Exhibit 10.1
RETIREMENT AGREEMENT
THIS RETIREMENT AGREEMENT (this "Agreement") is entered into as of
March 8, 2002 (the "Effective Date") by and between CarrAmerica Realty
Corporation (the "Company") and Xxxxxxx X. Xxxxxxx ("Xxxxxxx").
RECITALS
X. Xxxxxxx currently is Chief Financial Officer of the Company.
X. Xxxxxxx desires to retire as Chief Financial Officer and provide
for a smooth transition for a new Chief Financial Officer of the Company.
AGREEMENT
In consideration of the foregoing and the mutual covenants hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which hereby is acknowledged, the parties hereto agree as
follows:
1. Resignation. In connection with Xxxxxxx'x retirement, the Company
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and Xxxxxxx agree that Xxxxxxx hereby resigns as (i) Chief Financial Officer of
the Company, effective as of March 31, 2002 (the "CFO Resignation Date"), and
(ii) as an officer, director, trustee or any other similar position of any
subsidiary, affiliate or benefit plan of the Company, effective as of the CFO
Resignation Date. Notwithstanding the foregoing resignations, Xxxxxxx shall
remain an employee of the Company pursuant to the terms outlined in Section 2
below.
2. Transition Employment Period.
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(a) Xxxxxxx shall remain employed by the Company from and after the
CFO Resignation Date until March 31, 2003 (the "Retirement Date") unless such
employment is earlier terminated in accordance with Section 9 below (the
"Transition Employment Period"). During the Transition Employment Period,
Xxxxxxx shall render to Xxxxxx Xxxx, or his successor as Chief Executive Officer
of the Company, and any person who is subsequently appointed as Chief Financial
Officer of the Company (the "New CFO") such services of an advisory or
consultative nature as such officers may reasonably request, to enable the
Company to continue to have the benefit of his experience and knowledge of the
affairs of the Company and to assist in the transition of Xxxxxxx'x duties to
the New CFO. During the Transition Employment Period, Xxxxxxx shall devote at
least 10 hours per week but no more than 15 hours per week to performing his
duties for the Company. The Company, acting through Xxxxxx Xxxx, or his
successor as Chief Executive Officer of the Company, or the New CFO shall have
sole control of the manner and means of Xxxxxxx performing his services under
this Agreement, and Xxxxxxx shall complete such services in accordance with the
Company's means and methods of work.
(b) The parties acknowledge and agree that the Xxxxxxx'x fulfillment
of his obligations to the Company hereunder will not require the Employee's full
business time. In the time that the Employee is not providing services to the
Company, he may accept other employment or engagements and may participate in
any other activities without obtaining the Company's approval thereof; provided,
however, that such other employment, engagements and activities (i) do not
materially interfere with his ability to perform the services contemplated
hereby, (ii) do not involve any violation of this Agreement, (iii) would not
otherwise be injurious to the business or reputation of the Company or any of
its subsidiaries, and (iv) are reasonably and generally (subject to
confidentiality considerations) disclosed in advance by Xxxxxxx to Xxx Xxxx.
3. Compensation and Related Matters.
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(a) Base Salary. From and after the Effective Date until the
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Retirement Date, the Company shall continue to pay Xxxxxxx a base salary at the
annual rate of $380,000 per year, payable at the same time and in the same
manner as payments are made to other senior executive officers of the Company
(the "Base Salary").
(b) Bonus. For the year ended December 31, 2002, the Company
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shall pay to Xxxxxxx a bonus of $80,750 (representing the pro rated target bonus
for Xxxxxxx for January 1, 2002 through March 31, 2002). The bonus amount shall
be paid no later than February 28, 2003 at the same time and in the same manner
as bonus payments are made to other senior executive officers of the Company.
(c) Restricted Stock Units. All restricted stock units held by
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Xxxxxxx shall remain unaffected by the terms of this Agreement (i.e., they will
continue to vest on the same schedule through the Transition Employment Period).
Upon termination of Xxxxxxx'x employment either upon expiration of the
Transition Employment Period or earlier pursuant to Section 9 hereof), the terms
of the agreement governing Xxxxxxx'x restricted stock units shall govern.
(d) Stock Options. All stock options held by Xxxxxxx shall
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remain unaffected by the terms of this Agreement (i.e., they will continue to
vest on the same schedule from and after the Effective Date through the
Transition Employment Period); provided, that if (x) the closing trading price
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of the Company's common stock is less than $27.90 on the Floor Commencement Date
(as defined below), and (y) Xxxxxxx exercises options on or before the Floor
Termination Date (as defined below), the Company will pay to Xxxxxxx, promptly
after the exercise by him of any stock options outstanding as of the Retirement
Date, an amount equal to (i) the difference between $27.90 and the closing
trading price of the Company's common stock on the Retirement Date, multiplied
by (ii) the number of stock options exercised by Xxxxxxx. As used herein, "Floor
Commencement Date" means the first trading day after February 16, 2003 on which
the Company's trading window for executive officers and other designated
employees is not closed and "Floor Termination Date" means the tenth trading day
following the Floor Commencement Date on which the Company's trading window for
executive officers and other designated employees is not closed. After
termination of Xxxxxxx'x employment at the end of the Transition Employment
Period, the stock options held by Xxxxxxx, to the extent then
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exercisable, shall remain exercisable for the one year period currently provided
in the stock option agreements.
(e) Welfare and Pension Plans. From and after the Effective Date
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through the Retirement Date, Xxxxxxx shall participate in and be covered under
all the welfare benefit plans or programs maintained by the Company from time to
time for the benefit of its senior executives, including, without limitation,
all medical, hospitalization, disability, dental, life insurance, accidental
death and dismemberment and travel accident insurance plans and programs
(subject to the terms of those plans) to the extent Xxxxxxx satisfies the
eligibility requirements of those plans and programs. In addition, from and
after the Effective Date and through the Retirement Date, Xxxxxxx shall be
eligible to participate in all pension, retirement, savings and other employee
benefit plans and programs maintained from time to time by the Company for the
benefit of its senior executives (to the extent Xxxxxxx satisfies the
eligibility requirements of those plans ); provided, that Xxxxxxx shall not be
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entitled to receive any new stock option or restricted stock unit grants during
such period; and provided further, that Xxxxxxx shall not be entitled to
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participate in the Company's Amended and Restated Executive Deferred
Compensation Plan. If Xxxxxxx becomes entitled to continuation coverage (COBRA),
prior to the Retirement Date and while this Agreement is in full force and
effect, the Company's will pay the difference between the cost of COBRA coverage
and the amount of premiums charged to full time employees under any medical,
hospitalization and dental insurance plan maintained by the Company for the
remaining term of this Agreement.
(f) Expenses. From and after the Effective Date and through
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the Retirement Date, the Company shall continue to promptly reimburse Xxxxxxx
for all reasonable business expenses relating to services provided under this
Agreement upon the presentation of reasonably itemized statements of such
expenses in accordance with the Company's policies and procedures now in effect
or as such policies and procedures may be modified with respect to all senior
executive officers of the Company.
(g) Relocation Expenses. The Company shall reimburse Xxxxxxx for
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expenses incurred by him in connection with the sale of his residence in
Washington, D.C. (i.e., brokerage commissions and other sale-related costs and
transportation of household goods to Richmond, Virginia); provided, that the
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amount to be reimbursed shall not exceed $25,000.
4. Release.
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(a) Xxxxxxx, on behalf of himself and his heirs, executors,
administrators, successors and assigns, forever releases and discharges the
Company and its stockholders and affiliates, and the Company's and its
stockholders' and affiliates' respective agents, officers, employees and
directors, and their respective successors and assigns, from and against any and
all claims, damages, lawsuits, actions, causes of action, and liabilities
whatsoever, whether known or unknown, absolute or contingent, accrued or
unaccrued, including but not limited to, all claims arising from or in any way
connected with Xxxxxxx'x employment by the Company and the termination of
Xxxxxxx'x employment with the Company, but excluding any claims, damages or
liabilities associated with (i) the continuing option and restricted stock unit
agreements, (ii) benefits payable under the terms of employee benefit plans
maintained by the Company or its subsidiaries, or (iii) any breach by the
Company of the terms
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of this Agreement. This release includes, but is not limited to, rights or
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Age Discrimination in Employment Act of 1967, as amended, the Employee
Retirement Income Security Act of 1974, as amended, the Americans with
Disabilities Act, and any other federal, state or local statutes or common-law
rights of action prohibiting employment discrimination based on age, sex, race,
color, national origin, religion, handicap or veteran status or otherwise
concerning Xxxxxxx'x employment. Xxxxxxx also agrees not to xxx or otherwise
institute or cause to be instituted or in any way voluntarily participate in the
prosecution of any complaints or charges against any person or entity released
herein in any federal, state, District of Columbia or other court,
administrative agency or other forum concerning any claims released herein.
(b) Xxxxxxx acknowledges that he has carefully read this
Agreement which includes the release set forth in Section 4(a) (the "Release of
Claims") and fully understands all of its terms. Xxxxxxx is signing this
Agreement voluntarily and with full knowledge of its significance and
acknowledges that he has not relied upon any representation or statement,
written or oral, not set forth in this Agreement.
(c) Xxxxxxx acknowledges that he received this Agreement on
March 5, 2002, and that he understands that he has twenty-one (21) days after
the foregoing date within which to consider this Agreement, including the
Release of Claims, before signing it. Xxxxxxx understands that he has been given
the opportunity to and has in fact consulted with legal counsel of his own
choosing and that if he signs this Agreement prior to the twenty-first day, he
does so on a purely voluntary basis.
(d) Xxxxxxx further understands that for a period of seven (7)
days after he signs this Agreement, which includes the Release of Claims, that
he may revoke or cancel it by written notification to the Company and by
returning any sums paid to Xxxxxxx under this Agreement, and that this
Agreement, including the Release of Claims, will not become effective or
enforceable until that seven-day period has passed.
5. Confidentiality. Except as authorized or directed by the Company,
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Xxxxxxx shall not, at any time during or subsequent to the term of his
employment or this Agreement directly or indirectly publish or disclose any
confidential information of the Company or any of its affiliates or confidential
information of others that has come into the possession of the Company or of any
its affiliates or into his possession in the course of his employment with the
Company to any person or entity, and Xxxxxxx shall not use any such confidential
information for his own personal use or advantage or make it available to others
for use. All information, whether written or oral, regarding the business or
affairs of the Company or its affiliates, including, without limitation,
information as to their products, services, systems, software, finances
(including prices, costs and revenues), marketing plans, programs, methods of
operation, prospective and existing contracts and other business arrangements or
business plans, procedures, and strategies, shall be deemed confidential
information, except to the extent the same shall have been lawfully and without
breach of confidential obligation made available to the general public without
restriction. The Company shall be under no obligation to specifically identify
any information as to which the protection of this Section 5 extends by any
notice or other action. The parties acknowledge and agree that the foregoing
restriction is not intended to prohibit Xxxxxxx from making personal investments
in the Company or other public companies; provided, that (i) such investments
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are
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made in compliance with Section 6 of this Agreement, and (ii) such investments
are not made in violation of federal or state securities laws relating to
purchases or sales of securities while in the possession of material non-public
information.
6. Non-Compete. During the period in which Xxxxxxx is receiving any
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payments from the Company or any of its subsidiaries and for a period of one
year thereafter, without the consent of the Company, acting though Xxxxxx Xxxx,
or his successor as Chief Executive Officer of the Company, Xxxxxxx will not,
directly or indirectly, as a stockholder owning beneficially or of record more
than five percent of the outstanding shares of any class of stock of any issuer,
or as an officer, director, employee, consultant, partner, joint venturer,
proprietor or otherwise, engage in or become interested in (a) office real
estate management, leasing, development or construction services in the markets
in the United States where the Company is engaged in business or (b) any other
service that then is directly or indirectly in competition with the Company or
any of its subsidiaries (or any of their successors). During the period in which
Xxxxxxx is receiving any payments from the Company or any of its subsidiaries
and for a period of two years thereafter, Xxxxxxx shall not, without the prior
written consent of the Company, solicit or hire or induce the termination of
employment of any employees or other personnel providing services to the
Company, or any of its subsidiaries, for any business activity, other than a
business activity owned or controlled, directly or indirectly, by the Company or
any of its subsidiaries.
7. No Disparagement. During the period in which Xxxxxxx is receiving
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payments from the Company or any affiliate and for a period of two years
thereafter, Xxxxxxx shall not make disparaging statements, whether oral or
written, regarding the Company or any subsidiary, its business, officers,
directors or employees; provided, that the foregoing shall not prohibit Xxxxxxx
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from making statements regarding the Company as testimony if Xxxxxxx is
subpoenaed or otherwise compelled to provide testimony to any legislative,
administrative or judicial body. The Company will not assert that disparagement
has occured unless the Board, using reasonable judgment, adopts a resolution
identifying the specific words or action(s) that constitute disparagement.
8. Injunctive Relief. Xxxxxxx acknowledges and agrees that the
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compensation, benefits and other entitlements provided to him under this
Agreement are adequate consideration for Sections 5, 6 and 7. Xxxxxxx
acknowledges and warrants that he will be fully able to earn an adequate
livelihood for himself and his dependents if Sections 5, 6 and 7 should be
specifically enforced against him. Xxxxxxx also acknowledges that the
restrictions contained in Sections 5, 6 and 7 are reasonable and necessary to
protect the business and interests of the Company, the Company has relied and is
relying upon the enforceability of such restrictions in entering into this
Agreement, and any violation of these restrictions will cause substantial
irreparable injury to the Company. Therefore, Xxxxxxx agrees that the Company is
entitled, in addition to other remedies, to preliminary and permanent injunctive
relief to secure specific performance, and to prevent a breach or contemplated
breach, of Sections 5, 6 and 7. The restrictions set forth in Sections 5, 6 and
7 shall be construed as independent covenants, and the existence of any claim or
cause of action against the Company, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the restrictions contained in Sections 5, 6 and 7. Xxxxxxx hereby consents to
the jurisdiction over his person of any courts within the
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District of Columbia with respect to any proceedings in law or in equity arising
out of this Agreement. If any court of competent jurisdiction shall hold that
the restrictions contained in Section 6 are unreasonable as to time or
geographical area, said restrictions shall be deemed to be reduced to the extent
necessary in the opinion of such court to make them reasonable.
9. Termination of Employment.
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(a) The Company may not terminate Xxxxxxx`s employment hereunder
except for Cause as defined in Section 10 below. If Xxxxxxx'x employment is
terminated by the Company for Cause, the effective date of Xxxxxxx'x termination
of employment shall be the date (which may not be retroactive) of written notice
of termination given by or on behalf of the Board of Directors of the Company
(the "Board") to Xxxxxxx.
(b) Xxxxxxx'x employment hereunder shall also terminate (i) upon
Xxxxxxx'x death or permanent and total disability (as that term is used in the
Company's 1997 Stock Option and Incentive Plan), in which event the effective
date of Xxxxxxx'x termination of employment shall be the date of Xxxxxxx'x death
or the commencement of the disability, and (ii) upon 15 days' prior written
notice by Xxxxxxx to the Company.
(c) In the event Xxxxxxx'x employment is terminated by the
Company for Cause (as defined in Section 10), in the event of Xxxxxxx'x total
disability, or in the event Xxxxxxx terminates his employment, the Company shall
promptly thereafter pay to Xxxxxxx, or his legal representatives, all
compensation and expense reimbursement to which he was entitled hereunder only
through the date of termination and shall have no further obligation to Xxxxxxx
or his legal representatives for compensation and expense reimbursement
hereunder.
(d) If Xxxxxxx'x employment is terminated in the event of
Xxxxxxx'x death, the Company shall promptly pay to Xxxxxxx'x estate (i) all
compensation and expense reimbursement to which he was entitled hereunder
through the date of termination, plus (ii) the extent to which (if at all), the
amount of compensation Xxxxxxx would have received pursuant to Section 3(a) and
3(b) hereof had he remained alive exceeds the life insurance proceeds to which
Xxxxxxx'x beneficiaries are entitled to receive under the Company's life
insurance program.
(e) If Xxxxxxx'x employment is terminated in the event of
Xxxxxxx'x disability, the Company shall promptly pay to Xxxxxxx (i) all
compensation and expense reimbursement to which he was entitled hereunder
through the date of termination, plus (ii) the extent to which the amount of
compensation Xxxxxxx would have received pursuant to Section 3(a) and 3(b)
hereof had he remained employed exceeds disability benefits which Xxxxxxx is
entitled to receive under the Company's disability insurance program (if any).
(f) Xxxxxxx and the Company shall use their best efforts to
provide for a proper transition and wind-down of the Xxxxxxx'x activities
hereunder in connection with any termination of Xxxxxxx'x employment hereunder.
10. Cause. For purposes of this Agreement, "Cause" for termination
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of Xxxxxxx'x employment by the Company hereunder shall be deemed to exist if (a)
Xxxxxxx is found guilty by a court of competent jurisdiction of having committed
fraud or theft against the
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Company or having committed a felony; (b) Xxxxxxx is found guilty by a court of
competent jurisdiction of having committed a crime involving moral turpitude;
(c) Xxxxxxx shall have compromised trade secrets or other proprietary
information of the Company; (d) Xxxxxxx shall have breached in any material
respect the provisions of Section 5, 6 or 7 of this Agreement; (e) Xxxxxxx shall
have willfully failed or refused to perform material assigned duties; or (f)
Xxxxxxx shall have engaged in gross or willful misconduct that causes
substantial and material harm to the business and operations of the Company or
an affiliate thereof, the continuation of which will continue to substantially
and materially harm the business and operations of the Company or an affiliate
thereof in the future. In the case of a termination of this Company of this
Agreement for Cause pursuant to clause (c), (d), (e) or (f) above, such
termination shall not occur unless the Board, using reasonable judgment,
approves such a termination pursuant to a resolution identifying the specific
action(s) on which such termination is based.
11. No Assignments. This Agreement is personal to each of the
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parties hereto. Neither party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party hereto.
However, in the event of the death of Xxxxxxx all rights to receive payments
hereunder shall become rights of Xxxxxxx'x estate.
12. Amendment; Modification; Waiver. No amendments or additions to
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this Agreement shall be binding unless in writing and signed by both of the
parties hereto. No delay or failure at any time on the part of the Company in
exercising any right, power or privilege under this Agreement, or in enforcing
any provision of this Agreement, shall impair any such right, power, or
privilege, or be construed as a waiver of any default or as any acquiescence
therein, or shall affect the right of the Company thereafter to enforce each and
every provision of this Agreement in accordance with its terms.
13. Successors. The Company will require any successor (whether
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direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
14. Section Headings. The section headings used in this Agreement
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are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
15. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Notices. For purposes of this Agreement, notices and all other
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communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered, sent by overnight courier,
or mailed by first-class,
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registered or certified mail, return receipt requested, postage prepaid, or
transmitted by telegram, telecopy or telex, addressed as follows:
If to the Company:
CarrAmerica Realty Corporation
0000 X Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Chief Executive Officer
with a copy (which shall not constitute notice) to:
CarrAmerica Realty Corporation
0000 X Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, General Counsel
If to Xxxxxxx:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx Xx.
Xxxxxxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
17. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto, and supersedes all prior oral or written
agreements, commitments or understandings, with respect to the matters provided
for herein, except as otherwise specifically provided herein.
18. Further Assurance. Each of the Company and Xxxxxxx shall at any
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time, and from time to time, execute and deliver such further documents as the
other may reasonably request to effect fully the purposes of this Agreement.
19. Interpretation. Each party hereto hereby acknowledges that:
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(a) it or he was represented by counsel and had an opportunity
to participate equally in the drafting and negotiations of this Agreement;
(b) such negotiations were extensive and have been conducted on
an arm's length basis;
(c) Xxxxxxx is sophisticated and has substantial experience in
business and financial matters; and
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(d) there are no circumstances surrounding the drafting or
negotiations of this Agreement and no other reason that would or should require
a court construing this Agreement to construe it more strictly or stringently
against one party than against the other party.
20. Governing Law. This Agreement shall be governed by the laws of
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the District of Columbia, excluding the choice of law rules thereof.
21. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in their names and on their behalf as of the date
first above written.
Attest: CARRAMERICA REALTY CORPORATION
/s/Xxxxx Xxxxxx By: /s/Xxxxxx X. Xxxx
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Secretary Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
Date of Execution: March 8, 2002
/s/Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
Date of Execution: March 8, 2002
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