EXHIBIT 10.2
RESIGNATION AND GENERAL RELEASE AGREEMENT
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This Resignation and General Release Agreement ("Agree ment"), made
this 16th day of August 1996, by and between Xxxxxxxx X. Xxxxxxxxxxxxx
("Chillingworth"), an individual, and Santa Xxxxx Realty Enterprises, Inc. a
corporation ("Company"), is a resigna tion agreement which includes a general
release of claims.
In consideration of the covenants undertaken and the releases
contained in this Agreement, Chillingworth and Company agree as follows:
1. Chillingworth shall voluntarily resign from his position as
Executive Vice President of Company and as a member of the Board of Directors of
Company by executing Exhibit A attached hereto, such resignation to be effective
August 16, 1996. Chillingworth 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 Chillingworth agree to the following actions in full
discharge of any and all of its obligations to Chillingworth, including, without
limitation, the expired Employ ment Agreement dated as of March 16, 1994, the
Severance Agreement dated as of May 11, 1994, 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 Chillingworth a cash lump sum equal to
$206,080 within 10 days after the execution of this Agreement, provided that
Chillingworth does not revoke this Agree ment pursuant to Section 7(d) hereof.
Except for (i) the payment of any Accrued Obligations under Section VI-D-1(a)(i)
and (ii) of the Employment Agreement between the Company and Chillingworth and
(ii) any amounts due pursuant to the terms of any generally appli cable welfare
and pension benefit plans, the Company shall have no obligations to
Chillingworth with respect to items described in the Employment Agreement.
Within fourteen days after the date of execution of this Agreement, Company
agrees to provide Chilling worth a list of the obligations described in the
preceding sentence.
b. If a Change in Control (as defined in the Severance
Agreement between Chillingworth and the Company) occurs prior to May 16, 1997,
then the Company shall pay Chillingworth (or to the beneficiary designated by
Chillingworth if he has died prior to May 16, 1997 or, if there is no
beneficiary, his estate) , within 30 days after such Change in Control occurs, a
cash lump sum equal to $328,920 if the Change in Control occurs in 1996 or
$303,920 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
$206,080) and shall provide Chillingworth with the additional benefits set forth
in Section 7 of the Sever ance 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, Chillingworth's resigna tion shall be considered to be contingent on
the Change in Control.
c. The parties agree that Chillingworth's rights with respect
to all 54,000 of his stock options shall be limited to those of an employee who
retires 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 August 31,
1999 to exercise said options. Subject to appropriate action by the Company's
Compensation Committee, all nonvested options shall remain outstanding after
August 31, 1996, provided that they shall not be exercisable unless a Change in
Control Event (as defined in the Company's 1995 Share Award Plan) occurs prior
to May 16, 1997. If a Change in Control Event occurs prior to May 16, 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, Chillingworth shall
become 100% vested with respect to all 54,000 stock options previously granted
to him in which he is not already vested and he shall have until August 31, 1999
to exercise all 54,000 options; on August 31, 1999, all such options shall
expire. If a Change in Control Event does not occur prior to May 16, 1997, all
nonvested options shall expire. Chillingworth acknowledges that the foregoing
provisions are made in part in consideration for the waiver provided pursuant to
Section 7 hereof.
d. With respect to the lease agreement between the Company and
Chillingworth regarding the Company's cottage, the Company agrees that it shall
not exercise its right to terminate said lease because of the fact that
Chillingworth will no longer be an employee after August 31, 1996.
Chillingworth acknowledges that the Company is not waiving its rights to
terminate, or take any other action under, the lease pursuant to any other
provision of said lease.
e. On August 17, 1997 a Formation Agreement was executed among
the Company, Santa Xxxxx Operating Company and Colony Investors II, L.P.
Company agrees that (i) the transactions contemplated by the Formation Agreement
signed on that date constitute a Change in Control for the purpose of Section 2b
and c, (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,
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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 would welcome Chillingworth's 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. Xxxxxxxxxxxxx agrees that the cash 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. Except as expressly noted above, Chillingworth 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.
e. To the extent Chillingworth 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 Chillingworth can utilize to prepare and
submit claims on behalf of Chillingworth and his dependents under the medical
plan.
3. Chillingworth 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.
4. 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 Chillingworth 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, proce dures, state or federal laws or
regulations. Moreover, neither
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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 intro duced, however, in any proceeding to enforce the
Agreement. Such introduction shall be pursuant to an order protecting its
confiden tiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Chillingworth 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 and its
subsidiaries and affiliates, past and present, and each of them, as well as each
of its trustees, directors, officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and
each of them, hereinafter together and col lectively referred to as "Releasees,"
with respect to and from any and all claims, wages, demands, rights, liens,
agreements, con tracts, 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, or
his voluntary resignation from employment or any other transac tions,
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 disability.
Notwithstanding the language of the release contained in the prior sentences of
this paragraph, it is agreed that Xx. Xxxxxxxxxxxxx is not releasing the rights
that Chillingworth is entitled to as a director of the Company for
indemnification or insurance coverage with respect to Chilling-worth's actions
taken as a director of the Company.
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,
Chillingworth from and with respect to any and all claims, agreements,
obligations, losses,
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damages, injuries, demands and causes of action, known or unknown, suspected or
unsuspected, arising out of or in any way connected with Chillingworth's
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 Chillingworth, provided, however, that such release of
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Chillingworth shall not extend to any claims, known or unknown, suspected or
unsuspected, against Chillingworth which arise out of facts which are finally
adjudged by a court of competent jurisdic tion 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 Chillingworth and as to which the insurer has
a right to subrogation against Chillingworth.
6. It is the intention of 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,
Chillingworth hereby expressly waives any and all rights and benefits conferred
upon him by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and ex
pressly consents that this Agreement shall be given full force and effect
according to each and all of its express terms and provi sions, 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."
Chillingworth and Company acknowledge that they may hereafter discover claims or
facts in addition to or different from those which Chillingworth 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, Chillingworth 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. Chillingworth and
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 6,this section shall not apply to (i) those
categories of actual or potential claims by the Company that have not been
released under section 5 or (ii) the right to insurance and indemnity as a
director that Chillingworth is not releasing pursuant to section 5.
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7. Chillingworth 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 Discrimina tion in Employment Act of 1967, as amended,
which have arisen on or before the date of execution of this Agreement.
Chillingworth 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
8. Chillingworth 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. Chillingworth 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.
9. Chillingworth 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.
Without limiting the generality of the foregoing, Chillingworth 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 forego ing, Chillingworth specifically
agrees that he shall not disclose information regarding this Agreement to any
current or former employee of Releasees. Chillingworth hereby agrees that
disclosure by him of any of the terms and conditions of the Agreement in
violation of 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
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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.
10. Chillingworth warrants and represents that Chilling worth 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 Chillingworth 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.
11. Chillingworth and Company acknowledge that any employment or
contractual relationship between them will terminate on August 31, 1996, and
that they will have no further employment or contractual relationship except as
may arise out of this Agreement and that Chillingworth waives any right or claim
to reinstatement as an employee of Company.
12. All payments hereunder shall be reduced by federal and state
income tax withholding and other applicable withholding taxes. Chillingworth
agrees that Chillingworth shall be exclusive ly 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
Chillingworth hereby represents that Chillingworth shall make payments on such
taxes at the time and in the amount required of Chillingworth. In addition,
Chillingworth hereby agrees fully to defend, indemnify and hold harmless
Releasees and each of them from payment of taxes, interest and/or penalties that
are required of them by any government agency at any time as the result of
payment of the consideration set forth herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning Chillingworth's 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.
14. Chillingworth may revoke this Agreement in its entirety during
the seven days following execution of the Agreement by Chillingworth. 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 Chillingworth, unless it is revoked during the
seven-day period.
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15. If any provision of this Agreement or the applica tion 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.
16. 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.
17. 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.
18. 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.
19. Any dispute or controversy between Chillingworth, 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
Chillingworth's employment with Company or the termination of Chillingworth's
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 attor neys' fees. The nonprevailing
party shall also be solely responsi ble 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 generali ty 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
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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 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.
20. 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.
21. 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.
22. After execution of this Agreement, Company may, but is not
required to, present for approval to the Workers' Compensa tion Appeals Board an
appropriate stipulation or compromise and release extinguishing any and all
rights or claims Chillingworth may have under applicable workers' compensation
provisions.
23. 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 volun tarily 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.
______________________________________
Xxxxxxxx X. Xxxxxxxxxxxxx
EXECUTED this _____ day of _____________ 1996, at ________________
County, California.
SANTA XXXXX REALTY
ENTERPRISES, INC.
By ___________________________
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ENDORSEMENT
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I, Xxxxxxxx X. Xxxxxxxxxxxxx, hereby acknowledge that I was given 21
days to consider the foregoing Agreement and volun tarily 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.
___________________________________
Xxxxxxxx X. Xxxxxxxxxxxxx
EXHIBIT A
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Dear Santa Xxxxx Realty Enterprises, Inc.:
This is to advise you that effective August 16, 1996, I hereby
voluntarily resign my position as Executive Vice President of Santa Xxxxx Realty
Enterprises, Inc. and that, effective August 16, 1996, I resign from the Board
of Directors of Santa Xxxxx Realty Enterprises, Inc. This is to further advise
you that although I will continue as an employee of Santa Xxxxx Realty
Enterprises, Inc. until August 31, 1996, I hereby resign from all employment
with Santa Xxxxx Realty Enterprises, Inc., effective August 31, 1996.
Sincerely yours,
_________________________________
Xxxxxxxx X. Xxxxxxxxxxxxx
