EXHIBIT 10.3
RESIGNATION AND GENERAL RELEASE AGREEMENT
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This Resignation and General Release Agreement ("Agreement"), made
this 30th day of August 1996, by and between Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"),
an individual, Santa Xxxxx Operating Company, a corporation ("Company") and
Santa Xxxxx Realty Enter prises, Inc. ("Realty"), is a resignation agreement
which includes a general release of claims.
In consideration of the covenants undertaken and the releases
contained in this Agreement, Xxxxxxxxx, Company and Realty agree as follows:
1. Xxxxxxxxx shall voluntarily resign from his position as Vice
President - Finance and Chief Financial Officer of Company and as an officer or
a member of the Board of Directors of Company's subsidiaries by executing
Exhibit A attached hereto, such resignation to be effective August 30, 1996.
Xxxxxxxxx further agrees that he resigns as an employee of the Company by
executing Exhibit A attached hereto, such resignation to be effective August 31,
1996.
2. Company and Xxxxxxxxx agree to the following actions in full
discharge of any and all of its obligations to Xxxxxxxxx (except to the extent
such obligations are carried out under this agreement, either directly or by
incorporation by reference), including, without limitation, the Severance
Agreement dated as of October 1, 1992, and all awards provided pursuant to the
Company's 1995 Share Award Plan or the Company's 1984 Stock Option Program (and
any amendments to said agreements):
a. Company shall pay to Xxxxxxxxx a cash lump sum equal to
$141,000 within 8 days after the execution of this Agreement, provided that
Xxxxxxxxx does not revoke this Agreement pursuant to Section 7(d) hereof, and
shall pay him 30 days of vacation pay within seventy-two hours of execution of
this Agreement. Company shall also pay an amount not to exceed $18,900 for
outplacement services of an executive outplacement firm of Xxxxxxxxx'x choice or
for other documented expenses reasonably incurred by Xxxxxxxxx in pursuit of
reemployment, which amount equals 15% of his annual base salary. Xx. Xxxxxxxxx
may opt, however, to apply up to $2,000 of this amount to the payment of
properly documented attorney's fees as described in Section 2.f, in which case
the Company shall pay such amount directly to Brum xxxxx'x attorneys and shall
reduce the amount available for reemployment expenses by a corresponding amount.
Except for (i) the payment of Xxxxxxxxx'x annual base salary and reasonable
employment expenses through the date of termination to the extent not heretofore
paid, (ii) the payment of any amounts due pursuant to the terms of any generally
applicable welfare and pension benefit plans (other than the Company's vacation
pay plan) and (iii) any obligations provided for hereinafter in this Agreement,
the Company shall have no other obligations to Xxxxxxxxx.
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b. Notwithstanding any provisions to the contrary in the
Severance Agreement between Xxxxxxxxx and the Company, if a Change in Control
(as defined in such Severance Agreement) occurs prior to May 17, 1997, then the
Company shall pay Xxxxxxxxx (or to Xxxxxxxxx'x beneficiary if Xxxxxxxxx is not
then alive), within 30 days after such Change in Control occurs, a cash lump sum
equal to $219,833 if the Change in Control occurs in 1996 or $207,333 if the
Change in Control occurs in 1997 (these amounts represent the excess of the
amount set forth in Section 6 of the Severance Agreement over $141,000) and
shall provide Xxxxxxxxx with the additional benefits set forth in Section 7 of
the Severance Agreement (effective as of the Change in Control). The payment and
benefits described in the preceding sentence shall in each case be subject to
the limitations set forth in Section 8 of the Severance Agreement and reduced to
the extent required by Section 8. For the purpose of Section 8, Xxxxxxxxx'x
resignation shall be considered to be contingent on the Change in Control.
c. The parties agree that Xxxxxxxxx'x rights with respect to all
25,000 of his stock options shall be limited to those of an employee who
voluntarily terminates employment on August 31, 1996, so that his vested
interest in such options shall be limited to his vested percentage on that date
and he shall have until November 30, 1996 to exercise said options, unless such
options are extended by the Company's Compensation Committee as hereinafter set
forth. Subject to appropriate action by the Company's Compensation Committee,
all such options, both vested and nonvested, shall remain outstanding after
November 30, 1996 (unless earlier exercised by Xxxxxxxxx), provided that the
options that are not vested as of August 31, 1996 shall not be exercisable
unless a Change in Control Event (as defined in the Company's 1995 Share Award
Plan) occurs prior to May 17, 1997. If a Change in Control Event occurs prior to
May 17, 1997, subject to all applicable limitations relating to Section 280G of
the Internal Revenue Code set forth in the Company's 1995 Share Award Plan or
the Company's 1984 Stock Option Program or any related award agreements,
Xxxxxxxxx (or his beneficiary, if Xxxxxxxxx is not then alive) shall become 100%
vested with respect to all 25,000 stock options previously granted to Xxxxxxxxx
in which Xxxxxxxxx is not already vested and shall have three months after such
Change in Control Event to exercise all 25,000 options; at the end of such three
month period, all such options shall expire. If a Change in Control Event does
not occur prior to May 17, 1997, all such options shall expire. Xxxxxxxxx
acknowledges that the foregoing provisions are made in part in consideration for
the waiver provided pursuant to Section 7 hereof.
d. On August 17, 1996 a Formation Agreement was executed among
the Company, Realty, and Colony Investors II, L.P. ("Colony"). Company agrees
that (i) the transactions contemplated by the Formation Agreement signed on that
date, constitute a Change in Control for the purpose of Section 2b and c, (ii)
it is the Company's current interpretation of the regulations proposed under
Section 280G of the Internal Revenue Code that the transactions contemplated by
the Formation Agreement do not constitute a change in control within the meaning
of Section 280G, and (iii), if the
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parties to the Formation Agreement agree to extend the date for closing the
transactions contemplated by the Formation Agreement, the May 17 deadline for
determining whether a Change in Control has occurred for the purposes of this
Agreement shall be replaced by any later deadline agreed to with respect to the
transactions set forth in the Formation Agreement. The possible extended
deadline described in the preceding sentence shall only apply, however, for the
purpose of determining whether the transactions described in the Formation
Agreement have occurred within the time limits set forth in this Agreement for
determining whether a Change in Control has occurred, so that the May 17, 1997
deadline shall continue to apply with respect to determining whether a Change in
Control has occurred with respect to other possible transactions. For purposes
of this Section 2.d, the term "Formation Agreement" refers to the Formation
Agreement executed on August 17, 1996 and any amendment thereto or further
agreement whereby Colony acquires an interest in the Company or Realty in a
transaction substantially similar to that described in the August 17, 1996
agreement.
x. Xxxxxxxxx agrees that the payments made pursuant to the
foregoing provisions of this Section 2 shall not be treated as compensation for
purposes of the Company's Retirement Income Plan or Thrift Plan for Employees.
Xxxxxxxxx agrees that his date of termination shall be August 31, 1996 for
purposes of such plans, and all other incentive plans, practices, policies and
programs applicable to other executives or employees of the Company, as well as
any other benefits provided pursuant to the terms of any other agreement with
the Company.
f. The Company shall reimburse Xx. Xxxxxxxxx'x attorneys up to
$2,000 for attorney's fees incurred in connection with his termination of
employment, subject to appropriate documentation. At Xxxxxxxxx'x option this
amount may be supplemented by an amount up to $2,000 by reducing, by a
corresponding amount, the $18,900 available for payment of reemployment
expenses, as described in Section 2.a.
3. Xxxxxxxxx shall return to Company and shall not take or copy in
any form or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and Xxxxxxxxx relating to any
alleged violation of Company policies or procedures or any state or federal law
or regulation, this Agreement does not constitute an adjudication or finding on
the merits and it is not, and shall not be construed as, an admission by Company
of any violation of its policies, procedures, state or federal laws or
regulations. Moreover, neither this Agreement nor anything in this Agreement
shall be construed to be or shall be admissible in any proceeding as evidence of
or an admission by Company of any violation of its policies, procedures, state
or federal laws or regulations. This Agreement may be intro duced, however, in
any proceeding to enforce the Agreement. Such
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introduction shall be pursuant to an order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Xxxxxxxxx on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to xxx and fully releases and discharges Company, Realty and their subsidiaries
and affiliates, past and present, and each of them, as well as each of their
trustees, directors, officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and
each of them, hereinafter together and collectively referred to as "Releasees,"
with respect to and from any and all claims, wages, demands, rights, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys' fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which he now owns or holds or he has at any time heretofore owned or
held or may in the future hold as against said Releasees, arising out of or in
any way connected with his employment or other relationships with Company and
Realty, or his voluntary resignation from employment or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said Releasees, or any of them, committed or omitted prior to the
date of this Agreement including, without limiting the generality of the
foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, the California Fair Employment and Housing
Act, the California Family Rights Act, or any claim for severance pay, bonus,
sick leave, holiday pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers' compensation or disability.
Except for those obligations created by or arising out of this
Agreement, and except as provided below, Company and Realty hereby acknowledge
full and complete satisfaction of and release and discharge, and covenant not to
xxx, Xxxxxxxxx from and with respect to any and all claims, agreements,
obligations, losses, damages, injuries, demands and causes of action, known or
unknown, suspected or unsuspected, arising out of or in any way connected with
Xxxxxxxxx'x employment relationship with or termination from Company or Realty,
or any other occurrences, actions, omissions or claims whatever, known or
unknown, suspected or unsuspected, which Company or Realty now own or hold or
have at any time heretofore owned or held as against Xxxxxxxxx, provided,
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however, that such release of Xxxxxxxxx shall not extend to any claims, known or
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unknown, suspected or unsuspected, against Xxxxxxxxx which arise out of facts
which are finally adjudged by a court of competent jurisdiction to be a willful
breach of fiduciary duty or a crime under any federal, state, or local statute,
law, ordinance or regulation, or which are based upon facts which give rise to a
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recovery by Company or Realty under any applicable policies of insurance solely
as a result of a breach of a fiduciary duty or a crime by Xxxxxxxxx and as to
which the insurer has a right to subrogation against Xxxxxxxxx.
6. It is the intention of Xxxxxxxxx, Company and Realty in executing
this instrument that the same shall be effective as a bar to each and every
claim, demand and cause of action hereinabove specified. In furtherance of this
intention, Xxxxxxxxx, Company and Realty expressly waive any and all rights and
benefits conferred upon them by the provisions of SECTION 1542 OF THE CALIFORNIA
CIVIL CODE and expressly consent that this Agreement shall be given full force
and effect according to each and all of its express terms and provisions,
including those related to unknown and unsuspected claims, demands and causes of
action, if any, as well as those relating to any other claims, demands and
causes of action hereinabove specified. SECTION 1542 provides:
"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."
Xxxxxxxxx, Company and Realty acknowledge that they may hereafter discover
claims or facts in addition to or different from those which Xxxxxxxxx, Company
and Realty now know or believe to exist with respect to the subject matter of
this Agreement and which, if known or suspected at the time of executing this
Agreement, may have materially affected this settlement. Nevertheless,
Xxxxxxxxx, Company and Realty hereby waive any right, claim or cause of action
that might arise as a result of such different or additional claims or facts.
Xxxxxxxxx, Company and Realty acknowledge that they understand the significance
and consequence of such release and such specific waiver of SECTION 1542.
Notwithstanding the preceding provisions of this section 6, this section shall
not apply to those categories of actual or potential claims by the Company or
Realty that have not been released under section 5.
7. Xxxxxxxxx expressly acknowledges and agrees that, by entering
into this Agreement, he is waiving any and all rights or claims that he may have
arising under the Age Discrimination in Employment Act of 1967, as amended,
which have arisen on or before the date of execution of this Agreement.
Xxxxxxxxx further expressly acknowledges and agrees that:
a. In return for this Agreement, he will receive compensation
beyond that which he was already entitled to receive before entering into this
Agreement;
b. He was orally advised by Company and is hereby advised in
writing by this Agreement to consult with an attorney before signing this
Agreement;
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c. He was given a copy of this Agreement on August 23, 1996, and
informed that he has twenty-one (21) days within which to consider the
Agreement;
d. He was informed that he has seven (7) days following the
date of execution of the Agreement in which to revoke the Agreement; and
8. Xxxxxxxxx acknowledges that by reason of his position with
Company he has been given access to lists of customers, prices, engineering
plans, and similar confidential or proprietary materials or information
respecting Company's business affairs. Xxxxxxxxx represents that he has held all
such informa tion confidential and will continue to do so, and that he will not
use such information and relationships for any business (which term herein
includes a partnership, firm, corporation or any other entity) without the prior
written consent of Company.
9. Xxxxxxxxx agrees that the terms and conditions of this Agreement
shall remain confidential as between the parties and he shall not disclose them
to any other person except for his attorneys and tax advisors and his spouse.
Without limiting the generality of the foregoing, Xxxxxxxxx will not respond to
or in any way participate in or contribute to any public discussion, notice or
other publicity concerning, or in any way relating to, execution of this
Agreement or the events (including any negotia tions) which led to its
execution. Without limiting the generality of the foregoing, Xxxxxxxxx
specifically agrees that he shall not disclose information regarding this
Agreement to any current or former employee of Releasees. Xxxxxxxxx hereby
agrees that disclosure by him of any of the terms and conditions of the
Agreement in violation of the foregoing shall constitute and be treated as a
material breach of this Agreement.
Company agrees that its officers shall keep confidential the
terms and conditions of this Agreement among the officers and directors of the
Company and said officers shall undertake their best efforts to ensure that the
directors keep the terms and conditions of this Agreement confidential, except
to the extent that disclosures are required by federal securities or other laws
or the disclosure of the terms and conditions of this Agreement to consultants
and advisors of the Company and employees of the Company other than the officers
is necessary or appropriate.
10. Xxxxxxxxx warrants and represents that Xxxxxxxxx has not
heretofore assigned or transferred to any person not a party to this Agreement
any released matter or any part or portion thereof and Xxxxxxxxx shall defend,
indemnify and hold harmless Company from and against any claim (including the
payment of attorneys' fees and costs actually incurred whether or not litigation
is commenced) based on or in connection with or arising out of any such
assignment or transfer made, purported or claimed.
11. Xxxxxxxxx and Company acknowledge that any employ ment or
contractual relationship between them terminated on August 31, 1996, and that
they have no further employment or contractual
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relationship except as may arise out of this Agreement and that Xxxxxxxxx waives
any right or claim to reinstatement as an employee of Company and will not seek
employment in the future with Company or any Releasee.
12. All payments hereunder shall be reduced by federal and state
income tax withholding and other applicable withholding taxes. Xxxxxxxxx agrees
that Xxxxxxxxx shall be exclusively liable for the payment of all federal and
state taxes which may be due as the result of the consideration received from
the settlement of disputed claims as set forth herein and Xxxxxxxxx hereby
represents that Xxxxxxxxx shall make payments on such taxes at the time and in
the amount required of Xxxxxxxxx.
13. This instrument constitutes and contains the entire agreement and
understanding concerning Xxxxxxxxx'x employment, voluntary resignation from the
same and the other subject matters addressed herein between the parties, and
supersedes and replaces all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matters hereof. This
is an integrated document. This agreement may be modified only by a writing
signed by the parties.
14. Xxxxxxxxx may revoke this Agreement in its entirety during the
seven days following execution of the Agreement by Xxxxxxxxx. Any revocation of
the Agreement must be in writing and hand delivered to Xxxxxxx X. XxXxxxx, Esq.
at 000 Xxxx Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000 during the revocation period.
This Agreement will become effective and enforceable seven days following
execution by Xxxxxxxxx, unless it is revoked during the seven-day period.
15. If any provision of this Agreement or the application thereof is
held invalid, the invalidity shall not affect other provisions or applications
of the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
16. This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with, and
governed by, the laws of the State of California without regard to principles of
conflict of laws.
17. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
18. This Agreement may be executed in counterparts, and each
counterpart, when executed, shall have the efficacy of a signed original.
Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.
19. Any dispute or controversy between Xxxxxxxxx, on the one hand,
and Company (or any other Releasee), on the other hand,
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in any way arising out of, related to, or connected with this Agreement or the
subject matter thereof, or otherwise in any way arising out of, related to, or
connected with Xxxxxxxxx'x employ ment with Company or the termination of
Xxxxxxxxx'x employment with Company, shall be resolved through final and binding
arbitration in Los Angeles, California, pursuant to California Civil Procedure
Code (S)(S) 1282-1284.2, before a mutually agreed upon arbitrator. In the event
of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
Except as may be necessary to enter judgment upon the award or to
the extent required by applicable law, all claims, defenses and proceedings
(including, without limiting the generality of the foregoing, the existence of
the controversy and the fact that there is an arbitration proceeding) shall be
treated in a confidential manner by the arbitrator, the parties and their
counsel, and each of their agents, and employees and all others acting on behalf
of or in concert with them. Without limiting the generality of the foregoing, no
one shall divulge to any third party or person not directly involved in the
arbitration the contents of the pleadings, papers, orders, hearings, trials, or
awards in the arbitration, except as may be necessary to enter judgment upon an
award as required by applicable law. Any court proceedings relating to the
arbitration hereunder, including, without limiting the generality of the
foregoing, to prevent or compel arbitration or to confirm, correct, vacate or
otherwise enforce an arbitration award, shall be filed under seal with the
court, to the extent permitted by law.
20. No waiver of any breach of any term or provision of this
Agreement shall be construed to be, or shall be, a waiver of any other breach of
this Agreement. No waiver shall be binding unless in writing and signed by the
party waiving the breach.
21. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
22. After execution of this Agreement, Company may, but is not
required to, present for approval to the Workers' Compensation Appeals Board an
appropriate stipulation or compromise and release extinguishing any and all
rights or claims Xxxxxxxxx may have under applicable workers' compensation
provisions.
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23. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full
understanding of its consequences.
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EXECUTED this _____ day of _____________ 1996, at _____
_______________ County, California.
__________________________________
Xxxxxxx X. Xxxxxxxxx
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EXECUTED this _____ day of _____________ 1996, at ________________
County, California.
SANTA XXXXX OPERATING COMPANY
By ___________________________
EXECUTED this _____ day of _____________ 1996, at ________________
County, California.
SANTA XXXXX REALTY ENTERPRISES, INC.
By ___________________________
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ENDORSEMENT
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I, Xxxxxxx X. Xxxxxxxxx, hereby acknowledge that I was given 21 days
to consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this ____ day of ______________ 1996, at
_____________________ County, California.
_______________________________
Xxxxxxx X. Xxxxxxxxx
EXHIBIT A
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To Santa Xxxxx Operating Company
This is to advise you that effective August 30, 1996, I hereby voluntarily
resign my position as Vice President-Finance and Chief Financial Officer with
Santa Xxxxx Operating Company and that, effective August 30, 1996, I resign as
an officer of and from the Board of Directors of Company's subsidiaries. This is
to further advise you that although I will continue as an employee of Santa
Xxxxx Operating Company until August 31, 1996, I hereby resign from all
employment with Santa Xxxxx Operating Company and its subsidiaries, effective
August 31, 1996. I agree that I will not seek reemployment with Santa Xxxxx
Operating Company or its subsidiaries.
Sincerely yours,
____________________________
Xxxxxxx X. Xxxxxxxxx
