SEPARATION AGREEMENT AND RELEASE OF CLAIMS
EXHIBIT 10.1
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Separation Agreement and General Release of Claims (“Agreement”) is made and entered into
between Residential Funding Company, LLC (“RFC” or “Company”) and Xxxxx Xxxxxxx (“Xxxxxxx” or
“you”). This Agreement represents our mutual understanding and agreement concerning your at-will
employment with RFC, which will terminate effective June 1, 2007 (“Separation Date”).
IT IS HEREBY AGREED, by and between Xxxxxxx and RFC as follows:
1. Release Consideration. If you sign this Agreement on or before July 1, 2007 and do
not revoke pursuant to Section 17 of this Agreement, RFC will provide you with the following
consideration as set forth in Sections 1(a), 1(b), 1(c) and 1 (d).
a. The sum of $511,271.00 less all applicable federal, state, local, and benefit
withholdings, payable to you within 10 business days following the 15-Day Revocation Period
detailed in Section 17 herein. RFC will issue you an IRS Form W-2 for this sum. This
consideration represents a full and final compromise of any and all of your claims for
compensation and/or damages of any kind as well as any and all claims for attorney’s fees
and costs, and is not something to which you would be entitled in the event you do not sign
this Agreement.
b. The sum of $2,019,750.00 less all applicable, federal, state, local and benefit
withholdings, payable to you on or before February 29, 2008, but only if you are in
compliance with Section 5 (a) through (d) below on that date. RFC will issue you an IRS Form
W-2 for this sum.
c. RFC will reimburse you for six months of office rental expenses in an aggregate amount
not to exceed $22,455.00, to be used within a twelve (12) month period. This reimbursement
shall only be for the actual cost of the office space itself, no additional business
expenses. The reimbursement shall begin effective on the later of (i) June 1, 2007 or (ii)
the commencement of Xxxxxxx’ lease, which will occur no later than December 1, 2007. RFC
will issue you an IRS Form 1099 for this amount.
d. You will be provided with full-time administrative support by Xxxxxxxx Xxxxx beginning on
June 1, 2007 and ending on September 28, 2007. Xx. Xxxxx will remain on the payroll of RFC
during this time period.
2. Release and Waiver of Claims by You. Except as described in Sections 2.3 and 2.4
below, you WAIVE AND RELEASE any and all claims, whether or not now known to you, against RFC and
its parent companies, current and former officers, directors, members, investors, employees,
attorneys, agents, predecessors, successors, affiliates, subsidiaries, assigns and legal
representatives (together, the “Releasees”), arising from or relating to any and all acts, events
and omissions occurring prior to the date you sign this Agreement.
2.1. Included Claims. The claims being waived and released include, without
limitation,
a. any and all claims arising from or relating to your recruitment, hire, employment
and termination of employment with RFC;
b. any and all claims of wrongful discharge, emotional distress, defamation,
misrepresentation, fraud, detrimental reliance, breach of contractual obligations,
promissory estoppel, negligence, assault and battery, violation of public policy;
c. any and all claims of unlawful discrimination, harassment and retaliation under
applicable federal, state and local laws and regulations;
d. any and all claims of violation of any federal, state and local law relating to
recruitment, hiring, terms and conditions of employment, and termination of
employment; and
e. any and all claims for monetary damages and any other form of personal relief.
The claims being waived and released also include claims under the federal Age Discrimination in
Employment Act, as amended (“ADEA”).
2.2 Unknown Claims. In waiving and releasing any and all claims against the Company
Releasees, whether or not now known to you, you understand that this means that, if you later
discover facts different, from or in addition to those facts currently known by you, or believed by
you to be true, the waivers and releases of this Agreement will remain effective in all respects —
‘despite such different or additional facts and your later discovery of such facts, even if xxx
would not have agreed to this Agreement if you had prior knowledge of such facts.
2.3. Exceptions. The only claims that are not being waived and released by you under
this Section 2 are claims you may have for:
a. unemployment, state disability and/or paid family leave insurance benefits
pursuant to the terms of applicable state law;
b. continuation of existing participation in Company-sponsored group health benefit
plans, at your full expense, under the federal law known as “COBRA” and/or under an
applicable state counterpart law;
c. any benefit entitlements that are vested as of the Separation Date pursuant to
the terms of a Company-sponsored benefit plan governed by the federal law known as
“ERISA;”
d. violation of any federal, state or local statutory and/or public policy right or
entitlement that, by applicable law, is not waivable; and
e. any wrongful act or omission occurring after the date you sign this Agreement.
2.4. Government Agency Claims Exception. Nothing in this Section 2, or elsewhere in
this Agreement, prevents or prohibits you from filing a claim with a government agency, such as the
U.S. Equal Employment Opportunity Commission, that is responsible for enforcing a law on behalf of
the government.
3. Release and Waiver of Claims by Company. The Company waives and releases any and all
claims, whether or not now known to it, against Xxxxxxx, arising from or relating to any and all
acts, events and omissions occurring prior to the date of this Agreement with the exception of
claims arising from Xxxxxxx’ criminal conduct, fraud, willful and wanton misconduct, breach of
fiduciary duty and/or claims against Xxxxxxx arising out of loan transactions, if any, between
Xxxxxxx and the Company, its parents, subsidiaries or affiliates.
4. Waiver of Rights. You understand that by executing this Agreement, you are waiving
any rights that you may have with respect to any plan or agreement between you and the Company
and/or its parents in which you may have eligibility or entitlement to severance or other
compensation, including but not limited to the GMAC Senior Leadership Severance Plan, the GMAC
Long-Term Phantom Interest Plan, the GMAC LLC 2007 Annual Incentive Plan, the GMAC Mortgage Group
Phantom Stock Plan and the GMAC Management LLC Class C. Membership Interests Plan.
5. Non-Competition and Non-Solicitation. You acknowledge and recognize the highly
competitive nature of the businesses of Residential Capital, LLC its affiliates, successors and
direct and indirect subsidiaries (collectively “ResCap”) and accordingly agree that:
a. for 6 months from the date you execute this Agreement you will not engage in any
activity which is competitive with ResCap, including without limitation becoming an
employee, investor (except for passive investments of not more than five percent
(5%) of the outstanding shares of, or any other equity holdings of a competitor of
ResCap’s that is traded on the New York Stock Exchange, Nasdaq or any other
over-the-counter securities market), officer, owner, agent, partner or director of,
consultant or contractor or other participant in, any firm, person or other entity
in any geographic area that either directly or indirectly competes with ResCap.
“Competitive” means any individual or entity engaged in the business of the
origination and/or servicing of mortgage loans, the securitization of mortgage
loans, real estate finance services, business financing services, including but not
limited to resort finance, residential finance, healthcare finance or acquisition or
development and construction finance. Notwithstanding the foregoing, nothing in
this provision is intended to prohibit you from engaging in personal investments in
real estate finance services, business financing services, including but not limited
to resort finance, residential finance, or development and construction finance..
You affirm that from June 1, 2007 until the date you execute this Agreement that you
have not engaged in the activities described in this paragraph 5(a).
b. for 6 months from the date you execute this Agreement you will not directly or
indirectly assist others in engaging in any of the activities in which you are
prohibited to engage by clause (a) above. You affirm that from June 1, 2007 until
the date you execute this Agreement that you have not engaged’ in the activities
described in this paragraph 5(b).
c. for 18 months from the date you execute this Agreement you will not directly or
indirectly induce any employee of ResCap to terminate his/her employment with ResCap
or employ or offer employment to any person who was employed by ResCap unless such
person shall have ceased to be employed by ResCap for a period of at least twelve
(12) months. You affirm that from June 1, 2007 until the date you execute this
Agreement that you have not the activities described in this paragraph 5(c).
d. for 6 months from the date you execute this Agreement you will not directly or
indirectly solicit business from any Customer of ResCap, with respect to the
origination and/or servicing of mortgage loans, the securitization of mortgage
loans, real estate finance services, business financing services, including but not
limited to resort finance, residential finance, healthcare finance or acquisition or
development and construction finance. The term “Customer” of ResCap, as used in
this paragraph, shall mean those entities and their successors or affiliates that,
within the twelve (12) month period immediately preceding your Separation Date,
purchased products or services from ResCap. You specifically agree and understand
that the scope of this restriction is reasonable and tailored to reflect the nature
of your work for ResCap. You affirm that from June 1, 2007 until the date you
execute this Agreement that you have not engaged in the activities described in this
paragraph 5(d).
e. It is expressly understood and agreed that (i) although you and ResCap consider
the restrictions contained in this Section 5 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
geographic restrictions or any other restriction contained herein is unenforceable,
this Agreement shall not be rendered void but rather shall be deemed to be
enforceable to such maximum extent as such court may judicially determine or
indicate to be enforceable, and (ii) if any restriction contained in this Agreement
is determined to be unenforceable and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
f. Notwithstanding any provision of this Agreement to the contrary, upon RFC’s good
faith determination that you have breached any provision of this Section 5, RFC’s
obligations to make any payments to you under Section 1(b) of this Agreement shall
xxxxx if you are unable to cure such breach, within the reasonable discretion of the
Company, within ten days after written notice to you detailing which sub-section(s)
you breached and the factual basis for the claim of breach. RFC shall send written
notice of breach to you detailing the factual basis for the claim of breach. Such
notice shall be sent to: Xxxxx Xxxxxxx 00000 Xxxxx
Xxxxxx, Xxxx Xxxxxxx, XX 00000. Should you fail to cure the breach within 10 days
after receiving the written notice, RFC’s obligations to make any payments to you
under Section 1(b) of this Agreement shall continue to be abated until the
respective claims of the parties related to the breach have been adjudicated.
g. After payment of the consideration set forth in Section 1(b) has been made, you
agree that upon an arbitrator’s determination under subsection h below, that you
have breached any provision of this Section 5, it will cause irreparable harm to RFC
and you will become immediately liable to RFC for $200,000 if you are unable to cure
such breach, within the sole discretion of the Company, within ten days after
written notice to you detailing which sub-section(s) you breached and the factual
basis for the claim of breach. RFC shall send written notice of breach to you
detailing the factual basis for the claim of breach. Such notice shall be sent to:
Xxxxx Xxxxxxx 00000 Xxxxx Xxxxxx, Xxxx Xxxxxxx, XX 00000.
h. Any controversy or claim arising out of or relating to Section 5, or breach
thereof shall be submitted to arbitration in Minneapolis, Minnesota in accordance
with the Rules of the American Arbitration Association relating to employment
disputes. The award rendered in any arbitration proceeding held under this
Paragraph shall be final and binding, and judgment upon the award may be entered in
any court having jurisdiction thereof.
6. Cooperation. You agree that you will cooperate with reasonable requests by RFC,
its parents, subsidiaries or affiliates for assistance in the transition of your duties as well as
the preparation and defense of claims or litigation matters involving the Company, its parents,
subsidiaries or affiliates at times that are mutually convenient. Such cooperation shall include,
but is not limited to, being available for interview by Company representatives or its attorneys;
attending administrative or judicial hearings; attending depositions, meetings, strategy sessions
and trial; and assisting in responding to correspondence from third parties and discovery requests.
RFC agrees to reimburse your reasonable out-of-pocket expenses, excluding attorney’s fees,
incurred in providing such cooperation and, to the extent that your involvement takes more than
eight hours in the aggregate, RFC will compensate you at an hourly rate of $300. All other
requests for cooperation by the Company not involving the preparation and defense of claims or
litigation matters as specifically set forth herein shall be limited to 12 months from the date you
execute this Agreement. All requests for your cooperation shall not exceed more than 20 hours per
month. This time limitation is exclusive of any activities you are required to participate in by
subpoena or court order.
7. Confidential Information. You agree and acknowledge that during the course of your
employment with RFC that you had access and were privy to information, documents and/or materials
relating to RFC, its parents, subsidiaries and affiliates that are of a confidential and/or
proprietary nature or which constitute trade secrets and/or privileged information, the disclosure
of which will cause irreparable harm to RFC, its parents, subsidiaries and affiliates. As part of
this Agreement, you agree to return such information which is in your possession or which has been
given to others, and that you will not discuss or disclose to any person or entity any trade
secret, confidential, proprietary and/or privileged information without the express permission of
RFC.
8. Confidentiality and Non-Disparagement. You agree that you will not communicate or
disclose the terms of this Agreement, or the circumstances leading up to this Agreement to any
persons other than your spouse, attorney, accountant and/or tax consultant, or as otherwise
required by law. It will be a material breach of this Agreement to discuss this Agreement with any
employee or former employee of RFC, its parents, subsidiaries and affiliates. You agree that you
will not publicly or privately disparage any of the products, services or actions of ResCap or
GMAC, LLC, their employees, or any related entity, or make detrimental, harmful or injurious
remarks regarding ResCap or GMAC, LLC their employees, or any related entity. Nothing in this
Section 8, or elsewhere in this Agreement, is intended to prevent or prohibit you from (i)
providing information regarding your former employment relationship. with RFC, as may be required
by law or legal process; or (ii) cooperating, participating or assisting in any government entity.
investigation or proceeding.
9. You agree that if an arbitrator (as provided below) has determined that you have breached
the terms of Sections 7 or 8, it will cause irreparable harm to RFC and you will become immediately
liable to RFC for $200,000.00 if you are unable to cure such breach, within the sole discretion of
the Company, within ten days after written notice to you detailing which sub-section(s) you
breached and the factual basis for the claim of breach. RFC shall send written notice of breach to
you detailing the factual basis for the claim of breach. Such notice shall be sent to: Xxxxx
Xxxxxxx 00000 Xxxxx Xxxxxx, Xxxx Xxxxxxx, XX 00000. Any controversy or claim arising out of or
relating to Section 9 shall be submitted to arbitration in Minneapolis, Minnesota in accordance
with the Rules of the American Arbitration Association relating to employment disputes. The award
rendered in any arbitration proceeding held under this Paragraph shall be final and binding, and
judgment upon the award may be entered in any court having jurisdiction thereof.
10. Confidentiality and Non-Disparagement. Company agrees that it will not
communicate or disclose the terms of this Agreement, or the circumstances leading up to this
Agreement to any entities or persons other than senior management of the Company, its attorneys,
accountants, tax consultants, and/or Company personnel based on business necessity or as otherwise
required by law. Nothing in this Section 10, or elsewhere in this Agreement, is intended to
prevent or prohibit Company from (i) providing information which may be required by law or legal
process; or (ii) cooperating, participating or assisting in any government entity investigation or
proceeding.
11. Construction of Agreement. Should any of the provisions or terms of this Agreement
require judicial interpretation, it is agreed that the Court interpreting or construing this
Agreement shall not apply a presumption that such provision(s) or term(s) shall be more strictly
construed against one party by reason of the rule of construction that a document is to be
construed more strictly against the party who prepared it, it being agreed that all parties and
their counsel have participated in the review of this Agreement.
12. Entire Agreement. The undersigned further agree, declare and represent that no
promise, inducement, representation or agreement not herein expressed has been made to any party or
caused them to enter this Agreement. The Agreement contains the entire agreement between the
parties and the terms of the Agreement are contractual and not a mere recital. This is a fully
integrated agreement. It may not be altered or modified by oral agreement or
representation or otherwise except by a writing of subsequent date hereto signed by all
parties in interest.
13. Severability. Other than for Sections 1, 2, 2.1 2.4, 4 and 5 herein, the
paragraphs of this Agreement are severable. Finding that any particular paragraph of this Agreement
is invalid and/or unenforceable shall not affect the validity or enforceability of the remaining
provisions of the Agreement.
14. Facsimile Signatures. This Agreement may be executed in any number of
counterparts, and with facsimile signatures, with the same effect as if all of the parties hereto
had signed the same document. All counterparts shall be construed together and shall constitute one
agreement. Absent an original signature, it is hereby understood and agreed that a facsimile
signature shall be binding upon the parties and otherwise admissible under the Best Evidence Rule.
15. Governing Law. This Agreement is made and entered into in the State of Minnesota
and shall in all respects be interpreted, enforced and governed under the laws of Minnesota.
16. Acknowledgement.
a. You have read the terms of this Agreement and understand its terms and effects, including
the fact that you have agreed to RELEASE AND FOREVER DISCHARGE RELEASEES from any claims arising
out of your employment relationship with RFC, the terms and conditions of that employment
relationship, and the termination of that employment relationship;
b. You have signed this Agreement voluntarily and knowingly in exchange for the consideration
provided to you, which you acknowledge is adequate and satisfactory;
c. You have been advised by RFC through this document to consult with an attorney concerning
this Agreement prior to signing it;
d. RFC provided you with a period of at least twenty-one (21) days in which to consider this
Agreement, and decide whether or not to sign it, and you have signed on the date indicated below
after concluding that it is satisfactory to you;
e. Neither RFC, nor any of its agents, representatives, employees, or attorneys, has made any
representations to you concerning the terms or effects of this Agreement other than those contained
herein.
17. Right to Revoke. You also understand you have the right to revoke this Agreement
insofar as it relates to claims or potential claims under the Minnesota Human Rights Act and/or the
Age Discrimination in Employment Act. In order to revoke this Agreement, you must provide written
notice, delivered in person or sent by certified mail, to the following:
Xxxx X. Xxxxxxxx
Associate General Counsel
GMAC Mortgage, LLC
000 Xxxxxx Xxxx, X. X. Xxx 000,
Xxxxxxx, XX 00000-0000
Associate General Counsel
GMAC Mortgage, LLC
000 Xxxxxx Xxxx, X. X. Xxx 000,
Xxxxxxx, XX 00000-0000
To be effective, any revocation relating to the Minnesota Human Rights Act must be delivered within
fifteen (15) calendar days following your execution of this agreement, and any revocation relating
to the Age Discrimination in Employment Act must be delivered within seven calendar (7) days (the
“Revocation Periods”). Because of these Revocation Periods, this Agreement will not become
effective or enforceable until the sixteenth calendar day after you sign it, provided that you have
delivered your signed Agreement to the Company, and you did not revoke the Agreement as set forth
above.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the
foregoing Separation Agreement and Release of Claims this 25 day of July, 2007.
WITNESS: /s/ Xxxx Xxxx Xxxxx
|
/s/ Xxxxx Xxxxxxx | |
| Xxxxx Xxxxxxx | ||
| RESIDENTIAL FUNDING COMPANY, LLC | ||
| By: /s/ Xxxxx X. Xxxxx | ||
| Title: President |
