SEPARATION AGREEMENT
Exhibit
99.1
THIS
SEPARATION AGREEMENT (this “Agreement”)
is
made and entered into as of February 27, 2007, by and between Xxxxxxx
Properties, Inc., a Maryland corporation (the “REIT”),
Xxxxxxx Properties, L.P., a Maryland limited partnership (the “Operating
Partnership”),
and
Xxxxxx X. Xxxxx (the “Executive”).
WHEREAS,
the
REIT,
the Operating Partnership and the Executive have previously entered into
that
certain Employment Agreement, effective as of June 27, 2003 (the “Employment
Agreement”),
pursuant to which the Executive is currently employed as Executive Vice
President and Chief Financial Officer of the REIT and the Operating Partnership
(collectively, the “Company”).
WHEREAS,
pursuant to that certain Performance Award Agreement, dated as of April [23],
2005, by and between the REIT, the Operating Partnership and the Executive
(the
“Performance Award Agreement”), the REIT granted to the Executive a Performance
Award (as defined in the Performance Award Agreement) under the Amended and
Restated 2003 Incentive Award Plan of Xxxxxxx Properties, Inc., Xxxxxxx
Properties Services, Inc. and Xxxxxxx Properties, L.P..
WHEREAS,
the Executive and the Company desire to specify the terms of the Executive’s
resignation from his positions as Executive Vice President and Chief Financial
Officer of the Company, and as an employee of the Company, and to provide
for
the termination of the Employment Agreement.
|
1.
|
RESIGNATION;
TERMINATION OF EMPLOYMENT
AGREEMENT
|
1.1. Resignation.
The
Executive hereby tenders, and the Company hereby accepts, the Executive’s
resignations from (a) his positions as Executive Vice President and Chief
Financial Officer of the Company and as an employee of the Company, (b) his
position as an officer and/or employee of any and all subsidiaries and
affiliates of the Company, in each case effective as of March
2,
2007 (the “Effective
Date”).
Notwithstanding anything contained herein or in the Employment Agreement, the
Executive’s resignation hereunder shall not be deemed either a resignation for
“Good Reason” or a termination for “Cause” for purposes of, and each as defined
in, the Employment Agreement. No later than the Effective Date, Executive shall
return to the Company all Company property in his possession, including without
limitation, keys, credit cards, telephone calling cards, computer hardware
and
software, cellular and portable telephone equipment, personal digital assistant
(PDA) devices, manuals, books, notebooks, financial statements, reports and
other documents.
2
Date,
the
Employment Agreement shall automatically terminate and be of no further force
and effect, and neither the Company nor the Executive shall have any further
obligations thereunder; provided,
however,
that the
Company’s obligation to pay to the Executive the Accrued Obligations and the
Other Benefits (each as defined in the Employment Agreement) and the provisions
of Section 8 (Certain Additional Payments by the Company) and Section 9
(Confidential Information and Non-Solicitation) of the Employment Agreement
shall survive the termination of the Executive’s employment and the termination
of the Employment Agreement.
1.3.
Performance
Award. Executive hereby acknowledges that the Performance Award Agreement
provides that in the event of a termination of the Executive’s employment with
the Company for any reason, the Executive’s right to receive payment of the
Performance Award shall be forfeited to the extent that the Performance Award
is
not vested as of the date of termination. Executive further acknowledges that
neither the Performance Award nor any portion thereof is vested as of the date
hereof, and, to the extent that the Performance Award is not vested as of the
Effective Date, all of the Executive’s right, title and interest in the
Performance Award shall thereupon be forfeited.
1.4
Consulting
Agreement. Concurrently with the execution of this Agreement, the parties
hereby agree to execute that certain Consulting Services Agreement, dated as
of
the date hereof, between the Company and Executive, in the form attached hereto
as Exhibit A which shall become effective as of the Effective Date (the
“Consulting Agreement”).
|
2.
|
MUTUAL
RELEASE
|
2.1.
Executive’s Release. In consideration of the Company Release (as defined below)
and the Company’s agreement to enter into the Consulting Agreement, and for
other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the Executive agrees that, as of the Effective Date,
he
shall execute and deliver to the Company a release of claims in substantially
the form attached hereto as Exhibit B (the “Executive Release”).
2.2.
Company’s Release. In consideration of the Executive Release and the Executive’s
agreement to enter into the Consulting Agreement, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company agrees that, as of the Effective Date, it shall
execute and deliver to the Executive a release of claims in substantially
the
form attached hereto as Exhibit C (the “Company Release”).
|
3.
|
CONFIDENTIALITY,
NON-SOLICITATION
|
3.1. Reaffirmation
of Prior Agreements.
Executive hereby acknowledges and agrees that the Executive is bound by certain
confidentiality and non-solicitation covenants set forth in Section 9 of the
Employment Agreement. Notwithstanding anything contained in this Agreement,
Executive hereby reaffirms the covenants and provisions set forth in Section
9
of the Employment Agreement and acknowledges and agrees that the provisions
of
Section 9 of the Employment Agreement shall survive the termination of the
Executive’s employment with the
3
Company
and shall remain in full force and effect.
|
4.
|
DISPUTE
RESOLUTION
|
4.1. Arbitration.
Any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement or the interpretation of this Agreement or any arrangements relating
to this Agreement or contemplated in this Agreement or the breach, termination
or invalidity thereof shall be settled by final and binding arbitration
administered by JAMS/Endispute in Los Angeles, California in accordance with
the
then existing JAMS/Endispute Arbitration Rules and Procedures for Employment
Disputes. In the event of such an arbitration proceeding, the Executive and
the
Company shall select a mutually acceptable neutral arbitrator from among the
JAMS/Endispute panel of arbitrators. In the event the Executive and the Company
cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint
an arbitrator. Neither the Executive nor the Company nor the arbitrator shall
disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of all parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or federal law, or both,
as
applicable, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply
the
standards governing such motions under the Federal Rules of Civil Procedure.
The
arbitrator shall render an award and a written, reasoned opinion in support
thereof. Judgment upon the award may be entered in any court having jurisdiction
thereof.
4.2. Waiver
of Jury Trial.
By
submitting a dispute to arbitration, the parties hereto understand that they
will not enjoy the benefits of a jury trial. Accordingly, the parties hereto
expressly waive the right to a jury trial.
4.3. Nonexclusive
Remedy.
Notwithstanding the above provisions regarding arbitration, the parties each
retain their respective rights to seek injunctive relief or other provisional
remedies provided under the law in any court having competent jurisdiction.
|
5.
|
MISCELLANEOUS
|
5.1. Section
409A of the Code.
To
the
extent applicable,
this
Agreement shall be interpreted in accordance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”),
and
Department of Treasury regulations and other interpretive guidance issued
thereunder. Notwithstanding any provision of this Agreement to the contrary,
the
Company may adopt such amendments to this Agreement or adopt other policies
and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Company determines are necessary
or
appropriate to (a) exempt the amounts and benefits provided hereunder from
Section 409A of the Code and/or preserve the intended tax treatment of such
amounts or benefits, or (b) comply with the requirements of Section 409A of
the
Code and related Department of Treasury guidance.
4
5.2. Withholding.
The
Company may withhold from any amounts payable or benefits provided under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be
withheld pursuant to any applicable law or regulation.
5.3. Severability.
In
construing this Agreement, if any portion of this Agreement shall be found
to be
invalid or unenforceable, the remaining terms and provisions of this Agreement
shall be given effect to the maximum extent permitted without considering the
void, invalid or unenforceable provision.
5.4. Successors.
This
Agreement is personal to the Executive and without the prior written consent
of
the Company shall not be assignable by the Executive otherwise than by will
or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives. This Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns. The Company will require any successor (whether 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 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.
5.5
Final and Entire Agreement. This Agreement represents the final and
entire agreement among the parties with respect to the subject matter hereof
and
supersedes all prior agreements (including, without limitation, the Employment
Agreement, subject to Section 3.1 hereof), negotiations and discussions between
the parties hereto and/or their respective counsel with respect to the subject
matter hereof; provided, however, that notwithstanding the foregoing, this
Agreement shall not supersede or otherwise affect that certain Indemnification
Agreement (the “Indemnification Agreement”), dated as of June 27, 2003, between
the Company and the Executive which shall remain in full force and effect.
Any
amendment to this Agreement must be in writing, signed by duly authorized
representatives of the parties, and stating the intent of the parties to amend
this Agreement.
5.6. Consultation
with Counsel.
The
Executive acknowledges that (a) he has consulted with or has had the opportunity
to consult with independent counsel of his own choice concerning this Agreement
and has been advised to do so by the Company, and (b) he has read and
understands the Agreement, is fully aware of its legal effect, and has entered
into it freely based on his own judgment.
5.7. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without reference to principles of conflict of laws that
would result in the application of any law other than that of the State of
California.
5.8. Cooperation
in Legal Proceedings.
The
Executive agrees that, after the Effective Date, upon the reasonable request
of
the Company, he shall cooperate with and assist the Company in undertaking
and
preparing for legal and other proceedings relating to the affairs of the Company
and its subsidiaries. The Executive shall be reimbursed for the reasonable
expenses he incurs in connection with any such cooperation and/or assistance,
and shall receive from the Company reasonable per
diem
compensation in connection therewith.
5
5.9. Non-Disparagement.
The
Executive agrees that he will not make any statement, publicly or privately,
which would reasonably be expected to disparage the REIT, the Operating
Partnership, any of their subsidiaries or any of their respective employees,
officers or directors. The REIT and the Operating Partnership agree that they
will not make any statement, publicly or privately, which would reasonably
be
expected to disparage the Executive.
5.10. Notices.
All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If
to the
Executive: at the Executive’s most recent address on the records of the Company;
If
to the
REIT or the Operating Partnership:
Xxxxxxx
Properties, Inc.
0000
Xxxxx Xxxxxx
Xxxxx
Xxxxxx, XX 00000
Attn:
General Counsel
with
a
copy to:
Xxxxxx
& Xxxxxxx
000
Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
5.10. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be an
original, but all of which taken together shall constitute one
instrument.
[Signature
Page Follows]
6
IN
WITNESS WHEREOF, the parties hereto have each executed this Agreement as of
the
date first above written.
EXECUTIVE
/s/
Xxxxxx X.
Xxxxx
Dallas
E.
Xxxxx
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:/s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Executive Vice President
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By:
Xxxxxxx Properties, Inc.
Its:
General Partner
By:/s/ Xxxx
X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Executive Vice President
EXHIBIT
A
CONSULTING
SERVICES AGREEMENT
EXHIBIT
B
GENERAL
RELEASE
For
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, except for rights created by that certain Separation Agreement,
dated as of February 27, 2007, by and between Xxxxxxx Properties, Inc. (the
“REIT”), Xxxxxxx Properties, L.P. (the “Operating Partnership”) and the
undersigned, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of the REIT, the Operating Partnership,
Xxxxxxx Services, Inc. and each of their partners, subsidiaries, associates,
affiliates, successors, heirs, assigns, agents, directors, officers, employees,
representatives, lawyers, insurers, and all persons acting by, through, under
or
in concert with them, or any of them, of and from any and all manner of action
or actions, cause or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown,
fixed or contingent (hereinafter called “Claims”), which the undersigned now has
or may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
hereof. The Claims released herein include, without limiting the generality
of
the foregoing, any Claims in any way arising out of, based upon, or related
to
the employment or termination of employment of the undersigned by the Releasees,
or any of them; any alleged breach of any express or implied contract of
employment; any alleged torts or other alleged legal restrictions on Releasee’s
right to terminate the employment of the undersigned; and any alleged violation
of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination
In
Employment Act, the Americans With Disabilities Act, and the California Fair
Employment and Housing Act.
THE
UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
THE
UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON
LAW
PRINCIPLES OF SIMILAR EFFECT.
IN
ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(A) HE
HAS
THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(B) HE
HAS
TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT;
AND
(C) HE
HAS
SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS RELEASE, AND THIS
RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION
PERIOD.
The
undersigned represents and warrants that there has been no assignment or other
transfer of any interest in any Claim which he may have against Releasees,
or
any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys’ fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer or any rights or Claims under any
such
assignment or transfer. It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Releasees
against the undersigned under this indemnity.
The
undersigned agrees that if he hereafter commences any suit arising out of,
based
upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the undersigned agrees to pay to Releasees, and each of them, in addition
to any other damages caused to Releasees thereby, all reasonable attorneys’ fees
incurred by Releasees in defending or otherwise responding to said suit or
Claim.
The
undersigned further understands and agrees that neither the payment of any
sum
of money nor the execution of this Release shall constitute or be construed
as
an admission of any liability whatsoever by the Releasees, or any of them,
who
have consistently taken the position that they have no liability whatsoever
to
the undersigned.
IN
WITNESS WHEREOF, the undersigned has executed this Release as of this
27th
day of
February, 2007.
Xxxxxx
X.
Xxxxx
EXHIBIT
C
GENERAL
RELEASE
For
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, except for rights created by that certain Separation Agreement,
dated as of February 27, 2007, by and between Xxxxxxx Properties, Inc. (the
“REIT”), Xxxxxxx Properties, L.P. (the “Operating Partnership,” and together
with the REIT, the “Company”), and Xxxxxx X. Xxxxx (the “Executive”), the
Company does hereby release and forever discharge, the “Releasees” hereunder,
consisting of the Executive and his heirs and assigns, of and from any and
all
manner of action or actions, cause or causes of action, in law or in equity,
suits, debts, liens, contracts, agreements, promises, liability, claims,
demands, damages, losses, costs, attorneys’ fees or expenses, of any nature
whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”),
which the REIT, the Operating Partnership or any of their subsidiaries now
has
or may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
hereof. The Claims released herein include, without limiting the generality
of
the foregoing, any Claims in any way arising out of, based upon, or related
to
the employment or termination of employment of the Executive by the Releasees,
or any of them.
The
Company represents and warrants that there has been no assignment or other
transfer of any interest in any Claim which it may have against Releasees,
or
any of them, and the Company agrees to indemnify and hold Releasees, and each
of
them, harmless from any liability, Claims, demands, damages, costs, expenses
and
attorneys’ fees incurred by Releasees, or any of them, as the result of any such
assignment or transfer or any rights or Claims under any such assignment or
transfer. It is the intention of the parties that this indemnity does not
require payment as a condition precedent to recovery by the Releasees against
the Company under this indemnity.
The
Company agrees that if it hereafter commences any suit arising out of, based
upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the Company agrees to pay to Releasees, and each of them, in addition
to
any other damages caused to Releasees thereby, all reasonable attorneys’ fees
incurred by Releasees in defending or otherwise responding to said suit or
Claim.
The
Company further understands and agrees that neither the payment of any sum
of
money nor the execution of this Release shall constitute or be construed as
an
admission of any liability whatsoever by the Releasees, or any of them, who
have
consistently taken the position that they have no liability whatsoever to the
Company.
IN
WITNESS WHEREOF, the REIT and the Operating Partnership have executed this
Release as of this 27th
day of
February, 2007.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:
____________________________
Name:
Xxxx X. Xxxxxx
Title:
Executive Vice President
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By:
Xxxxxxx Properties, Inc.
Its:
General Partner
By:
____________________________
Name:
Xxxx X. Xxxxxx
Title:
Executive Vice President
