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Exhibit 10.1
SEVERANCE AGREEMENT
This Severance Agreement (this "Agreement") is made and entered
into as of this second day of September, 2008 (the "Effective
Date") by and between Standard Pacific Corp., a Delaware
corporation (the "Company") and Jeffrey Peterson ("Executive").
WHEREAS, the Executive has made a major contribution to the
management of the Company.
WHEREAS, the Company considers the continued availability of
Executive’s services, managerial skills and business
experience to be in the best interest of the Company and its
stockholders, and desires to assure the continued services of
Executive on behalf of the Company.
WHEREAS, Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide him
with income security and benefits in accordance with the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. Term. Executive’s entitlement to the
severance payments described in Section 4 below is contingent
on, among other things, his employment being terminated by the
Company other than for Cause within two years following the
Effective Date. This Agreement will terminate if Executive remains
employed by the Company two years following the Effective Date.
2. No Employment Contract. This Agreement relates
solely to the payment of severance benefits to Executive in the
event his employment is terminated without Cause. This Agreement,
including the recitals hereto, shall not be deemed to create a
contract of employment between the Company and Executive, and shall
create no right in Executive to continue in the Company’s
employment for any specific period of time, or to create any other
rights in Executive or obligations on the part of the Company or
its subsidiaries, except as expressly set forth herein. This
Agreement shall not restrict the right of the Company to terminate
Executive’s employment at any time for any reason or no
reason, with or without Cause, or restrict the right of Executive
to terminate his employment at any time for any reason or no
reason.
3. Cause. As used herein, Cause shall mean the occurrence
or existence of any of the following with respect to Executive:
(a) Executive’s conviction by, or entry of a plea of
guilty or nolo contendere in, a court of competent and final
jurisdiction for any crime involving moral turpitude or any
felony;
(b) whether prior to or subsequent to the date
hereof, Executive’s willful engaging in dishonest or
fraudulent actions or omissions which results directly or
indirectly in any demonstrable material financial or economic harm
to the Company or its affiliates;
(c) Executive’s willful breach or willful and habitual
neglect of his or her material duties, and such breach or neglect
remains uncured for a period of forty-five (45) days after
written notice from the Company;
(d) Executive’s gross misconduct in the performance of his
job duties;
(e) the repeated non-prescription use of any controlled
substance which in the reasonable determination of the Board of
Directors of the Company (the "Board") renders Executive unfit to
serve in his or her capacity as an officer or employee of the
Company or its affiliates; or
(f) Executive’s physical destruction of substantial
property or assets of the Company or its affiliates.
4. Payment of Severance. Provided that
(i) Executive signs and does not revoke the Release in the
form attached hereto as Exhibit A within 60 days following the
date of his termination of employment, and (ii) Executive
complies at all times with the requirements set forth in
Section 5 below, then the Company will provide the payments
and benefits set forth in Sections 4(a)-(f) to Executive if
his employment is terminated for any reason other than for Cause
during the term of this Agreement. If the Release has not become
effective within 60 days following termination of Executive’s
employment, then this Agreement will terminate in its entirety and
the parties will have no further rights or obligations
hereunder.
(a) Executive will receive pay in any amount equal to three
times his base salary in effect as of the date of termination,
payable in equal monthly installments over a three-year period
commencing upon the effective date of the Release.
(b) The Company will pay Executive’s COBRA premiums for
continued medical, dental and vision insurance coverage for 12
months provided Executive exercises his right to such continuation
coverage.
(c) Executive shall be entitled to continuation of the
Company’s AYCO financial planning benefit (or any other
comparable benefit then utilized by the Company if AYCO is no
longer utilized) for the remainder of the calendar year in which
his termination of employment occurs, including preparation of all
tax returns pertaining to that calendar year.
(d) All options to acquire shares of Company stock and all
shares of restricted Company stock that have not vested as of the
date that Executive’s employment terminates, but which would
otherwise vest (i) within six months of the date of
termination or (ii) during the remainder of the calendar year
in which Executive’s employment terminates, whichever period
of time is longer, shall, upon the effective date of the Release,
vest effective as of the date Executive’s employment
terminates.
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(e) The Company will extend the time period for
Executive to exercise all vested stock options (including those
accelerated options as set forth in Section 4(d) above) to the
date 90 days following December 31 of the year in which
Executive’s employment is terminated or, if earlier, the
expiration of the maximum term of the option.
(f) The Company shall reimburse Executive for outplacement fees
not to exceed Ten Thousand Dollars ($10,000) paid by Executive to a
qualified outplacement agency, for the purpose of assisting
Executive to secure reemployment. To the extent necessary to avoid
a violation of Section 409A of the Internal Revenue Code (the
"Code"), such reimbursement shall be effected as follows: up to
Five Thousand Dollars ($5,000) may be paid in the calendar year in
which the termination of employment occurs, and up to Five Thousand
Dollars ($5,000) may be paid in the calendar year following the
year in which the termination of employment occurs. Executive, at
his option, may elect payment to him of the $10,000 in lieu of
receiving the outplacement services.
(g) Notwithstanding anything in this Agreement to the contrary,
the amount of any payment or benefit to be received by Executive
pursuant to this Agreement or otherwise which would be subject to
the excise tax imposed by Section 4999 of the Code shall be
reduced (but not below zero) by the amount, if any, necessary to
prevent any part of any such payment or benefit received or to be
received by Executive from being subject to such excise tax. In
applying this principle, the reduction shall be made in a manner
consistent with the requirements of Section 409A of the Code,
and where two economically equivalent amounts are subject to
reduction but payable at different times, such amounts shall be
reduced on a pro rata basis (but not below zero).
(h) All amounts required to be paid by the Company hereunder
shall be subject to any and all applicable withholdings, including
any withholdings for any related federal, state or local taxes.
Executive shall be responsible for any and all income taxes or
other taxes incurred by him as a result of his receipt of any
compensation received from the Company pursuant to the terms of
this Agreement.
(i) No severance or other amounts are payable to Executive
hereunder if he voluntarily terminates his employment for any
reason, or if his employment is terminated for Cause.
5. Nondisclosure; Non-Disparagement; Non-Solicitation;
Misappropriation of Corporate Opportunities.
(a) Nondisclosure. Executive acknowledges that in
the course of his employment with the Company, certain factual and
strategic information specifically related to the Company and its
affiliates has been disclosed to him in confidence (" Company
Information "). Executive agrees to keep such Company
Information confidential, not to, directly or indirectly, make use
of such information on his own behalf or on behalf of others or for
any other purpose, and to return all tangible forms of such
information to the Company upon the termination of his
employment.
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(b) Non-Disparagement . Executive
shall not disparage the Company, or its subsidiaries or affiliates
or their respective officers, directors, employees and agents, or
publish, republish, comment upon, or otherwise disseminate:
(i) any claims made by him against the Company; (ii) any
other comments suggesting or otherwise accusing the Company or its
subsidiaries or affiliates or their respective officers, directors,
employees and agents of any act of discrimination, misconduct,
other negative behavior or any breach of any agreements. Nothing in
this provision shall be construed to prevent Executive from filing
a claim with a court or in arbitration or giving truthful testimony
pursuant to a valid subpoena or other judicial process.
(c) Non-Solicitation. Without the prior written
consent of the Company, for a period of three (3) years
following the termination of his employment, Executive shall not,
directly or indirectly, entice or solicit or seek to induce or
influence any person who is an employee or consultant of the
Company or any of its affiliates, to leave their employment or
engagement with the Company or any of its affiliates.
(d) Misappropriation of Corporate Opportunities.
Without the prior written consent of the Company, Executive, for a
period of three (3) years following his termination of
employment, will not solicit, accept or participate in any business
opportunities or transactions made known to him in his capacity as
an employee of, or as a result of his employment by, the
Company.
(e) Equitable Relief and Cessation of Severance.
Executive agrees that his violation, or threatened violation, of
Sections 5(a), 5(b), 5(c) and 5(d) would cause irreparable damage
to the Company and its affiliates, and that therefore the Company
shall be entitled to an injunction prohibiting Executive from any
such violation or threatened violation. In addition, in the event
of a violation of any of the above provisions, the Company may
immediately cease any and all severance payments and benefits set
forth in Section 4 above, and thereafter will have no further
obligation to provide such payments and benefits.
6. Section 409A. Notwithstanding any other
provision of this Agreement to the contrary, severance benefits
paid pursuant to Section 4, to the extent of payments made
from the date of termination of Executive’s employment
through March 15 of the calendar year following such
termination, are intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury regulations
and thus are payable pursuant to the "short-term deferral"
rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations. To the extent such severance payments are made
following said March 15, they are intended to constitute
separate payments for purposes of Section 1.409A-1(b)(9)(iii)
of the Treasury Regulations to the maximum extent permitted by said
provision, with any excess amount being regarded as subject to the
distribution requirements of Sec
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