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Colony Rih Holdings - Seperation & Waiver of Non-Compete Agreement Dated As of March 27, 2006
Exhibit 10.63
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this " Agreement" ) is dated as of and executed on March 27, 2006, and is entered into by and between Resorts International Hotel, Inc., a New Jersey corporation (the " Company" ), Colony RIH Holdings, Inc., a Delaware corporation (" Colony RIH" ) and Audrey S. Oswell (" Executive" ).
WHEREAS, Executive and the Company are parties to an employment agreement by and among the Company and Executive, dated October 1, 2001 and a First Amendment to Employment Agreement dated as of June 17, 2004 (collectively, the " Employment Agreement" ), pursuant to which Executive serves as President and Chief Executive Officer of the Company; and
WHEREAS, Executive and Colony RIH are parties to a Stock Option Agreement dated as of October 1, 2001, as amended by Amendment to Stock Option Agreement dated June 17, 2004 (as so amended, the " Option Agreement" ) between Executive and Colony RIH pursuant to which certain options to purchase shares of capital stock of Colony RIH were issued to Executive; and
WHEREAS, subject to the terms and conditions contained herein, Executive and the Company have mutually agreed to embody in this Agreement the terms and conditions applicable to Executive' s termination of employment with the Company, effective as of the close of business on May 1, 2006 (the " Effective Date" ).
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company, Colony RIH and Executive hereby agree as follows:
Section 1. Effective Date; Termination of Employment Agreement and Stock Option Agreement: Entire Agreement . The Company, Colony RIH and Executive hereby agree to this Agreement, effective as of the Effective Date. (a) Termination of Employment Agreement . Upon the Effective Date, all rights and obligations of the Company (or its affiliated companies) and the Executive under the Employment Agreement and any other agreement, arrangement or understanding between the Company (or its affiliated companies) and the Executive, shall terminate and be cancelled in their entirety without liability of any party thereunder, and this Agreement shall constitute the entire agreement between Executive and the Company relating to Executive' s employment with the Company, termination thereof, and certain activities (as set forth herein) following such termination and shall supersede the Employment Agreement and any other agreement, arrangement and understanding, whether written, oral, express or implied, between Executive and the Company (or its affiliated companies) relating to Executive' s employment with and termination from employment with the Company and its affiliated companies. For the avoidance of doubt, as of the Effective Date Executive hereby waives her right to any payments or benefits in connection with her termination of employment pursuant to Section 6 of the Employment Agreement or rights to any bonus payment pursuant to any other agreement or understanding, whether written, oral, express or implied, between Executive and the Company and its affiliated companies (other than pursuant to this Agreement).
(b) Termination of Stock Option Agreement . In consideration of the payment set forth in this Section l(b), upon the Effective Date, all rights and obligations of Colony RIH and the Executive under and pursuant to the Option Agreement, and, as incorporated by reference in the Option Agreement, the Stockholders Agreement (as defined in the Option Agreement) shall terminate and be cancelled in their entirety without liability of any party thereunder. For the avoidance of doubt, on the Effective Date, Executive shall surrender and relinquish all right, title and interest in and to all options to purchase shares of Class A Common Stock and Class B Common Stock, as defined in the Option Agreement and deliver to Colony RIH for cancellation the original Option Agreement. In consideration of the termination of the Option Agreement and the surrender of all options by Executive, Colony RIH shall pay to Executive the sum of Three Hundred Fifty Thousand ($350,000) Dollars in a single lump-sum payment on the Effective Date. (c) Change of Control . In the event that on or before June 30, 2006, the Company either consummates a transaction that would constitute a Change of Control (as defined in the Option Agreement), or executes a definitive agreement to consummate such a transaction and thereafter completes such transaction, then the Company shall pay to Executive on the date of closing of such transaction, cash in an amount equal to (i) the Call Price (as defined in the Option Agreement) for the number of shares of Class A Common Stock and Class B Common Stock which the Executive is entitled to purchase as of the Effective Date pursuant to vested options under the Option Agreement (the " Vested Options" ), less (ii) the exercise price under the Option Agreement applicable to such Vested Options, and less (iii) Four Hundred Thousand ($400,000) Dollars.
Section 2. Resignation . Effective on the Effective Date, Executive shall resign as an officer and employee of the Company and from any and all directorships, committee memberships or any other positions she holds with the Company or any of its affiliated companies.
Section 3. Company Property . On the Effective Date, Executive shall return to the Company all Company-owned property in her possession on such date, including, but not limited to, all Company credit cards, handbooks, work manuals or procedure books, client or customer documents, tools, computers, or other Company equipment and/or materials maintained by Executive. For a twelve (12) month period following the Effective Date, the Company shall cause all non-business correspondence sent to Executive' s business address to be forwarded to an address designated from time to time by Executive.
Section 4. Accrued Payments and Benefits; Severance . The Company shall pay to Executive all of the following:
(a) Accrued Base Salary . On the Effective Date, the Company shall pay to Executive all accrued and unpaid Base Salary (as such term is defined in the Employment Agreement) prorated based on Executive' s service through the Effective Date.
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(b) Accrued Vacation Pay . On the Effective Date, the Company shall pay to Executive all accrued and unused vacation pay and other Accrued Benefits (as such term is defined in the Employment Agreement) earned through the Effective Date, which, for the avoidance of doubt, Executive and the Company agree total One Hundred Eighteen Thousand Two Hundred Seventy ($118,270) Dollars, representing four (4) weeks of accrued and unused vacation pay, four (4) weeks of accrued and unused sick pay, and one (1) accrued and unused personal day. (c) Accrued Bonus . On the Effective Date, the Company shall pay to Executive an amount equal to Thirty-Three Thousand Three Hundred Thirty-Four ($33,334) Dollars, representing the prorated portion based on Executive' s service through the Effective Date of the minimum annual bonus which Executive would have been entitled to receive under Paragraph 3(b) of the Employment Agreement if Executive had remained employed through the end of the fiscal year that includes the Effective Date.
(d) Severance Payment . Ten (10) days following the Effective Date, and provided the release and waiver of claims specified in Section 7 then remains in full force and effect, the Company shall pay to Executive a severance payment in the amount of Fifty Thousand ($50,000) Dollars.
(e) Expense Reimbursement . Upon submission by Executive of vouchers or receipts, the Company shall reimburse Executive for any expenses incurred by Executive in furtherance of Executive' s duties under the Employment Agreement through the Effective Date.
Section 5. Termination Benefits; Waiver of Non-Competition .
(a) Life Insurance . On the Effective Date, the Company shall assign and transfer to Executive the term life insurance policy maintained by the Company on the life of the Executive, and Executive shall assume all obligations with respect to such life insurance policy accruing on and after the Effective Date; provided that Executive will not be required to reimburse the Company for any premium paid covering periods after the Effective Date. (b) Health Insurance . The Company shall continue medical and dental coverage for Executive and her eligible dependents on the Company' s group medical and dental health care plans in which Executive is currently enrolled until the earlier of December 31, 2006 or such time as Executive becomes eligible for the medical and dental benefits program of a new employer. Except to the extent of changes to any such plans applicable to participants generally, such medical and dental coverage shall be on the same terms existing on the date hereof for Executive including, without limitation, MERP benefits. In the event Executive is not eligible for continued enrollment in such medical and dental plans and elects to continue health care coverage for herself and her eligible dependents under the group health plan of the Company pursuant to COBRA, the Company shall reimburse executive for the Executive' s COBRA premiums through December 31, 2006.
(c) Waiver of Non-Competition . For the avoidance of doubt, the Company forever waives, discharges and releases Executive from the obligations contained in the restrictive covenants relating to non-competition set forth in Section 7(a) or elsewhere in the Employment Agreement.
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Section 6. Full Settlement . The amounts paid under Sections l(b), 4 and 5 shall constitute full settlement and satisfaction with respect to all obligations and liabilities of the Company, Colony RIH and their affiliates, officers, directors, trustees, employees, shareholders, representatives and/or agents to Executive with respect to her employment with the Company, including, without limitation, all claims for wages, salary, vacation pay, draws, incentive pay, bonuses, stock and stock options, commissions, severance pay and any and all other forms of compensation or benefits. Except as otherwise specifically provided in this Agreement, by law or pursuant to the express provisions of any Company employee benefit plan, Executive' s participation in all employee benefit plans and executive compensation plans and practices of the Company shall terminate on the Effective Date.
Section 7. Release and Waiver of Claims at the Effective Date . In consideration for the benefits and payments provided for in Sections 4 and 5 of this Agreement, and other good and valuable consideration, the Company and Executive hereby agree to execute a mutual release and waiver of claims in the form attached hereto as Exhibit A , effective as of the Effective Date (except as provided in Section 2(e) of Exhibit A).
Section 8. Taxes . The payments due to Executive under this Agreement shall be subject to reduction to satisfy all applicable Federal, state and local employment and withholding tax obligations to the extent required by law.
Section 9. Non-Admission . Executive expressly acknowledges that this Agreement does not constitute an admission by the Company or Colony RIH of any violation of any employment law, regulation, ordinance, or administrative procedure, or any other federal, state, or local law, common law, regulation or ordinance relating to Executive' s employment or termination of employment.
Section 10. Continuing Obligations of Executive and the Company . (a) Non-Solicitation of Clients . Executive covenants and agrees that for a period of one (1) year immediately following the Effective Date, Executive shall not, directly or indirectly, solicit or induce (i) any customers or clients of the Company or its successors, assigns, subsidiaries or affiliates, or (ii) any vendors, suppliers or consultants then under contract to the Company or its successors, assigns, subsidiaries or affiliates, to terminate his, her or its relationship with the Company or its successors, assigns, subsidiaries or affiliates, for the purpose of associating with any competitor of the Company or its successors, assigns, subsidiaries or affiliates, or otherwise encourage such customers or clients, or vendors, suppliers or consultants then under contract, to terminate his, her or its relationship with the Company or its successors, assigns, subsidiaries or affiliates, for any other reason.
(b) Non-Solicitation of Employees, etc. Executive covenants and agrees that for a period of one (1) year immediately following the Effective Date, Executive shall not, directly or indirectly, solicit or induce any officer, director, employee, agent or consultant of the Company or its successors, assigns, subsidiaries or affiliates, to terminate his, her or its employment or other relationship with the Company or its successors, assigns, subsidiaries or affiliates, for the purpose of associating with any competitor of the Company or its successors, assigns, subsidiaries or affiliates, or otherwise encourage such person or entity to leave or sever his, her or its employment relationship with the Company or its successors, assigns, subsidiaries or affiliates, for any other reason.
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(c) Non-Disparagement . Except to the extent required by law, regulation or order of any court or governmental agency, each of the Company and Executive agree not to make any derogatory, disparaging or defamatory remarks, written or oral, about Executive or the Company, respectively, to any third party, or make any comments concerning any aspect of the termination of their relationship.
(d) Confidentiality by Executive . All books of account, records, systems, correspondence, documents, and any and all other data, in whatever form, concerning or containing any reference to the works and business of the Company or its affiliated companies shall belong to the Company and shall be given up to the Company in accordance with Section 3 of this Agreement. Executive agrees that Executive shall not at any time, without the Company' s prior written consent, disclose to any other person or business entity any such information or any trade secrets, plans or other information or data, in whatever form, concerning the Company' s or any of its affiliated companies' or customers' practices, businesses, procedures, systems, plans or policies (collectively, " Confidential Information" ), nor shall Executive disclose to any third party or utilize any such Confidential Information in any way, provided, however, Executive may disclose information to the extent disclosure is compelled or required under applicable law pursuant to a discovery request, subpoena or court order. Executive shall provide to the Company prompt notice of any such proposed disclosure and cooperate, at the Company' s expense, with actions by the Company to protect the Confidential Information. Executive hereby confirms that all Confidential Information constitutes the Company' s exclusive property, and that all of the restrictions on Executive' s activities contained in this Agreement and such other nondisclosure policies of the Company are required for the Company' s reasonable protection. This confidentiality provision shall survive the termination of this Agreement. Confidential Information shall not include all or any portion of information which (i) is approved for release by written authorization of the Company; (ii) is or becomes generally available to the public other than as a result of a disclosure by Executive; or (iii) was or becomes rightfully available to Executive on a non-confidential basis from a source other than the Company provided such source was not under a duty of confidentiality with respect to such information. Further, Executive may disclose the terms of this Agreement to her representatives and to third parties in connection with potential employment or engagement, provided that such third parties agree to keep the terms of this Agreement confidential until such time as the Company discloses the terms of this Agreement pursuant to the Company' s disclosure obligations under applicable law.
Section 11. Forfeiture of Payments; Limitation on Damages . Executive acknowledges that if Executive breaches, in any material respect, the terms or conditions contained in the Agreement, the Company will no longer be required to make or continue any payments or benefits payments described herein, to the extent permitted by applicable law. This does not limit the Company' s rights to seek specific performance under Section 13 hereof. No party hereto shall be entitled to consequential, special or punitive damages against any other party for breach of this Agreement, and the Company further agrees that it shall not have the right to recover against Executive damages for any breach of this Agreement in excess of the amount of the payments specified in Sections l(b) and 4(d) herein.
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Section 12. Cooperation with Investigations/Litigation . Executive agrees to reasonably cooperate in any Company investigations and/or litigation regarding events which occurred during Executive' s tenure with the Company, whether civil, criminal, or administrative in nature; provided that such cooperation shall not, in Executive' s determination, unreasonably interfere with any future employment or engagement. The Company will reimburse Executive at the hourly rate of Three Hundred ($300) Dollars per hour and for her reasonable out-of-pocket expenses incurred by Executive in extending such cooperation.
Section 13. Specific Performance . Executive agrees that if Executive breaches any provision in Section 10 of this Agreement, the Company will be irreparably harmed and will have no adequate remedy at law and will be entitled to an injunction as a matter of right from any court of competent jurisdiction restraining further breach of any of the provisions of Section 10 of this Agreement without any obligation to post a bond or other security. Company agrees that if Company or its affiliates, officers, directors, agents or other representatives breach any provision in Section 10(c) of this Agreement, Executive will be irreparably harmed and will have no adequate remedy at law and will be entitled to an injunction as a matter of right from any court of competent jurisdiction restraining further breach of any of the provisions of Section 10(c) of this Agreement without any obligation to post a bond or other security.
Section 14. Notice . Other than a notice of revocation of the waiver and release of claims in accordance with Exhibit A attached hereto, any notice given by either party shall be in writing and shall be deemed to be given five (5) business days after deposit with the United States Postal Service, postage prepaid, certified return receipt requested or upon actual delivery to the other party at the following addresses: To:
Resorts International Hotel, Inc.
Colony RIH Holdings, Inc.
1133 Boardwalk
Atlantic City, NJ 08401 Attn: General Counsel To:
Audrey S. Oswell
30 Alpine Court Voorhees, NJ 06043 cc:
Graham, Curtin & Sheridan
4 Headquarters Plaza
Morristown, NJ 07962
Attn: Peter Michael Laughlin cc:
Klehr, Harrison, Harvey, Branzburg & Ellers, LLP 260 S. Broad Street
Philadelphia, PA 19102 Attn: Leonard M. Klehr
Attn: Ira C. Gubernick
Section 15. Arbitration Except as necessary for the Company, Colony RIH or Executive to specifically enforce or enjoin a breach of this Agreement (to the extent such remedies are available), the parties agree that any and all disputes...
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