1
EXHIBIT 10.22
SEPARATION AGREEMENT
AND MUTUAL GENERAL RELEASE
This Separation Agreement and Mutual General Release ("Agreement") is made and
entered into as of the 26th day of January, 2000, at Seattle, Washington by and
among SHURGARD STORAGE CENTERS, INC., a Washington corporation ("Shurgard"), on
the one hand; and XXXXXXX XXXX, an individual ("Xxxx") and XXXX XXXX, an
individual, on the other hand.
R E C I T A L S
X. Xxxx has been employed by Shurgard or its predecessor from October 1, 1982
through the present, most recently as Executive Vice President and Chief
Operating Officer and as an officer and director of various affiliates and
subsidiaries of Shurgard.
B. Shurgard and Xxxx have determined that Xxxx will end his employment as an
officer of Shurgard, and as an officer and/or director of Shurgard's
subsidiaries and affiliates effective January 27, 2000.
X. Xxxx and Shurgard desire to determine their respective rights, benefits,
duties and obligations, and therefore enter into this Agreement upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and agreements herein contained, the parties hereto agree as
follows:
A G R E E M E N T
1. Payments to Xxxx. Commencing January 28, 2000 or such other date as the
parties may agree (the "Commencement Date"), Shurgard shall pay Xxxx (i) salary
continuation benefits equal to his 1999 base salary ($240,000.00) in equal
bi-weekly monthly payments for twelve (12) months, each installment to be paid
on Shurgard's regular payroll dates, and (ii) an amount necessary for Xxxx to
continue medical benefits for himself and his dependents on the same basis as
Xxxx currently receives such benefits as of the date of execution of this
Agreement in accordance with COBRA. All payments made under this Section 1 shall
be subject to ordinary withholding and payroll taxes. In the event that Xxxx
accepts employment with an employer offering medical benefits substantially
similar to those he currently receives at Shurgard, Shurgard may discontinue the
COBRA payments following Xxxx'x enrollment in such benefit program. Xxxx will
cease to accrue vacation, sick leave or other paid leave benefits as of January
27, 2000.
2. Benefits. In addition to the compensation described above, Xxxx shall be
entitled to the following additional benefits:
(a) Xxxx shall be eligible to participate in Shurgard's bonus
program for calendar year 1999 as approved by Shurgard's Board of Directors, to
be paid in accordance with standard company procedures. Xxxx shall also be
entitled to any vested benefits under Shurgard's 401(k) plan and ESOP plan
contributed to and/or earned in 1999, to be distributed to Xxxx in accordance
with standard company procedure for departing employees.
(b) Xxxx shall be eligible for performance awards under
Shurgard's 1995 Long-Term Incentive Compensation Plan based on Shurgard's
2
business results for the measurement period commencing January 1, 1997 and
ending December 31, 1999, to be paid in accordance with standard company
procedures.
(c) Xxxx will be reimbursed the balance of his community-giving
fund established by him, which balance is approximately $6,500.00.
(d) The post-termination exercise period of all of Xxxx'x
nonqualified stock options which have vested as of the Commencement Date will be
extended to January 27, 2001, unless the options by their respective terms
expire sooner. In the event Xxxx wishes to sell more than 15,000 shares of
Shurgard stock at one time, Xxxx agrees to cooperate with Shurgard in the
orderly disposition of such shares.
(e) Xxxx will be entitled to reimbursement for outplacement
services to be given by Xxx Xxxxx Xxxxxxxx or other provider reasonably
acceptable to Shurgard, up to a maximum of $11,000.00.
3. Status of Other Agreements. Xxxx shall be entitled to his proportional share
of the remaining proceeds to be distributed from Shurgard Institutional I and II
in accordance with his status as a shareholder of Shurgard. The provisions of
this Agreement shall supercede the Senior Management Business Combination
Agreement previously entered into between Xxxx and Shurgard.
4. Change of Control. In the event of a "change of control," as defined below,
(i) all payments pursuant to Section 1 of this Agreement shall immediately
become due and payable, and (ii) the noncompetition provisions of Paragraph 8
below shall be deemed void. For purposes of this Agreement, "change of control"
shall mean (i) the sale of fifty percent (50%) or more of the common stock or
assets of Shurgard by any party not approved by the Board of Directors of
Shurgard, or (ii) during any twelve (12) month period, the replacement of more
than half of the incumbent Board members with people nominated other than by the
incumbent Board.
5. General Release of Shurgard. Except for the obligations set forth herein and
any obligation to indemnify Xxxx imposed by operation of law or provided in
Shurgard's Certificate of Incorporation or Bylaws, Xxxx and Xxxx Xxxx hereby
acknowledge full and complete satisfaction of and do hereby release and fully
discharge Shurgard, its predecessor, successor, parent, subsidiary and
affiliated entities, past and present as well as its partners, officers,
directors, shareholders, agents, servants, employees, representatives,
attorneys, heirs, successors and assigns, past and present, and each of them
(collectively referred to as the "Shurgard Releasees"), from any and all claims,
demands, and causes of action of every kind and nature (including, without
limitation, claims for damages, costs, expenses, loss of services, loss of
consortium, and attorneys' and accountants' fees and expenses), whether known or
unknown, suspected or unsuspected, which Xxxx and Xxxx Xxxx now owns or holds or
at any time heretofore has owned or held against the Shurgard Releasees, or any
of them, arising out of, resulting from, or in any way related to any
transaction, agreement, occurrence, act, or omission whatsoever occurring,
existing, or omitted at any time before the date hereof, including, without
limiting the generality of the foregoing, such claims, demands, and causes of
action:
(a) Arising out of or in any way connected with Xxxx'x
employment by Shurgard.
(b) Arising out of any federal, state or other government
statute or ordinance, including without limitation, Title VII of the Civil
-2-
3
Discrimination in Employment Act of 1967 (29 U.S.C. Section 21 et seq.), the
California Fair Employment and Housing Act, or any other legal limitation on the
employment relationship.
6. Review and Revocation Period; Effective Date. Shurgard and Xxxx agree that
Xxxx shall have twenty-one (21) days to review this Agreement and consult legal
counsel if he so chooses, during which time the proposed terms of this Agreement
shall not be amended, modified or revoked by Shurgard. Xxxx may revoke this
Agreement if he so chooses by providing notice of his decision to revoke the
Agreement to Shurgard within seven days following the date he signs this
Agreement. This Agreement shall become effective and enforceable upon expiration
of such seven (7)-day revocation period. Xxxx acknowledges and agrees that the
compensation and benefits he is receiving pursuant to this Agreement is greater
than the compensation and benefits to which he would otherwise have been
entitled to upon termination of his employment with Shurgard.
7. General Release of Xxxx. Except for the obligations set forth herein, any
claims for willful misconduct or fraud, and any loans or borrowings by Xxxx from
any deferred compensation plan or agreement, Shurgard for itself and for its
subsidiaries and affiliate corporations hereby acknowledges full and complete
satisfaction of and does hereby release and fully discharge Xxxx, his agents,
servants, employees, representatives, attorneys, heirs, successors and assigns,
past and present, and each of them (collectively referred to as the "Xxxx
Releasees"), from any and all claims, demands, and causes of action of every
kind and nature (including, without limitation, claims for damages, costs,
expenses, loss of services, and attorneys' and accountants' fees and expenses),
whether known or unknown, suspected or unsuspected, which Shurgard or its
subsidiary or affiliate corporations now own or hold or at any time heretofore
has owned or held against the Xxxx Releasees, or any of them, arising out of,
resulting from, or in any way related to any transaction, agreement, occurrence,
act, or omission whatsoever occurring, existing, or omitted at any time before
the date hereof, including, without limiting the generality of the foregoing,
such claims, demands, and causes of action arising out of or in any way
connected with Xxxx'x employment by Shurgard.
8. Noncompetition.
(a) As used herein, the term "Competitive Activity" shall mean
any participation in, assistance of business from, engagement in business with,
or assistance, promotion or organization of, any person, partnership,
corporation, firm, association or other business organization, entity or
enterprise by Xxxx (other than the Company) which, directly or indirectly, is
engaged in, or hereinafter engages in the acquisition, development, and/or
operation of self storage facilities, containerized or other portable storage
activities (other than ownership not to exceed two percent in any publicly
traded company).
(b) During the period commencing on January 28, 2000 and ending
on the later of (i) the termination of this Agreement, or (ii) January 27, 2001,
Xxxx shall not engage in any Competitive Activity in (i) any of the metropolitan
statistical areas listed on Exhibit "A" attached to this Agreement and hereby
incorporated by reference, or (ii) any of the following countries: (A) Belgium;
(B) Canada; (C) Denmark; (D) Finland; (E) France; (F) Germany; (G) Italy; (H)
Norway; (I) Spain; (J) Sweden, (K) Switzerland, and (L) the United Kingdom.
(c) Solicitation of Customers. During the period commencing on
the execution of this Agreement and ending on the later of (i) the termination
of this Agreement, or (ii) January 27, 2001, Xxxx shall not directly or
indirectly, either for his own benefit or purposes or for the benefit or
purposes of any other person, solicit, call on, interfere with, accept any
-3-
4
business from, attempt to divert or entice away any person or firm who was or
is a customer of the Company, if such business involves the development,
operation, and/or disposition of self storage facilities.
(d) Solicitation of Employees. During the period commencing on
the execution of this Agreement and ending on the later of (i) the termination
of this Agreement, or (ii) January 27, 2001, Xxxx shall not directly or
indirectly, employ or offer to employ, call on, solicit, interfere with, attempt
to direct or entice away any current employee or independent contractor of the
Company in any capacity if that person possesses or has knowledge of any trade
secrets.
(e) Trade Secrets. Xxxx shall not, without the prior written
consent of the Company, except as may be required by law, governmental rules and
regulations or litigation between the parties, disclose or use, in any way, any
confidential business or technical information or trade secret of the Company,
whether or not conceived of or prepared by Xxxx (the "Trade Secrets"), including
without limitation any information concerning any procedures, operations,
investments, techniques, data, compilations of information, records, financing,
costs, employees, purchasing, accounting, marketing, merchandising, sales,
customers, salaries, pricing, profits, plans for future development, and the
identity, requirements, preferences, practices and methods of doing business of
specific parties with whom the Company transacts business, and all other
information which is related to any service or business of the Company; all of
which Trade Secrets are the exclusive and valuable property of the Company.
(f) Injunctive Relief. Xxxx hereby acknowledges and agrees that
it would be difficult to fully compensate the Company for damages resulting from
the breach or threatened breach of the foregoing provisions and, accordingly,
that the Company, without being required to post any bond, shall be entitled to
(i) discontinue any severance and/or benefit payments due to Xxxx; and (ii)
temporary and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to enforce such provisions.
This provision with respect to injunctive relief shall not, however, diminish
the Company's right to claim and recover damages. Notwithstanding the foregoing,
the Company agrees that in the event that Xxxx engages in the development,
operation and/or disposition of self storage facilities, containerized or other
portable storage activities in violation of subsection (a) above, and further
providing that Xxxx has not violated any other subsection of this Section 8, and
is not otherwise in default of this Agreement, the Company's remedy for such
violation shall be limited to (i) immediate discontinuance of any further
severance and/or benefit payments in excess of three (3) months' worth of
severance and/or benefit payments which Xxxx shall be entitled to retain, due to
Xxxx, and recovery of any severance and/or benefits paid to Xxxx from the
commencement date of such violation, and (ii) in the event that such a breach
occurs after April 3, 2000, Xxxx shall no longer be entitled to exercise any
vested but unexercised stock options.
9. Consultation With Counsel. Each party hereto acknowledges and represents that
he or it has consulted with legal counsel before effecting this settlement and
executing this Agreement and that he or it understands its meaning, including
the release of any claims under the Age Discrimination in Employment Act of 1967
(20 U.S.C. Section 21, et. seq.), and expressly consents that this Agreement
shall be given full force and effect according to each and all of its express
terms and provisions, including those relating to the release of unknown and
unsuspected claims, demands, and causes of action.
10. No Admissions. This Agreement is part of the compromise and settlement of
contested claims. No action taken by the parties hereto, either previously or in
connection with the compromise reflected in this Agreement, shall be deemed or
construed to be an admission of the truth or falsity of any matter pertaining to
any claim, demand, or cause of action referred to herein or relating to the
subject matter of this Agreement, or any acknowledgment by them, or any of them,
of any fault or liability to any party hereto or to any other person in
connection with any matter or thing.
-4-
5
11. Non-Disparagement. Xxxx shall not disparage or negatively criticize
Shurgard, its management, its products, or any of its employees to any other
person in any manner whatsoever. Shurgard shall not disparage or negatively
criticize Xxxx in any manner whatsoever.
12. No Assignments. Each party hereto represents and warrants to each other
party hereto, and each of them, that no portion of any claim, demand, cause of
action, or other matter released herein, nor any portion of any recovery or
settlement to which one party might be entitled from another party, has been
assigned or transferred to any other person or entity, either directly or by way
of subrogation or operation of law. Each party hereby agrees to indemnify,
defend, and hold harmless each other party, and each of them, from all loss,
cost, claim, or expense (including, but not limited to, all expenses of
investigation and defense of any such claim or action, including reasonable
attorneys' and accountants' fees and expenses) arising out of any claim made or
action instituted by any person or entity who claims to be the beneficiary of
such assignment or transfer, and to pay and satisfy any judgment resulting from
or any settlement of any such claim or action.
13. Governing Law. This Agreement and its terms and conditions shall be governed
by the laws and construed solely in accordance with the laws of the of State of
Washington.
14. Failure or Delay Not a Waiver. No failure or delay on the part of any party
to exercise any right hereunder, nor any other indulgence of such party, shall
operate as a waiver of any other rights hereunder, nor shall any single exercise
by any party of any right hereunder preclude any other or further exercise
thereof. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
15. No Representations. Each party hereto acknowledges that he or it has relied
wholly upon his or its own judgment, belief and knowledge of the existence,
nature and extent of each claim, demand, or cause of action that he or it may
have against another which is hereby released and that he or it has not been
influenced to any extent in entering into this Agreement by any representations
or statements regarding any such claim, demand, or cause of action made by any
other party hereto. Each party acknowledges that he or it is executing and
delivering this Agreement after having received from legal counsel of his or its
own choosing legal advice as to her or its rights hereunder and the legal effect
hereof.
16. Attorneys' Fees and Costs. In the event any litigation, arbitration or other
proceeding is brought for the interpretation or enforcement of this Agreement,
or because of an alleged dispute, default, misrepresentation, or breach arising
out of or relating to any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees, costs, and expenses actually incurred in connection therewith, in addition
to any other relief to which she, it, or they may be entitled.
17. Integration. This Agreement constitutes the entire understanding between the
parties hereto pertaining to the subject matter hereof and fully supersedes any
and all prior agreements and understandings, whether written or oral, between
the parties hereto pertaining to the subject matter hereof.
18. Amendments. No changes in, additions to, or modifications of this Agreement
shall be valid unless set forth in writing executed by all parties hereto.
-5-
6
19. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective parties and their heirs,
executors, administrators, agents, representatives, successors, and assigns.
20. Additional Documents. The parties hereto agree to execute such additional
documents and perform such further acts as may be reasonably necessary to
effectuate the purpose of this Agreement.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. Headings. The Headings in this Agreement are for convenience or reference
only, and shall not limit or otherwise affect the meaning hereof.
23. Authority to Execute. Each individual signing this Agreement, and any other
documents executed in connection with this Agreement, whether signed
individually or on behalf of any person or entity, warrants and represents that
he or he has full authority to so execute the Agreement on behalf of the parties
on whose behalf he so signs. Each separately acknowledges and represents that
this representation and warranty is an essential and material provision of this
Agreement and shall survive execution of this Agreement. Shurgard represents and
warrants that it has the authority and capacity to perform each of its
obligations under this Agreement or that it will cause such obligation to be
fulfilled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first written above.
SHURGARD STORAGE CENTERS, INC.
a Washington corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Chairman & CEO
Date Signed: 1/26/2000
-6-
7
/s/ Xxxxxxx Xxxx
-----------------------------------
XXXXXXX XXXX
Date Signed: 1/26/2000
/s/ Xxxx Xxxx
-----------------------------------
XXXX XXXX
Date Signed: 1/26/2000
-7-