Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
1. PARTIES. The parties to this Separation Agreement and General
Release ("Agreement") are:
A. M. Xxxxx Xxxxxxxx ("Employee").
B. PS Business Parks, Inc., and its past and present shareholders,
officers, directors, employees, affiliated companies, attorneys, agents and
representatives ("Employer").
2. RECITALS.
A. Employee has been employed by Employer as Senior Vice President
of Acquisitions and Dispositions since on or about November 11, 1996. The
parties agree that the employment relationship will terminate at 11:59 P.M.
Pacific Time on March 31, 2009.
B. Pursuant to Employee's terms of employment and prior to entering
into this Agreement, Employee had been awarded various non-qualified stock
options under Employer's equity plans including 15,000 non-qualified stock
options to acquire 15,000 common shares of PS Business Parks, Inc. stock, that
that are currently vested and exercisable, with a xxxxx xxxxx of $31.66; and 400
restricted stock units that were scheduled to vest on June 14, 2009.
C. The parties have agreed that to end their employment
relationship in a mutually satisfactory manner, and to resolve all known and
unknown disputes between the parties, the following covenants and agreements
shall be made:
3. POSITIONS. Employee will continue to serve as PS Business Parks,
Inc.'s Senior Vice President of Acquisitions and Dispositions through March 31,
2009. In this position, Employee will continue to report to PS Business Park's
Chief Executive Officer or to such other person as may be designated by
Employer's Chief Executive Officer or its Board of Directors. During the term of
this Agreement, Employer may, consistent with Employee's qualifications and
experience, change Employee's responsibilities at any time by creating new
responsibilities and/or moving certain responsibilities. Employee will continue
to devote his full time efforts toward fulfilling the responsibilities of his
position through March 31, 2009.
4. COOPERATION. The parties agree that through March 31, 2009, Employee
will, among other things that Employer may reasonably request in connection with
Employer's business, (a) use his reasonable best efforts to assist in
effectuating a smooth transition of his projects, assignments and
responsibilities and (b) provide ongoing strategic and other advice and
assistance as Employer may determine, in its sole discretion, to be necessary.
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The parties further agree that at all times following March 31,
2009, Employee will cooperate fully with the Employer in providing truthful
testimony as a witness or a declarant in connection with any present or future
court, administrative, governmental agency or arbitration proceeding involving
the Employer with respect to which the Employee has relevant information arising
out of his employment with the Employer. Employee also will assist Employer
during the discovery phase (or prior thereto) of any judicial, administrative,
arbitration, or governmental agency proceeding involving Employer and with
respect to which the Employee has relevant information arising out of his
employment with Employer including, without limitation, meeting with counsel,
assisting and cooperating in the preparation and review of documents, and
meeting with other representatives of the Employer. The parties agree that such
cooperation and assistance shall, to the extent practicable (giving due regard
to the needs of the Employer and the requirements of Employee's then current
work obligations), be at times and places that are mutually convenient to both
the Employee and the Employer. Moreover, Employee will not be required to assist
on such matters in excess of an average of 10 hours per month up to a total of
20 hours, except at an hourly rate of $200.00. If the parties cannot agree on
mutually convenient times and places, the Employer will provide the Employee
with a choice of three acceptable dates in different weeks and places and
Employee will select one of the three. The parties agree that this procedure
shall apply anytime the Employer and Employee cannot agree on a mutually
convenient time and place to meet. The Employer agrees that it will pay, upon
production of appropriate receipts, the reasonable business expenses (including
air transportation, hotel, and similar expenses) incurred by Employee in
connection with such assistance. Employee represents that he is not presently
aware of any conflict of interest between himself and Employer in connection
with any pending litigation or investigations that may give rise to a question
regarding the possible need for independent counsel with respect to the defense
of such matters.
Effective as of 11:59 P.M. Pacific Time, March 31, 2009, Employee
will be terminated as Senior Vice President of Acquisitions and Dispositions of
PS Business Parks, Inc., and terminated from all other officer positions that he
holds with PS Business Parks, Inc. with any of its subsidiaries and affiliated
companies. Employee agrees to sign, if requested by Employer, any forms
necessary to effectuate such termination from any offices he holds with
Employer.
5. COMPENSATION. Until Employee's employment terminates on March 31,
2009, Employee will continue to be paid twice monthly on the fifteenth and last
day of the month at a rate of $205,000 per year. Until March 31, 2009, Employee
will continue to participate in Employer's group insurance plans and 401(k)
plan. Until March 31, 2009, Employer will continue to reimburse Employee for
those properly documented, reasonable travel or similar expenditures incurred by
Employee consistent with prior practice that are reasonably necessary for the
proper discharge of Employee's duties under this Agreement. Employee will submit
all expense reports for reasonable business expenses by March 31, 2009 and
provide receipts satisfactory to Employer in accordance with Employer's current
policy.
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On the Effective Date, if Employee executes and delivers to Employer
a signed copy of this Agreement which has not been revoked, as further
consideration, and as previously approved by the PS Business Parks, Inc.
Compensation Committee, Employee will have through December 31, 2009 to exercise
15,000 non-qualified stock options that are currently vested and exercisable. In
addition, 400 restricted stock units that were scheduled to vest on June 14,
2009 will be accelerated and vested as of March 31, 2009. All other unvested PS
Business Parks, Inc. stock options and restricted stock units shall terminate as
of 11:59 PM Pacific Time, April 1, 2009. All vested PS Business Parks, Inc.
stock options held by Employee on March 31, 2009 shall be handled in accordance
with the applicable equity plan and option agreement. Employee agrees to comply
with the Employer's trading blackout period in effect on March 31, 2009
prohibiting open market trading in Employer's securities, until Employer advises
its executive officers and insiders that the window to trade Employer securities
is open, which will occur by email to Employee's designated email and is
currently anticipated to open after two trading days following the public
announcement of Employer's first quarter 2009 earnings. Employee shall not be
subject to any further Employer trading blackout periods after the first quarter
2009 trading window opens.
In addition, on the Effective Date, if Employee executes and
delivers to Employer a signed copy of this Agreement which has not been revoked,
as further consideration and to further assist Employee in transitioning to new
employment, and as previously approved by the PS Business Parks, Inc.
Compensation Committee, Employer will pay to Employee a lump sum payment in the
amount of $153,750 less all applicable state and federal withholdings.
In addition, Employer will pay to Employee any accrued but unused
vacation time as of March 31, 2009.
Employee acknowledges that as of the time of Employee's execution of
this Agreement, Employee has received all wages and other compensation due
Employee in connection with Employee's employment relationship with Employer,
including but not limited to compensation for vested vacation benefits, and that
the compensation provided for in this section will constitute the sole, entire,
and only financial obligations of Employer to Employee.
Employee acknowledges and agrees that Employer has made no
representations to Employee regarding the tax consequences of any amounts
received by Employee pursuant to this Agreement. Employee agrees to pay federal,
state and/or local taxes, if any, which are required by law to be paid with
respect to this Agreement. Employee fully agrees to indemnify and hold Employer,
and all of its Employees, principals and agents, harmless from any claims,
demands, deficiencies, levies, assessments, executions, judgments or recoveries
by any governmental entity against Employer for any amounts claimed due on
account of this Agreement or pursuant to claims made under any federal, state or
local tax laws, and any costs, expenses or damages sustained by Employer or its
employees or principals by reason of any such claims, including any amounts paid
by Employer as taxes, attorneys fees, deficiencies, levies, assessments, fines,
penalties, interest or otherwise.
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6. NON-ADMISSION OF LIABILITY. The parties understand and agree that
their execution of this Agreement shall not in any way constitute or be
construed as an admission of liability whatsoever by either party, their
successors or any related parties.
7. TERMINATION OF EMPLOYMENT RELATIONSHIP. Unless the employment
relationship is otherwise terminated in connection with this section, the
parties agree that Employee's employment with Employer shall terminate as of
11:59 P.M. Pacific Time on March 31, 2009.Prior to March 31, 2009, the
employment relationship may only be terminated for "cause" and if Employee is
terminated for cause, Employee will not apply nor shall Employee be re-employed
by Employer. Termination for "cause" may be based upon any of the following, as
determined by Employer in its reasonable discretion:
(i) Any act of fraud, dishonestly, embezzlement, or theft.
(ii) Conviction of, or a plea of nolo contendere to, any felony or
any misdemeanor involving moral turpitude;
(iii) Any act of gross negligence in the performance of Employee's
responsibilities;
(iv) Any inexcusable repeated or prolonged absence from work other
than as a result of illness or a disability;
(v) Employee's voluntary resignation from employment with Employer.
In the event Employee's employment is terminated for cause, Employee
will receive his base salary and unused vested vacation benefits through the
date of termination, and Employer will not owe to Employee any other
compensation or financial obligations.
8. PROPERTY. No later than March 31, 2009, Employee will return to
Employer all documents, reports, files, memoranda, records, Company credit
cards, key passes, door and file keys, laptop, computer access codes,
information and other physical and personal property of Employer which Employee
received or helped prepare in connection with Employee's employment and which
Employee has in Employee's possession. The term "information" as used in this
Agreement means (a) confidential information including, without limitation,
information received from Employer's clients, employees or its agents, under
confidential conditions; and (b) other business or financial information
received because of Employee's employment with Employer.
Employee further represents that he will remove all personal
possessions from Employer's premises prior to March 31, 2009.
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9. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employer's competitive
success depends on the proper safeguarding of Employer's trade secrets and
confidential information. Certain such information of Employer pertains to the
privacy interests of individuals and must be safeguarded for that reason as
well. Employee promises to continue to preserve the confidentiality of
Employer's trade secrets and commercially useful confidential information
learned through Employee's employment and to use this information only as
necessary and appropriate for Employer's legitimate business purposes. Employee
promises to safeguard against disclosure without the consent of affected persons
all information touching on the privacy interests of Employer's employees and
tenants. Employer's trade secrets and commercially useful confidential
information include without limitation Employer's non-public financial
information and the contents of Employer's business plans.
10. NON SOLICITATION. Employee agrees that for a period of one year
following the termination or expiration of this agreement, Employee will not
directly or indirectly, or by action in concert with others, induce or influence
(or seek to induce or influence), any person who is engaged as an employee,
agent, independent contractor or consultant by Employer to terminate such
person's employment or engagement with Employer.
11. GENERAL RELEASE BY EMPLOYEE. In exchange for the promises contained
herein, Employee, for good and valuable consideration, the adequacy and receipt
of which is hereby acknowledged, for Employee, Employee's attorneys, successors
and assigns (collectively "Releasers"), hereby releases and forever discharges
Employer, and its subsidiaries, affiliates, officers, directors, shareholders,
agents, attorneys, present employees and past employees, and their successors,
heirs, executors and administrators (collectively "Releasees"), and each of them
from any and all past, present and future claims, demands, causes of action, and
liabilities of every kind and nature whatsoever, known and unknown, suspected or
unsuspected, which the Releasors ever had, now have, hereinafter can, shall or
may have, from the beginning of time to the effective date hereof, including but
not limited to any claims, demands, causes of action or liabilities which
Employee could assert at common law, by any statute, rule, regulation, ordinance
or law, whether federal, state or local, or in any other grounds whatsoever,
that pertain to or arise out of the Employee's employment with Employer,
including but not limited to claims under the California Labor Code, California
Government Code, the Employment Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. ss. 1001, et seq., Title VII of the Civil Rights Act of
1964, 42 U.S.C. ss. 2000E et seq., the Age Discrimination In Employment Act, the
Equal Pay Act, the Rehabilitation Act of 1973, Section 1981 of Title 42 of
United States Code, claims for wrongful discharge, breach of contract,
negligence, implied contract, quasi-contract, promissory estoppel, implied
covenant of good faith and fair dealing, bad faith and denial of existence of
contract, defamation, interference with contractual relationships, invasion of
privacy, infliction of emotional distress, employment discrimination,
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retaliation, failure to prevent discrimination from occurring, fraud, and all
other federal, state and local laws, ordinances, regulations or orders which
relate in any way to employment, termination of employment or the continuing
effects thereof; provided, however, that notwithstanding the foregoing, the
Indemnity Agreement between Employer and Employee, dated as of May 4, 2004 shall
continue in full force and effect pursuant to its terms and Employee shall
continue to have all rights and obligations provided for thereunder.
12. NOTICE RE WAIVER OF RIGHTS. If Employee signs this Agreement,
Employee will forever give up all rights and claims released in this Agreement,
including the waiver and release of all discrimination claims. The Federal Age
Discrimination In Employment Act requires that employers give certain notices to
employees (including ex-employees) involved in claims that may include age
discrimination. Pursuant to the Federal Age Discrimination In Employment Act,
Employer hereby notifies Employee of the following employee rights:
A. Employee may not waive or release any right or claim under the
Age Discrimination In Employment Act unless Employee's waiver and release is
knowing and voluntary, and employee fully understands all of the terms of the
release.
B. Employee's waiver and release must be part of an agreement
between Employee and Employer and must be written in a manner calculated to be
understood by Employee.
C. Employee's waiver or release must specifically refer to the
rights or claims arising under the Federal Age Discrimination In Employment Act.
D. Employee may not waive or release any of Employee's rights or
claims that arise after the date Employee signs this Agreement.
E. Employee may only waive or release rights or claims in exchange
for consideration in addition to anything of value to which Employee is already
entitled.
F. Employee is advised in writing to consult with an attorney
before signing this Agreement.
G. Employee has a period of at least 21 days in which to consider
whether to sign this Agreement, and this Agreement provides that for seven days
after Employee signs this Agreement, Employee may revoke the Agreement and this
Agreement will not become effective or enforceable until this seven day
revocation period expires.
Revocation shall be made solely by delivering a written notice of revocation to:
Xxxxxx X. Xxxxxxx, Xx.
President and Chief Executive Officer
PS Business Parks, Inc., Inc.
000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
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13. POWER TO RELEASE. Employee represents and warrants that Employee is
the sole owner of the claims, demands, causes of action and liabilities which
Employee is releasing, and Employee has full power to give the release provided
for herein. Employee further represents and warrants that Employee has not
assigned or transferredany of the claims, demands, causes of action or
liabilities released herein and agrees to indemnify and hold Employer harmless
from and against any claims, demands, causes of action and liabilities,
including attorney fees incurred, arising out of any such transfer or
assignment.
14. WAIVER OF UNKNOWN CLAIMS. Employee expressly waives the provisions,
rights and benefits of Section 1542 of the California Civil Code and any similar
laws of any other jurisdiction, which provide:
"Section 1542. General Release -- Claims Extinguished. 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."
Notwithstanding the provisions of Section 1542, and for the purpose
of implementing a full and complete release and discharge of all Releasees with
respect to claims in California as well as all other jurisdictions, Employee
expressly acknowledges that the General Release contained in Paragraph 11 is
intended to include not only claims that are known, anticipated or disclosed,
but also claims that are unknown, unanticipated and undisclosed.
This Paragraph 14 shall not serve as a release of rights under or
preclude Employee from filing suit to enforce the provisions of the Agreement or
the Indemnity Agreement between Employer and Employee, dated as of May 4, 2004
or with respect to any right to indemnification provided under Employee's
director and officers' liability insurance policy or Employer's bylaws.
15. INTEGRATION. This Agreement contains a single integrated contract
expressing the entire agreement of the parties on the issues stated herein. With
the exception of the parties' existing arbitration agreement (which the parties
intend to remain effective), and the Indemnity Agreement between Employer and
Employee, dated as of May 4, 2004, there are no other agreements, written or
oral, express or implied, prior or collateral, between the parties, except the
Agreement set forth herein. No representative of any party hereto has or had any
authority to make any representations or promises not contained in this
Agreement, and each of the parties acknowledges that they have not executed this
Agreement in reliance upon any such representation or promise. This Agreement
cannot be modified or changed except by a written instrument signed by each of
the parties.
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16. SEVERABILITY. The provisions of this Agreement are severable, and
if any part is found to be unenforceable, the other provisions shall remain
fully valid and enforceable.
17. EFFECTIVE DATE. Employee shall have a period of at least 21 days
within which to consider this Agreement, and, if thereafter executed by
Employee, this Agreement may be revoked by Employee for a period of seven days
following the execution of this Agreement. This Agreement shall not become
effective or enforceable until such revocation period has expired without the
exercise of such revocation right ("Effective Date").
18. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. This Agreement may be
executed in counterparts, each of which may be deemed to be an original and all
of which shall constitute the Agreement; provided, however, that the Agreement
shall not become effective until completely conforming counterparts have been
signed and delivered by each of the parties hereto.
19. CAPTIONS AND INTERPRETATIONS. Paragraphs, titles, captions
contained herein are inserted for convenience and reference, and are not
intended to define, limit or describe the scope of the Agreement or any
provisions thereof. No provision of the Agreement is to be interpreted for or
against any party on the basis that a particular party or Employee's attorney
drafted such provisions.
20. CONDITIONS OF EXECUTION. Each party acknowledges and warrants that
their execution of the Agreement is free and voluntary.
21. ATTORNEY FEES AND COSTS. If any party hereto commences any action
or other proceeding to enforce or interpret this Agreement, including any
actions to reform or rescind or any manner effect the provisions of this
Agreement, the prevailing party shall be entitled to all reasonable costs
incurred therewith, including but not limited to actual attorney fees.
Otherwise, the parties shall each bear their own attorney fees and costs
incurred.
Dated: March 31, 2009 /s/ M. Xxxxx Xxxxxxxx
---------------------------
M. Xxxxx Xxxxxxxx, Employee
Dated: March 31, 2009 PS BUSINESS PARKS, INC., Employer
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxxxx, Xx.
Its: President and Chief Executive Officer
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