August 26, 2009
Mr. Matthew M.
Martin
Chief Financial
Officer
American
Community Properties Trust
222 Smallwood
Village
St. Charles, MD
20602
Re: Terms
of Employment
Dear
Matt:
First, allow me
to express my appreciation for your service as the Chief Financial
Officer of American Community Properties Trust (the “Parent
Company”) and as an employee of American Rental Management
Company (the “Company”). You have performed
your duties with great skill and professionalism and we are lucky
to have you. The purpose of this letter agreement (this
“Agreement”) is to reconfirm the terms of your position
as the Chief Financial Officer of the Parent Company and the terms
of your continued employment with the Company, as originally
approved by the Board of Trustees of the Parent Company when you
were first appointed as the Chief Financial Officer of the Parent
Company, and to create certain additional incentives for you to
remain as the Parent Company’s Chief Financial Officer and as
an employee of the Company.
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Position and
Duties . During your continued employment
with the Company, your position with the Parent Company shall
continue to be Chief Financial Officer and you shall have such
other duties, consistent with your position, as shall be specified
and designated from time to time by the Board of Trustees (the
“Board”), including the performance of services as an
employee of the Company and any other subsidiary or affiliate of
the Parent Company without any additional
compensation. You shall devote substantially all of your
business time and effort to the performance of your
duties.
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Base
Salary . Your
annual base salary (“Annual Salary”) will continue to
be $225,000, payable semi-monthly and subject to regular deductions
and withholdings as required by law. Your Annual Salary
may be increased (but not decreased) from time to time by an amount
as may be approved by the Compensation Committee of the
Board. Your annual base salary will not be reduced below
$225,000.
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Benefits and
Incentives . You will continue to be entitled to
participate in all of the benefit plans and programs, including the
Parent Company’s long-term incentive plan, in which other
senior executives of the Parent Company are entitled to
participate. In addition, the Company will continue to
pay you a car allowance of $500.00 per month.
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Termination;
Severance . If
your position with Parent Company is terminated by the Parent
Company for any reason other than for Cause (as defined below), or
if you resign from your position with the Parent Company with Good
Reason (as defined below), then the Company will pay you a lump-sum
cash payment in an amount equal to one-half of your then current
Annual Salary within 10 days after the effective date of such
termination or resignation. As a condition to receiving
such payment, you will resign from all other positions with the
Parent Company, the Company and any of their respective
subsidiaries or affiliates and you will execute a general release
of claims in form reasonably acceptable to the Board.
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Definitions . The following definitions shall
apply:
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“Cause” shall mean:
(i) your
commission of a felony or a crime involving moral
turpitude;
(ii) your
commission of any act of theft, fraud, embezzlement or
misappropriation against the Parent Company or its subsidiaries or
affiliates;
(iii) your
continued failure to substantially perform your duties as the Chief
Financial Officer of the Parent Company (other than such failure
resulting from your incapacity due to physical or mental illness)
or any material violation of Parent Company policy, which failure
is not remedied within 30 calendar days after written demand for
substantial performance is delivered by the Parent Company which
specifically identifies the manner in which the Parent Company
believes that you have not substantially performed your duties or
violated Parent Company policy; or
(iv) your
material breach of this Agreement.
“Good Reason” shall mean, without
your express written consent, the occurrence of any of the
following circumstances unless, if correctable, such circumstances
are fully corrected within 30 days after you deliver to the Parent
Company written notice of resignation for Good Reason:
(i) The
assignment to you of duties materially inconsistent with your
position as Chief Financial Officer of the Parent Company, or an
alteration in the nature of your position, duties, responsibilities
and authorities (other than inadvertent actions which
are
