AGREEMENT AND GENERAL RELEASE
Exhibit 10.4
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL RELEASE (“AGREEMENT”) MUST BE SIGNED AFTER TERMINATION OF EMPLOYMENT AND
MUST BE FILED WITH X.X. XXXXXX, INC., 000 XXXXXXXX XXXXXX, XXXXX 000, XXXX XXXXX, XX 00000, ATTN:
XXXXX XXXXXX-XXXXXXX NO LATER THAN DECEMBER 5, 2006. IF THIS AGREEMENT IS NOT RECEIVED BY X.X.
XXXXXX BY DECEMBER 5, 2006, THIS AGREEMENT WILL BE NULL AND VOID AND OFFERS MADE WITHIN IT
WITHDRAWN. THIS AGREEMENT MAY BE REVOKED WITHIN SEVEN DAYS AFTER IT WAS SIGNED BY FILING A WRITTEN
AND SIGNED REVOCATION NOTICE WITH XXXXX XXXXXX-XXXXXXX, 000 XXXXXXXX XXXXXX, XXXXX 000, XXXX XXXXX,
XX 00000. TO BE EFFECTIVE, REVOCATION MUST DELIVERED TO X.X. XXXXXX WITHIN SEVEN DAYS AFTER YOU
SIGNED THE AGREEMENT. YOU MAY NOT MAKE ANY CHANGES TO THIS FORM.
X.X. XXXXXX, INC. and any subsidiary corporations of X.X. Xxxxxx, Inc., and all other entities
related directly or indirectly to X.X. Xxxxxx, Inc. (collectively “the Company”) and I, XXXXXX X.
NOON, agree as follows:
1. Recitals.
1.1. On or about April 1, 1995, I entered into an Employment Agreement (“Employment
Agreement”) with the Company wherein I agreed to employment with the Company.
1.2. Pursuant to paragraph 7 of the Employment Agreement, my employment can be terminated
provided the Company or I provide 15 days notice of termination. However, I have decided to resign
from the Company effective immediately, and both I and the Company have agreed to waive the notice
provisions of paragraph 7 of the Employment Agreement.
1.3. I informed the Company that I was resigning my employment with the Company effective
October 20, 2006.
2. Benefits. The Company promises to pay or provide the following to me:
2.1. Severance Pay in Consideration for Release. The Company will pay me additional
compensation which I would not otherwise be entitled to receive in exchange for the releases set
forth below consisting of $47,115.46, representing gross base salary (without benefits or
additional compensation) for fourteen (14) weeks of employment, plus an additional $5,000. These
payments, collectively, constitute my Severance Pay. This Severance Pay will be subject to all
applicable federal, state and local taxes and related employment deductions.
2.2. Vacation Time Cashout. I will receive a gross payment of $17,091.97 for my unused but
accrued annual vacation and personal time. This amount shall be subject to all appropriate
federal, state, and local taxes and other customary and proper payroll deductions.
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2.3. Final Wages. I have my final gross wages of $3,365.38, exclusive of any Bonus
Compensation (as described in section 2.3.1. of this Agreement) less all applicable federal, state
and local taxes and related employment deductions. This constitutes my final accrued and unpaid
wages from the Company. I agree that I am not entitled to any additional wages (other than the
Bonus Compensation as described in section 2.3.1 of this Agreement, as approved), from the Company.
2.3.1. Bonus Compensation. Subject to the terms of my Fiscal Year 2006 Chief Operating
Officer Compensation Plan, executed by me on February 1, 2006, and as approved by the Compensation
Committee of the Board of Directors of the Company, I agree that I will receive a gross amount of
$563,405 from the Company. This amount constitutes the entire amount of my Bonus Compensation to
which I am entitled from the Company. This amount shall be subject to all appropriate federal,
state, and local taxes and other customary and proper payroll deductions. I understand that the
Bonus Compensation, as approved by the Compensation Committee of the Board of Directors of the
Company, will be paid to me to me no later than forty-eight (48) hours after final approval by the
Compensation Committee. I agree that I am not entitled to any additional Bonus Compensation from
the Company. I further agree that the Bonus Compensation described in section 2.3.1. of this
Agreement is not being paid in consideration of my providing the Release to the Company contained
in section 3 of this Agreement.
2.4. Stock Options. I understand that I have participated in the Company’s 1991 Stock
Incentive Plan, as amended, and the 2006 Stock Incentive Plan, and the related non-qualified stock
option agreements for each stock option grant (collectively “Stock Option Plans”). I understand
and agree that the provisions of the Stock Option Plan are controlling over my rights to obtain
stock options associated with my employment at the Company. I agree that I am not entitled to any
additional options, or any acceleration of the granting of new options, or the acceleration of the
vesting of existing options from the Company under the Company’s Stock Option Plans.
2.5. 60 Day Notice Payment. I understand that my resignation is occurring during a reduction
of force by the Company. Accordingly, I have received a gross amount of $26,923.12 equal to 60
days wages. This amount shall be subject to all appropriate federal, state, and local taxes and
other customary and proper payroll deductions.
2.5.1. Benefit Reimbursements. The Company agrees to pay me the gross amount of $3,051.81.
This amount shall be subject to all appropriate federal, state, and local taxes and other customary
and proper payroll deductions. The net amount is equal to the cost of continuing my employment
benefits for the next 60 days. I will receive this amount regardless of whether I elect to
continue my employment benefits pursuant to COBRA following the termination of my employment with
the Company.
2.6. 401k, SERP, & Deferred Compensation. I will be eligible for a distribution of my vested
401k account, Supplemental Executive Retirement Plan No. 2 (SERP No. 2) account, and Deferred
Compensation Plan in accordance with the applicable plan guidelines. (Distribution election forms
will be forwarded to me as applicable by separate cover).
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2.7. Eligibility for Continuation Benefits. As to Company-provided medical, dental or vision
plans in which I participate, I will be entitled to buy continued health plan coverage under the
normal COBRA health care continuation rules. Details regarding this coverage will be provided to
me under separate cover.
2.8. Indemnification. The Company agrees that it will indemnify me in my role as an officer
of the Company in accordance with the Seventh Article of the Certificate of Incorporation, as
amended, of the Company which provides that employees and officers of the Company shall be
indemnified to the fullest extent provided by the General Corporation Law of the State of Delaware
(“DGCL”), provided my actions are within the scope contemplated by the DGCL. The Company
acknowledges that such indemnification includes actions, suits, claims or proceedings related to my
role as the named Responsible Managing Officer on behalf of the Company, including but not limited
to Continental Residential, Inc., X.X. Xxxxxx San Diego Holding Company, Inc. and Western Pacific
Housing Management, Inc., under State of California Contractors Licenses, provided my actions are
within the scope contemplated by the DGCL. I agree to meet with and cooperate, to the fullest
extent of the law, with the Company and its counsel, in any action for which the Company provides
me indemnification.
2.9. Payments by the Company
2.9.1. I agree that the Severance Pay described in subsection 2.1, is a benefit that the
Company is not required to pay me under its normal policies and procedures or under the Employment
Agreement. The benefits described in sections 2.2, 2.3, 2.5, and 2.5.1 of this Agreement have been
paid to me and I have received them, on my last date of employment, which is October 20, 2006. I
understand that I will receive the Bonus Compensation described in section 2.3.1 as approved by the
Compensation Committee of the Board of Directors, no later than forty-eight (48) hours after
approval by the Compensation Committee.
2.9.2. I understand and agree that my Severance Pay under subsection 2.1 will be paid or made
available to me only if (1) I have signed and returned this Release to the Company within 45 days;
(2) I have not revoked the Agreement, which I understand I may do within seven days after I sign
it; and (3), I have returned all Company property as required by section 4.3 of this Agreement.
The Company will not pay me the Severance Pay described in section 2.1 until after the expiration
of the seven-day revocation period (or if I have revoked this Agreement, then the Company will not
pay me the severance pay at all) and after it has certified that I have, in fact, returned all
Company property as required by this Agreement.
2.10. No Other Payments. I agree that other than the consideration and other payments listed
in this Agreement, and with the exception of those payments mandated by law, I am not entitled to
any other consideration, cash, payment, salary, wage, commission, severance, distribution, fringe
benefit (excluding my 401k plan contributions, SERP No. 2, and Deferred Compensation Plan), COBRA
benefit, insurance, vacation/personal pay and/or bonus compensation, under any employment policy,
this Agreement or any other prior oral and/or written agreement. Except for the obligations and
promises set forth in this Agreement, I agree and understand that this Agreement releases the
Released Parties from each and every obligation,
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monetary or otherwise, owed to me now and in the future.
3. Complete Release
3.1. In General. I irrevocably and unconditionally release all the Claims described in
subsection 3.2 that I may now have against the Released Parties listed in subsection 3.4, except
that I am not releasing any Claim that relates to: (i) my right to enforce this Release or (ii) any
rights or claims under the Age Discrimination in Employment Act or any other law that may arise
after I sign this Release.
3.2. Claims Released. Subject only to the exceptions just noted, I am releasing all known and
unknown claims, promises, causes of action, or similar rights of any type that I presently may have
(“Claims”) with respect to any Released Party listed in subsection 3.4. I understand that the
Claims I am releasing might arise under many different laws (including statutes, regulations, other
administrative guidance, and common law doctrines), such as the following:
Antidiscrimination statutes, such as the Age Discrimination in Employment Act and Executive
Order 11,141, which prohibit age discrimination in employment; Title VII of the Civil Rights
Act of 1964, Sections 1981 and 1983 of the Civil Rights Act of 1866, and Executive Order
11,246, which prohibit discrimination based on race, color, national origin, religion, or
sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the
Americans with Disabilities Act and Sections 503 and 504 of the Rehabilitation Act of 1973,
which prohibit discrimination based on disability; and any other federal, state, or local
laws prohibiting employment discrimination, such as the California Fair Employment and
Housing Act, which prohibits discrimination based on race, color, national origin, ancestry,
physical or mental disability, medical condition, marital status, sex, age, or sexual
orientation;
Federal employment statutes, such as the WARN Act, which requires that advance notice be
given of certain workforce reductions; the Employee Retirement Income Security Act of 1974,
which, among other things, protects employee benefits; the Fair Labor Standards Act of 1938,
which regulates wage and hour matters; the Family and Medical Leave Act of 1993, which
requires employers to provide leaves of absence under certain circumstances; and any other
federal laws relating to employment, such as veterans’ reemployment rights laws.
Other laws, such as federal, state, or local laws providing workers’ compensation benefits,
restricting an employer’s right to terminate employees, or otherwise regulating employment;
any federal, state, or local law enforcing express or implied employment contracts or
requiring an employer to deal with employees fairly or in good faith; any other federal,
state, or local laws providing recourse for alleged wrongful discharge, tort, physical or
personal injury, emotional distress, fraud, negligent misrepresentation, defamation, and
similar or related claims, such as California Labor Code sections 200 et
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seq. relating to salary, commissions, compensation, benefits and other matters, and any
applicable California Industrial Welfare Commission order.
Examples of released Claims include, but are not limited to: (i) Claims that in any way
relate to my employment with the Company, or the termination of that employment, such as
Claims for compensation, bonuses, commissions, lost wages, or unused accrued vacation or
sick pay; (ii) Claims that in any way relate to any employee benefit program; (iii) Claims
that I have irrevocable or vested rights to severance or similar benefits or to
post-employment health or group insurance benefits; (iv) any Claim, such as a benefit claim,
that was explicitly or implicitly denied before I signed this Release; (v) any Claim I might
have for extra benefits as a consequence of payments I receive because of signing this
Release; or (vi) any Claim to attorneys’ fees or other indemnities.
3.3. Unknown Claims. I understand that I am releasing Claims that I may not know about. That
is my knowing and voluntary intent, even though I recognize that someday I might learn that some or
all of the facts I currently believe to be true are untrue and even though I might then regret
having signed this Release. Nevertheless, I am assuming that risk and I agree that this Release
shall remain effective in all respects in any such case. I expressly waive all rights I might have
under any law that is intended to protect me from waiving unknown claims. I understand the
significance of doing so.
I expressly waive the protection of Section 1542 of the Civil Code of the State of
California, which states that:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
3.4. Released Parties. The Released Parties are the Company, all current or former related
companies, partnerships, or joint ventures, and, with respect to each of them, all of the Company’s
or such related entities’ predecessors and successors, and, with respect to each such entity, all
of its past, present, and future employees, officers, directors, stockholders, owners,
representatives, assigns, attorneys, agents, insurers, employee benefit programs (and the trustees,
administrators, fiduciaries, and insurers of such programs), and any other persons acting by,
through, under, or in concert with any of the persons or entities listed in this subsection, and
their successors.
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4. My Promises
4.1. Employment Termination. I agree that my employment with the Company and its affiliates
has ended or will end on October 20, 2006, the date specified by the Company.
4.2. Pursuit of Released Claims. I agree to withdraw with prejudice all complaints or
charges, if any, I have filed against any Released Party with any agency or court. I promise to
request any administrative agency or other body assuming jurisdiction of any such lawsuit,
complaint, or charge to withdraw from the matter or dismiss the matter with prejudice.
4.3. Company Property. I agree to immediately return to the Company all files, memoranda,
documents, records, copies of the foregoing, credit cards, keys, and any other property of the
Company or its affiliates that are in my possession. I specifically agree that the Company will
not pay me the Severance Pay indicated pursuant to section 2.1 until I have returned all of the
Company’s property back to the Company.
4.4. Taxes. I am responsible for paying any taxes on amounts I receive because I signed this
Release and I agree that the Company is to withhold all taxes it determines it is legally required
to withhold.
4.5. Employment Agreement Terms. I understand and agree that my Employment Agreement contains
the following terms, which I specifically reaffirm and incorporate in this Agreement. I understand
and agree that the Company would not pay me the Severance Pay described in section 2.1 absent my
agreement and reaffirmation of the following provisions of my Employment Agreement.
4.5.1. Non-Solicitation of Employees. I agree that I will not, either directly or indirectly,
for my own account or either as agent, servant or employee, or as a shareholder of any corporation,
or member of any firm, solicit the employment of any employee of the Company, its parents,
subsidiaries, affiliates, successors or assigns, for a period of three years following October 20,
2006. I understand that the Company is paying me the Severance Pay described in section 2.1 of
this Agreement in reliance upon my agreement not to solicit the Company’s employees.
4.5.2. Termination of Non-Compete Provision. I understand that the Company has agreed that
section 2(a) of my Employment Agreement concerning my ability to engage or attempt to engage in the
development of raw land for residential construction or in the construction and sale of single
family homes shall be null and void and of no effect.
4.6. Ownership of Claims. I have not assigned or transferred any Claim I am releasing, nor
have I purported to do so.
4.7. Nonadmission of Liability. I agree not to assert that this Release is an admission of
guilt or wrongdoing and I acknowledge that the Released Parties do not believe or admit that
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any of them has done anything wrong.
4.8. No Disparagement. I agree not to criticize, denigrate, or disparage any Released Party.
4.9. Nondisclosure. I acknowledge that I possess secret, confidential, or proprietary
information or trade secrets concerning the operations, future plans, or business methods of the
Company and its affiliates. I agree that the Company and its affiliates would be severely damaged
if I used or disclosed this information. To prevent this harm, I have made the following promises
and I acknowledge that the Company would be irreparably harmed if I broke any of them; these
promises supersede other similar promises I may have made only to the extent that these promises
are more protective of the Company’s interests, as it determines:
4.9.1. Promise Not to Disclose. I promise never to use or disclose any such information before
it has become generally known within the relevant industry through no fault of my own. I agree that
this promise will never expire.
4.10. Implementation. I agree to sign any documents and do anything else that is necessary in
the future to implement this Release.
4.11. Future Cooperation. I agree that as a named executive officer of the Company certain
disclosures of my compensation and affiliated transactions with the Company are required to be
publicly disclosed by the Company under the Securities Exchange Act of 1934, as amended, and I
agree to provide any necessary information to the Company regarding myself as the Company requests,
including completing the required Directors and Officers Questionnaire. Additionally I agree to
cooperate, including meeting with the Company’s counsel on a reasonable basis, in the defense or
prosecution of any litigation to which the Company is a party.
4.12. Agreement Not To Xxx. I represent that I will not in the future file any lawsuit or
complaint against the Released Parties based on the Claims purportedly released in this Release. I
promise never to seek any damages, remedies, or other relief for myself personally (any right to
which I hereby waive) by filing or prosecuting a charge with any administrative agency with respect
to any Claim purportedly released by this Release. Notwithstanding the forgoing, nothing in this
Agreement shall preclude me from bringing suit to challenge the validity or enforceability of this
Agreement under the Age Discrimination in Employment Act [29 U.S.C. § 620, et seq.] as amended by
the Older Workers Benefit Protection Act. Nor shall anything in this Agreement be interpreted as
preventing or precluding my participation in any investigation or proceeding conducted by the Equal
Employment Opportunity Commission. Nor shall anything in this Agreement be interpreted as
prohibiting me from filing a charge, including a challenge to the validity of the waiver agreement,
with the EEOC pursuant to the Age Discrimination in Employment Act as amended.
4.13. Other Representations. I have not suffered any job-related wrongs or injuries for which
I might still be entitled to compensation or relief, such as an injury for which I might receive a
workers’ compensation award in the future. I acknowledge and agree that I have not
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suffered any discrimination on account of my age, sex, race, national origin, marital status,
sexual orientation, physical disability, mental disability, marital status, medical condition, or
any other protected status, and that none of these ever has been an adverse factor used against me
by any Released Party. I further acknowledge that I have been paid all wages and/or commissions
owing to me. I understand that the Company relied on these representations in entering into this
Release with me.
5. Consequences of Violating My Promises
5.1. General Consequences. I agree to pay the reasonable attorneys’ fees and any damages the
Released Parties may incur as a result of my breaching a promise I made in this Release (such as by
suing a Released Party over a released Claim) or if any representation I made in this Release was
false when made. I acknowledge that the Company would be irreparably harmed by any actual or
threatened violation of Section 4.9 that involves disclosure or use of confidential information or
trade secrets and that the Company will be entitled to an injunction prohibiting me from committing
any such violation.
6. Consideration of Release.
6.1. I acknowledge that, before signing this Agreement, I was given a period of at least 45
calendar days to consider this Agreement. I further acknowledge that I have received the listing
of people effected by the Company’s recent reduction in force in the Southern California Region,
attached hereto as Exhibit “A”. I understand that if I fail to return this Agreement to the
Company by December 5, 2006, as indicated at the top of this Agreement, that this Agreement and the
offers contained in it will be withdrawn, null and void. I also acknowledge that I have seven days
after I sign this Agreement to revoke my agreement to it by sending a written revocation notice to
the Company c/o Xxxxx Xxxxxx-Xxxxxxx X.X. Xxxxxx, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx,
XX 00000. I waive any right I might have to additional time beyond this consideration period
within which to consider this Agreement. I acknowledge that: (1) I took advantage of this period
to consider this Agreement before signing it; (2) I carefully read this Agreement; (3) I fully
understand it; (4) I am entering into it voluntarily; (5) I am receiving valuable consideration in
exchange for my execution of this Agreement that I would not otherwise be entitled to receive; (6)
I understand that the Company, in writing, encouraged me to discuss this Agreement with my attorney
(at my own expense) before signing it, and that I did so to the extent I deemed appropriate; (7) I
understand that this Agreement waives any claims or rights I may have pursuant to the Age
Discrimination in Employment Act, as amended, except any such claims arising under said Act which
may arise after I sign this Agreement; (8) I understand that this Agreement does not prevent me
from bringing a suit to challenge the validity of this Agreement as it applies to the claims
seeking to enforce the ADEA; and, (9) I understand that this Agreement does not prohibit me from
participating in any investigation or proceeding conducted by Equal Employment Opportunity
Commission with regard to claims brought to enforce the Age Discrimination in Employment Act, as
amended.
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7. Miscellaneous
7.1. Entire Agreement. This is the entire agreement between me and the Company. This
agreement may not be modified or canceled in any manner except by a writing signed by both me and
an authorized Company official. I acknowledge that the Company has made no representations or
promises to me (such as that my former position will remain vacant) other than those in this
Release. If any provision in this Release is found to be unenforceable, all other provisions will
remain fully enforceable.
7.2. Successors. This Release binds my heirs, administrators, representatives, executors,
successors, and assigns, and will inure to the benefit of all Released Parties and their respective
heirs, administrators, representatives, executors, successors, predecessors and assigns.
7.3. Interpretation. This Release shall be construed as a whole according to its fair
meaning. It shall not be construed strictly for or against me or any Released Party. Unless the
context indicates otherwise, the term “or” shall be deemed to include the term “and” and the
singular or plural number shall be deemed to include the other. Captions are intended solely for
convenience of reference and shall not be used in the interpretation of this Release. Except to the
extent governed by federal law, this Release shall be governed by the statutes and common law of
the State of California (excluding any that mandate the use of another jurisdiction’s laws).
7.4. Counterparts; Facsimile Signature. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall constitute one and
the same written agreement. I and the Company agree that a facsimile signature shall be valid for
all purposes as though it were an original signature.
TAKE THIS RELEASE HOME, READ IT, AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING IT: IT
INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS. IF YOU WISH, YOU SHOULD TAKE ADVANTAGE OF THE
CONSIDERATION PERIOD AFFORDED BY SECTION 6 AND CONSULT YOUR ATTORNEY.
[signatures on following page]
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FOR EMPLOYEE:
| Date: 10/28/2006 | /s/ Xxxxxx X. Noon | |||||
| Xxxxxx X. Noon | ||||||
FOR THE COMPANY: |
||||||
| Dated: 11/2/2006 | X.X. XXXXXX, INC. | |||||
| By: | /s/ Xxx X. Harbour | |||||
| Xxx X. Harbour | ||||||
| Its Senior Vice President | ||||||
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