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Exhibit 10(b)
SEVERANCE AGREEMENT
This Severance Agreement dated as of August 16, 1996, by and between
Interstate General Company L.P., a Delaware limited partnership (the
"Company"), and Xxxxxxx X. Xxxxxxxxxxx, a resident of Maryland (the
"Executive").
W I T N E S S E T H:
WHEREAS, prior to June 18, 1996 the Executive was employed in the
capacity of President and Chief Operating Officer of the Company; and
WHEREAS, in connection with employment of the Executive, Executive
and the Company entered into that certain Amended and Restated Employment
Agreement dated as of January 15, 1996 (the "Employment Agreement"); and
WHEREAS, effective as of June 18, 1996 the Executive resigned his
positions with the Company and its affiliates; and
WHEREAS, following such resignation, the Executive and the Company
have reached mutual agreement regarding severance compensation and other terms
and conditions relating to the termination of the Executive's employment with
the Company which the parties wish to reflect by this Agreement;
NOW, THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Resignation; Disposal of Units. The Executive hereby confirms
that effective as of June 18, 1996, (the "Resignation Date") the Executive
resigned from any and all positions as officer, director or otherwise that he
may have held with the Company, Equus Gaming Company L.P. ("Equus") or any
affiliate of any of the foregoing. The Executive further represents and
warrants that as of the date hereof neither he, nor any member of his immediate
family, beneficially owns any equity or debt securities issued by the Company,
Equus or any affiliate of either.
2. Severance Compensation and Benefits.
(a) For the six-month period ending December 18, 1996 (the
"Ending Date"), the Company shall continue to pay the Executive semi-monthly
payments of his base salary in effect on the Resignation Date, with the final
such payment to be made on the next regularly scheduled payment date following
the Ending Date, and prorated to compensate for the period between the
preceding payment date and the Ending Date.
(b) Upon execution of this Agreement, the Company shall pay
the Executive for his unused, accrued vacation in the amount of $16,370.31.
(c) If the Executive elects under COBRA to continue to receive
Company provided medical and dental insurance benefits, the Company shall pay,
with respect to insurance covering the period ending on the Ending Date, the
Company share of insurance premiums payable under the Company's medical and
dental insurance plan that would have been payable by the Company if the
Executive had remained employed by the Company through the Ending Date. Any
premiums payable by the Executive under such plan with respect to the period
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ending on the Ending Date shall be withheld from amounts payable under
Subsection (a) of this Section and paid by the Company. The Executive's rights
with respect to medical and dental insurance benefits following the Ending Date
shall be limited to rights under COBRA.
(d) The Company hereby transfers to the Executive ownership of
the Zaurus personal scheduler previously purchased by the Company for the
Executive's business use.
(e) Upon execution of this Agreement, the Company shall pay the
Executive the amount of $21,635 to reimburse the Executive for legal fees
incurred by the Executive in connection with the review and negotiation of the
Employment Agreement.
(f) Upon execution of this Agreement, the Company shall
reimburse the Executive for expenses reflected on his previously submitted June
expense report.
(g) Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by the Company hereunder to the Executive
shall be subject to the withholding of such amounts relating to taxes as the
Company may reasonably determine it should withhold pursuant to any applicable
law or regulation. In lieu of withholding such amounts, in whole or in part,
the Company may, in its sole discretion, accept other provisions for payment of
taxes and withholdings as required by law, provided it is satisfied that all
requirements of law affecting its responsibilities to withhold compensation
have been satisfied.
3. Return of Company Materials.
(a) The Executive represents that, except as set forth on Schedule 3
attached hereto, he has returned to the Company all Company Records (defined
below) and all other items of personal property, including all Company credit
cards, telephone cards, keys, identification cards and software, that were in
the Executive's possession, custody or control on the Resignation Date and that
were generated or acquired by the Executive for use in connection with his
employment by the Company (collectively "Company Materials"). "Company
Records" shall mean all copies of all written materials, notes, notebooks,
minutes, letters, memoranda, books of account, litigation records, files,
drawings, photographs, video recordings, audio recordings, electronically or
magnetically stored data, charts, plans, specifications, maps and other
documents relating to the Company or any of its affiliates, or any of their
respective officers, personnel, customers, suppliers, contractors, counsel,
accountants or other parties having any business relationship with the Company
or any of its affiliates (collectively "Covered Persons"); provided, that,
Company Records shall not include any written materials or other documents
relating to the foregoing that have been made generally available to the public
without violating any property rights of the Company. Notwithstanding the
foregoing, Company Materials shall not include the personal scheduler referred
to in Section 2 above or any personal property purchased by the Executive using
his own funds and not reimbursed by the Company, but shall include all office
furnishings currently remaining in the Executive's former office at the
Company's headquarters.
(b) Schedule 3 contains a complete and accurate list of all Company
Materials, a copy of which has been retained by the Executive (the "Copied
Materials"). The Company shall review the Copied Materials and within 30 days
following the date hereof shall determine in good faith whether retention of
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Copied Materials by the Executive could be contrary to the best interests of
the Company. Upon any request by the Company during such 30 day period. The
Executive shall promptly surrender to the Company all copies, extracts,
summaries, notes recorded in any form and within the Executive's possession,
custody or control, of any Copied Materials so determined by the Company.
During such 30 day period the Executive shall not disclose any of the Copied
Materials to any person other than the Company or the Executive's Counsel.
4. Effect on Employment Agreement. Effective as of the Resignation
Date, except as otherwise provided in this Agreement:
(a) The Executive hereby forever releases and discharges the
Company and all of the Covered Persons from any and all obligations
and/or claims under the terms of the Employment Agreement or
otherwise related to or arising in connection with the Executive's
employment by the Company, except for the obligations of the Company
under this Agreement and under Section VIII (Indemnification) of the
Employment Agreement and the obligations of the Company under the
terms of that certain Amended and Restated Unit Application Rights
Agreement dated as of March 16, 1995 as amended by the First
Amendment thereto dated as of January 15, 1996 (the "Unit
Agreement").
(b) the Company hereby forever releases and discharges the
Executive from any obligations under the Employment Agreement and
arising out of the Executive's employment with the Company except for
the obligations of the Executive (the "Incorporated Obligations")
under Sections V.C. (Confidentiality), and V.E. (Noncompetition)
thereof which such obligations are hereby incorporated and
established as obligations under this Agreement; provided, however,
that (even though the Company is not presently aware of any basis for
any claim against the Executive), this release shall not release the
Executive from liability to the Company for any criminal or tortious
conduct.
5. Additional Post-Resignation Obligations. In addition to
complying with the Incorporated Obligations, the Executive agrees as follows:
(a) the Executive, upon the Company's request, shall cooperate
with the Company and use his best efforts, subject to reimbursement
by the Company of the Executive's reasonable expenses, in bringing or
defending any claim relating to activities of the Company prior to
the Resignation Date, whether such claim be brought or defended in
litigation, arbitration or other public or private hearing or
proceeding;
(b) the Executive shall indemnify and hold the Company and the
Covered Persons harmless against any losses, liabilities or damages
(including expenses and attorney's fees) arising from any breach by
Executive of his obligations hereunder or under the Incorporated
Obligations;
(c) the Executive shall not make any public statement which
has, or may be reasonably expected to have, the effect of disparaging
the reputation or business of the Company or any of the Covered
Persons and which would otherwise subject the Executive to civil
liability under applicable law;
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(d) except to the extent of any claims not released pursuant to
Section 4(a) above, the Executive shall never xxx or threaten to xxx
or otherwise assert any claim against the Company or any Covered
Person relating to the Executive's employment or service or with the
Company or cessation of employment or service with the Company;
(e) for a period of ten (10) years from the Resignation Date
neither the Executive, his spouse, nor any of his affiliates will,
directly or indirectly, without in each instance the prior written
consent of the Company expressed in a resolution duly adopted by the
Board of Directors of the managing general partner of the Company;
(i) purchase or otherwise acquire, or offer, propose or
agree to purchase or otherwise acquire, or advise, encourage or
assist in the acquisition of, any equity or debt securities of the
Company or Equus or any of their affiliates or options or rights to
acquire any such securities (collectively "Prohibited Securities");
(ii) act together with any other person for the purpose of
acquiring, holding, voting or disposing of any Prohibited Securities;
or
(iii) act alone or together with any person to acquire, or
propose a business combination with, the Company or Equus, or to
control or influence the management or policies of the Company or
Equus;
provided, however, that nothing in this Subsection (e) shall prohibit the
Executive from any future employment with the Company or any discussions
regarding such prospective employment.
5. Arbitration. Any dispute or controversy arising between the
Executive and the Company relating to this Agreement shall be submitted to
private, binding arbitration, upon the written request of either the Executive
or the Company, before a panel of three arbitrators, under the administration
of and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). In the event of such dispute or controversy,
the Company and the Executive shall independently and simultaneously select and
identify one arbitrator each, both of whom must have no past or present
familial or business relationships with the parties and must possess expertise
in the area of compensation of senior management employees in the real estate
industry. In the event that a party has not selected its arbitrator within 60
days of initiation of the arbitration, the AAA shall select such arbitrator.
These two arbitrators shall jointly agree upon and select a third arbitrator
who also possesses such credentials. These three arbitrators shall hear and
decide the dispute or controversy by majority vote, and their decision and
award shall be final and conclusive upon the parties, and their heirs,
administrators, executors, successors, and assigns. The arbitrators shall have
no power or authority to add to, subtract from, or otherwise modify the terms
of this Agreement. Wherever the Commercial Arbitration Rules of the AAA
conflict with the procedures set forth in this section, the terms of this
section shall govern. The Executive and the Company agree that the arbitration
must be initiated by personally delivering a statement of claim to the AAA and
to the party against whom the claim is asserted no later than ninety (90) days
after the basis of the claim becomes known, or reasonably should have been
known or discovered, by the party asserting the claim. In the event
arbitration is not initiated within such ninety (90) day period, such claim,
dispute, or controversy shall be irrevocably time-barred. A judgment based
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upon such arbitration award may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, any action brought by the Company
seeking a temporary restraining order, temporary and/or permanent injunction,
and/or a decree of specific performance of the terms of this Agreement may be
brought in a court of competent jurisdiction without the obligation to proceed
first to arbitration.
7. Assignability and Binding Effect. The Executive may not assign
this Agreement, or any obligation or rights hereunder, to any other person or
entity without the express written consent of the Company. This Agreement
shall be binding upon the Executive and his heirs, executors, administrators,
and successors.
8. Governing Law. This Agreement shall be governed by the laws of
the State of Delaware (excluding the choice-of-law rules thereof).
9. Captions. All captions contained in this Agreement are for
convenience only and in no way define or describe the intent of the parties or
specific terms hereof.
10. Severability. If any provision of this Agreement shall to any
extent be held invalid or unenforceable, the remaining terms and provisions
shall not be affected thereby and such invalid or unenforceable term shall be
reformed to be enforced to the maximum extent permitted by applicable law.
11. Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof. Except for the Unit
Agreement, all prior negotiations or stipulations concerning any matter which
preceded or accompanied the execution hereof are conclusively deemed to be
superseded hereby. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and such officer or director as may be
specifically designated by the Board of Directors of the Company's managing
general partner.
12. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
duly given when delivered by hand or facsimile transmission or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Company:
Interstate General Company L.P.
000 Xxxxxxxxx Xxxxxxx Xxxxxx
Xx. Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
If to the Executive:
Xx. Xxxxxxx X. Xxxxxxxxxxx
0000 Xxxxxxx Xxxxx
Xx. Xxxxxxx, Xxxxxxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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13. Remedies.
(a) The Executive acknowledges and agrees that the Company would be
irreparably damaged in the event that the Executive fails to perform any of his
obligations under this Agreement in accordance with their specific terms.
Accordingly, the Executive agrees that the Company, in addition to any other
remedy to which it may be entitled, shall be entitled to an injunction to
redress breaches of this Agreement and to specifically enforce the terms and
provisions hereof in any action instituted in any federal or state court in
Maryland or other federal or state court having jurisdiction. The Executive
further agrees that in the event that the Executive fails to perform any of his
obligations under this Agreement in accordance with their specific terms, the
Company shall have no further obligation to pay any amounts or provide the
Executive any benefits provided for under the terms of this Agreement.
(b) The Company acknowledges and agrees that the Executive would be
irreparably damaged in the event that the Company fails to perform any of its
obligations under this Agreement in accordance with their specific terms.
Accordingly, the Company agrees that the Executive, in addition to any other
remedy to which it may be entitled, shall be entitled to an injunction to
redress breaches of this Agreement and to specifically enforce the terms and
provisions hereof in any action instituted in any federal or state court in
Maryland or other federal or state court having jurisdiction. The Company
further agrees that in the event that the Company fails to pay to Executive the
compensation and benefits provided under Section 2 of this Agreement in
accordance with their specific terms, the release and discharge by the
Executive of the Company pursuant to Section 4(a) of this Agreement shall be
null and void.
14. Execution. The parties represent that they have the capacity
and authorization, whether it be personal or by the Board of Directors of the
managing general partner of the Company to execute this Agreement and shall be
legally bound hereby. Further, the Executive represents that he has read and
fully understands this meaning and intent of this Agreement and has had a
opportunity to review it with counsel.
15. Counterparts. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first set forth below.
INTERSTATE GENERAL COMPANY L.P.
BY: INTERSTATE GENERAL
MANAGEMENT CORPORATION, its
managing general partner
Date: August 20, 1996 /s/ Xxxx X. Xxxx
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By: Xxxx X. Xxxx
Senior Vice President
Date: August 21, 1996 /s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx
