SEPARATION AND GENERAL RELEASE AGREEMENT
Exhibit 10.23
This Separation and General Release Agreement (the “Agreement”), is made as of April 2,
2007and will be effective as of December 31, 2007, by and between J. Xxxxxxx Xxxxxxx (“Xxxxxxx”),
an individual, Archstone-Xxxxx Operating Trust, a Maryland real estate investment trust (the
“Operating Trust”) and Archstone-Xxxxx Trust, a Maryland real estate investment trust (the “ASN”)
(Operating Trust and ASN are collectively referred to as the “Company”).
WHEREAS, Xxxxxxx is currently the Chief Operating Officer (the “COO”) of the Company, and
WHEREAS, the Company and the Executive desire to establish the terms and conditions of
Xxxxxxx’x resignation as COO, continued employment with the Company during 2008 and subsequent
retirement from the Company Agreement on the terms and conditions contained herein,
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained
and for good and valuable consideration, the sufficiency of which is hereby acknowledged, Xxxxxxx
and the Company (the “Parties”) hereby agree as follows:
1. Officer Resignation. Xxxxxxx shall take all necessary and appropriate actions to resign
his position as COO of the Company and as an officer and/or director of all subsidiaries of the
Company effective December 31, 2007 (the “Resignation Date”). Following the resignation as Chief
Operating Officer, Xxxxxxx shall remain employed through December 31, 2008.
2. Termination Date/Salary. Xxxxxxx’x employment with the Company shall be continued through
December 31, 2008 (the “Termination Date”). During the term of Xxxxxxx’x employment, the Company
shall continue to pay to Xxxxxxx his base salary at the rate of $450,000, less applicable
withholdings and deductions for the period beginning with the Resignation Date and ending on the
Termination Date. The salary payments shall be made in bi-weekly payments in accordance with the
Company’s usual payroll practices.
3. Restricted Stock Units. Provided that Xxxxxxx complies with the terms of this Agreement,
executes a release containing terms substantially similar to those contained in Section 17 within
30 days following his Termination Date (the “Termination Release”), and does not rescind or seek to
have overturned or declared invalid the Termination Release, and subject to the other terms,
conditions and limitations of the Archstone-Xxxxx Trust 2001 Long-Term Incentive Plan (the “LTIP”)
and the applicable Restricted Share Unit Agreement, all unvested restricted share units awarded
prior to Xxxxxxx’x Resignation Date shall continue to vest following the Resignation Date in
accordance with their terms without requiring Xxxxxxx’x continued employment by the Company. The
provisions of this Section shall constitute an amendment of any Restricted Share Unit Agreement
pursuant to which restricted share units would vest after December 31, 2008.
4. Long-Term Incentive Plan. As an additional severance payment, upon Xxxxxxx’x Termination
Date, and provided Xxxxxxx complies with the terms of this Agreement and execute and does not seek
to invalidate the Termination Release, Xxxxxxx shall be entitled to an amount of cash equal to 2/3
of the value of the performance units to which he would be entitled had he remained employed
through the entire performance period described in the Performance Unit Agreement between Xxxxxxx
and ASN dated as of May 2, 2007 (the “Unit Agreement”). Xxxxxxx acknowledges that the
determination of the amount shall not be made until 2009 in accordance with the procedures
established for making LTIP awards to other executives of the Company, shall not be made until at
least 6 months following the Termination Date, and shall only be made in the event no award is
made under the Unit Agreement.
5. Benefits. Following Xxxxxxx’x resignation as COO, Xxxxxxx shall remain eligible for all
benefits generally available to employees of the Company; provided, however, that Xxxxxxx shall not
be entitled to any bonus, LTIP award or restricted stock unit or other stock based award with
respect to services performed during 2008.
(a) Upon the Termination Date, Xxxxxxx shall be entitled to those benefits provided
under the terms, conditions and limitations of the Company’s retirement and welfare benefit
plans or programs (excluding any severance program) subject to the provisions of the
applicable plan or program.
(b) Except as expressly provided in this Agreement, the Company will not provide to
Xxxxxxx any other compensation, whether or not accrued, directly or indirectly, in
connection with Xxxxxxx’x termination of employment with the Company.
(c) The Company shall continue to indemnify and hold harmless Xxxxxxx for all actions
taken by Xxxxxxx during his employment in accordance with Xxxxxxx’x existing terms of
employment.
6. Change in Control Agreement. The parties agree that the Change in Control Agreement
between Xxxxxxx and the Company dated August 12, 2002 shall expire as of the Resignation Date.
7. Representations.
(a) Xxxxxxx represents and warrants that he has brought no charges, complaints, claims,
actions or proceedings against the Company as of the date of this Agreement. Xxxxxxx
further agrees that he will not commence any lawsuit or, to the fullest extent permitted by
law, other proceedings against the Company with respect to any cause, matter, claim, act or
omission occurring thereafter, provided, however, that this shall not limit Xxxxxxx from
enforcing his rights under this Agreement.
(b) Xxxxxxx represents and warrants that as of the Termination Date he will return to
the Company all property of the Company in whatever form retained, including any copies
thereof, in the possession of or under the control of Xxxxxxx, including, but without
limitation, all budget information and all notes, memoranda and meeting details regarding
operations of the Company, all of which shall be delivered to the Chief Operating Officer of
the Company on or immediately after the Termination Date.
(c)
Xxxxxxx will not disparage the Company or any of its shareholders, trustees, officers, employees or agents. The Company will not disparage Xxxxxxx.
8. Non-Disclosure.
(a) Confidential Information Defined. Xxxxxxx has created, has had contact
with, use of, and received confidential information and/or trade secrets of Company,
including, but not limited to, data concerning existing or proposed advertising proposals or
campaigns, marketing and sales research, techniques, manuals, programs, systems, designs,
computer programs, formulas, pricing, bidding methods, innovations, inventions, discoveries,
improvements, research and development, specifications, data, know-how, formats, marketing
plans, business plans and strategies, investment and disposition strategies, information
regarding the skills and compensation of other employees of Company, forecasts, financial
information, budgets, projections, and customer and/or supplier identities,
characteristics, preferences and agreements (collectively “Confidential Information”).
Confidential Information may be contained
in materials including, but not limited to,
customer lists, supplier lists and price lists, reports or computer programs, as well as be constituted by unwritten information, techniques, processes,
practices or knowledge. Confidential Information includes all information disclosed by
Company to Xxxxxxx and information developed or learned by Xxxxxxx while a shareholder,
officer and/or employee of Company. Confidential Information includes all information that
has or could have commercial value or other utility in the business in which Company has
been engaged or in which it is contemplated engaging. Confidential Information also
includes all information of which the unauthorized disclosure could be detrimental to the
interests of Company, whether or not such information is identified as Confidential
Information by Company.
(b) Scope. For the “Restricted Period” (as hereinafter defined) Xxxxxxx will
not, either directly or indirectly, for Xxxxxxx’x own benefit or for the benefit of any
third party, use, divulge, disclose, or communicate to any third party, any of the
Confidential Information in any manner whatsoever, unless the Company otherwise consents to
the disclosure or use of any of the Confidential Information in writing prior to such
disclosure or use. With respect to each particular item of Confidential Information, the
“Restricted Period” shall mean: (a) the period ending on March 31, 2011, if the item of
Confidential Information at issue does not constitute a trade secret, or (b) indefinitely,
if the item of Confidential Information at issue constitutes a trade secret, until such item
of Confidential Information at issue ceases to be a trade secret, but in no event earlier
than March 31, 2011 if the item continues to be Confidential Information. Notwithstanding
the foregoing, Confidential Information does not include information (i) in the public
domain, (ii) received by Xxxxxxx outside of Xxxxxxx’x relationship with Company as a
shareholder, director, officer and/or employee, from a party not under an obligation of
confidentiality to Company, directly or indirectly, or (iii) that later becomes public,
unless such information is made public by Xxxxxxx in breach of this Agreement or any other
agreement by which Xxxxxxx is bound or by any other party directly or indirectly under an
obligation of confidentiality to Company.
9. Covenant Not-To-Compete. To protect the Company’s proprietary interest in the Confidential
Information and to protect the goodwill and value of the Business of Company (hereafter defined),
Xxxxxxx shall not, except with the prior written consent of the Company, for the Non-Compete Term
(as hereafter defined) anywhere in the United States of America, its respective territories,
possessions and protectorates, engage, directly or indirectly, individually or in association or in
combination with any other person or entity, as proprietor or owner, officer, director or
shareholder (other than as a passive investor in and holder of less than five percent (5%) of the
common stock of any publicly traded corporation), member or manager of any limited liability
company, or as an employee, agent, independent contractor, consultant, advisor, joint venturer,
trustee, licensee, principal, partner or otherwise, whether or not for monetary benefit, in (a) any
business that competes with the Company or any entity in which the Operating Trust or ASN has a 25%
or greater direct or indirect ownership interest (the “Company Related Entity”) or (b) otherwise
includes the business of the acquisition, disposition, operation, development, management or
financing of multifamily apartment communities (the “Business of Company”). Xxxxxxx agrees that
the Company has, is and intends to conduct the Business of Company throughout the United States of
America. Consequently, Xxxxxxx and Company agree that it is not possible to limit the geographic
scope of this non-competition covenant contained in this Section to particular cities, provinces or
other geographic subdivisions of these specified jurisdictions. For purposes of this Agreement,
the “Non-Compete Term” shall mean the period ending on March 31, 2011.
10. Nonsolicitation of Employees. To protect Company’s proprietary interest in the
Confidential Information and in Company’s relationships with its employees and contractors, and to
protect the goodwill and value of the Business of Company, during the Employee Non-Solicitation
Term (as hereinafter defined), Xxxxxxx will not, except with the prior written consent of Company,
individually or in association or combination with or through any other person or entity, directly
or indirectly, encourage, induce or entice any employee or independent contractor of Company to
terminate or modify
such person’s or entity’s employment, engagement or business relationship with
Company. For purposes of this Agreement, the “Employee Non-Solicitation Term” shall mean the period ending on March 31,
2011.
11. Covenant Not to Hire Employees. To protect Company’s proprietary interest in the
Confidential Information and in Company’s relationships with its employees and contractors, and to
protect the goodwill and value of the Business of Company, during the Non-Hire Term (as hereinafter
defined), Xxxxxxx will not, except with the prior written consent of Company, individually or in
association or combination with or through any other person or entity, directly or indirectly, hire
or attempt to hire, whether as an employee, consultant or otherwise, any person who at such time is
an employee or contractor of Company to perform the same or substantially similar services as such
employee or contractor performed or supplied for or on behalf of Company. For purposes of this
Agreement, the “Non-Hire Term” shall mean the period ending on March 31, 2011. During the Non-Hire
Term, Xxxxxxx also agrees that he will not, except on behalf of Company, directly or indirectly
hire or attempt to hire, whether as an employee, consultant or otherwise, any person who at any
time in the six (6) month period prior to such time had been employed by Company.
12. Nondisruption; Other Matters. For twenty-four (24) consecutive months from the
Termination Date, Xxxxxxx agrees that he will not directly or indirectly interfere with, disrupt or
attempt to disrupt any past, present or prospective relationship, contractual or otherwise, between
Company, on the one hand, and any of its customers, suppliers or employees, on the other hand.
13. Equitable Relief. Xxxxxxx acknowledges and agrees that Company’s remedies at law for
breach of any of the provisions of this Agreement would be inadequate and, in recognition of this
fact, Xxxxxxx agrees that, in the event of such breach, in addition to any remedies at law it may
have, without posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent injunction or any
other equitable remedy that may be available. Xxxxxxx further acknowledges that should Xxxxxxx
violate any of the provisions of this Agreement, it will be difficult to determine the amount of
damages resulting to Company and that in addition to any other remedies they may have, Company
shall be entitled to temporary and permanent injunctive relief without the necessity of proving
damages.
14. Acknowledgement. Each of Xxxxxxx and Company acknowledges and agrees that the covenants
and agreements contained in this Agreement have been negotiated in good faith by the parties, are
reasonable and are not more restrictive or broader than necessary to protect the interests of the
parties thereto, and would not achieve their intended purpose if they were on different terms or
for periods of time shorter than the periods of time provided herein or applied in more restrictive
geographical areas than are provided herein.
15. Separate Covenants. The covenants contained in this Agreement shall be construed as a
series of separate covenants, one for each of the counties in each of the states of the United
States of America, one for each geographic subdivision of each country in Europe in which the
Company has operations, and their respective territories, possessions and protectorates.
16. Severability. The parties agree that construction of this Agreement shall be in favor of
its reasonable nature, legality and enforceability, and that any construction causing
unenforceability shall yield to a construction permitting enforceability. It is agreed that the
noncompetition, nonsolicitation, and nonhiring covenants and provisions of this Agreement are
severable, and that if any single covenant or provision or multiple covenants or provisions should
be found unenforceable, the entire Agreement and remaining covenants and provisions shall not fail
but shall be construed as enforceable without any severed covenant or provision in accordance with
the tenor of this Agreement. The parties specifically agree that no covenant or provision of this
Agreement shall be invalidated because of overbreadth insofar as the parties acknowledge the scope
of the covenants and provisions contained herein to be reasonable
and necessary for the protection
of Company and not unduly restrictive upon Xxxxxxx. However, should a court or any other trier of
fact or law determine not to enforce any covenant or provision of this Agreement as written due to overbreadth, then the parties agree that said covenant or
provision shall be enforced to the extent reasonable, with the court or such trier to make any
necessary revisions to said covenant or provision to permit its enforceability and that any such
limitation on the enforceability of any such covenant or provision shall not affect the
enforceability of any other covenant or provision of this Agreement.
17. Releases.
(a) In consideration of this Agreement and the monies and other good and valuable
consideration provided by the Company pursuant to this Agreement, except for claims arising
out of the obligations of the parties under this Agreement, any claim for indemnification
that Xxxxxxx has against the Company pursuant to any Company document or insurance policy
(which shall remain in effect with respect to all actions arising in connection with his
employment to the same extent as such claims existed prior to the termination of employment)
or any claims as a shareholder of the Company, Xxxxxxx hereby irrevocably and
unconditionally releases, waives and forever discharges the Company, its successors and
assigns, and its past and present officers, trustees, and employees, including all
employees, directors and officers of any of the Company’s affiliates (collectively,
“Company Releasees”), from any and all actions, causes of action, claims, counterclaims,
demands, damages, rights, remedies and liabilities of whatever kind or character, in law or
equity, suspected or unsuspected, past or present, that he has ever had, may now have, or
may later assert against the Company Releasees, including without limitation for statutory
interest or attorneys’ fees, and arising at anytime from the beginning of time to the
Effective Date of this Agreement (hereinafter collectively referred to as “Xxxxxxx’x
Claims”), and including, without limitation, any claims arising out of, in connection with,
or relating to Xxxxxxx’x recruitment, employment and termination of employment, and any
claims arising out of or related to any federal, state and/or local labor or civil rights
laws including, without limitation, the federal Civil Right Acts of 1866, 1871, 1964 and
1991, the Age Discrimination in Employment Act of 1967, as amended by, inter alia, the Older
Workers’ Benefit Protection Act of 1990, the Consolidated Omnibus Reconciliation Act of
1985, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993,
the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, as well
as any other applicable local and/or state employment, civil rights, human rights and
discrimination laws, as each may have been amended from time to time. Except as limited
above or by this Agreement, execution of this Agreement by Xxxxxxx operates as a complete
bar and defense against any and all of Xxxxxxx’x Claims against the Company Releasees.
(b) In consideration of this Agreement, except for claims arising out of the
obligations of the parties under this Agreement, the Company hereby irrevocably and
unconditionally releases, waives and forever discharges Xxxxxxx, his successors and assigns
from any and all actions, causes of action, claims, counterclaims, demands, damages, rights,
remedies and liabilities of whatever kind or character, in law or equity, suspected or
unsuspected, past or present, that it has ever had, may now have, or may later assert
against Xxxxxxx, including without limitation for statutory interest or attorneys’ fees, and
arising at anytime from the beginning of time to the Effective Date of this Agreement
(hereinafter collectively referred to as “Company’s Claims”), and including, without
limitation, any claims arising out of, in connection with, or relating to the Employment
Agreement, and/or Xxxxxxx’x recruitment, employment and termination of employment, as each
may have been amended from time to time. Execution of this Agreement by the Company
operates as a complete bar and defense against any and all of Company’s Claims against
Xxxxxxx.
18. Miscellaneous Provisions.
(a) This Agreement contains the entire agreement between and among the Parties and
supersedes any and all prior agreements, arrangements, negotiations, discussions or
understandings between and among the parties relating to the subject matter hereof. No
oral understanding, statements, promises or inducements contrary to the terms of this
Agreement exist. This Agreement cannot be changed or terminated orally. Should any
provisions of this Agreement be held invalid, illegal or unenforceable, it shall be deemed
to be modified so that its purpose can lawfully be effectuated and the balance of this
Agreement shall remain in full force and effect.
(b) Xxxxxxx and the Company agree that, except as contemplated by this Agreement, any
prior agreements and understandings between them, if any, whether oral or written and of
whatever nature, are hereby cancelled, terminated and superseded by this Agreement and shall
be of no further force or effect.
(c) This Agreement shall extend to, be binding upon, and inure to the benefit of the
Parties and their respective successors, executors, heirs and assigns.
(d) This Agreement shall be governed by and construed in accordance with the laws of
the State of Colorado, the site of the Company’s principal place of business.
(e) This Agreement may be executed in any number of counterparts each of which when so
executed shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
(f) In the event of any ambiguity, this Agreement or any of its provisions shall not be
construed for or against either party on the basis of which party drafted the particular
language at issue.
19. Effective Date/Revocation. Xxxxxxx may revoke this Agreement in writing at any time
during a period of seven (7) calendar days after the execution of this Agreement by both of the
Parties (the “Revocation Period”). This Agreement shall be effective and enforceable automatically
on the date Xxxxxxx executes the Certificate of Non-Revocation of Separation Agreement and General
Release, in the form attached as Exhibit A. The certificate should be executed and dated by
Xxxxxxx at least one (1) day after expiration of the Revocation Period (the “Effective Date”).
20. Notices. Any notices or requests under this Agreement shall be in writing and addressed
as follows:
If to Xxxxxxx:
At his address as reflected on the records of the Company;
If to the Company:
IN SIGNING THIS SEPARATION AND GENERAL RELEASE AGREEMENT, XXXXXXX ACKNOWLEDGES THAT HE HAS
BEEN INFORMED OF THE FOLLOWING RIGHTS AVAILABLE TO HIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT (ADEA):
(A) HE HAS READ AND UNDERSTANDS THIS AGREEMENT AND IS HEREBY ADVISED IN WRITING HE HAS THE
RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT;
(B) HE HAS SIGNED THIS AGREEMENT VOLUNTARILY AND UNDERSTANDS THAT THIS AGREEMENT CONTAINS A
FULL AND FINAL RELEASE OF ALL OF XXXXXXX’X CLAIMS;
(C) HE HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS AGREEMENT;
(D) THIS AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR OTHER EMPLOYEE
TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS OF EMPLOYEES; AND
(E) HE DOES NOT WAIVE RIGHTS OR CLAIMS UNDER THE ADEA THAT MIGHT ARISE AFTER THE DATE THIS
WAIVER IS EXECUTED.
| AGREED AND ACCEPTED: | ||||
| /s/ J. Xxxxxxx Xxxxxxx | ||||
| J. Xxxxxxx Xxxxxxx | ||||
| Archstone-Xxxxx Trust | ||||
By: |
/s/ R. Xxxxx Xxxxxxx | |||
Title: CEO |
||||
ACKNOWLEDGMENT
STATE OF COLORADO
COUNTY OF JEFFERSON
On
Aug 22, 2007 before me the undersigned, personally appeared J. Xxxxxxx Xxxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the person, or the person upon behalf of
which the individual acted, executed the instrument.
| /s/ Xxxxxxx X. Xxxxxx | ||||
ACKNOWLEDGMENT
STATE OF COLORADO
COUNTY OF
JEFFERSON
On
Aug 22, 2007 before me the undersigned, personally appeared R. Xxxxx Xxxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that he executed the same in his
capacity as an officer of Archstone-Xxxxx Trust, and that by his signature on the instrument,
Archstone-Xxxxx Trust, upon behalf of which the individual acted, executed the instrument.
| /s/ Xxxxxxx X. Xxxxxx | ||||
EXHIBIT A
CERTIFICATION OF NON-REVOCATION OF
SEPARATION AND GENERAL RELEASE AGREEMENT
SEPARATION AND GENERAL RELEASE AGREEMENT
I hereby certify and represent that seven (7) calendar days have passed since the Parties
signed the Settlement Agreement and General Release (the “Agreement”) and that I have NOT exercised
my right to revoke that Agreement pursuant to the Older Workers Benefit Protection Act of 1990. I
understand that Archstone-Xxxxx Trust, and the other Releasees, in providing me with benefits under
the Agreement, are relying on this Certificate, and that I can no longer revoke the Agreement.
| , | 2007 | |||||
J. Xxxxxxx Xxxxxxx
|
Date of Execution |
IMPORTANT:
This Certificate should be signed, dated and returned to the Company no earlier than on the
eighth (8th) calendar day after the Agreement is executed by both parties.
