EXHIBIT 10.1
RESIGNATION AND GENERAL RELEASE AGREEMENT
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This Resignation and General Release Agreement ("Agreement"), made
this 16th day of August 1996, by and between Xxxxxxx X. Xxxxxx ("Xxxxxx"), an
individual, and Santa Xxxxx Operating Company, a corporation ("Company"), is a
resignation agreement which includes a general release of claims.
In consideration of the covenants undertaken and the releases
contained in this Agreement, Xxxxxx and Company agree as follows:
1. Xxxxxx shall voluntarily resign from his position as Chief
Executive Officer of Company and its subsidiaries and as a member of the Board
of Directors of Company and Santa Xxxxx Realty Enterprises, Inc. ("Realty") by
executing Exhibit A attached hereto, such resignation to be effective August 16,
1996. Xxxxxx further agrees that he resigns as an employee of the Company by
executing Exhibit A attached hereto, such resignation to be effective August 31,
1996.
2. Company and Xxxxxx agree to the following actions in full
discharge of any and all of its obligations to Xxxxxx (except to the extent such
obligations are carried out under this agreement, either directly or by
incorporation by reference), including, without limitation, the Employment
Agreement dated as of January 1, 1994, the Severance Agreement dated as of
October 1, 1992, the Exchange Agreement dated as of December 15, 1994, the
Restricted Stock Agreement dated as of April 1, 1995, and all awards provided
pursuant to the Company's 1995 Share Award Plan or the Company's 1984 Stock
Option Program (and any amendments to said agreements):
a. Company shall pay to Xxxxxx a cash lump sum equal to
$672,000 within 8 days after the execution of this Agreement, provided that
Xxxxxx does not revoke this Agreement pursuant to Section 8(d) hereof. Except
for the payment of any Accrued Obligations under Section V-E-1(a)(i), (ii), and
(iii) of the Employment Agreement between the Company and Xxxxxx and any amounts
due pursuant to the terms of any generally applicable welfare and pension
benefit plans, the Company shall have no other obligations to Xxxxxx under the
Employment Agreement. Within seven days after the date of execution of this
Agreement, Company agrees to provide Xxxxxx a list of the obligations described
in the preceding sentence.
b. If a Change in Control (as defined in the Severance
Agreement between Xxxxxx and the Company) occurs prior to May 17, 1997, then the
Company shall pay Xxxxxx (or to Xxxxxx'x beneficiary if Xxxxxx is not then
alive), within 30 days after such Change in Control occurs, a cash lump sum
equal to $190,500 if the Change in Control occurs in 1996 or $148,333 if the
Change in Control occurs in 1997 (these amounts represent the excess of the
amount set forth in Section 6 of the Severance Agreement over $672,000) and
shall provide Xxxxxx with the additional benefits set
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forth in Section 7 of the Severance Agreement (effective as of the Change in
Control). The payment and benefits described in the preceding sentence shall in
each case be subject to the limitations set forth in Section 8 of the Severance
Agreement and reduced to the extent required by Section 8. For the purpose of
Section 8, Xxxxxx'x resignation shall be considered to be contingent on the
Change in Control.
c. With respect to the Restricted Stock Agreement between the
Company, Xxxxxx and the Xxxxxx Family Trust, the Company agrees that 43,161
Paired Shares are free from the restrictions set forth in the Restricted Stock
Agreement. Subject to appropriate action by the Company's Compensation
Committee, Company agrees that, with respect to the remaining 43,161 Paired
Shares, Xxxxxx'x employment shall be treated as continuing through May 16, 1997
(thus deferring any right of the Company to repurchase the Paired Shares), and
the Restricted Period shall only expire (so that the Xxxxxx Family Trust becomes
vested in the shares), subject to the provisions of Section 11(b) of the
Restricted Stock Agreement, if one of the following events occurs prior to May
17, 1997: (1) Xxxxxx'x death, (2) Xxxxxx'x Total Disability, or (3) a Change in
Control Event (as defined in the Company's 1995 Share Award Plan). Capitalized
terms set forth in this subsection c. which are not defined herein shall be
defined in accordance with the Restricted Stock Agreement.
d. The parties agree that Xxxxxx'x rights with respect to all
134,000 of his stock options shall be limited to those of an employee who
voluntarily terminates employment on August 31, 1996, so that his vested
interest in such options shall be limited to his vested percentage on that date
and he shall have until November 30, 1996 to exercise said options. Subject to
appropriate action by the Company's Compensation Committee, all such options,
both vested and nonvested, shall remain outstanding after November 30, 1996,
provided that the options that are not vested as of August 16, 1996 shall not be
exercisable unless a Change in Control Event (as defined in the Company's 1995
Share Award Plan) occurs prior to May 17, 1997. If a Change in Control Event
occurs prior to May 17, 1997, subject to all applicable limitations relating to
Section 280G of the Internal Revenue Code set forth in the Company's 1995 Share
Award Plan or the Company's 1984 Stock Option Program or any related award
agreements, Xxxxxx (or his beneficiary, if Xxxxxx is not then alive) shall
become 100% vested with respect to all 134,000 stock options previously granted
to Xxxxxx in which Xxxxxx is not already vested and shall have three months
after such event to exercise all 134,000 options; at the end of such three month
period, all such options shall expire. If a Change in Control Event does not
occur prior to May 17, 1997, all such options shall expire. Xxxxxx acknowledges
that the foregoing provisions are made in part in consideration for the waiver
provided pursuant to Section 8. hereof.
e. On August 17, 1997 a Formation Agreement was executed among
the Company, Santa Xxxxx Realty Enterprises, Inc., and Colony Investors II, L.P.
Company agrees that (i) the
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transactions contemplated by the Formation Agreement signed on that date
constitute a Change in Control for the purpose of Section 2b, c, and d, (ii) it
is the Company's current interpretation of the regulations proposed under
Section 280G of the Internal Revenue Code that the transactions contemplated by
the Formation Agreement do not constitute a change in control within the meaning
of Section 280G, and (iii), if the parties to the Formation Agreement agree to
extend the date for closing the transactions contemplated by the Formation
Agreement, the May 16 deadline for determining whether a Change in Control has
occurred for the purposes of this Agreement shall be replaced by any later
deadline agreed to with respect to the transactions set forth in the Formation
Agreement. The possible extended deadline described in the preceding sentence
shall only apply, however, for the purpose of determining whether the
transactions described in the Formation Agreement have occurred within the time
limits set forth in this Agreement for determining whether a Change in Control
has occurred, so that the May 16, 1997 deadline shall continue to apply with
respect to determining whether a Change in Control has occurred with respect to
other possible transactions.
f. The Company shall reimburse Xx. Xxxxxx'x attorneys up to
$7500 for attorney's fees incurred in connection with his termination of
employment, subject to appropriate documentation.
g. The Company would welcome Xxxxxx'x use of the Directors
Room, such presence to be in accordance with the Company's policy with respect
to retired directors and the rules and regulations pertaining to all directors.
x. Xxxxxx agrees that the payments made pursuant to the
foregoing provisions of this Section 2. shall not be treated as compensation for
purposes of the Company's Retirement Income Plan or Thrift Plan for Employees
and the Company agrees that Xxxxxx is 100% vested in the Retirement Income Plan
and the Thrift Plan. Except as expressly noted above, Xxxxxx agrees that his
date of termination shall be August 31, 1996 for purposes of such plans, and all
other incentive plans, practices, policies and programs applicable to other
executives or employees of the Company, as well as any other benefits provided
pursuant to the terms of his Employment Agreement or any other agreement with
the Company.
i. To the extent Xxxxxx participates in the medical plan made
available by the Company and he is not employed in another position in which he
has available the services of a secretary, the Company agrees to provide
secretarial services that Xxxxxx can utilize to prepare and submit claims on
behalf of Xxxxxx and his dependents under the medical plan.
3. Xxxxxx and Company agree to release to the press, on the date of
execution of this Agreement, the release set forth in Exhibit B attached hereto.
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4. Xxxxxx shall return to Company and shall not take or copy in any
form or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information.
5. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and Xxxxxx relating to any alleged
violation of Company policies or procedures or any state or federal law or
regulation, this Agreement does not constitute an adjudication or finding on the
merits and it is not, and shall not be construed as, an admission by Company of
any violation of its policies, procedures, state or federal laws or regulations.
Moreover, neither this Agreement nor anything in this Agreement shall be
construed to be or shall be admissible in any proceeding as evidence of or an
admission by Company of any violation of its policies, procedures, state or
federal laws or regulations. This Agreement may be introduced, however, in any
proceeding to enforce the Agreement. Such introduction shall be pursuant to an
order protecting its confidentiality.
6. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Xxxxxx on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to xxx and fully releases and discharges Company, Realty and their subsidiaries
and affiliates, past and present, and each of them, as well as each of their
trustees, directors, officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and
each of them, hereinafter together and collectively referred to as "Releasees,"
with respect to and from any and all claims, wages, demands, rights, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys' fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which he now owns or holds or he has at any time heretofore owned or
held or may in the future hold as against said Releasees, arising out of or in
any way connected with his employment or other relationships with Company and
Realty, or his voluntary resignation from employment or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said Releasees, or any of them, committed or omitted prior to the
date of this Agreement including, without limiting the generality of the
foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, the California Fair Employment and Housing
Act, the California Family Rights Act, or any claim for severance pay, bonus,
sick leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers' compensation or
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disability. Notwithstanding the language of the release contained in the prior
sentences of this paragraph, it is agreed that Xx. Xxxxxx is not releasing the
rights that Xxxxxx is entitled to as a director of Realty and Operating Company
and its subsidiaries for indemnification or insurance coverage with respect to
Xxxxxx'x actions taken as a director of such companies.
Except for those obligations created by or arising out of this
Agreement, and except as provided below, Company hereby acknowledges full and
complete satisfaction of and releases and discharges, and covenants not to xxx,
Xxxxxx from and with respect to any and all claims, agreements, obligations,
losses, damages, injuries, demands and causes of action, known or unknown,
suspected or unsuspected, arising out of or in any way connected with Xxxxxx'x
employment relationship with or termination from Company, or any other
occurrences, actions, omissions or claims whatever, known or unknown, suspected
or unsuspected, which Company now owns or holds or has at any time heretofore
owned or held as against Xxxxxx, provided, however, that such release of Xxxxxx
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shall not extend to any claims, known or unknown, suspected or unsuspected,
against Xxxxxx which arise out of facts which are finally adjudged by a court of
competent jurisdiction to be a willful breach of fiduciary duty or a crime under
any federal, state, or local statute, law, ordinance or regulation, or which are
based upon facts which give rise to a recovery by Company under any applicable
policies of insurance solely as a result of actions or omissions by Xxxxxx and
as to which the insurer has a right to subrogation against Xxxxxx.
7. It is the intention of Xxxxxx and Company in executing this
instrument that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified. In furtherance of this
intention, Xxxxxx and Company expressly waive any and all rights and benefits
conferred upon them by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL
CODE and expressly consent that this Agreement shall be given full force and
effect according to each and all of its express terms and provisions, including
those related to unknown and unsuspected claims, demands and causes of action,
if any, as well as those relating to any other claims, demands and causes of
action hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Xxxxxx and Company acknowledge that they may hereafter discover claims or facts
in addition to or different from those which Xxxxxx and Company now know or
believe to exist with respect to the subject matter of this Agreement and which,
if known or suspected at the time of executing this Agreement, may have
materially affected this settlement. Nevertheless, Xxxxxx and Company hereby
waive any right, claim or cause of action that might arise as a result of such
different or additional claims or facts. Xxxxxx and
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Company acknowledge that they understand the significance and consequence of
such release and such specific waiver of SECTION 1542. Notwithstanding the
preceding provisions of this section 7, this section shall not apply to (i)
those categories of actual or potential claims by the Company that have not been
released under section 6 or (ii) the right to insurance and indemnity as a
director that Xxxxxx is not releasing pursuant to section 6.
8. Xxxxxx expressly acknowledges and agrees that, by entering into
this Agreement, he is waiving any and all rights or claims that he may have
arising under the Age Discrimination in Employment Act of 1967, as amended,
which have arisen on or before the date of execution of this Agreement. Xxxxxx
further expressly acknowledges and agrees that:
a. In return for this Agreement, he will receive compensation
beyond that which he was already entitled to receive before entering into this
Agreement;
b. He was orally advised by Company and is hereby advised in
writing by this Agreement to consult with an attorney before signing this
Agreement;
c. He was given a copy of this Agreement on August 16, 1996,
and informed that he has twenty-one (21) days within which to consider the
Agreement;
d. He was informed that he has seven (7) days following the
date of execution of the Agreement in which to revoke the Agreement; and
9. Xxxxxx acknowledges that by reason of his position with Company
he has been given access to lists of customers, prices, engineering plans, and
similar confidential or proprietary materials or information respecting
Company's business affairs. Xxxxxx represents that he has held all such
information confidential and will continue to do so, and that he will not use
such information and relationships for any business (which term herein includes
a partnership, firm, corporation or any other entity) without the prior written
consent of Company.
10. Xxxxxx agrees that the terms and conditions of this Agreement
shall remain confidential as between the parties and he shall not disclose them
to any other person except for his attorneys and tax advisors and his spouse.
Without limiting the generality of the foregoing, Xxxxxx will not respond to or
in any way participate in or contribute to any public discussion, notice or
other publicity concerning, or in any way relating to, execution of this
Agreement or the events (including any negotiations) which led to its execution.
Without limiting the generality of the foregoing, Xxxxxx specifically agrees
that he shall not disclose information regarding this Agreement to any current
or former employee of Releasees. Xxxxxx hereby agrees that disclosure by him of
any of the terms and conditions of the Agreement in violation of
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the foregoing shall constitute and be treated as a material breach of this
Agreement.
Company agrees that its officers shall keep confidential the terms and
conditions of this Agreement among the officers and directors of the Company and
said officers shall undertake their best efforts to ensure that the directors
keep the terms and conditions of this Agreement confidential, except to the
extent that disclosures are required by federal securities or other laws or the
disclosure of the terms and conditions of this Agreement to consultants and
advisors of the Company and employees of the Company other than the officers is
necessary or appropriate.
11. Xxxxxx warrants and represents that Xxxxxx has not heretofore
assigned or transferred to any person not a party to this Agreement any released
matter or any part or portion thereof and Xxxxxx shall defend, indemnify and
hold harmless Company from and against any claim (including the payment of
attorneys' fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
12. Xxxxxx and Company acknowledge that any employment or contractual
relationship between them terminated on August 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement and that Xxxxxx waives any right or claim to reinstatement as an
employee of Company.
13. All payments hereunder shall be reduced by federal and state
income tax withholding and other applicable withholding taxes. Xxxxxx agrees
that Xxxxxx shall be exclusively liable for the payment of all federal and state
taxes which may be due as the result of the consideration received from the
settlement of disputed claims as set forth herein and Xxxxxx hereby represents
that Xxxxxx shall make payments on such taxes at the time and in the amount
required of Xxxxxx.
14. This instrument constitutes and contains the entire agreement and
understanding concerning Xxxxxx'x employment, voluntary resignation from the
same and the other subject matters addressed herein between the parties, and
supersedes and replaces all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matters hereof. This
is an integrated document. This agreement may be modified only by a writing
signed by the parties.
15. Either Xxxxxx or Company may revoke this Agreement in its
entirety during the seven days following execution of the Agreement by Xxxxxx.
Any revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by Xxxxxx, unless it is revoked during the seven-day
period.
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16. If any provision of this Agreement or the application thereof is
held invalid, the invalidity shall not affect other provisions or applications
of the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
17. This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, the laws of the State of California without regard to principles of
conflict of laws.
18. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
19. This Agreement may be executed in counterparts, and each
counterpart, when executed, shall have the efficacy of a signed original.
Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.
20. Any dispute or controversy between Xxxxxx, on the one hand, and
Company (or any other Releasee), on the other hand, in any way arising out of,
related to, or connected with this Agreement or the subject matter thereof, or
otherwise in any way arising out of, related to, or connected with Xxxxxx'x
employment with Company or the termination of Xxxxxx'x employment with Company,
shall be resolved through final and binding arbitration in Los Angeles,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2, with
the exception of Sections 1283 and 1283.05, before a mutually agreed upon
arbitrator. In the event of such arbitration, the prevailing party shall be
entitled to recover all reasonable costs and expenses incurred by such party in
connection therewith, including attorneys' fees. The nonprevailing party shall
also be solely responsible for all costs of the arbitration, including, but not
limited to, the arbitrator's fees, court reporter fees, and any and all other
administrative costs of the arbitration, and promptly shall reimburse the
prevailing party for any portion of such costs previously paid by the prevailing
party. Any dispute as to the reasonableness of costs and expenses shall be
determined by the arbitrator.
Except as may be necessary to enter judgment upon the award or to the
extent required by applicable law, all claims, defenses and proceedings
(including, without limiting the generality of the foregoing, the existence of
the controversy and the fact that there is an arbitration proceeding) shall be
treated in a confidential manner by the arbitrator, the parties and their
counsel, and each of their agents, and employees and all others acting on behalf
of or in concert with them. Without limiting the generality of the foregoing,
no one shall divulge to any third party or person not directly involved in the
arbitration the contents of the pleadings, papers, orders, hearings, trials, or
awards in the arbitration, except as may be necessary to enter
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judgment upon an award as required by applicable law. Any court proceedings
relating to the arbitration hereunder, including, without limiting the
generality of the foregoing, to prevent or compel arbitration or to confirm,
correct, vacate or otherwise enforce an arbitration award, shall be filed under
seal with the court, to the extent permitted by law.
21. No waiver of any breach of any term or provision of this
Agreement shall be construed to be, or shall be, a waiver of any other breach of
this Agreement. No waiver shall be binding unless in writing and signed by the
party waiving the breach.
22. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
23. After execution of this Agreement, Company may, but is not
required to, present for approval to the Workers' Compensation Appeals Board an
appropriate stipulation or compromise and release extinguishing any and all
rights or claims Xxxxxx may have under applicable workers' compensation
provisions.
24. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full
understanding of its consequences.
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I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this _____ day of _____________ 1996, at _____
_______________ County, California.
__________________________________
Xxxxxxx X. Xxxxxx
XXXXXX FAMILY TRUST
By: ______________________________
Xxxxxxx X. Xxxxxx, Trustee
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EXECUTED this _____ day of _____________ 1996, at ________________
County, California.
SANTA XXXXX OPERATING COMPANY
By ___________________________
Approved as to content and form:
O'MELVENY & XXXXX LLP
________________________________
________________________________
By _____________________________
________________________
Attorneys for _______________
________________________________
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ENDORSEMENT
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I, Xxxxxxx X. Xxxxxx, hereby acknowledge that I was given 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this ____ day of ______________ 1996, at
_____________________ County, California.
_______________________________
Xxxxxxx X. Xxxxxx
EXHIBIT A
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To Santa Xxxxx Operating Company and
Santa Xxxxx Realty Enterprises, Inc.:
This is to advise you that effective August 16, 1996, I hereby voluntarily
resign my positions as President and Chief Executive Officer of Santa Xxxxx
Operating Company and my positions as an officer of any of its subsidiaries, and
that, effective August 16, 1996, I resign from the Board of Directors of Santa
Xxxxx Operating Company and Santa Xxxxx Realty Enterprises, Inc. I further
advise you that I resign, effective August 31, 1996, as an employee of the
Company and its subsidiaries.
Sincerely yours,
____________________________
Xxxxxxx X. Xxxxxx
EXHIBIT B
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PORTIONS OF PRESS RELEASE PERTAINING TO THE
RESIGNATIONS OF XX. XXXXXX AND XX. XXXXXXXXXXXXX
Having fulfilled his primary objective of repositioning Santa Xxxxx for
long-term growth, Xxxxxxx X. Xxxxxx, Chairman and Chief Executive Officer of
Santa Xxxxx Operating Company, has decided to leave the Company, and so has
resigned his seats on the Boards of Directors of Realty and Operating Company.
It was also announced today that Xxxxxxxx X. Xxxxxxxxxxxxx, Executive Vice
President and Vice Chair of Realty, has retired from the Company and,
accordingly, has resigned his position as a director of Realty.
