Exhibit 10.4
XXXXXXXXXXX X. XXXXXXXX
SEPARATION AND SETTLEMENT AGREEMENT
AND GENERAL RELEASE
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This Separation and Settlement Agreement and General Release (the
"Agreement") is made as of the 17th day of September 2001, by and between
Xxxxxxxxxxx X. Xxxxxxxx (the "Employee") and Konover Property Trust, Inc. (the
"Company") concerning the Employee's resignation of employment with the Company.
WHEREAS, the Company and the Employee entered into that certain Employment
Agreement dated as of December 15, 1995 as subsequently amended (collectively,
the "Employment Agreement"); and
WHEREAS, the Employee's employment with the Company shall terminate,
effective as of September 30, 2001 (the "Effective Date"); and
WHEREAS, the Company and the Employee intend that this Agreement shall be
in complete settlement of all rights of the Employee under the Employment
Agreement, under any other written agreement between the Employee and the
Company relating to his employment by the Company and its affiliates; and
WHEREAS, the terms of this Agreement have been approved by the Board of
Directors and the Compensation Committee of the Company;
NOW THEREFORE, in consideration of the mutual promises and agreements set
forth below, the Company and the Employee agree as follows:
1. The Employee hereby resigns from the employ of the Company as of the
close of business on the Effective Date.
2. The Employee hereby resigns as an officer of the Company and from all
other positions with the Company and all of its subsidiaries and
related entities effective as of the close of business on the
Effective Date.
3. The Employee shall be entitled to a severance benefit consisting of
One Hundred Ninety Three Thousand One Hundred Twenty Eight Dollars
($193,128) (the "Cash Severance Benefit", which consists of an amount
equal to 12 months of pay at Employee's salary as of September 1,
2001, plus forgiveness (the "Loan Forgiveness") of the outstanding
balance, including accrued interest, on Employee's promissory note to
the Company, dated September 15, 1999 in the original principal amount
of Forty Thousand Dollars ($40,000). The Cash Severance Benefit shall
be reduced by the tax withholding applicable to the Loan Forgiveness,
which tax withholding shall be paid by the Company to the applicable
governmental entities. Provided that this Agreement has become final
and binding in accordance with paragraph 18 below, payment of the Cash
Severance Benefit after reduction in accordance with the preceding
sentence (the "Net Severance Amount") will be made by wire transfer in
2 equal installments;
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the first on October 1, 2001 and the second on January 4, 2002. In
addition to the withholding applicable to the Loan Forgiveness, each
such installment of the Net Severance Amount shall be subject to
applicable withholding. All unpaid installments shall accelerate and
be immediately due and payable in the event of a sale of more than 50%
of the Company's voting securities or a liquidation or a winding up of
the Company or a sale of substantially all of its assets. All wire
transfers under this Agreement shall be pursuant to the instructions
that are attached hereto unless directed otherwise by the Employee in
writing addressed to the Company's general counsel.
4. The Employee shall receive all vacation pay accrued and unused, if
any, as of the Effective Date to the extent provided in accordance
with the Company's standard policies. Such payment shall be paid at
the time of the first regularly scheduled payroll date that follows
the date on which the Agreement becomes final and binding pursuant to
paragraph 18 below.
5. The parties agree that for vesting purposes under the terms of various
stock option and restricted stock agreements between them, Employee
shall be treated as if his position with the Company was eliminated
and he was terminated as of the Effective Date "without cause" (as
such term is defined in said stock option and restricted stock
agreements). As a result of the foregoing, the Employee's vested stock
under the Exchange Agreement between the parties dated November 11,
1997 and various restricted stock and option agreements is as set
forth on Exhibit A hereto. The parties hereto confirm that such
agreements shall remain in effect.
6. The Company shall, on the Effective Date, make a lump sum payment to
the Employee of Eleven Thousand Eight Hundred Forty-Nine Dollars
($11,849), an amount equal to 18 months of COBRA premiums for the
Employee's current level of medical and dental coverage, minus the
premium costs paid by a typical Company employee for 18 months of
coverage at Employee's current coverage level. Employee acknowledges
that this payment does not constitute an automatic election of COBRA
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coverage.
7. The Employee agrees that no additional payments are due from the
Company on any basis whatsoever other than his salary and benefits
through the Effective Date, and reimbursements in accordance with the
Company's policies for ordinary and reasonable expenses incurred on or
before the Effective Date and submitted to the Company within 30 days
after the Effective Date. The preceding sentence shall not limit any
payments which the Employee is entitled to as a shareholder of the
Company.
8. The Employee agrees to cooperate with the Company and its affiliates
in the defense of any claims that may be made against the Company and
its affiliates relating to the period in which he was employed by the
Company (the "Employment Period"), and will cooperate with the Company
and its affiliates in the prosecution of any such claims that may be
made by the Company or any affiliate. The Employee expressly agrees to
cooperate with the Company in the pursuit or defense of any claims
against or by any other employees, or former employees, of the Company
regarding their employment or termination of
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employment with the Company during the Employment Period. The Employee
agrees, unless precluded by law, to promptly inform the Company if he
is asked to participate (or otherwise become involved) in any claims
that may be filed against the Company or any affiliate relating to the
Employment Period. The Employee also agrees, unless precluded by law,
to promptly inform the Company if he is asked to assist in any
investigation (whether governmental or private) of the Company or any
affiliate (or their actions) relating to the Employment Period,
regardless of whether a lawsuit has then been filed against the
Company or any affiliate with respect to such investigation. Promptly
upon the receipt of the Employee's written request, the Company agrees
to reimburse the Employee for all reasonable out-of-pocket expenses
associated with such cooperation, including travel expenses. The
Company further agrees to attempt in good faith to accommodate the
Employee's schedule with respect to such cooperation. This paragraph 8
shall not apply to any action in which the Employee has an interest
which is adverse to the Company, and shall not preclude the Employee
from responding to an inquiry in an honest manner.
9. The Employee agrees that on and after the date of this Agreement, he
will not make any statement that disparages the Company or its
subsidiaries or affiliates or its shareholders or their affiliates or
any of their officers, directors or employees and the Company agrees
not to make any statement which disparages the Employee; provided that
the provisions of this paragraph 9 shall not apply to testimony as a
witness, any disclosure required to be made by the Company, compliance
with other legal obligations, the assertion of or defense against any
claim of breach of this Agreement or the Employee's statements or
disclosures to officers or directors of the Company, and shall not
require either party to make false statements or disclosures.
10. The Employee agrees that, except as may be required by the lawful
order of a court or agency of competent jurisdiction, the Employee
will keep the terms of this Agreement secret and confidential until
such time as the Company discloses the Agreement pursuant to the
requirements of applicable law. Notwithstanding the foregoing
provisions of this paragraph, the Employee may disclose the contents
of this Agreement to his attorneys, accountants and financial
advisors, and his immediate family provided that the Employee takes
steps that are reasonably calculated to assure that such persons do
not further disclose the terms of this Agreement.
11. The Employee shall assign or cause to be assigned all interests held
by the Employee or any person or entity affiliated with the Employee
in Sunset KPT Investment, Inc. to one or more individuals/or entities
as designated by the Company's Board of Directors in consideration for
Two Thousand Five Hundred Dollars ($2,500) and shall execute such
documents as the Company may reasonably require in connection
therewith, on or before October 1, 2001.
12. The Company hereby releases the Employee from the restrictions set
forth in subparagraph 6(a)(i) of the Employment Agreement (relating to
noncompetition). Subject to the preceding sentence, the Employee
expressly acknowledges and agrees that the Employee will continue to
remain subject to the Covenants and
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Confidential Information provisions of paragraph 6 of the Employment
Agreement, and further agrees that obligations under such provisions
are not limited in any way by this Agreement or resignation from
employment with the Company. The Employee agrees to promptly, but in
no event later than the date on which this Agreement becomes final and
binding in accordance with paragraph 18, return all records, manuals,
correspondence, notes, financial statements, computer printouts and
other documents and recorded material of every nature (including
copies thereof) that may be in the Employee's possession or control
dealing with Confidential Information, as defined in the Employment
Agreement, and all other property of the Company in accordance with
reasonable procedures to be agreed to between the Employee and the
Company's general counsel. The Employee further agrees that until
March 31, 2002, he will not, without the consent of the chief
executive officer of the Company, which shall not be unreasonably
withheld, employ or solicit or attempt to solicit for employment with
or on behalf of any entity any employee of the Company or any person
who is employed by the Company on the date hereof unless such person
is involuntarily terminated from employment by the Company.
13. Any payments under this Agreement, or other amounts under this
Agreement which are required to be treated as compensation, shall be
subject to applicable tax withholding and payroll deductions at the
lowest applicable statutory rates.
14. The Employee knowingly and voluntarily releases and forever discharges
the Company, its representatives, successors, assigns, subsidiaries,
parents, and shareholders and all of their affiliates, directors,
officers, employees, venture capital investors, agents, and all
trustees, administrators and fiduciaries under any Company benefit
plan (the "Company Parties"), of and from any and all claims, known
and unknown, which the Employee, the Employee's family, heirs,
executors, administrators, successors, and assigns (the "Employee
Parties") ever had, now have or may have as of the date of execution
of this Agreement, for, upon, or by reason of any matter, cause or
thing whatsoever including, but not limited to, any alleged violation
of:(a) the Age Discrimination in Employment Act of 1967, as amended;
(b) Title VII of the Civil Rights Act of 1964, as amended; (c) The
Civil Rights Act of 1991; (d) Sections 1981 through 1988 of Title 42
of the United States Code, as amended; (e) the Employee Retirement
Income Security Act of 1974, as amended; (f) The Immigration Reform
Control Act, as amended; (g) The Americans with Disabilities Act of
1990, as amended; (h) The National Labor Relations Act, as amended;
(i) The Fair Labor Standards Act, as amended; (j) The Occupational
Safety and Health Act, as amended; (k) The Family and Medical Leave
Act of 1993; (l) any state anti-discrimination law; (m) any state wage
and hour law; (n) any other local, state or federal law, regulation or
ordinance including, but not limited to, the Worker Adjustment and
Retraining Notification Act; (o) any public policy, contract, tort,
or common law; (p) the Employment Agreement; or (q) any allegation for
costs, fees, or other expenses including attorneys' fees incurred in
these matters. Notwithstanding, the foregoing, the Employee shall
continue to be entitled to indemnification in accordance with the
Company's Articles of Incorporation and By-Laws. Nothing herein shall
limit the payments to which the Employee is entitled as a shareholder
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of the Company. Notwithstanding anything herein to the contrary, the
parties acknowledge that the Employee believes in good faith that he
is entitled, upon his termination of employment, to monies and other
consideration substantially in excess of the monies and consideration
agreed upon in this Agreement and that the latter represents a
settlement of claims which the Employee is only willing to make on the
express condition that the payments set forth in this Agreement are
fully and timely made. In view of the preceding sentence, the parties
agree that if the Company fails to timely pay the amounts due under
the terms of this Agreement as of the date on which they become due
and such failure continues for five (5) business days after delivery
of written notices (the "Default Notices") from Employee to the
Company's chief executive officer and its general counsel (which
notices shall be delivered pursuant to paragraph 23 below), each such
payment shall be increased with interest from the fifteenth day after
the default at the rate of 12% per annum, and all other payments to
which the Employee is entitled under this Agreement shall be
immediately due and payable.
15. The Company hereby releases the Employee Parties from any and all
claims known or unknown which the Company ever had, now have or may
have as of the date of execution of this Agreement (a) for, upon or by
reason of any stock option, restricted stock repurchase right or
dividend equivalents awarded to the Employee or (b), other than any
claim relating to or arising out of the Employee's actions which are
determined pursuant to a final judicial determination to constitute
fraud or criminal activity, for, upon or by reason of any other
matter, cause or thing whatsoever including, without limitation, any
claim arising out of his employment with the Company or its
subsidiaries. The Company agrees that the payments to which the
Employee is entitled under this Agreement shall not be subject to any
offset or defenses arising out of any obligations of the Employee to
the Company or out of any claims by the Company against the Employee
and that the Company shall not invoke any defenses in the event of
litigation by the Employee to enforce the obligation to make such
payments in full and shall not bring any declaratory or other action
with respect to such payments.
16. The Employee agrees to cooperate in good faith with the general
counsel of the Company for the purpose of determining whether there is
any material agreement between the Company and any third party
imposing material liability on the Company, of which the general
counsel is not otherwise aware and as to which the Employee
represented or purported to represent the Company in negotiating the
terms of the agreement or was otherwise aware of the existence of such
agreement.
17. The Employee acknowledges that he was given twenty-one (21) days to
consider this Agreement, to consult with an attorney and to decide
whether or not to sign the Agreement.
18. For a period of up to and including seven (7) days after the date the
Employee signs this Agreement the Employee may revoke it entirely. No
rights or obligations contained in this Agreement shall become
enforceable before the end of the 7-day revocation period, at which
time the Agreement shall become final and binding.
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19. This Agreement shall be binding upon each of the parties and upon
their respective heirs, administrators, representatives, executors,
successors and assigns, and shall inure to the benefit of each party
and to their heirs, administrators, representatives, executors,
successors, and assigns.
20. THE EMPLOYEE HAS BEEN ADVISED TO CONSIDER THIS AGREEMENT AND HAS BEEN
ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF
THIS AGREEMENT. HAVING ELECTED TO EXECUTE THIS AGREEMENT, AND TO
RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH ABOVE, THE EMPLOYEE
FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, DOES VOLUNTARILY
ENTER INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL
CLAIMS THE EMPLOYEE AND EMPLOYEE PARTIES MAY HAVE AGAINST THE COMPANY
AS PROVIDED IN SECTION 14, PROVIDED THAT THE EMPLOYEE IS NOT WAIVING
ANY RIGHTS EMPLOYEE MAY HAVE TO ENFORCE THE TERMS OF THIS AGREEMENT.
21. This Agreement shall be construed in accordance with the laws of the
State of North Carolina, without regard to the conflict of law
provisions of any state.
22. This Agreement reflects the entire agreement between the Employee and
the Company and, except as specifically provided herein, supersedes
all prior agreements and understandings, written or oral relating to
the subject matter hereof.
23. Any notice pertaining to this Agreement shall be in writing and shall
be deemed to have been effectively given on the earliest of (a) when
received, (b) upon personal delivery to the party notified, (c) one
business day after delivery via facsimile with electronic confirmation
of successful transmission, (d) one business day after delivery via an
overnight courier service or (e) three days after deposit with the
United Postal Service, and addressed as follows
to the Employee at:
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Law Offices of Xxxxxxx X. Xxxxxxxx, LLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
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to the Company at:
Chief Executive Officer
Konover Property Trust, Inc.
0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
General Counsel
Konover Property Trust
0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
24. This Agreement may not be modified or amended except by a writing
signed by the parties to this Agreement.
25. This Agreement may be signed in multiple counterparts, each of which
shall be deemed an original. Any executed counterpart returned by
facsimile shall be deemed an original executed counterpart.
* * * * * **
IN WITNESS WHEREOF, this Separation Agreement and General Release has been
duly executed as of the Effective Date.
__________________________ Date: September 17, 2001
Xxxxxxxxxxx X. Xxxxxxxx
Xxxxxxx Property Trust, Inc.
______________________________ Date: September 17, 2001
By:
Title:
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