SEPARATION AND RELEASE AGREEMENT
Exhibit 10.85
THIS SEPARATION AND RELEASE AGREEMENT (this “Agreement”) is entered into on December 29, 2009,
by and between Xxxxxxxx Xxxx (the “Employee”) and Avatar Properties Inc., a Florida corporation
(the “Company”).
WITNESSETH:
WHEREAS, the Employee has been employed by the Company to serve as the President of the
Company pursuant to an Amended and Restated Employment Agreement made as of December 22, 2008 (the
“Employment Agreement”); and
WHEREAS, the Company and the Employee have agreed that Employee shall no longer hold any
position with the Company as an executive officer and employee effective as of the end of business
on December 31, 2009, and will receive compensation pursuant to the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth,
the parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT. Employee and the Company agree that the Employee’s
employment with the Company shall be terminated by mutual agreement of both parties effective as of
the end of business on December 31, 2009 (the “Resignation Date”).
2. RESIGNATION. The Employee agrees to resign (i) from his position as the President
of the Company and (ii) from any other positions that he holds with the Company or any other
affiliated company (each an “Affiliated Company”) of the Company, effective as of the Resignation
Date. The Employee acknowledges and agrees that after the Resignation Date he will not have the
authority to represent or bind the Company, or any Affiliated Company, as an officer or employee.
3. TERMINATION OF EMPLOYMENT AGREEMENT AND OTHER ITEMS.
3.1 Employee acknowledges and agrees that this Agreement shall terminate the Employment
Agreement, except as described herein, and this Agreement sets forth all of the compensation
payable to him effective as of the date of this Agreement.
3.2 The Employee acknowledges and agrees that the Company has paid him all wages and any other
compensation that is payable to him under the Employment Agreement including, but not limited to,
all salary payments, bonuses, incentive compensation, reimbursement for the business expenses and
vacation pay, to which he is entitled under the Employment Agreement or otherwise in connection
with his employment with the Company. The Employee further acknowledges that, except as described
in this Agreement, his eligibility to participate in any of the Company’s benefit programs
including, but not limited to, participation in employee benefits plans, such as 401(k), savings,
pension, shared and deferred
compensation plans and health insurance benefits, such as medical, dental, hospitalization,
disability, life insurance and other plans offered to the Company’s executives, will be terminated
as of the Resignation Date as a result of the termination of the Employment Agreement.
3.3 The Company and Employee acknowledge and agree that Employee will continue to have until
March 13, 2013, to exercise the 60,000 options to purchase common stock (the “Common Stock”) of
Avatar Holdings Inc. (“Avatar”) at a price of $25.00 per share that have been granted to Employee
pursuant to the Non-Qualified Stock Option Agreement dated March 13, 2003.
3.4 The Company agrees that the 47,708 shares of Common Stock issued to Employee, which are
subject to the Amended and Restated Restricted Stock Unit Agreement dated December 22, 2008, are
fully vested. These shares shall be delivered to Employee as promptly as practicable after the
date of this Agreement. Employee agrees not to sell, pledge, gift, transfer or hypothecate or
enter into any agreement to sell, pledge, gift, transfer or hypothecate any such shares prior to
December 31, 2010.
3.5 The Company and the Employee acknowledge the termination of the Employment Agreement as of
the Resignation Date, except for the covenants and obligations set forth in Section 4 of the
Employment Agreement, which by its terms survives the termination of the Employment Agreement and
are incorporated herein by reference. The Employee acknowledges and agrees that he will comply
with the obligations and covenants set forth in Section 4 of the Employment Agreement for the
applicable time periods set forth in the Employment Agreement.
3.6 In exchange for $1.00 and other good and valuable consideration, the Company hereby
transfers, without representation or warranty, all of the Company’s or any Affiliated Companies’,
right, title and interest in and to the “Xxxxxxxx-Xxxx” name, and all common law rights thereto.
3.7 It is understood that Employee either directly or indirectly through one or more entities
with respect to which he may be involved in any manner (an “Employee Entity”) may engage in the
development, construction, purchase and sale of real estate in areas not subject to Section 4 of
the Employment Agreement. If prior to January 1, 2011 Employee or any Employee Entity seeks to
invest by means of equity or debt in any real estate investment of (a) more than ten (10) developed
or undeveloped residential units or (b) an investment of more than $5,000,000 in the aggregate,
then Employee shall send a right of first refusal notice (a “Right of First Refusal Notice”) to the
Company by email, overnight courier or regular mail to Xxxxxx Xxxxxx with copy to Xxxxxxx Xxxx at
the following addresses: Xxxxx Xxxxxx, 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxx 00000 or Xxxxx_Xxxxx@xxxxxxxxxxxxxx.xxx with a copy to Xxxxxxx Xxxx, 000 Xxxxxxxx Xxxxxx,
00xx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000 or Xxxxxxx_Xxxx@xxxxxxxxxxxxxx.xxx.
3.8 Any Right of First Refusal Notice shall state (a) the purpose of the investment, (b) the
amount and nature of such investment, and (c) the timing of such investment. If the Company
desires to make such investment, the Company shall respond to Employee within thirty (30) days of
receipt by the Right of First Refusal Notice and the parties thereafter
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will negotiate a joint venture arrangement respecting such investment. If the Company does
not respond within such period or affirmatively declines to make such investment, Employee shall be
entitled to make such investment on the terms set forth in the Right of First Refusal Notice
without any participation by the Company.
3.9 Employee agrees, upon reasonable request by the Company, to provide consulting services to
the Company at no charge for up to twenty (20) hours in any calendar month during calendar year
2010. In the event the Company desires Employee to perform more than twenty (20) hours of
consulting services in any calendar month, Employee and the Company shall negotiate in good faith
the compensation for such arrangement. Whenever Employee is performing consulting services for the
Company, he shall be reimbursed for his direct out-of-pocket expenses in accordance with standard
Company policy. In the event that the Employee does provide any consulting services to the Company
under this Agreement, Employee shall not be an employee of the Company and shall at all times be
self-employed or the employee of an Employee Entity.
4. PAYMENT AND BENEFITS.
4.1 Payment. In consideration of the covenants set forth herein, the Company agrees to
pay the Employee, not later than December 31, 2009, an amount equal to 50% of the cash compensation
otherwise payable to him for calendar year 2010 in the amount of $450,000 pursuant to the Amended
and Restated Employment Agreement, dated as of December 22, 2008, between the Company and Employee,
which is hereby terminated. This compensation payable to the Employee hereunder is stated in gross
amount and shall be subject to all applicable withholding taxes, other normal payroll and any other
amounts required by law to be withheld.
4.2 Benefits. The Company will provide the Employee with information regarding any
benefits which may be converted to individual coverage and/or coverage which includes his spouse in
accordance with Consolidated Omnibus Budget Reconciliation Act (“COBRA”) regulations. Employee
acknowledges and agrees that he will not be entitled to any perquisites, benefits or other
compensation whatsoever after the Resignation Date, except as described in this Agreement.
5. WAIVER AND RELEASE IN FAVOR OF COMPANY.
5.1 Waiver and Release by Employee. For good and valuable consideration, the receipt
and sufficiency of which is acknowledged by the Employee, including the payments to the Employee as
described in Section 4, Employee hereby agrees that his separation of employment from the Company
was not due in any way to age or any other type of discrimination or any wrongful act of the
Company, and Employee and his Releasors, as hereinafter defined, do hereby voluntarily and fully
release and forever discharge the Company, together with its past and current predecessors,
successors, shareholders, officers, directors, employees, attorneys, trustees, insurers,
representatives, contractors, representatives, related organizations and affiliates (collectively,
the “Released Parties”), jointly and individually, from any and all claims, demands, debts, causes
of action, claims for relief, and damages, of whatever kind or nature, known or unknown, developed
or undeveloped, which Employee had, now has or may hereinafter have from the beginning of the world
to the date hereof including, without limitation, all claims and all rights which the Employee may
have under Title VII of the Civil
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Rights Act of 1964; the Equal Employment Opportunity Act of 1972; the Civil Rights Act of
1991; the Age Discrimination and Employment Act of 1967; the Employee Retirement Security Act 42
U.S.C. § 1981; the Older Workers’ Benefit Protection Act; the Americans with Disabilities Act; the
Family Medical Leave Act of 1993; the Equal Pay Act; the Fair Labor Standards Act; and any and all
other federal and state statutes which regulate employment; and the laws of contracts, tort and
other subjects but excluding any claims not waivable by law.
5.2 Releasors. For purposes of paragraph 5, “Releasors” shall mean, collectively, the
spouse of the Employee and the Employee’s dependents, heirs, executors administrators and assigns,
past and present and each of them and their trustees, directors, officers, agents, attorneys,
insurers, employees, stockholders, representatives, successors, assigns and all persons acting by,
through, under or in connection with them, past and present. Execution of this Agreement and
payment of the payments specified in paragraph 4 of this Agreement does not constitute an admission
by any Released Party of any violation of any civil rights or other employment discrimination
statute, or any other legal statute, provision, regulation, ordinance, order or action under common
law. Rather, this Agreement expresses the intention of the parties to resolve all possible issues
and other claims related to or arising out of Employee’s employment by the Company without the time
and expense of litigation.
5.3 Directors and Officer Insurance. The Company currently has in place directors and
officers insurance that covers those persons that are currently officers of the Company as well as
those persons who were formerly officers of the Company. Notwithstanding the foregoing release,
the Company agrees that so long as the Company is maintaining directors and officers insurance
covering past officers, such insurance shall also cover Employee for his actions as an officer of
the Company subject to the limitations applicable to all present and prior officers contained in
such policies.
6. WAIVER AND RELEASE IN FAVOR OF EMPLOYEE. For good and valuable consideration, the
receipt and sufficiency of which is acknowledged by the Company, including the early termination of
the Employment Agreement, the Company does hereby voluntarily and fully release and forever
discharge the Employee from any and all claims, demands, debts, causes of action, claims for
relief, and damages, of whatever kind or nature, known or unknown, developed or undeveloped, which
Company had, now has or may hereinafter have from the beginning of the world to the date hereof,
excluding any claims not waivable by law or arising from the Employee’s gross negligence, criminal
or other intentional wrongful acts (e.g., fraud) to the detriment of the Company. Notwithstanding
the foregoing, Employee agrees to assist the Company (without any cost to Employee) in defending
any claim against the Company or the Employee related to his status as an employee including,
without limitation, helping with any investigation or appearing as a witness in any litigation
involving the Company.
7. GOVERNING LAW. The law of the State of Florida shall govern the validity of this
Agreement, the construction of its terms and the interpretation of the rights and duties of the
parties. This Agreement constitutes the entire agreement and understanding between the Employee and
the Company regarding the Employee’s resignation from employment with the Company. Any agreement to
amend or modify the terms and conditions of this Agreement must be in writing and executed by the
parties hereto. This Agreement may be specifically enforced in judicial proceedings and may be used
as evidence in a subsequent proceeding in which a breach is alleged.
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8. CONFIDENTIALITY. The Employee agrees that he will keep confidential all information
regarding the Company, its business operations and this Agreement including, but not limited to,
information about pricing, customers, current and former employees and will not disclose such
information to anyone unless such information is (i) published and becomes public knowledge (other
than through or by the Employee on his behalf), (ii) required by legal process in formal legal
proceeding, or (iii) is necessary to report income to the appropriate taxing authorities. The
provisions of this paragraph are in addition to, and not in lieu of, any other obligations of
confidentiality entered into by the Employee and the Company.
9. NON-DISPARAGEMENT. (a) The Employee agrees that he will not directly or
indirectly, individually or in concert with others for a period of five years from the date of this
Agreement, (i) disparage, interfere with or attempt to interfere with, the reputation, goodwill,
services or business of the Company or any of the Affiliated Companies and/or the stockholders,
directors, officers, employees, agents or representatives of the Company or any Affiliated
Companies or (ii) engage in any conduct, take any actions or make any statements (oral or written)
to the public, future employers, customers, vendors, the investment community, the media, current,
former or future employees or the Company or any Affiliated Company, or any other third party
whatsoever that is calculated to have, or reasonably likely or possibly having, the effect of
undermining, disparaging or otherwise reflecting negatively or could reasonably be considered to
undermine, disparage or reflect negatively, on the Company or the Affiliated Companies or the
reputation, goodwill, services and business of the Company or the Affiliated Companies.
(b) The Company agrees that it will not directly or indirectly, individually or in concert
with others for a period of five years from the date of this Agreement, (i) disparage, interfere
with or attempt to interfere with, the reputation, goodwill, services or business of the Employee
or (ii) engage in any conduct, take any actions or make any statements (oral or written) to the
public, future employers, customers, vendors, the investment community, the media, current, former
or future employees or the Company or any Affiliated Company, or any other third party whatsoever
that is calculated to have, or reasonably likely or possibly having, the effect of undermining,
disparaging or otherwise reflecting negatively or could reasonably be considered to undermine,
disparage or reflect negatively, on the Employee or the reputation, goodwill, services and business
of the Employee.
10. KNOWING AND VOLUNTARY SETTLEMENT. IN EXECUTING THIS AGREEMENT, EMPLOYEE HEREBY
REPRESENTS THAT HE HAS BEEN AFFORDED A REASONABLE OPPORTUNITY TO CONSIDER THIS AGREEMENT; THAT HE
HAS COMPLETELY AND CAREFULLY READ THIS AGREEMENT; THAT HE HAS BEEN ADVISED BY THE COMPANY TO
CONSULT WITH AN ATTORNEY OF HIS OWN CHOICE PRIOR TO EXECUTING THIS AGREEMENT, AND RELIED ON THE
LEGAL ADVICE OF HIS ATTORNEY; THAT HE HAD THE OPPORTUNITY TO HAVE AN ATTORNEY EXPLAIN TO HIM THE
TERMS OF THIS AGREEMENT; THAT HE KNOWS AND UNDERSTANDS THE CONTENTS OF THIS AGREEMENT; THAT THE
TERMS OF THIS AGREEMENT ARE SATISFACTORY TO AND FULLY UNDERSTOOD AND VOLUNTARILY ACCEPTED BY HIM.
11. EFFECT OF AGREEMENT AND INTERPRETATION. The Company and Employee intend this
Agreement to be legally binding upon and inure to the benefit of each of
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them and their respective heirs, administrators, executors, successors and assigns. The
language of this Agreement shall be construed as a whole, according to its fair meaning and intent
and not strictly for or against any party hereto, regardless of who drafted or was principally
responsible for drafting this Agreement. The recitals contained at the beginning of this Agreement
are expressly made a part of this Agreement. Headings are for convenience only and should not be
used in interpreting this Agreement.
12. SEVERABILITY AND JURY WAIVER. Should any provision of this Agreement be declared
illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be
enforceable, including the general release language, such provision shall immediately become null
and void, leaving the remainder of the Agreement in full force and effect. The Company and the
Employee each knowingly, intentionally, and irrevocably waive any and all rights to a jury trial
for any litigation or legal proceeding in any way relating to or arising out of this Agreement or
the Employment Agreement.
13. SECTION HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.
14. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but a complete set of which taken together shall
constitute one and the same instrument.
15. ATTORNEYS’ FEES. In the event that either party hereto commences litigation
against the other to enforce such party’s rights hereunder, the prevailing party shall be entitled
to recover all costs, expenses and fees, including reasonable attorneys’ fees (including in-house
counsel), paralegals’ fees, and legal assistants’ fees through all appeals.
16. NEUTRAL CONSTRUCTION. Each party to this Agreement was represented by counsel, or
had the opportunity to consult with counsel. No party may rely on any drafts of this Agreement in
any interpretation of the Agreement. Each party to this Agreement has reviewed this Agreement and
has participated in its drafting and, accordingly, no party shall attempt to invoke the normal rule
of construction to the effect that ambiguities are to be resolved against the drafting party in any
interpretation of this Agreement.
IN WITNESS WHEREOF, the aforesaid parties have hereunto set their hands and seals as of the
day below written.
| AVATAR PROPERTIES INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Chairman of the Board | |||
| By: | /s/ Xxxxxxxx Xxxx | |||
| Xxxxxxxx Xxxx | ||||
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