EXHIBIT 10.18
June 30, 1999
Mr. Larry E. Wright
11 DeWitt Place
Tequesta, FL 33469
Re: Agreement and Release between Larry E. Wright and
Associated Estates Realty Corporation
Dear Mr. Wright:
This Agreement and Release (this "Agreement") sets forth our
mutual understanding and our commitments related to your
termination of employment with Associated Estates Realty
Corporation, an Ohio corporation (the "Company") as of July 1,
1999. This Agreement is final and binding on you and the
Company. You and the Company are parties to an employment
agreement dated as of June 30, 1998 (your "Employment
Agreement"). No commitment, obligation or claim solely arising
out of or related to your employment relationship with the
Company, your separation from employment or your Employment
Agreement (collectively, "Your Employment") not contained herein
will be asserted, supported or permitted by you or recognized by
the Company.
1. Effective Date. The effective date of your termination
of employment with the Company is July 1, 1999.
2. Termination Payments. As consideration for your
promises contained in this Agreement and the continuation of all
of the provisions of Paragraph 6, entitled "Covenants and
Confidential Information," of your Employment Agreement, as
modified by Paragraph 10 hereof:
a. On July 7, 1999, if you do not cancel this Agreement on
or before that date, you will receive a one-time, lump sum
termination payment of $575,000, representing all bonuses due and
payable under your Employment Agreement, the advance payment of
the base pay under your Employment Agreement through June 30,
2001 and bonuses that could be payable under your Employment
Agreement, as well as consideration for your execution of this
Agreement; and
b. The termination of employment will be effective July 1,
1999 and the Company will maintain your current salary and
benefits until that date.
3. COBRA. All insurance, including medical, dental and
life, that has covered you while employed by the Company will be
discontinued as of July 1, 1999. The Company will provide you
with the necessary information and forms related to your option
to purchase continued medical coverage for up to 18 months,
beginning July 1, 1999, under the applicable provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA").
Applicable COBRA premiums to continue coverage for you will be
paid by you.
4. Vacation. You agree that the payments made pursuant to
Paragraph 2 cover the value of any accrued vacation owed to you.
5. Taxes. All payments made under this Agreement shall be
subject to applicable taxes and minimum withholding as prescribed
by law. You agree that you will be solely responsible for the
payment of any taxes that may be required to be paid by you or on
your behalf based on, or as a result of, payments made in
accordance with this Agreement (other than any obligation to
withhold taxes with respect to such payments, which is the
obligation of the Company).
6. Broker s License. You agree that your broker s license
will remain with the Company so long as you serve as a director
of the Company. The Company will pay all costs incurred by you
to maintain your broker's license. The Company will pay,
reimburse, indemnify, defend and hold you harmless from and
against any and all penalties, claims, losses, liabilities,
damages, charges, costs and/or expenses (including without
limitation, attorneys' fees and court costs) arising out of or
resulting from or in any manner connected with the Company's use
of your broker's license.
7. Release. (a) Other than as set forth in this
Agreement, you have no further monies, bonuses, benefits or
entitlements coming or accruing from the Company or the Company
Released Parties (as defined herein) solely arising out of Your
Employment.
In consideration of the payments and agreements described in
this Agreement, you, for yourself and for your executors,
administrators, assigns and heirs (including your spouse and
family members), fully and forever release the Company and the
Company Released Parties, from and of any and all actions, suits,
claims, issues, charges, allegations, demands, disputes,
liabilities, debts or sums of money of any kind or nature
whatever, which you have or may have, on or prior to the date
hereof solely arising out of Your Employment.
This release specifically includes any actions sounding in
or related to tort, contract or discrimination of any kind,
including but not limited to any and all claims arising under any
federal, state or local laws prohibiting age, race, sex,
disability and other forms of discrimination, including but not
limited to age discrimination claims under the Age Discrimination
in Employment Act, claims under Title VII of the 1964 Civil
Rights Act, the Americans with Disabilities Act, the Employee
Retirement Income Security Act, or arising under any other
federal, state or local statute relating to employment.
You understand that you may be replaced by a younger
individual and expressly agree that among the claims being
released herein are any and all claims that might arise out of
any such action by the Company or the Company Released Parties.
You voluntarily waive any right to seek reemployment by the
Company.
You also agree that neither you nor anyone acting on your
behalf will file, claim, sue or cause or permit to be filed or
claimed, any action for damages or other relief against the
Company or the Company Released Parties involving any matter
occurring prior to the date of this Agreement, or involving the
effects of actions or practices which arose prior to the date of
this Agreement solely arising out of Your Employment. You
further agree that you will neither seek nor accept any further
benefit or consideration from any source whatsoever in respect to
any claims solely arising out of Your Employment which you have
asserted or could have asserted against the Company or the
Company Released Parties.
Further, you agree that this Agreement meets the
requirements of the Age Discrimination in Employment Act of 1967
("ADEA"), as amended by the Older Workers Benefit Protection Act
of 1990 ("OWBPA"), including the provisions of 29 U.S.C.
SS 626(f)(1) regarding specific requirements for the waiver of
rights and claims thereunder in any way arising prior to the
execution of this Agreement. Those requirements include that you
understand and acknowledge that by executing this Agreement:
a. You are knowingly and voluntarily waiving any and
all rights and claims you may have under the ADEA and OWBPA;
b. You are receiving hereunder consideration in
addition to anything of value to which you are already entitled;
c. You have been advised to consult with an attorney
of your choice prior to executing this Agreement;
d. You have carefully read this Agreement, know and
understand its contents and its significance, and intend to be
bound by its terms;
e. You have been given a period of 21 days from the
receipt of this Agreement to consider its contents and
ramifications and your decision to sign it, although you may
execute it and return it prior to that if desired.
f. You will be given seven days following execution
of this Agreement to revoke it by notifying Nan Zieleniec in
writing, since it will not become effective or enforceable and
no payments will be made under this Agreement until that seven
day revocation period has expired.
You agree that the contents of these paragraphs not only
release the Company and the Company Released Parties from any and
all claims as stated herein which you could or may make on your
own behalf, but also those claims solely with respect to Your
Employment, which could or may be made by any other person or
entity (including your spouse and family members).
It is further understood and agreed that this entire
Agreement is not to be construed as an admission of liability by
the Company or the Company Released Parties. Further, the
payment of monies under this Agreement does not constitute an
admission by or on behalf of the Company or the Company Released
Parties that you are entitled to such payment pursuant to any
policy or practice.
Nothing in this Agreement shall be construed as a release,
waiver or other relinquishment by you and any of Your Released
Parties of your rights under (including, without limitation, your
right to receive the moneys held under) the AERC 401(k) Plan and
the MIG Money Purchase Plan, all of which shall continue to be
held by you whether or not this Agreement becomes effective.
(b) In consideration of the agreements described in this
Agreement, Company, for itself and its successors and permitted
assigns fully and forever release you and Your Released Parties,
from and of any and all actions, suits, claims, issues, charges,
allegations, demands, disputes, liabilities, debts or sums of
money of any kind or nature whatever, which Company has or may
have, on or prior to the date hereof, solely arising out of Your
Employment, except fraud.
Company agrees that the contents of the preceding paragraph
release you from any and all claims with respect to Your
Employment as stated herein which Company could or may make on
its own behalf.
It is further understood and agreed that this entire
Agreement is not be to construed as an admission of liability by
you or Your Released Parties.
8. Options. You were granted options to purchase the
Company s common shares, without par value, pursuant to plans
maintained by the Company for that purpose. You acknowledge and
agree that, under the terms of the options granted to you, all of
your non-qualified options will be forfeited on the date of your
termination. You will have three months from the date of your
termination to execute any incentive options granted to you by
the Company.
9. Directorship. You and the Company agree that you will
continue to serve as a member of the Company's board of directors
you are removed or voluntarily resign or until your successor is
duly elected following you not being nominated to the board. You
will be compensated for such service as a non-employee, non-
independent director.
10. Non-Compete. You agree to continue to be bound by the
terms of Paragraph 6, entitled "Covenants and Confidential
Information," of your Employment Agreement for so long as you
serve as a director of the Company and for a period of two years
thereafter. You hereby agree and acknowledge that Paragraph 6(a)
of your Employment Agreement precludes you from advising
institutional investors, pension funds and other persons with
respect to multifamily real estate development and acquisitions.
11. Company Property. You agree to repay to the Company
any outstanding debts solely arising out of Your Employment or
non-reimbursable expenses, and to return all credit cards,
telephone cards, cellular telephones and other equipment or
property of the Company in your possession prior to July 15,
1999.
12. No Further Obligations. You expressly acknowledge that
the Company has no further obligations to you, and Company
expressly acknowledges that you have no further obligations to
Company, pursuant to your Employment Agreement, which Employment
Agreement is agreed void and of no further effect as of July 1,
1999, except for all of the provisions of Paragraph 6, entitled
"Covenants and Confidential Information," of your Employment
Agreement which shall continue as set forth in Paragraph 10.
13. Acknowledgment. You acknowledge that the payment
referred to in Paragraph 2 and the benefits provided under
Paragraph 9 are solely in exchange for the promises in your
Employment Agreement and this Agreement and are not normally
available under the Company s policies to employees. You further
acknowledge that such payments and benefits do not constitute an
admission by the Company or the Company Released Parties of
liability or of violation of any applicable law or regulation.
The Company expressly denies any liability or alleged violation
and states that payments and promises are being made solely for
the purpose of effectuating a mutually amicable separation of you
from your employment with the Company.
14. Non-disparagement. You agree not to disparage, directly
or indirectly, the Company or the Company Released Parties or any
of their personnel, management, products, services or practices,
and the Company agrees that neither it nor any of its affiliates
or any of their respective personnel shall, directly or
indirectly, disparage you.
15. Confidentiality of Agreement. The parties agree to
keep all provisions, terms and conditions of the Agreement
confidential, and not disclose them to any person not a party
hereto other than your counsel, spouse and tax advisor, under any
circumstances, except as required by law.
16. No Further Promises. You agree that no promise has
been made to you except those contained in this Agreement which
sets forth the entire understandings of the parties.
17. Revocation of Agreement. You may revoke and cancel
this Agreement in writing at any time within seven days after
your execution of this Agreement by providing written notice of
revocation to the Company. If you do so revoke, this Agreement
will be null and void and the Company will have no obligation to
make the payments or fulfill the obligations contained herein.
This Agreement shall not become effective and enforceable until
after the expiration of that seven-day revocation period. After
such time, if there has been no revocation, this Agreement shall
be fully effective and enforceable.
18. Successors and Assigns. This Agreement will also be
binding on the parties and their respective, successors and
permitted assigns and, with respect to you, heirs. This Agreement
releases, to the extent set forth herein, (a) the Company and its
successors, assigns, divisions, parents or affiliates, officers,
directors, shareholders, members, employees, heirs, agents and
counsel, including, without limitation, any and all management
and supervisory employees (collectively, the "Company Released
Parties"), and (b) you and your successors, assigns, executors,
administrators, heirs (including spouse and family members),
counsel and agents (collectively, "Your Released Parties").
Neither this Agreement nor any the rights or obligations herein
may assigned or otherwise transferred by a party without the
prior written consent of the other party. Any such assignment or
other transfer in violation of the preceding sentence shall be
null and void.
19. Entire Agreement. This Agreement contains the entire
agreement between the parties and this Agreement cannot be
modified, varied or altered, except in a writing signed by both
parties hereto.
20. Enforceability. If any provision of this Agreement is
declared invalid or unenforceable, the remaining portions of the
Agreement shall not be affected thereby and shall be enforced.
21. Ohio Law. This Agreement shall be governed by the laws
of the State of Ohio.
Please confirm that the foregoing correctly states the
understanding between us by signing and returning to the Company
a counterpart hereof.
ASSOCIATED ESTATES REALTY CORPORATION
By: /s/ Jeffrey I. Friedman
Name: Jeffrey I. Friedman
Title: Chairman, President and
Chief Executive Officer
Accepted and agreed to as of the date hereof:
/s/ Larry E. Wright
Larry E. Wright