agreement; (2) the executive
being required to relocate his office to executive offices outside of an area
within a fifty (50) mile radius of the Company’s existing executive offices; (3)
there being a material reduction in the overall value of the employee benefits
being provided to the executive, unless the reduction is effective for all
senior executive employees; or (4) a material breach by the Company of any
of
its obligations to the executive under the Kelly Agreement, and in each case,
so
long as the executive gives such notice within sixty (60) days of the
circumstances believed by the executive to constitute Good Reason and the
Company fails to remedy those circumstances within thirty (30) days of its
receipt of such notice.
All
payments and benefits to which Mr. Kelly may become entitled under the Kelly
Agreement are subject to delay or modification if necessary to comply with
Section 409A of the Internal Revenue Code.
The
employment agreements contain customary restrictive covenants relating to
protection of confidential information, non-solicitation and a non-compete
clause that will prevent Mr. Kelly from seeking or obtaining employment by
any competitor during the term of his employment with the Company and for one
year thereafter.
(b)
Executive Retention Agreement with Cynthia Hedrick
On
August 6, 2007, American Community Properties Trust (“ACPT” or the “Company”)
and its wholly owned subsidiary, American Rental Management Company, entered
into an executive retention agreement with Cynthia Hedrick (the “Hedrick
Agreement”) under which Ms. Hedrick will continue to serve as Executive Vice
President, Chief Financial Officer of the Company for a term expiring December
31, 2009 unless earlier terminated. The Hedrick Agreement is
retroactively effective as of July 1, 2007 and automatically will be renewed
for
successive one-year periods following May 31, 2009 unless either the Company
or
Ms. Hedrick notifies the other of non-renewal. In such position, Ms.
Hedrick will report to Mr. Kelly.
The
Hedrick Agreement provides for the executive to receive an annual base salary
of
$275,000, subject to annual inflationary adjustments and discretionary increases
determined by the Company’s Board of Trustees. In addition, under her
agreement, Ms. Hedrick will be entitled to participate in the Company’s standard
benefits, five weeks of paid vacation annually, a monthly car allowance and
membership fees and dues at her country club, among other
perquisites.
The
Hedrick Agreement will terminate prior to the stated term upon Ms. Hedrick’s
death or disability. In addition, the Company may terminate Ms.
Hedrick’s employment under the Hedrick Agreement for “cause” or for any other
reason. Ms. Hedrick may terminate her employment under the Hedrick
Agreement for “good reason” or for any other reason, as well as upon a change of
control of the Company or the first anniversary thereafter. If Ms.
Hedrick’s employment is terminated by the Company other than for “cause” or by
her for “good reason,” upon any non-renewal or by Ms. Hedrick upon the first
anniversary of a change of control of the Company, Ms. Hedrick will be entitled
to receive severance in the amount of 24 months of her then-current base salary,
subject to customary withholding and deductions. Under certain
circumstances related to a change of control, Ms. Hedrick will be entitled
to
receive a gross-up of such severance amount in an amount necessary to make
her
whole for any excise taxes payable by her in connection with such
severance.
The
definitions of “cause” and “good reason” in the Hedrick Agreement are
substantially similar to those used in the Kelly Agreement (except in respect
of
reporting obligations as described above). In addition, as in the
Kelly Agreement, the Hedrick Agreement contains similar restrictive covenants
and provides for delay or modification of severance payments if necessary to
comply with Section 409A of the Internal Revenue Code.
The
foregoing descriptions of the executive retention agreements with Mr. Kelly
and
Ms. Hedrick are qualified in their entirety by reference to the respective
agreements which are filed as Exhibit 10.1 and 10.2 to this Current Report
on
Form 8-K.
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Item
9.01
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Financial
Statements and Exhibits.
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(c)
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Exhibits
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10.1
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ACPT
Employment Agreement with Edwin L. Kelly signed August 6,
2007
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10.2
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ACPT
Employment Agreement with Cynthia Hedrick signed August 6,
2007
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SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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AMERICAN
COMMUNITY PROPERTIES TRUST
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(Registrant)
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Dated:
August 9, 2007
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By:/s/Cynthia
L. Hedrick
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Cynthia
L. Hedrick
Executive
Vice President and Chief Financial
Officer
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