On September 25, 2008, the Board of
Trustees of American Community Properties Trust (the “Company”) appointed Mr.
Stephen Griessel as the Company’s Chief Executive Officer, effective October 1,
2008. J. Michael Wilson has resigned that position as of the same
date, but will continue to serve as Chairman of the Board of
Trustees.
Mr. Griessel, 49, formed Regenovation
LLC, a consulting firm wholly owned by him, in 2002 and has provided consultant
services to the Company for the past sixteen months. Prior to
providing full-time consulting services to ACPT beginning in June 2007, Mr.
Griessel provided consulting services to Crestview Capital, an investment fund
in Chicago, from January 2003 to April 2004, and to The Ginn Company, a
developer and operator of private destination communities headquartered in
Celebration, Florida, from May 2004 to May 2007. Mr. Griessel was
also employed by Montana Metal Products LLC of Des Plaines, Illinois, serving as
its business development manager from May 2002 to May 2007. Prior to that, Mr.
Griessel served as the Managing Director and was a shareholder of RCI Southern
Africa, and was a founding shareholder and the CEO of Tourvest, until recently a
publicly traded multi-faceted tourism company in Southern Africa.
In
connection with his appointment as Chief Executive Officer, the Company entered
into an employment agreement with Mr. Griessel dated October 1,
2008. The agreement supersedes Mr. Griessel’s prior consulting
agreement with the Company, dated July 2, 2007. The agreement
provides for Mr. Griessel to serve as the Company’s Chief Executive Officer for
a term expiring October 1, 2011, unless earlier terminated pursuant to the terms
of the agreement. The agreement renews automatically for successive
one-year periods following October 1, 2011, unless either the Company or Mr.
Griessel notifies the other of non-renewal in accordance with the terms of the
agreement.
During
the term of the agreement, Mr. Griessel will receive an annual base salary of
$550,000, subject to discretionary increases determined by the Company’s
Compensation Committee. Mr. Griessel also will be entitled to receive
an annual cash bonus based on his achievement of performance objectives set by
the Company’s Compensation Committee, subject to approval by the Company’s Board
of Trustees, with a threshold amount of 20% of Mr. Griessel’s annual base
salary; a base amount of 40% of Mr. Griessel’s annual base salary; and a maximum
amount of 60% of Mr. Griessel’s annual base salary. The Company has
agreed to pay Mr. Griessel a relocation bonus of $244,000, payable over 12
months and, if Mr. Griessel’s Palm Coast, Florida home does not sell by the
first anniversary of the agreement, the Company shall pay Mr. Griessel
$15,416.66 each month thereafter, for a period not to exceed 12 months, if
during such month Mr. Griessel has not sold the home. To the extent
that Mr. Griessel is paid a relocation bonus, he will not be eligible to receive
an annual cash bonus for that period. In addition, Mr. Griessel will
be entitled to participate in the Company’s standard benefits, receive
reimbursement for certain life and disability insurance policies maintained by
Mr. Griessel, five weeks of paid vacation annually, receive a $1,000 a month
vehicle allowance, receive reimbursement for up to $14,000 in legal fees
incurred in the preparation of the agreement, and reimbursement for membership
fees in the Young Presidents Organization, among other perquisites.
The
agreement also provides that the Company will grant Mr. Griessel an award of
363,743 restricted common shares of beneficial interest. Such shares
will be awarded pursuant to, and shall vest in accordance with, an award
agreement granted under the Company’s equity incentive plan and approved by the
Company’s Compensation Committee, subject to approval by the Company’s Board of
Trustees, with such award remaining subject to approval by the Company’s
shareholders at the Company’s annual meeting. Half the shares awarded
will vest over five years with the remaining shares vesting based on performance
criteria to be determined by the Company’s Board of Trustees.
If Mr.
Griessel’s employment is terminated without “cause” or by Mr. Griessel for “good
reason” (as both are defined in the agreement), he will be entitled to severance
benefits that include: (i) a continuation of his annual base salary for 12
months, (ii) a continuation of reimbursements for certain life and disability
insurance policies maintained by Mr. Griessel for 12 months, and (iii) a
continuation of Mr. Griessel’s participation on the Company’s benefit plans for
12 months. In addition, if Mr. Griessel terminates his employment for
“good reason”, all of Mr. Griessel’s equity awards shall vest. The
agreement also provides for certain benefits upon Mr. Griessel’s death or
disability.
The
agreement includes customary restrictive covenants relating to the protection of
confidential information and non-solicitation, and it also includes a
non-compete clause that will prevent Mr. Griessel from seeking or obtaining
employment by any competitor during the term of his employment with the Company
and for one year thereafter.
Mr. Griessel has also entered into an
agreement with Mr. Wilson and members of his family pursuant to which the
Wilsons will, effective October 1, 2008 assign to Mr. Griessel the economic
benefit of seven percent of the shares of common stock owned by
them.
Appointment
of Matthew Martin as Chief Financial Officer
On September 25, 2008, the Board of
Trustees also appointed Mr. Matthew M. Martin as the Company’s Chief Financial
Officer. Mr. Martin has been employed with the Company since 2005 as
Chief Accounting Officer, and has been serving as the Company’s Principal
Financial Officer since August 2008. Prior to joining the Company, he
worked for FTI Consulting serving as a Manager in the Forensic and Litigation
Consulting practice from 2002 to 2005. Prior to joining FTI
Consulting, he managed audits for Arthur Andersen. Mr. Martin is a
Certified Public Accountant in the State of Maryland.
Retirement
of Edwin L. Kelly as President and Chief Operating Officer
On October 1, 2008, Mr. Edwin L. Kelly
notified the Company that he will retire as the Company’s President and Chief
Operating Officer effective December 1, 2008. Through December 1,
2008, Mr. Kelly will continue to be compensated in accordance with the terms of
the Executive Retention Agreement between him and the Company, dated as of July
1, 2007 (the “Employment Agreement”). On December 1, 2008, the
Employment Agreement will terminate in accordance with its terms, and it will
not be renewed. Pursuant to the Employment Agreement, Mr. Kelly will
receive a severance payment equal to 36 months of his base salary to be paid in
a single lump sum on May 1, 2009. The Company has also agreed to
enter into a consulting agreement with Mr. Kelly providing compensation for his
services at a rate of $10,000 per month, for an initial term of one
year.