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EXHIBIT 10.3.1
CONFIDENTIALITY AGREEMENT
AND GENERAL RELEASE
This CONFIDENTIALITY AGREEMENT AND GENERAL RELEASE (hereafter
"Agreement") is entered into by Irvine Apartment Communities, Inc. ("Company")
and Xxxxx Xxxx (XXXX).
1. XXXX hereby tenders his voluntary resignation from the Company, which
will be implemented in accordance with the terms of this agreement.
2. From October 1, 1998 to February 1, 1999, XXXX will continue to be
employed as a regular employee of the Company, will continue to receive his
present monthly salary, will continue to participate in all of the benefit plans
for which he and other Company executives are eligible, and will perform his
normal executive duties and/or other duties consistent with his CFO position as
assigned by the President or the Board of Directors. XXXX understands that the
Company will begin an active search for a new CFO, and XXXX agrees to cooperate
as requested in the transition process, including the probability that the new
CFO would begin work prior to February 1, 1999. Throughout the time period up to
February 1, 1999, XXXX agrees to work in a professional and cooperative manner
to make this transition work as smoothly as possible.
3. On or about February 1, 1999, the following will occur:
x. XXXX will return to the Company all files, records, credit
cards, keys, equipment, and any other property or documents maintained by him
which relate to the Company or its owners, directors, employees, or related
entities.
b. A cash bonus payment of $165,000, less legally required
deductions, will be paid to XXXX.
c. A payment of $375,000, less legally required deductions, will be
provided to XXXX.
d. Vesting of restricted stock awards, vesting of stock options and
dividend equivalent payments for XXXX shall all cease on February 1, 1999,
regardless of any extension of his employment status as described in paragraph
4. Payment for restricted stock which vests in 1998 will be provided to XXXX by
check (not in the form of shares) in February or March, 1999. Payment for
restricted stock which vests in 1999 (through February 1) will also be provided
to XXXX by check (not in the form of shares) in February or March, 1999 and the
payment amount will assume that FAD targets for the 100% vesting level are
achieved in 1999. In addition, vested stock options will remain exercisable
until 90 days following XXXX'x employment termination date.
4. XXXX'x employment will cease on February 1, 1999, unless he is on
short-term disability status on February 1, 1999, in which case, his employment
will continue and will not terminate until he is released from short-term
disability status for any reason (e.g., recovery, conversion to LTD, expiration
of short-term disability benefits). During this period, the Company will
continue XXXX on the payroll at his present salary and provide continued
benefits after February 1, 1999 (except no additional vacation accrual after the
first thirty days on disability status), but payroll costs after February 1 will
be subtracted from the six month consulting payment described in paragraph 5a,
so that payroll costs after February 1, 1999 and the consulting payments will
not exceed $125,000 in total.
5. XXXX will be retained as a consultant to the Company for a period of
six months following the termination of his employment. During the six months,
XXXX may be employed or retained as an employee or consultant to other persons
or companies, but will remain available to provide consulting services as
requested in a professional and timely manner to the Company for a maximum of
thirty hours in total for the six month period. Such services will be similar in
kind to the expertise XXXX provided to the Company during the period of his
employment. If any material is needed by him in order to perform any requested
consulting service, it will be provided to him and promptly returned by him.
a. For such services, XXXX will be paid $20,833 per month retainer,
payable on or about the first day
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Xxx Xxxx
of the month commencing on the first day of the month following the termination
of his employment, andcontinuing monthly thereafter until payments totaling
$125,000 have been made (including any costs under paragraph 4). The payroll
costs for XXXX after February 1 described in paragraph 4 shall be deducted as
they occur from each month's retainer.
6. XXXX will also receive the following payments and benefits:
a. The Company will reimburse reasonable expenses incurred by XXXX
(telephone, travel, etc.) which are necessarily incurred and approved in advance
in the performance of his consulting services requested by the Company under
this agreement.
b. Group insurance coverage pursuant to the terms of the Company's
group insurance plans will be continued at the Company's expense through
February 28, 1999 at which time XXXX may continue such insurance if he desires
in accordance with the provisions of such plans. If XXXX'x employment is
continued beyond February 1, as outlined in paragraph 4, then his insurance
coverage shall continue until the last day of the month in which his employment
is terminated. In addition, the Company agrees not to make any public
announcements which refer to XXXX'x medical condition.
x. XXXX will continue to be covered by the Company's Directors' and
Officers' Insurance in accordance with the terms of such policy through XXXX'x
consulting period and thereafter.
7. XXXX promises not to disparage the Company or its owners, directors,
officers, employees, or related entities and not to use or disclose to any
person or entity in any manner any personal, financial or confidential
information or trade secrets related to the Company, its owners, directors,
officers, employees, or related entities which he learned while employed by the
Company, and further promises not to disclose to anyone (other than his spouse
and tax/legal advisor) the terms of this Agreement or the fact or amount of any
payment made by the Company in settlement of XXXX'x claims. XXXX also promises
not to solicit or participate in or assist in any way in the solicitation of any
Company employee to cease employment with the Company, and the customers of the
Company to cease or decrease doing business with the Company or to do business
with any competitor of the Company for a period of twelve months following
February 1, 1999. Nothing in this provision will be construed as a prohibition
from XXXX working during the consulting period referred to in paragraph 5 or
thereafter as an executive of any company, whether competing or not.
8. In exchange for the payments and benefits provided in this
agreement, XXXX hereby unconditionally releases and forever discharges the
Company and its related or successor companies, its owners, directors, officers,
employees, representatives and agents, from any and all claims, (including, but
not limited to, any claims under any state or federal statutes or public
policies relating to discrimination or any other subjects), liabilities,
demands, losses and expenses (including attorneys' fees) of any nature
whatsoever, known or unknown, including, but not limited to, his employment
relationship or termination, which he now has or may have in the future based on
any act or omission which occurred prior to the date XXXX signs this Agreement.
XXXX agrees that his rights hereafter are governed by this Agreement. XXXX
expressly waives and relinquishes all rights and benefits afforded by Section
1542 of the California Civil Code, and does so understanding and acknowledging
the significance of such specific waiver of section 1542. Section 1542 states 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 Company hereby releases XXXX from any claims of any kind based on any facts
known to the Company's Board of Directors at this time.
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9. Should XXXX breach any of his obligations in this Agreement
(including, but not limited to, paragraphs 2,7 and 8), payments under this
Agreement shall stop in addition to any other legal or equitable remedies the
Company may pursue.
10. This Agreement contains all of the terms, promises, representations,
and understandings made between the parties. XXXX agrees that no promises,
representations, or inducements have been made to him other than those which are
expressly set forth herein. XXXX acknowledges and agrees that he has had
sufficient opportunity to fully and privately review this document prior to its
execution, and has had ample opportunity to consult an attorney in connection
therewith, if he so desired.
11. This Agreement will be interpreted in accordance with the laws of
the State of California. Any dispute arising hereafter between the parties
regarding this Agreement or XXXX'x employment or otherwise (except any claim
against any insurer for benefits under any insurance plan referenced herein)
shall be resolved by an experienced employment arbitrator selected in accordance
with the employment rules and procedures of the American Arbitration
Association. Should XXXX or the Company pursue any other legal or administrative
action, the other party shall be entitled to recover all costs, expenses, and
attorneys' fees it incurs as a result of such action.
DATED: October 12, 1998 By: /s/ XXXXX XXXX
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Xxxxx Xxxx
Witness of Voluntary Signature
DATED: October 12, 1998 By: /s/ signature illegible
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Witness' Signature
IRVINE APARTMENT COMMUNITIES
DATED: October 12, 1998 By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx
Chairman
DATED: October 12, 1998 By: /s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. XxXxxxxxx
President
