Exhibit 10.1
EMPLOYMENT AGREEMENT AND GENERAL RELEASE
1. PARTIES. The parties to this Employment Agreement and General
Release ("Agreement") are:
A. John E. Graul ("Employee").
B. Public Storage, and its past and present shareholders,
officers, directors, employees, affiliated companies, attorneys, agents and
representatives ("Employer").
2. RECITALS.
A. Employee has been employed by Employer as President,
Self-Storage Operations since on or about February 23, 2004. The parties agree
that the employment relationship will continue until 11:59 P.M. Pacific Time on
December 31, 2008.
B. Pursuant to Employee's terms of employment and prior to
entering into this Agreement, Employee had been awarded various non-qualified
stock options under Employer's equity plans including 10,000 non-qualified stock
options to acquire 10,000 common shares of Public Storage stock that were
scheduled to vest on February 23, 2009, with a grant price of $48.32; 8,000
non-qualified stock options to acquire 8,000 common shares of Public Storage
stock that were scheduled to vest on March 3, 2009, with a grant price of
$56.12; 5,000 non-qualified stock options to acquire 5,000 common shares of
Public Storage stock that were scheduled to vest on March 16, 2009, with a grant
price of $82.90; 375 restricted stock units that were scheduled to vest on
November 2, 2008; 1,500 restricted stock units that were scheduled to vest on
March 3, 2009; 375 restricted stock units that were scheduled to vest on March
15, 2009; and 1,000 restricted stock units that were scheduled to vest on March
16, 2009.
C. The parties have agreed that to end their employment
relationship in a mutually satisfactory manner, and to resolve all known and
unknown disputes between the parties, the following covenants and agreements
shall be made:
3. POSITIONS. Employee will continue to serve as Public Storage's
President, Self-Storage Operations through December 31, 2008. In this position,
Employee will continue to report to Public Storage's Chief Executive Officer or
to such other person as may be designated by Employer's Chief Executive Officer
or its Board of Directors. During the term of this Agreement, Employer may,
consistent with Employee's qualifications and experience, change Employee's
responsibilities at any time by creating new responsibilities and/or moving
certain responsibilities. Employee will continue to devote his full time efforts
toward fulfilling the responsibilities of his position through December 31,
2008.
4. COOPERATION. The parties agree that through December 31, 2008,
Employee will, among other things that Employer may reasonably request in
connection with Employer's business, (a) use his reasonable best efforts to
assist in effectuating a smooth transition of his projects, assignments and
responsibilities and (b) provide ongoing strategic and other advice and
assistance as Employer may determine, in its sole discretion, to be necessary.
The parties further agree that at all times following December
31, 2008, Employee will cooperate fully with the Employer in providing truthful
testimony as a witness or a declarant in connection with any present or future
court, administrative, governmental agency or arbitration proceeding involving
the Employer with respect to which the Employee has relevant information arising
out of his employment with the Employer. Employee also will assist Employer
during the discovery phase (or prior thereto) of any judicial, administrative,
arbitration, or governmental agency proceeding involving Employer and with
respect to which the Employee has relevant information arising out of his
employment with Employer including, without limitation, meeting with counsel,
assisting and cooperating in the preparation and review of documents, and
meeting with other representatives of the Employer. The parties agree that such
cooperation and assistance shall, to the extent practicable (giving due regard
to the needs of the Employer and the requirements of Employee's then current
work obligations), be at times and places that are mutually convenient to both
the Employee and the Employer. The parties agree that this procedure shall apply
anytime the Employer and Employee
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cannot agree on a mutually convenient time and place to meet. The Employer
agrees that it will pay, upon production of appropriate receipts, the reasonable
business expenses (including air transportation, hotel, and similar expenses)
incurred by Employee in connection with such assistance. Employee represents
that he is not presently aware of any conflict of interest between himself and
Employer in connection with any pending litigation or investigations that may
give rise to a question regarding the possible need for independent counsel with
respect to the defense of such matters.
Effective as of 11:59 P.M. Pacific Time, December 31, 2008,
Employee will resign as President, Self-Storage Operations, and resign from all
other officer positions that he holds with Public Storage or with any of its
subsidiaries and affiliated companies. Employee agrees to sign, if requested by
Employer, forms of resignation from any offices he holds with Employer and any
related forms necessary to effectuate such resignation.
5. COMPENSATION. Until Employee's employment terminates on
December 31, 2008, Employee will continue to be paid twice monthly on the
fifteenth and last day of the month at a rate of $45,833 per month for the
nine-month period between April 1, 2008 and December 31, 2008. Until December
31, 2008, Employee will continue to accrue vacation benefits and participate in
Employer's group insurance plans and 401(k) plan. Until December 31, 2008,
Employer will continue to reimburse Employee for those properly documented,
reasonable travel or similar expenditures incurred by Employee consistent with
prior practice that are reasonably necessary for the proper discharge of
Employee's duties under this Agreement. Employee will submit all expense reports
for reasonable business expenses by December 31, 2008 and provide receipts
satisfactory to Employer in accordance with Employer's current policy.
On December 31, 2008, if Employee executes and delivers to
Employer (1) on or before December 31, 2008, a signed copy of this Agreement
which has not been revoked, and (2) on December 31, 2008, a further General
Release by Employee in the form attached hereto as Addendum A, as further
consideration and subject to prior approval by the Public Storage Compensation
Committee, (1) Employee's10,000 non-qualified stock options to acquire 10,000
common shares of Public Storage stock that were scheduled to vest on February
23, 2009, with a grant price of $48.32; 8,000 non-qualified stock options to
acquire 8,000 common shares of Public Storage stock that were scheduled to vest
on March 3, 2009, with a grant price of $56.12; 5,000 non-qualified stock
options to acquire 5,000 common shares of Public Storage stock that were
scheduled to vest on March 16, 2009, with a grant price of $82.90; 1,500
restricted stock units that were scheduled to vest on March 3, 2009; 375
restricted stock units that were scheduled to vest on March 15, 2009; and 1,000
restricted stock units that were scheduled to vest on March 16, 2009; will be
accelerated and vested as of December 31, 2008, and (2) subject to any Public
Storage securities trading blackout period applicable to Employer's executive
officers, Employee shall have until the close of trading on the New York Stock
Exchange on March 31, 2009 to exercise any stock options held by Employee that
are fully vested as of December 31, 2008. All other unvested Public Storage
stock options and restricted stock units shall terminate as of 11:59 PM Pacific
Time, January 1, 2009. All vested Public Storage stock options held by Employee
on December 31, 2008 shall be handled in accordance with the applicable equity
plan and option agreement.
Employee acknowledges that as of the time of Employee's
execution of this Agreement, Employee has received all wages and other
compensation due Employee as of the date of execution of this Agreement in
connection with Employee's employment relationship with Employer, and that the
compensation provided for in this section will constitute the sole, entire, and
only financial obligations of Employer to Employee.
Employee acknowledges and agrees that Employer has made no
representations to Employee regarding the tax consequences of any amounts
received by Employee pursuant to this Agreement. Employee agrees to pay federal,
state and/or local taxes, if any, which are required by law to be paid with
respect to this Agreement. Employee fully agrees to indemnify and hold Employer,
and all of its Employees, principals and agents, harmless from any claims,
demands, deficiencies, levies, assessments, executions, judgments or recoveries
by any governmental entity against Employer for any amounts claimed due on
account of this Agreement or pursuant to claims made under any federal, state or
local tax laws, and any costs, expenses or damages sustained by Employer or its
employees or principals by reason of any such claims, including any amounts paid
by Employer as taxes, attorneys fees, deficiencies, levies, assessments, fines,
penalties, interest or otherwise.
Employer represents that this Agreement and the compensation
set forth therein have been approved by Employer's Compensation Committee of
Employer's Board of Directors.
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6. NON-ADMISSION OF LIABILITY. The parties understand and
agree that their execution of this Agreement shall not in any way constitute or
be construed as an admission of liability whatsoever by either party, their
successors or any related parties.
7. TERMINATION OF EMPLOYMENT RELATIONSHIP. Unless the
employment relationship is otherwise terminated in connection with this section,
the parties agree that Employee's employment with Employer shall terminate as of
11:59 P.M. Pacific Time on December 31, 2008, and that Employee will not apply
nor shall Employee be re-employed by Employer. Prior to December 31, 2008, the
employment relationship may only be terminated for "cause." Termination for
"cause" may be based upon any of the following, as determined by Employer in its
reasonable discretion:
(i) Any act of fraud, dishonestly, embezzlement, or theft.
(ii) Conviction of, or a plea of nolo contendere to, any
felony or any misdemeanor involving moral turpitude;
(iii) Any act of gross negligence in the performance of
Employee's responsibilities;
(iv) Any inexcusable repeated or prolonged absence from work
other than as a result of illness or a disability;
(v) Employee's voluntary resignation from employment with
Employer.
In the event Employee's employment is terminated for cause,
Employee will receive his base salary and unused vested vacation benefits
through the date of termination, and Employer will not owe to Employee any other
compensation or financial obligations.
8. PROPERTY. No later than December 31, 2008, Employee will
execute and deliver to Employer a truthful written acknowledgment that Employee
has returned to Employer all documents, reports, files, memoranda, records,
Company credit cards, key passes, door and file keys, laptop, computer access
codes, information and other physical and personal property of Employer which
Employee received or helped prepare in connection with Employee's employment and
which Employee has in Employee's possession. The term "information" as used in
this Agreement means (a) confidential information including, without limitation,
information received from Employer's clients, employees or its agents, under
confidential conditions; and (b) other business or financial information
received because of Employee's employment with Employer.
Employee further represents that he will remove all personal
possessions from Employer's premises prior to December 31, 2008.
9. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employer's
competitive success depends on the proper safeguarding of Employer's trade
secrets and confidential information. Certain such information Employer pertains
to the privacy interests of individuals and must be safeguarded for that reason
as well. Employee promises to continue to preserve the confidentiality of
Employer's trade secrets and commercially useful confidential information
learned through Employee's employment and to use this information only as
necessary and appropriate for Employer's legitimate business purposes. Employee
promises to safeguard against disclosure without the consent of affected persons
all information touching on the privacy interests of Employer's employees and
tenants. Employer's trade secrets and commercially useful confidential
information include without limitation Employer's non-public financial
information and the contents of Employer's business plans.
10. NON SOLICITATION. Employee agrees that for a period of one
year following the termination or expiration of this agreement, Employee will
not directly or indirectly, or by action in concert with others, induce or
influence (or seek to induce or influence), any person who is engaged as an
employee, agent, independent contractor or otherwise by Employer to terminate
such person's employment or engagement with Employer.
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11. A. GENERAL RELEASE BY EMPLOYEE. In exchange for the promises
contained herein, Employee, for good and valuable consideration, the adequacy
and receipt of which is hereby acknowledged, for Employee, Employee's attorneys,
successors and assigns (collectively "Releasers"), hereby releases and forever
discharges Employer, and its subsidiaries, affiliates, officers, directors,
shareholders, agents, attorneys, present employees and past employees, and their
successors, heirs, executors and administrators (collectively "Releasees"), and
each of them from any and all past, present and future claims, demands, causes
of action, and liabilities of every kind and nature whatsoever, known and
unknown, suspected or unsuspected, which the Releasors ever had, now have,
hereinafter can, shall or may have, from the beginning of time to the effective
date hereof, including but not limited to any claims, demands, causes of action
or liabilities which Employee could assert at common law, by any statute, rule,
regulation, ordinance or law, whether federal, state or local, or in any other
grounds whatsoever, that pertain to or arise out of the Employee's employment
with Employer, including but not limited to claims under the California Labor
Code, California Government Code, the Employment Retirement Income Security Act
of 1974 ("ERISA"), 29 U.S.C. ss. 1001, et seq., Title VII of the Civil Rights
Act of 1964, 42 U.S.C. ss. 2000E et seq., the Age Discrimination In Employment
Act, the Equal Pay Act, the Rehabilitation Act of 1973, Section 1981 of Title 42
of United States Code, claims for wrongful discharge, breach of contract,
negligence, implied contract, quasi-contract, promissory estoppel, implied
covenant of good faith and fair dealing, bad faith and denial of existence of
contract, defamation, interference with contractual relationships, invasion of
privacy, infliction of emotional distress, employment discrimination,
retaliation, failure to prevent discrimination from occurring, fraud, and all
other federal, state and local laws, ordinances, regulations or orders which
relate in any way to employment, termination of employment or the continuing
effects thereof.
B. GENERAL RELEASE BY EMPLOYER. Employer hereby releases,
acquits and forever discharges Employee and his heirs, representatives and
assigns, from any and all charges, claims, rights, agreements, actions, costs,
expenses, causes of action, obligations, damages, losses, promises and liability
of whatever kind and nature, in law or equity or otherwise, whether known or
unknown, suspected or unsuspected, directly or indirectly arising out of, based
upon or relating in any way to Employee's employment with Employer or relating
to or arising from any alleged act or omission by Employee, provided, however,
that nothing in this Agreement shall be construed to be a waiver or release of
any rights Employer has to enforce the terms of this Agreement. Employer agrees
that this release extends to all claims of every nature and kind, known or
unknown, suspected or unsuspected, vested or contingent, past, present or
future, arising from or attributable to any alleged act or omission of Employee
during the course of his employment with Employer.
12. NOTICE RE WAIVER OF RIGHTS. If Employee signs this Agreement,
Employee will forever give up all rights and claims asserted in the Action,
including the waiver and release of all discrimination claims. The Federal Age
Discrimination In Employment Act requires that employers give certain notices to
employees (including ex-employees) involved in claims that may include age
discrimination. Pursuant to the Federal Age Discrimination In Employment Act,
Employer hereby notifies Employee of the following employee rights:
A. Employee may not waive or release any right or claim under
the Age Discrimination In Employment Act unless Employee's waiver and release is
knowing and voluntary, and employee fully understands all of the terms of the
release.
B. Employee's waiver and release must be part of an agreement
between Employee and Employer and must be written in a manner calculated to be
understood by Employee.
C. Employee's waiver or release must specifically refer to the
rights or claims arising under the Federal Age Discrimination In Employment Act.
D. Employee may not waive or release any of Employee's rights
or claims that arise after the date Employee signs this Agreement.
E. Employee may only waive or release rights or claims in
exchange for consideration in addition to anything of value to which Employee is
already entitled.
F. Employee is advised in writing to consult with an attorney
before signing this Agreement.
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G. Employee has a period of at least 21 days in which to
consider whether to sign this Agreement, and this Agreement provides that for
seven days after Employee signs this Agreement, Employee may revoke the
Agreement and this Agreement will not become effective or enforceable until this
seven day revocation period expires.
Revocation shall be made solely by delivering a written notice of revocation to:
CANDACE N. KROL
SENIOR VICE PRESIDENT - HUMAN RESOURCES
PUBLIC STORAGE
701 WESTERN AVENUE, GLENDALE, CA 91201
13. POWER TO RELEASE. Employee represents and warrants that
Employee is the sole owner of the claims, demands, causes of action and
liabilities which Employee is releasing, and Employee has full power to give the
release provided for herein. Employee further represents and warrants that
Employee has not assigned or transferred any of the claims, demands, causes of
action or liabilities released herein and agrees to indemnify and hold Employer
harmless from and against any claims, demands, causes of action and liabilities,
including attorney fees incurred, arising out of any such transfer or
assignment.
14. WAIVER OF UNKNOWN CLAIMS. Employee expressly waives the
provisions, rights and benefits of Section 1542 of the California Civil Code and
any similar laws of any other jurisdiction, which provide:
"Section 1542. General Release -- Claims Extinguished. A
general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the
time of executing the release, which if known by him or her
must have materially affected his or her settlement with the
debtor."
Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of all Releasees with
respect to claims in California as well as all other jurisdictions, the parties
expressly acknowledge that the General Release contained in Paragraph 11 is
intended to include not only claims that are known, anticipated or disclosed,
but also claims that are unknown, unanticipated and undisclosed.
This Paragraph 14 shall not serve as a release of rights under or
preclude the parties from filing suite to enforce the provisions of the
Agreement or with respect to any right to indemnification provided under
Employee's director and officers' liability insurance policy or Employer's
bylaws.
15. INTEGRATION. This Agreement contains a single integrated
contract expressing the entire agreement of the parties on the issues stated
herein. With the exception of the parties' existing arbitration agreement (which
the parties intend to remain effective), there are no other agreements, written
or oral, express or implied, prior or collateral, between the parties, except
the Agreement set forth herein. No representative of any party hereto has or had
any authority to make any representations or promises not contained in this
Agreement, and each of the parties acknowledges that they have not executed this
Agreement in reliance upon any such representation or promise. This Agreement
cannot be modified or changed except by a written instrument signed by each of
the parties.
16. SEVERABILITY. The provisions of this Agreement are
severable, and if any part is found to be unenforceable, the other provisions
shall remain fully valid and enforceable.
17. EFFECTIVE DATE. Employee shall have a period of at least 21
days within which to consider this Agreement, and, if thereafter executed by
Employee, this Agreement may be revoked for a period of seven days following the
execution of this Agreement. This Agreement shall not become effective or
enforceable until such revocation period has expired before December 31, 2008
without the exercise of such revocation right ("Effective Date").
18. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. This Agreement
may be executed in counterparts, each of which may be deemed to be an
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original and all of which shall constitute the Agreement; provided, however,
that the Agreement shall not become effective until completely conforming
counterparts have been signed and delivered by each of the parties hereto.
19. CAPTIONS AND INTERPRETATIONS. Paragraphs, titles, captions
contained herein are inserted for convenience and reference, and are not
intended to define, limit or describe the scope of the Agreement or any
provisions thereof. No provision of the Agreement is to be interpreted for or
against any party on the basis that a particular party or Employee's attorney
drafted such provisions.
20. CONDITIONS OF EXECUTION. Each party acknowledges and
warrants that their execution of the Agreement is free and voluntary.
21. ATTORNEY FEES AND COSTS. If any party hereto commences any
action or other proceeding to enforce or interpret this Agreement, including any
actions to reform or rescind or any manner effect the provisions of this
Agreement, the prevailing party shall be entitled to all reasonable costs
incurred therewith, including but not limited to actual attorney fees.
Otherwise, the parties shall each bear their own attorney fees and costs
incurred.
Dated: April 16, 2008 /s/ John Graul
--------------------------
John E. Graul, Employee
Dated: April 16, 2008 PUBLIC STORAGE, Employer
By: /s/ Ronald L. Havner, Jr.
-------------------------
Ronald L. Havner, Jr.
Its: Chief Executive Officer
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