ex10-1.htm


    EMPLOYMENT
AGREEMENT

    


    THIS EMPLOYMENT AGREEMENT (this “Agreement”) effective
as of December
5, 2008, by and between MID-AMERICA APARTMENT COMMUNITIES,
INC., a Tennessee corporation (the “Company”), and H. ERIC BOLTON (the “Executive”).

    


    WITNESSETH:

    


    WHEREAS, the Company and
Executive entered into that certain employment agreement between Mid-America
Apartment Communities, Inc. and Executive effective as of December __, 1999 (the
“Original Employment
Agreement”);

    


    WHEREAS, the Company and the
Executive desire to enter into this Agreement which supercedes and replaces in
its entirety the Original Employment Agreement;

    


    WHEREAS, the Company desires
to employ the Executive to serve as the President and Chief Executive Officer of
the Company; and

    


    WHEREAS, to the extent this
Agreement provides for any “deferred compensation” within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), the
Agreement will be administered in compliance with Code Section 409A and the
regulations promulgated thereunder; and

    


    WHEREAS, the Company and the
Executive each deem it necessary and desirable to execute a written document
setting forth the terms and conditions of said relationship.

    


    NOW, THEREFORE, in
consideration of the premises and mutual obligations hereinafter set forth the
parties agree as follows:

     

    1. Definitions.  For
purposes of this Agreement, the following terms shall have the following
definitions:

     

    


    “1994 Plan” means the
Company’s Amended and Restated 1994 Restricted Stock and Stock Option
Plan.

    


    “2004 Plan” means the
Company’s 2004 Stock Plan.

    


    “Additional Amount”
means the amount the Company shall pay to the Executive in order to indemnify
the Executive against all claims, losses, damages, penalties, expenses,
interest, and Excise Taxes (including additional taxes on such Additional
Amount) incurred by Executive as a result of Executive receiving Change of
Control Benefits as further described in Section 9(e) of this
Agreement.

    


    “Agreement” has the
meaning set forth in the preamble above.

    


    “Arbitrators” means
the arbitrators selected to conduct any arbitration proceeding in connection
with any disputes arising out of or relating to this Agreement.

    


    “Award Plans” has the
meaning set forth in Section 4(b) of this
Agreement.

    


    “Base Salary” means
the annual salary to be paid to Executive as set forth in Section 4(a) of this
Agreement.

    


    “Benefit Plans” has
the meaning set forth in Section 4(c) of this
Agreement.

    


    “Board” means the
Board of Directors of the Company.

    


    “Change of Control”
means any of the following events which occur during the Term of this
Agreement:

     

    (i) any
“person”, as that term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act , becomes, is discovered to be, or files a report on Schedule 13D
or 14D-1 (or any successor schedule, form or report) disclosing that such person
is, a beneficial owner (as defined in Rule 13d-3 under the Exchange Act or any
successor rule or regulation), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities entitled to vote generally in the election of
directors, regardless of whether or not the Board shall have approved the
acquisition of such securities by the acquiring person;

     

     

    (ii) individuals
who, as of the effective date of this Agreement, constitute the Board cease for
any reason to constitute at least a majority of the Board, unless any such
change is approved by the vote of at least 80% of the members of the Board in
office immediately prior to such cessation;

     

     

    (iii) the
Company is merged, consolidated or reorganized into or with another corporation
or other legal person, or securities of the Company are exchanged for securities
of another corporation or other legal person, and immediately after such merger,
consolidation, reorganization or exchange less than 80% of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held, directly or indirectly, in the
aggregate by the holders of securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction;

     

     

    (iv) the
Company in any transaction or series of related transactions, sells all or
substantially all of its assets to any other corporation or other legal person
and less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or sales
are held, directly or indirectly, in the aggregate by the holders of securities
entitled to vote generally in the election of directors of the Company
immediately prior to such sale;

     

     

    (v) the
Company and its affiliates shall sell or transfer (in a single transaction or
series of related transactions) to a non-affiliate business operations or assets
that generated at least two-thirds of the consolidated revenues (determined on
the basis of the Company’s four most recently completed fiscal quarters for
which reports have been filed under the Exchange Act) of the Company and its
subsidiaries immediately prior thereto;

     

     

    (vi) the
Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K (or
any successor, form or report or item therein) that a change in control of the
Company has occurred;

     

     

    (vii) the
shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or

     

     

    (viii) any other
transaction or series of related transactions occur that have substantially the
effect of the transactions specified in any of the preceding clauses in this
sentence.

     

    


    “Change of Control
Benefits” means the Executive’s receipt of the Termination Payment or any
other payment, benefit or compensation (except for the Additional Amount) which
the Executive receives or has the right to receive from the Company or any of
its affiliates as a result of a Change of Control Termination.

    


    “Change of Control
Termination” means (i) a Termination Without Cause of the Executive’s
employment by the Company, in anticipation of, on, or within three (3) years
after a Change of Control, (ii) the Executive’s resignation for Good Reason on
or within three (3) years after a Change of Control, or (iii) Executive’s giving
of a Termination Notice of Voluntary Termination during the thirty days
immediately following the Change of Control or during the thirty days
immediately following the one year anniversary of the Change of
Control.

    


    “Code” has the meaning
set forth in the recitals above.

    


    “Company” means
Mid-America Apartment Communities, Inc., a Tennessee corporation, and any
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

    


    “Company Shares” means
the shares of common stock of the Company or any securities of a successor
company which shall have replaced such common stock.

    


    “Compensation
Committee” means the compensation committee of the Board.

    


    “Excess Parachute
Payments” has the meaning set forth in section 280G of the
Code.

    


    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

    


    “Excise Tax” means a
tax on Excess Parachute Payments imposed pursuant to Code section
4999.

    


    “Executive” means the
person identified in the preamble paragraph of this Agreement.

    


    “Fair Market Value”
means, on any give date, the closing sale price of the common stock of the
Company on the New York Stock Exchange on such date, or, if the New York Stock
Exchange shall be closed on such date, the next preceding date on which the New
York Stock Exchange shall have been open.

    


    “Good Reason” means
that the Executive terminated his employment because, within the six (6) month
period preceding the Executive’s termination, one or more of the following
conditions arose and the Executive notified the Company of such condition within
90 days of its occurrence and the Company did not remedy such condition within
30 days:

     

    (i) a
material diminution in the Executive’s Base Salary as in effect on the date
hereof or as the same may be increased from time to time;

     

    (ii) a
material diminution in the Executive’s authority, duties, or
responsibilities;

     

    (iii) the
relocation of the Company’s principal executive offices to a location outside a
thirty-mile radius of Memphis, Tennessee or the Company’s requiring the
Executive to be based at any place other than a location within a thirty-mile
radius of Memphis, Tennessee, except for reasonably required travel on the
Company’s business; or

     

    (iv) any other
action or inaction that constitutes a material breach by the Company of this
Agreement.

     

    “Multi-Family Residential
Business” means the business of acquiring, developing, constructing,
owning or operating multi-family residential apartment communities.

    


    “Multi-Family Residential
Property” means any real estate upon which the Multi-Family Residential
Business is being conducted.

    


    “Option(s)” means any
options issued to Executive pursuant to the 1994 Plan, 2004 Plan or any other
equity incentive plan adopted by the Company, any option granted with respect to
Partnership Units, or any option granted under the plan of any successor company
that replaces or assumes the Company’s or the Partnership’s
options.

    


    “Original Employment
Agreement” has the meaning set forth in the recitals.

    


    “Partnership” means
Mid-America Apartments, L.P., a Tennessee limited partnership.

    


    “Partnership Unit(s)”
means limited partnership interests of the Partnership.  The holder
has the option of requiring the Company to redeem such interests.  The
Company may elect to effectuate such redemption by either paying cash or
exchanging Company Shares for such interests.

    


    “Permanent Disability”
means the Executive: (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months; or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, receiving income replacement benefits for a period of
not less than three (3) months under an accident and health plan covering
employees or directors of the Company.  Medical determination of
Permanent Disability may be made by either the Social Security Administration or
by the provider of an accident or health plan covering employees or directors of
the Company provided that the definition of “disability” applied under such
disability insurance program complies with the requirements of the preceding
sentence.  Upon the request of the Company, the Executive must submit
proof to the Company of the Social Security Administration’s or the provider’s
determination.

    


    “Restricted Stock”
means any share of restricted common stock issued to Executive pursuant to the
1994 Plan, 2004 Plan or any other equity incentive plan adopted by the Company,
any option granted with respect to Partnership Units, or any restricted stock
granted under the plan of any successor company that replaces or assumes the
Company’s or the Partnership’s restricted stock awards.

    


    “Specified Employee”
means a key employee (as defined in Section 416(i) of the Code without regard to
paragraph 5 thereof) of the Company if any stock of the Company is publicly
traded on an established securities market or otherwise.

    


    “Term” has the meaning
assigned to it in Section 3 of this
Agreement.

    


    “Termination Date”
means the date on which the employment of Executive is terminated, which date
shall be (i) in the case of Executive’s Permanent Disability, 30 days after a
Termination Notice is given and Executive does not return to the full-time
performance of his duties within such 30 day period or (ii) in all other
instances, the date specified as the Termination Date in the Termination Notice,
which date shall not be less than thirty nor more than sixty days from the date
the Termination Notice is given.

    


    “Termination of
Employment” means the termination of the Employee’s employment with the
Company for reasons other than death or Permanent Disability.  Whether
a Termination of Employment takes place is determined based on the facts and
circumstances surrounding the termination of the Executive’s employment and
whether the Company and the Executive intended for the Executive to provide
significant services for the Company following such termination.  A
change in the Executive’s employment status will not be considered a Termination
of Employment if:

     

    (i) the
Executive continues to provide services as an employee of the Company at an
annual rate that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three full calendar years of
employment (or, if employed less than three years, such lesser period) and the
annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or, if less, such lesser period), or

     

    (ii) the
Executive continues to provide services to the Company in a capacity other than
as an employee of the Company at an annual rate that is fifty percent (50%) or
more of the services rendered, on average, during the immediately preceding
three full calendar years of employment (or if employed less than three years,
such lesser period) and the annual remuneration for such services is fifty
percent (50%) or more of the average annual remuneration earned during the final
three full calendar years of employment (or if less, such lesser
period).

     

    “Termination Notice”
means a written notice of termination of employment by Executive or the
Company.

    


    “Termination Payment”
has the meaning set forth in Section 9(b)(i) of this
Agreement.

    


    “Termination With
Cause” means the termination of the Executive’s employment by act of the
Board for any of the following reasons:

     

    (i) the
Executive’s conviction for a felony;

     

     

    (ii) the
Executive’s theft, embezzlement, misappropriation of or intentional infliction
of material damage to the Company’s property or business
opportunity;

     

     

    (iii) the
Executive’s intentional breach of the noncompetition provisions contained in
Section 10 of this
Agreement; or

     

     

    (iv) the
Executive’s ongoing willful neglect of or failure to perform his duties
hereunder or his ongoing willful failure or refusal to follow any reasonable,
unambiguous duly adopted written direction of the Board or any duly constituted
committee thereof that is not inconsistent with the description of the
Executive’s duties set forth in Section 2, if such
willful neglect or failure is materially damaging or materially detrimental to
the business and operations of the Company; provided that Executive shall have
received written notice of such failure and shall have continued to engage in
such failure after 30 days following receipt of such notice from the Board,
which notice specifically identifies the manner in which the Board believes that
Executive has engaged in such failure.

     

    


    For
purposes of this subsection, no act, or failure to act, shall be deemed
“willful” unless done, or omitted to be done, by Executive not in good faith,
and without reasonable belief that such action or omission was in the best
interest of the Company.  Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to Executive
and an opportunity for Executive, together with his counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, Executive was
guilty of misconduct as set forth above, and of continuing such misconduct after
notice from the Board.

    


    “Termination Without
Cause” means the termination of the Executive’s employment by the Company
for any reason other than Termination With Cause, or termination by the Company
due to Executive’s death or Permanent Disability.

    


    “Uniform Arbitration
Act” means the Uniform Arbitration Act, Tennessee Code Annotated §
29-5-391 et seq., as amended.

    


    “Voluntary
Termination” means the Executive’s voluntary termination of his
employment hereunder for any reason other than Good Reason.  If the
Executive gives a Termination Notice of Voluntary Termination and, prior to the
Termination Date, the Executive voluntarily refuses or fails to provide
substantially all the services described in Section 2 hereof for a
period greater than two consecutive weeks, the Voluntary Termination shall be
deemed to be effective as of the date on which the Executive so ceases to carry
out his duties. Voluntary refusal to perform services shall not include taking
vacation otherwise permitted in accordance with Section 4(d) hereof, the
Executive’s failure to perform services on account of his illness or the illness
of a member of his immediate family, provided such illness is adequately
substantiated at the reasonable request of the Company, or any other absence
from service with the written consent of the Board.

     

    2. Employment; Services.
The Company and the Executive acknowledge and agree that the Original Employment
Agreement is hereby terminated by mutual consent and neither the Company nor the
Executive shall have any continuing obligation to the other pursuant to the
terms of the Original Employment Agreement.  The mutual agreements and
covenants contained in this Agreement shall replace and supercede in their
entirety the provisions of the Original Employment Agreement.  The
Company shall employ the Executive, and the Executive agrees to be so employed,
in the capacity of President and Chief Executive Officer of the Company to serve
for the Term hereof, subject to earlier termination as hereinafter
provided.  The Executive shall devote such amount of his time and
attention to the Company’s affairs as are necessary to perform his duties to the
Company in his capacity as President and Chief Executive Officer.  The
Executive shall have authority and responsibility with respect to the day-to-day
management of the Company, consistent with direction from the Company’s
Board.

     

     

    3. Term;
Termination.

     

     

    (a) The term
of the Executive’s employment hereunder shall be one year and shall commence on
the date hereof and shall be extended automatically, for so long as the
Executive remains employed by the Company hereunder, the first day of each month
beginning June 1, 2008, for an additional one-month period (such period, as it
may be extended from time to time, being herein referred to as the “Term”), unless
terminated earlier in accordance with the terms of this Agreement, to the effect
that on the first day of each month, the remaining term of this Agreement and
the Executive’s employment hereunder shall be one year.

     

     

    (b) Any
purported termination of employment by Executive or the Company shall be
communicated by a Termination Notice.  The Termination Notice shall
indicate the specific termination provision in this Agreement relied upon and
set forth the facts and circumstances claimed to provide a basis for
termination.  If the party receiving the Termination Notice notifies
the other party prior to the Termination Date that a dispute exists concerning
the termination, the Termination Date shall be extended until the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction.  The Termination Date shall be extended by a
notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence.  Notwithstanding the pendency of any such dispute, the
Company will continue to pay Executive his full compensation in effect when the
notice giving rise to the dispute was given and Executive shall continue as a
participant in all Award Plans and Benefit Plans in which Executive participated
when the Termination Notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this
subsection.  Amounts paid under this subsection are in addition to all
other amounts due under this Agreement and shall not be offset against or reduce
any other amounts due under this Agreement.

     

     

    4. Compensation.

     

     

    (a) Base
Salary.  During the Term, the Company shall pay the Executive
for his services a “Base Salary” of
$407,753, to be paid in accordance with customary Company policies, such Base
Salary being subject to any increases approved by the Compensation Committee or
the Board, as the case may be.

     

     

    (b) Award
Plans.  During the Term, the Executive shall also be eligible
for additional compensation in the form of a cash bonus, shares of stock in the
Company, Partnership Units, or Options, and shall be eligible to participate the
1994 Plan, 2004 Plan, and any other stock option, incentive compensation, profit
participation, bonus or extra compensation plan that is adopted by the Company
and in which the Company’s executive officers generally participate
(collectively, “Award
Plans”).

     

     

    (c) Benefit
Plans.  During the Term, Executive shall be entitled to
participate in, and to all rights and benefits provided by, each and every
health, life, medical, dental, disability, insurance and welfare plan maintained
by the Company including, without limitation, the benefits contemplated by Section 4 of this
Agreement, that are maintained from time to time by the Company for the benefit
of Executive, the executives of the Company generally or for the Company’s
employees generally, provided that Executive is eligible to participate in such
plan under the eligibility provisions thereof that are generally applicable to
the participants thereof (collectively, “Benefit
Plans”).

     

     

    (d) Vacation. The
Executive shall be entitled each calendar year to vacation time, during which
time his compensation shall be paid in full. The time allotted for such vacation
shall be three (3) weeks.

     

     

    (e) Overall
Qualification.  Nothing in this Agreement shall be construed as
preventing the Company from modifying, suspending, discontinuing or terminating
any of the Benefit Plans or Award Plans without notice or liability to Executive
so long as (i) the modification, suspension, discontinuation or termination of
any such plan is authorized by and performed in accordance with the specific
provisions of such plan and (ii) such modification, suspension, discontinuation
or termination is taken generally with respect to all similarly situated
employees of the Company and does not single out or discriminate against
Executive.

     

     

    5. Expenses. The Company
recognizes that the Executive will have to incur certain out-of-pocket expenses,
including but not limited to travel expenses, related to his services and the
Company’s business and the Company agrees to reimburse the Executive for all
reasonable expenses necessarily incurred by him in the performance of his duties
upon presentation of a voucher or documentation indicating the amount and
business purposes of any such expenses; provided that Executive complies with
the Company’s policies and procedures regarding business expenses.

     

     

    6. Voluntary Termination;
Termination With Cause.  Except as otherwise provided in Section 9 of this
Agreement, if (i) the Executive shall cease being an employee of the Company on
account of a Voluntary Termination or (ii) there shall be a Termination With
Cause, the Executive shall not be entitled to any compensation after the
Termination Date of such Voluntary Termination or Termination With Cause (except
Base Salary and vacation accrued but unpaid on the Termination Date of such
event). In the event of a Voluntary Termination or Termination With Cause, the
Executive shall continue to be subject to the noncompetition covenant contained
in Section 10.

     

     

    7. Death or Disability.
In the event of the Executive’s death or Permanent Disability, the Company shall
continue to pay the Executive or his heirs, devisees, executors, legatees or
personal representatives, as appropriate, the semi-monthly payments of the Base
Salary then in effect for one year from the Executive’s death or Termination
Date following determination of Permanent Disability, as
applicable.  The Company shall also pay any amounts due pursuant to
the terms of any Benefit Plans and Award Plans in which Executive was a
participant, including, without limitation, the pro rata amount of any bonus to
be paid to Executive for the fiscal year in which Executive was
terminated.  Further, if Executive’s employment is terminated due to
Executive’s Permanent Disability and if Executive is no longer eligible to
participate in one or more of the Benefit Plans because of such termination,
then within thirty (30) days of the Executive’s Termination Date the Company
shall pay to Executive a lump sum in an amount equal to twelve (12) months of
COBRA continuation coverage under the Company’s group health plan and twelve
(12) months of insurance coverage which is substantially equivalent to the
remaining Benefit Plans to which Executive was entitled immediately prior to
such termination.

     

     

    8. Termination Without Cause;
Resignation for Good Reason.  The Company may terminate
Executive for any reason, or no reason at all, at any time and Executive may
terminate this Agreement at any time for Good Reason, provided that, upon
termination of this Agreement by the Executive for Good Reason or in the event
of a Termination Without Cause, except as otherwise provided in Section 9 of this
Agreement, the Company shall provide the compensation and benefits set forth in
this Section 8.  Executive
may terminate this Agreement for Good Reason notwithstanding any incapacity due
to physical or mental illness.  Executive’s continued employment shall
not constitute consent to, or a waiver of, rights with respect to any
circumstances constituting Good Reason hereunder.

     

     

    (a) Base Salary, Benefit and
Award Plans.  The Company shall continue to pay the Executive
the semi-monthly payments of the Base Salary then in effect for one year after
the Termination Date.  The Company shall also pay on the Termination
Date any amounts due pursuant to the terms of any Benefit Plans and Award Plans
in which Executive was a participant, including, without limitation, the pro
rata amount of any bonus to be paid to Executive for the fiscal year in which
Executive was terminated.  In addition, if Executive is no longer
eligible to participate in one or more of the Benefit Plans because of
termination of employment, then within thirty (30) days of the Executive’s
Termination Date the Company shall pay to Executive a lump sum in an amount
equal to twelve (12) months of COBRA continuation coverage under the Company’s
group health plan and twelve (12) months of insurance coverage which is
substantially equivalent to the remaining Benefit Plans to which Executive was
entitled immediately prior to such termination. All payments under this Section 8(a) shall be
made no later than the last day of the second calendar year following the year
in which the Executive incurs a Termination of
Employment.  Notwithstanding the foregoing, if the Executive is a
Specified Employee and the total of the payments under this Section 8(a) exceeds
the limit set forth in Treas. Reg. §1.409A-1(b)(9)(iii)(A) (related to
separation pay), then, the amount in excess of such limit shall be delayed for
six (6) months following the Executive’s Termination Date.  The
delayed amount shall be paid in a lump sum after the end of the six-month
delay.

     

     

    (b) Stock Options; Restricted
Stock.  All Options and Restricted Stock granted to Executive
shall become fully vested at the Termination Date.  In lieu of Company
Shares issuable upon exercise of any outstanding and unexercised Options granted
to Executive, Executive may, at Executive’s option, receive an amount in cash
equal to the product of (i) the Fair Market Value of Company Shares on the
Termination Date over the per share exercise price of each Option held by
Executive, times (ii) the number of Company Shares covered by each such
Option.   In the event Executive does not elect to receive a cash
payment for any outstanding and unexercised Options granted to Executive,
Executive shall have the right to exercise such Options in accordance with the
terms and conditions provided in the applicable stock option plans as if
Executive had continued his employment with the Company, notwithstanding
Executive’s termination.

     

     

    (c) Legal
Fees.  The Company shall also pay to Executive all legal fees
and expenses incurred by Executive as a result of a Termination Without Cause or
Executive’s resignation for Good Reason (including all such fees and expenses,
if any, incurred in contesting or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this
Agreement).

     

     

    9. Change of
Control.

     

     

    (a) Termination in Connection
with a Change of Control.  Notwithstanding any other provision
in this Agreement, in the event of a Change of Control Termination, the Company
shall, on the Termination Date, pay the Executive, in addition to any Base
Salary earned but not paid through the Termination Date and any amounts due
pursuant to Award Plans and Benefit Plans including, without limitation, the pro
rata amount of Executive’s anticipated bonus for the fiscal year in which
Executive is terminated, the compensation and benefits set forth in Section 9(b).

     

     

    (b) Compensation and
Benefits.

     

     

    (i) A
Termination Payment shall be paid which is equal to the sum of two and 99/100
(2.99) times the Executive’s annual base salary in effect on the Termination
Date plus two and 99/100 (2.99) times the average annual cash bonus paid to the
Executive for the two immediately preceding fiscal years, under this Agreement
or otherwise (but not including compensation under the Company’s Shareholder
Value Plan) (“Termination
Payment”); provided, however, that in no event shall the amount of the
Termination Payment exceed the amount that would be payable to Executive as Base
Salary and bonus compensation (based on the average annual bonus compensation
paid to Executive for the two immediately preceding fiscal years under this
Agreement or otherwise) between the Termination Date and the date upon which the
Executive and the Compensation Committee of the Board have mutually agreed that
the Executive will retire.  Notwithstanding Section 9(a), the
Termination Payment shall be calculated and paid immediately prior to the
closing of the transactions constituting a Change of Control if the Executive
receives notice prior to the Change of Control that his employment will be
terminated on or after the Change of Control.

     

     

    (ii) If
Executive is no longer eligible to participate in one or more of the Benefit
Plans because of termination of employment, then within thirty (30) days of the
Executive’s Termination Date the Company shall pay to Executive a lump sum in an
amount equal to eighteen (18) months of COBRA continuation coverage under the
Company’s group health plan, six (6) months of coverage under an individual
health insurance policy reasonably equivalent to the Company’s group health
plan, and twenty-four (24) months of insurance coverage which is substantially
equivalent to the remaining Benefit Plans to which Executive was entitled
immediately prior to such termination.

     

     

    (iii) In lieu
of Company Shares issuable upon exercise of any outstanding and unexercised
Options granted to Executive, Executive may, at Executive’s option, receive an
amount in cash equal to the product of (i) the excess of the higher of the Fair
Market Value of Company Shares on the Termination Date, or the highest per share
price for Company Shares actually paid in connection with any Change of Control
of the Company, over the per share exercise price of each Option held by
Executive, times (ii) the number of Company Shares covered by each such Option.
In the event Executive does not elect to receive a cash payment for any
outstanding and unexercised Options granted to Executive, Executive shall have
the right to exercise such Options in accordance with the terms and conditions
provided in the applicable stock option plans.

     

     

    (iv) The
Company shall also pay to Executive all legal fees and expenses incurred by
Executive as a result of a termination described in Section 9(a) of this
Agreement (including all such fees and expenses, if any, incurred in contesting
or disputing any such termination or in seeking to obtain or enforce any right
or benefit provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of Section 4999 of the
Code to any payment or benefit provided hereunder).

     

     

    (c) Certain Transactions.
Notwithstanding the provisions of subparagraphs (i) or (vi) in the definition of
change of control, unless otherwise determined in a specific case by majority
vote of the Board, a Change of Control shall not be deemed to have occurred for
purposes of this Agreement solely because (i) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the voting securities or
(ii) any Company-sponsored employee stock ownership plan, or any other employee
benefit plan of the Company, either files or becomes obligated to file a report
or a proxy statement under or in response to Schedule 13D, Schedule 14D-l, Form
8-K or Schedule 14A (or any successor schedule, form or report or item thereon)
under the Exchange Act, disclosing beneficial ownership by it of shares of stock
of the Company, or because the Company reports that a Change of Control of the
Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership.

     

     

    (d) Escrow
Arrangement.  If within thirty (30) days after the effective
date of a Change of Control Executive’s employment has not been terminated, the
Company shall deposit with an escrow agent, pursuant to an escrow agreement
between the Company and such escrow agent, a sum of money, or other property
permitted by such escrow agreement, which is substantially sufficient in the
opinion of the Company’s management to fund the amounts due to Executive set
forth in Section
9(b) of this
Agreement.  The escrow agreement shall provide that such agreement may
not be terminated until the earlier of (i) Executive’s employment has terminated
and all amounts due to Executive as set forth in this Agreement have been paid
to Executive or (ii) three (3) years after the effective date of the Change of
Control.

     

     

    (e) Tax Matters. If the
Excise Tax on Excess Parachute Payments will be imposed on the Executive under
Code section 4999 as a result of the Executive’s receipt of the Change of
Control Benefits, the Company shall indemnify the Executive and hold him
harmless against all claims, losses, damages, penalties, expenses, interest, and
Excise Taxes. To effect this indemnification, the Company shall pay to the
Executive the Additional Amount which is sufficient to indemnify and hold the
Executive harmless from the application of Code sections 280G and 4999,
including the amount of (i) the Excise Tax that will be imposed on the Executive
under section 4999 of the Code with respect to the Change of Control Benefits;
(ii) the additional (A) Excise Tax under section 4999 of the Code, (B) hospital
insurance tax under section 3111(b) of the Code and (C) federal, state and local
income taxes for which the Executive is or will be liable on account of the
payment of the amount described in subitem (i); and (iii) the further excise,
hospital insurance and income taxes for which the Executive is or will be liable
on account of the payment of the amount described in subitem (ii) and this
subitem (iii) and any other indemnification payment under this Section 9(e). The
Additional Amount shall be calculated and paid to the Executive at the time that
the Termination Payment is paid to the Executive. In calculating the Additional
Amount, the highest marginal rates of federal and applicable state and local
income taxes applicable to individuals and in effect for the year in which the
Change of Control occurs shall be used. Nothing in this paragraph shall give the
Executive the right to receive indemnification from the Company for federal,
state or local income taxes or hospital insurance taxes payable solely as a
result of the Executive’s receipt of (a) the Change in Control Benefits, or (b)
any additional payment, benefit or compensation other than the Additional
Amount.  As specified in items (ii) and (iii), above, all income,
hospital insurance and additional Excise Taxes resulting from additional
compensation in the form of the Excise Tax payment specified in item (i), above,
shall be paid to the Executive.

     

    


    The provisions of this Section 9(e) are
illustrated by the following example:

    


    Assume that the Termination Payment and
all other Change of Control Benefits result in a total federal, state and local
income tax and hospital insurance tax liability of $180,000; and an Excise Tax
liability under Code section 4999 of $70,000. Under such circumstances, the
Executive is solely responsible for the $180,000 income and hospital insurance
tax liability; and the Company must pay to the Executive $70,000, plus an amount
necessary to indemnify the Executive for all federal, state and local income
taxes, hospital insurance taxes, and Excise Taxes that will result from the
$70,000 payment to the Executive and from all further indemnification to the
Executive of taxes attributable to the initial $70,000 payment.

     

    10. Noncompetition.
During the Term, the Executive shall not, other than through the Company or
affiliates of the Company, own any interest in any Multi-Family Residential
Property (other than Multi-Family Residential Property in which the Company or
the Partnership has an ownership interest), as partner, shareholder or
otherwise, or engage in the Multi-Family Residential Business, directly or
indirectly, for his own account or for the account of others, either as an
officer, director, shareholder, owner, partner, promoter, employee, consultant,
advisor, agent, manager, or in any other capacity.  For a period of
two (2) years after a Change of Control Termination, Executive shall not own any
interest in any Multi-Family Residential Property as partner, shareholder or
otherwise, or directly or indirectly, for his own account or for the account of
others, either as an officer, director, promoter, employee, consultant, advisor,
agent, manager, or in any other capacity, engage in the Multi-Family Residential
Business within 5 miles of any Multi-Family Residential Property owned by the
Company or the Partnership at the time of termination of
employment.

     

    


    The Executive agrees that damages at
law for violation of the restrictive covenant contained herein would not be an
adequate or proper remedy to the Company, and that should the Executive violate
or threaten to violate any of the provisions of such covenant, the Company, its
successors or assigns, shall be entitled to obtain a temporary or permanent
injunction, as appropriate, against the Executive in any court having
jurisdiction over the person and the subject matter, prohibiting any further
violation of any such covenants. The injunctive relief provided herein shall be
in addition to any award of damages, compensatory, exemplary or otherwise,
payable by reason of such violation.

    


    Furthermore, the Executive acknowledges
that this Agreement has been negotiated at arms’ length by the parties, neither
being under any compulsion to enter into this Agreement, and that the foregoing
restrictive covenant does not in any respect inhibit his ability to earn a
livelihood in his chosen profession without violating the restrictive covenant
contained herein. The Company by these presents has attempted to limit the
Executive’s right to compete only to the extent necessary to protect the Company
from unfair competition. The Company recognizes, however, that reasonable people
may differ in making such a determination. Consequently, the Company agrees that
if the scope or enforceability of the restricted covenant contained herein is in
any way disputed at any time, a court or other trier of fact may modify and
enforce the covenant to the extent that it believes to be reasonable under the
circumstances existing at the time.

     

    11. Employment
Status.  The parties acknowledge and agree that Executive is an
employee of the Company, not an independent contractor.  Any payments
made to Executive by the Company pursuant to this Agreement shall be treated for
federal and state payroll tax purposes as payments made to a Company employee,
irrespective whether such payments are made subsequent to the Termination
Date.

     

     

    12. Notices.  All
notices or deliveries authorized or required pursuant to this Agreement shall be
deemed to have been given when in writing and personally delivered or when
deposited in the U.S. mail, certified, return receipt requested, postage
prepaid, addressed to the parties at the following addresses or to such other
addresses as either may designate in writing to the other party:

     

    


    
      	
              To
      the Company:

            	
              6584
      Poplar Avenue, Suite 340

              Memphis,
      Tennessee 38128

              Attn:  Chief
      Financial Officer

               

            
	
              To
      the Executive:

            	
              H.
      Eric Bolton

              3290
      Kenny Drive

              Germantown,
      Tennessee 38139

            


    

    


     

    13. Entire Agreement.
This Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof and shall not be modified in any manner
except by instrument in writing signed, by or on behalf of, the parties hereto;
provided, however, that any amendment or termination of the covenant of
noncompetition in Section 10 must be approved by a majority of the Directors of
the Company other than the Executive, if the Executive is then a director of the
Company. This Agreement shall be binding upon and inure to the benefit of the
heirs, successors and assigns of the parties hereto.

     

     

    14. Arbitration.  Any
controversy concerning or claim arising out of or relating to this Agreement
shall be settled by final and binding arbitration in Memphis, Shelby County,
Tennessee at a location specified by the party seeking such
arbitration.

     

     

    (a) The
Arbitrators.  Any arbitration proceeding shall be conducted by
three (3) Arbitrators and the decision of the Arbitrators shall be binding on
all parties.  Each Arbitrator shall have substantial experience and
expert competence in the matters being arbitrated.  The party desiring
to submit any matter relating to this Agreement to arbitration shall do so by
written notice to the other party, which notice shall set forth the items to be
arbitrated, such party’s choice of Arbitrator, and such party’s substantive
position in the arbitration.  The party receiving such notice shall,
within fifteen (15) days after receipt of such notice, appoint an Arbitrator and
notify the other party of its appointment and of its substantive
position.  The Arbitrators appointed by the parties to the Arbitration
shall select an additional Arbitrator meeting the aforedescribed
criteria.  The Arbitrators shall be required to render a decision in
accordance with the procedures set forth in Subparagraph (b) below within thirty
(30) days after being notified of their selection.  The fees of the
Arbitrators shall be equally divided amongst the parties to the
arbitration.

     

     

    (b) Arbitration
Procedures.  Arbitration shall be conducted in accordance with
the Uniform Arbitration Act, except to the extent the provisions of such Act are
modified by this Agreement or the subsequent mutual agreement of the
parties.  Judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof.  Any party hereto
may bring an action, including a summary or expedited proceeding, to compel
arbitration of any controversy or claim to which this provision applies in any
court having jurisdiction over such action in Shelby County, Tennessee, and the
parties agree that jurisdiction and venue in Shelby County, Tennessee are
appropriate and approved by such parties.

     

     

    15. Applicable Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of Tennessee.

     

     

    16. Assignment. The
Executive acknowledges that his services are unique and personal. Accordingly,
the Executive may not assign his rights or delegate his duties or obligations
under this Agreement, except with respect to certain rights to receive payments
as described in Section 7.

     

     

    17. Headings.  Headings
in this Agreement are for convenience only and shall not be used to interpret or
construe its provisions.

     

     

    18. Successors; Binding
Agreement.   The Company will require any successor to all
or substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a beach of
this Agreement and shall entitle Executive to compensation from the Company in
the same amount and on the same terms as Executive would be entitled to
hereunder if Executive terminates his employment for Good Reason.  The
Company’s rights and obligations under this Agreement shall inure to the benefit
of and shall be binding upon the Company’s successors and assigns.

     

    


    


    


    [The
remainder of this page is intentionally left blank.]

    


    IN WITNESS WHEREOF, the parties have
executed this Agreement effective as of the date first above
written.

    


    MID-AMERICA APARTMENT

    COMMUNITIES, INC.

    


    


    By: /s/Simon R.C.
Wadsworth___________

    Name: Simon R.C.
Wadsworth___________

    Title:  EVP and
CFO___________________

    


    


    


    EXECUTIVE:

    


    


    /s/H. Eric
Bolton______________________

    H. Eric
Bolton