EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment
Agreement
(this
"Agreement") is made and entered into by
and among Home Properties, L.P., a New York limited partnership
(the "Company"),
Home Properties,
Inc., a Maryland corporation ("HME") and Edward J. Pettinella,
an individual (the "Employee").
WHEREAS,
the
Company
and the
Employee
desire to amend and
restate the
Employee's
existing
Employment
Agreement to formalize
the terms
pursuant to
which the Employee will continue to be employed by the Company.
NOW,
THEREFORE,
in
consideration
of the mutual
promises,
benefits and
covenants herein contained, the parties hereby agree as follows:
1. Term.
This Amended and Restated
Agreement will be effective on January
1, 2007 ("the Commencement
Date") and shall terminate on December 31, 2008 (the
"Expiration Date") unless terminated sooner in accordance with
Section 4 of this
Agreement.
Unless
either party gives
written
notice of
termination
of this
Agreement at least 60 days prior to the Expiration
Date,
this Agreement
shall
automatically
renew for an additional
one-year term, provided that the term of
this Agreement may not extend beyond December 31, 2009.
2. Duties. During the term of this Agreement,
subject to the direction and
control
of the
Board of
Directors
of HME (the
"Board
of
Directors"),
the
Employee shall serve in the capacity of Chief Executive Officer and
President of
HME and shall perform and discharge well and faithfully any
management and other
duties
consistent with the position of Chief Executive Officer and
President as
may be assigned to the Employee by the Board of
Directors.
The Employee
shall
devote
substantially
all of his business time to the interests and business of
the Company, HME and their subsidiaries and affiliates except
during a customary
vacation
period of four weeks per year,
periods of illness and other
absences
beyond his control.
3. Compensation, Benefits and Expenses.
3.1 Base
Salary.
The Base
Salary to be paid to the
Employee
under this
Agreement shall be determined in the discretion of the Compensation
Committee of
the Board of Directors (the "Compensation Committee").
3.2
Incentive
Compensation.
The
Employee
shall
receive
incentive
compensation pursuant to the Company's Incentive
Compensation Plan. The Company
has the right to change or
eliminate
the
Incentive
Compensation
Plan at any
time.
The
incentive
compensation
to be paid to the Employee in 2007 shall be
based on the Company's
performance in 2006, continuing in like progression with
the incentive
compensation
to be paid in any year based on the Company's prior
year's
performance,
including
the
incentive
compensation
to be paid to the
Employee in the year following the termination of this Agreement,
which shall be
based on the Company's
performance in the year of termination.
Notwithstanding
the above, the Employee acknowledges that whether any incentive
compensation is
to be paid and the amount of that
incentive
compensation
is completely in the
discretion of the Compensation Committee.
3.3 Stock Option Grants and
Restricted
Stock Awards.
On an annual basis,
the Company shall review the performance of the Company and the
Employee and the
Company may provide the Employee
with
additional
compensation
in the form of
long-term equity incentives,
such as stock options and restricted stock, if the
Compensation
Committee
determines
that the performance of the Company and the
Employee's
contribution
to the Company
warrant the payment of such additional
consideration.
3.4 Fringe Benefits.
During the period of the Employee's
employment,
the
Company
shall
provide
the
Employee
with such
fringe
benefits
as shall be
determined by the Compensation Committee, provided such fringe
benefits shall be
no less favorable than those provided to other senior executives of
the Company,
HME or their subsidiaries or affiliates.
3.5 Expenses. During the term of this Agreement, the Company
authorizes the
Employee to incur reasonable and necessary
expenses in the course of performing
his duties and rendering
services under this
Agreement,
and the Company shall
reimburse the Employee for all such
expenses
within 30 days after the Employee
renders to the Company an account of such expenses and such other
substantiation
as the Company may reasonably
request.
At the Company's
corporate office, the
Company
shall
provide
the
Employee
with an
office,
office
equipment
and
appropriate
clerical
support
to
discharge
Employee's
duties
under
this
Agreement.
4. Termination.
4.1
Termination.
This
Agreement may be terminated by the Company
(after
approval by the Board of Directors) at any time, with or without
"Cause," or by
the Employee at any time, with or without "Good Reason."
4.2 Definition of Cause. As used herein, "Cause" shall be
determined by the
Corporate
Governance/Nominating
Committee
of
the
Board
of
Directors
(the
"Corporate
Governance/Nominating
Committee")
in the reasonable and good faith
exercise of its discretion,
and shall mean: (a) dishonest or fraudulent actions
by the
Employee in the conduct of his duties for the Company or the
conviction
of the Employee of a felony;
(b) death of the Employee;
(c) a material failure
by the Employee to devote substantially all of his business time to
the business
of the Company;
(d) a material
failure by the Employee to follow the Company's
good faith
instructions and directives that is not cured by the Employee
within
60 days after receiving notice;
(e) unreasonable and material neglect,
refusal
or failure by the
Employee
to perform
the duties
assigned to him that is not
cured by the Employee within 60 days after receiving notice;
(f) the Employee's
material
breach of this Agreement
that is not cured by the Employee
within 60
days after receiving notice;
(g) the Employee's
material breach of any portion
of
Section
6 of this
Agreement;
(h) the
Employee's
breach
of the
Code of
Business
Conduct
and
Ethics
of Home
Properties,
Inc.
and
its
Affiliated
Companies and/or the Company's Code of Ethics for Senior Financial
Officers (the
"Code of Ethics"); (i) any other act or omission which subjects the
Company, HME
or their subsidiaries or affiliates to substantial public
disrespect, scandal or
ridicule;
(j) any governmental
regulatory agency recommends or orders that the
Company
terminate the
employment of the Employee or relieve him of his duties;
or (k) any physical or mental
disability of the Employee that prevents him from
performing his duties for 90 consecutive days or for an aggregate
of 180 days in
any 12-month period.
4.3
Definition of Good Reason.
As used herein,
"Good Reason" shall mean:
(a) a material
breach of this Agreement by the Company or HME that is not cured
within 60 days after receiving notice of such breach,
with the determination as
to whether
there has been a breach and
whether
the breach is
material
to be
determined by the Corporate
Governance/Nominating
Committee in the
reasonable
and good faith exercise of its discretion; or (b) any requirement
by the Company
that the
Employee
relocate
to a principal
place of
business
outside of the
Rochester, New York metropolitan area.
4.4
Termination
for Cause or Without Good Reason.
In the event that: (a)
the Company
terminates this Agreement for Cause; or (b) the Employee resigns or
terminates
without
Good
Reason,
then the
Employee's
rights to receive
any
payments and benefits pursuant to this Agreement shall,
effective upon the date
of termination,
terminate in all respects, except that the Company shall pay to
the Employee any payments and benefits
hereunder that are accrued and unpaid up
to such date (which
amount shall not include any incentive
compensation
under
the Company's
Incentive Plan for services rendered during the year in which the
termination
occurs), and shall reimburse the Employee for any expenses incurred
as of such date pursuant to Section 3.5 of this
Agreement.
In the event of any
termination described in this Section 4.4, then all rights of any
kind under any
existing
stock option held by the Employee
shall
expire
immediately
and all
shares of
restricted
stock held by the
Employee as to which the
restrictions
have
not
lapsed
in
accordance
with
the
provision
of the
award
shall be
forfeited.
4.5 Termination Without Cause or for Good Reason.
4.5.1
Separation
Pay. In the event that (a) the Company
terminates
this
Agreement
for any reason other than for Cause,
or (b) the Employee
resigns or
terminates
with Good
Reason,
then the Company
shall pay to the
Employee any
payments
and
benefits
hereunder
that are accrued and unpaid up to, and shall
reimburse the Employee for any expenses incurred pursuant to
Section 3.5 of this
Agreement prior to, the date of termination.
4.5.2
Additional
Separation
Pay. In the event of a
termination
of this
Agreement described in Section 4.5.1 of this Agreement, if the
Employee executes
the release and waiver under Section 4.5.3 of this Agreement and
such release is
not revoked,
and the Employee has complied with Section 4.9 of this
Agreement,
then in addition to the
payments to be made
pursuant to Section
4.5.1 of this
Agreement:
(i) the Company
shall pay to the Employee
within 20 business
days
after
termination (but no earlier than the expiration of the revocation
period
for the release),
a lump sum equal to the greater of 2.9
multiplied by (x) the
Employee's Base Salary, and (y) incentive compensation
determined in accordance
with
Section
3.2 of
this
Agreement
for
the
year
preceding
the
date
of
termination;
(ii) the
Company shall pay to the Employee prior to March 31st of
the year following
termination,
the incentive
compensation
that the Employee
would have earned based on his targeted bonus as provided in
Section 3.2 of this
Agreement
pro-rated
for the
portion
of the
year
that the
Employee
was an
employee;
(iii) all restrictions on restricted stock held by the Employee
shall
lapse; (iv) all options
previously issued to the Employee shall vest and remain
exercisable until the earlier of their expiration date or one year
following the
date of termination; and (v) the fringe benefits provided to the
Employee during
the Term of this
Agreement
pursuant
to Section
3.3 of this
Agreement
shall
continue
until
the
earlier
to occur of (A)
December
31,
2010,
or (B) the
Employee receives substantially
equivalent benefits from a subsequent employer.
In the event that the
termination
occurs
before
the amount of the
incentive
compensation for services rendered in the year preceding the date
of termination
has been
finally
determined,
then the
payment
to the
Employee
shall be an
estimate
based on the
Employee's
targeted bonus with an adjustment to be made
promptly upon the
determination
of the actual amount pursuant to the Company's
Incentive Compensation Plan.
4.5.3
Release and Waiver.
In exchange
for the
additional
consideration
under Section 4.5.2 of this
Agreement,
the Employee shall release the Company,
HME
and
their
affiliates,
and
their
directors,
officers,
employees,
shareholders,
partners,
agents
and
assigns
from
any
and
all
claims
and
obligations
that
arise out of or are in any way
related
to
events,
acts or
omissions
occurring
at
any
time
prior
to
or at
the
time
of
Employee's
termination.
Notwithstanding the foregoing,
the Employee shall not be required
to release the Company,
HME or their
affiliates
from:
(i) any
obligation to
indemnify the Employee
pursuant to the articles and bylaws of the Company,
any
valid fully executed indemnification
agreement with the Company, any applicable
directors and officers
liability
insurance policy, and applicable law; or (ii)
any
obligations
to make
payments
to the
Employee
under
Section
4 of this
Agreement.
The Employee shall
acknowledge
that: (A) he is knowingly and
voluntarily
waiving and
releasing
any rights he may have under the Age
Discrimination
in
Employment
Act ("ADEA");
(B) that the
consideration
give
