-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LmryVvHqKikxvFMEJwYnBOXXivr/JgYi6fUMZZAA4uTChDMAdagkkm9un3W7zYWW 6zEEd3CWJvWNXM21AvYKiA== 0001019056-99-000515.txt : 19990902 0001019056-99-000515.hdr.sgml : 19990902 ACCESSION NUMBER: 0001019056-99-000515 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990830 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC GULF COMMUNITIES CORP CENTRAL INDEX KEY: 0000771934 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE DEALERS (FOR THEIR OWN ACCOUNT) [6532] IRS NUMBER: 590720444 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08967 FILM NUMBER: 99704689 BUSINESS ADDRESS: STREET 1: 2601 S BAYSHORE DR CITY: MIAMI STATE: FL ZIP: 33133-5461 BUSINESS PHONE: 3058594000 MAIL ADDRESS: STREET 1: 2601 S BAYSHORE DR CITY: MIAMI STATE: FL ZIP: 33133 8-K 1 FORM 8-K Securities and Exchange Commission Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 30, 1999 ----------------------------- ATLANTIC GULF COMMUNITIES CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-8967 59-0720444 - -------------------------------------------------------------------------------- (State or Other Juris- (Commission File (IRS Employer diction of Incorporation) Number) Identification No.) 2601 South Bayshore Drive Miami, Florida 33133-5461 - -------------------------------------------------------------------------------- (Address of Principal (Zip Code) Executive Offices) (305) 859-4000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 5. OTHER EVENTS On August 30, 1999, Atlantic Gulf Communities Corporation ("Atlantic Gulf") entered into an employment termination agreement with Mr. J. Larry Rutherford (Mr. Rutherford's "Termination Agreement," a copy of which is attached as Exhibit 10.1 hereto), pursuant to which Mr. Rutherford's employment with the Company and its subsidiaries and affiliates (collectively, the "Company") terminated, effective as of August 17, 1999. On August 18, 1999, Atlantic Gulf entered into an employment agreement with Mr. Richard Ackerman (Mr. Ackerman's "Employment Agreement," a copy of which is attached as Exhibit 10.2 hereto), pursuant to which Mr. Ackerman was appointed to the position of Chief Executive Officer of Atlantic Gulf, effective as of August 17, 1999. The principal terms of Mr. Rutherford's Termination Agreement and Mr. Ackerman's Employment Agreement are summarized below: MR. RUTHERFORD'S TERMINATION AGREEMENT. Pursuant to Mr. Rutherford's Termination Agreement: 1. Mr. Rutherford's employment with Atlantic Gulf as its President and Chief Executive Officer terminated, without cause, effective as of August 17, 1999 (the "Effective Date"). 2. As of the Effective Date, Mr. Rutherford resigned as a director and officer of all of Atlantic Gulf's subsidiaries and affiliates. 3. Mr. Rutherford has agreed to continue to serve as a director and non-executive Chairman of the Board of Directors of Atlantic Gulf (the "Board"). Mr. Rutherford has tendered his unsigned letter of resignation from the Board to the Company, which will become effective upon the earlier to occur of (a) the date Mr. Rutherford instructs the Board to sign and date the letter or (b) the date the Board elects, in its sole and absolute discretion, to accept and date the letter. 4. Atlantic Gulf has agreed to continue to pay to Mr. Rutherford his Base Salary, at the rate of $450,000 per annum, through December 31, 2000, in accordance with Atlantic Gulf's normal payroll practices. 5. All of Mr. Rutherford's stock options to acquire Atlantic Gulf common stock that were unexercised on the Effective Date terminated as of such date. 6. On the Effective Date, Atlantic Gulf canceled Mr. Rutherford's $600,000 nonrecourse promissory note and, in exchange therefor, Mr. Rutherford returned to Atlantic Gulf the shares of Atlantic Gulf common stock that he purchased with the proceeds of such note. 7. The Company has agreed to cancel Mr. Rutherford's two $199,000 recourse promissory notes on December 31, 2000, if Mr. Rutherford is not in breach of his Termination Agreement as of that date and, at the time of such cancellation, Mr. Rutherford has agreed to return to Atlantic Gulf the shares of Atlantic Gulf common stock that he purchased with the proceeds of such notes. 8. Atlantic Gulf has agreed to continue certain of Mr. Rutherford's employee benefits (i.e., Company health and life insurance and his Company leased automobile) so long as he remains a director of Atlantic Gulf. 9. Mr. Rutherford has agreed to provide up to 40 hours of consulting service per month to the Company so long as he continues to receive the payments referenced in paragraph 4 above. 10. Mr. Rutherford has agreed to certain restrictive covenants, i.e., (a) an agreement not to compete with Atlantic Gulf within a 100 mile radius of the Company's Chenoa project located in Aspen/ Glenwood Springs, Colorado, and a 25 mile radius of the Company's West Bay Club Project, located in Lee County, Florida, and an agreement not to participate (as an equity or debt investor) in any of the Company's real estate projects, in both cases through December 31, 2000) and (b) an agreement not to disclose confidential information of the Company. 11. The parties provided to each other mutual general releases (with certain stated exceptions) relating principally to Mr. Rutherford's service as a director and officer of the Company, his employment agreement and the termination of his employment with the Company. 12. The Company agreed to provide limited indemnification to Mr. Rutherford related principally to, among other things, Mr. Rutherford's service as a director and officer of the Company and his employment agreement. 13. The provisions of Mr. Rutherford's Employment Agreement which, by their terms, were to survive the termination of his employment with the Company, will continue in full force and effect, including, for example, his agreements not to disclose confidential information of the Company and not to solicit employees of the Company for a stated period of time. THE FOREGOING IS INTENDED AS A SUMMARY ONLY, AND IS NOT (AND SHOULD NOT BE CONSIDERED TO BE) A DEFINITIVE DESCRIPTION OF ALL, OF THE TERMS OF MR. RUTHERFORD'S TERMINATION AGREEMENT. FOR A COMPLETE DESCRIPTION OF THE TERMS OF MR. RUTHERFORD'S TERMINATION OF EMPLOYMENT WITH THE COMPANY, SEE THE COPY OF MR. RUTHERFORD'S TERMINATION AGREEMENT ATTACHED AS EXHIBIT 10.1 HERETO. MR. ACKERMAN'S EMPLOYMENT AGREEMENT. Pursuant to Mr. Ackerman's Employment Agreement: 1. As of the Effective Date, Atlantic Gulf retained Mr. Ackerman to serve as Chief Executive Officer of Atlantic Gulf through December 31, 1999. 2. Mr. Ackerman's salary is $35,000 per month, pro rated for partial months. If the parties are unable to reach an agreement for any reason on the terms of an extension of Mr. Ackerman's Employment Agreement at least 30 days prior to its scheduled termination date, Mr. Ackerman will be paid an additional amount retroactive to August 17, 1999, equal to $15,000 per month, pro rated for partial months, within 10 days following the termination of his Employment Agreement. 3. While employed by Atlantic Gulf, Mr. Ackerman will be entitled to participate in all employee benefit programs to the extent eligible thereunder. 4. While employed by Atlantic Gulf, Atlantic Gulf has agreed to maintain director and officer insurance for Mr. Ackerman and otherwise indemnify him for losses incurred by him as a result of any suit or proceeding relating to his service with Atlantic Gulf. 5. Mr. Ackerman has agreed to certain restrictive covenants, i.e., (a) a limited agreement not to solicit Atlantic Gulf employees during his employment and for one year thereafter and (b) a limited agreement not to disclose confidential information of Atlantic Gulf. 6. Atlantic Gulf agreed to reimburse Mr. Ackerman for his attorneys fees and costs incurred in connection with entering into his Employment Agreement. THE FOREGOING IS INTENDED AS A SUMMARY ONLY, AND IS NOT (AND SHOULD NOT BE CONSIDERED TO BE) A DEFINITIVE DESCRIPTION OF ALL, OF THE TERMS OF MR. ACKERMAN'S EMPLOYMENT AGREEMENT. FOR A COMPLETE DESCRIPTION OF THE TERMS OF MR. ACKERMAN'S EMPLOYMENT WITH ATLANTIC GULF, SEE THE COPY OF MR. ACKERMAN'S EMPLOYMENT AGREEMENT ATTACHED AS EXHIBIT 10.2 HERETO. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 10.1 Letter Agreement, dated as of August 17, 1999, between Mr. J. Larry Rutherford and the Company. 10.2 Letter Agreement, dated as of August 17, 1999, between Mr. Richard Ackerman and the Company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ATLANTIC GULF COMMUNITIES CORPORATION (Registrant) /s/ JOHN H. FISCHER ------------------------------------ By: John Fischer Title: Vice President and Treasurer Date: August 27, 1999 /s/ MATT ALLEN ------------------------------------ By: Matt Allen Title: Vice President - Finance Date: August 27, 1999 EX-10.1(C) 2 EXHIBIT 10.1(C) ATLANTIC GULF COMMUNITIES CORPORATION 2601 SOUTH BAYSHORE DRIVE SUITE 400 MIAMI, FL 33133-5461 August 17, 1999 Mr. J. Larry Rutherford c/o Atlantic Gulf Communities Corporation 2601 South Bayshore Drive Fourth Floor Miami, FL 33133-5461 Re: Letter Agreement Regarding Termination of Employment ---------------------------------------------------- Dear Larry: This will confirm the terms of our mutual agreement concerning the termination of your employment with Atlantic Gulf Communities Corporation ("Atlantic Gulf") and its subsidiaries and affiliates (collectively, the "Company"). Reference is hereby made to: - your Employment Agreement with Atlantic Gulf, dated as of November 17, 1997, as amended by those certain letter agreements, dated as of November 26, 1997, and December 29, 1997 (collectively, your "Employment Agreement"); - your Stock Incentive Plan and Agreement with Atlantic Gulf, dated as of November 17, 1997, as amended by the November 26, 1997 amendment to your Employment Agreement (collectively, your "Stock Incentive Agreement"); - the Stock Option Agreements issued to you by Atlantic Gulf (your "ESOP Stock Option Agreements") under its Employee Stock Option Plan ("ESOP"); - your promissory note in the principal amount of $199,000, dated as of December 29, 1997; - your promissory note in the principal amount of $199,000, dated as of July 6, 1998; J. Larry Rutherford August 17, 1999 Page 2 - your promissory note in the principal amount of $600,000, dated as of July 6, 1998; - your Pledge and Security Agreement with Atlantic Gulf, dated as of December 29, 1997, as amended by that certain First Amendment to Pledge and Security Agreement, dated as of July 6, 1998 (collectively, the "Pledge Agreement"). The loans evidenced by your two $199,000 promissory notes (the "$199,000 Notes") are referred to herein as your "Recourse Loans," the loan evidenced by your $600,000 promissory note (the "$600,000 Note," which, together with the two $199,000 Notes, are collectively referred to herein as your "Notes") is referred to herein as your "$600,000 Loan" and the two Recourse Loans and the $600,000 Loan are collectively referred to herein as your "Loans." Your two $199,000 Notes, $600,000 Note and Pledge Agreement are referred to herein as your "Loan Documents." Capitalized terms used herein and not otherwise defined have the meanings assigned to them in your Employment Agreement. 1. You and Atlantic Gulf agree that your employment with the Company shall be terminated, without "cause" (as defined in Section 5.1 of your Employment Agreement), pursuant to Section 5.4 of your Employment Agreement, effective at the close of business on August 17, 1999 (the "Termination Date"). Pursuant to the terms of your Employment Agreement: a. On or before the fifth business day immediately following the Termination Date, Atlantic Gulf will pay to you your accrued and earned but unpaid Base Salary through the Termination Date. b. For the period commencing on the day immediately following the Termination Date and ending on December 31, 2000, Atlantic Gulf will continue to pay you your Base Salary at the annual rate of $450,000, payable in installments consistent with Atlantic Gulf's normal payroll schedule, subject to applicable withholding and other taxes. In the event of your death, payments required to be made under this paragraph 1.b. shall be paid to your estate in accordance with the terms hereof. c. Except to the extent expressly provided otherwise herein, Section 6. of your Employment Agreement (excluding Section 6.1 thereof) shall remain in full force and effect following the Termination Date. J. Larry Rutherford August 17, 1999 Page 3 2. Notwithstanding anything in your Employment Agreement, Stock Incentive Agreement, the ESOP and/or your ESOP Stock Option Agreement to the contrary: a. You acknowledge and agree you have not earned, and are not entitled to receive, any Incentive Compensation under your Employment Agreement. b. On and as of the Termination Date: i. all of the Options granted to you under your Stock Incentive Agreement (your "ISA Options") that are not exercisable as of the Termination Date shall automatically terminate; ii. all of your ISA Options that are exercisable, but have not been exercised, as of the Termination Date shall automatically terminate; iii. all of your rights, privileges and benefits under your Stock Incentive Agreement shall automatically terminate; and iv. your Stock Incentive Agreement shall terminate. c. On and as of the Termination Date: i. all of the Options granted to you under the ESOP and your ESOP Stock Option Agreements (your "ESOP Options") that are not exercisable as of the Termination Date shall automatically terminate; ii. all of your ESOP Options that are exercisable, but have not been exercised, as of the Termination Date shall automatically terminate; iii. all of your rights, privileges and benefits under the ESOP and your ESOP Stock Option Agreements shall automatically terminate; and iv. your ESOP Stock Option Agreements shall terminate. d. With respect to your Loans: i. On and as of the Termination Date: J. Larry Rutherford August 17, 1999 Page 4 A. your $600,000 Loan will be canceled and you will be released from any further obligations thereunder; B. if you have them in your possession, you will deliver to Atlantic Gulf the stock certificates evidencing the shares of Atlantic Gulf purchased with the proceeds of your $600,000 Loan, which certificates are identified in Exhibit A hereto (the "Stock Certificates"); C. if Atlantic Gulf has possession of the Stock Certificates referenced in paragraph d.1.B. above and you have not already executed stock powers in blank for all of such Stock Certificates, you agree to do so; and D. Atlantic Gulf will return to you your $600,000 Note, marked "canceled." ii. On December 31, 2000, unless you are in breach of this Agreement on such date (other than any breach which has been waived by the Company, which the Company may do or not do, in its sole and absolute discretion) and the Board of Directors of Atlantic Gulf (the "Board") has provided you with written notice of such breach before December 31, 2000, including in reasonable detail the nature of such aforesaid breach: A. your two Recourse Loans will be canceled and you will be released from any further obligations thereunder; B. if you have them in your possession, on or before December 30, 2000, you will deliver to Atlantic Gulf the stock certificates evidencing the shares of Atlantic Gulf purchased with the proceeds of your Recourse Loans, which Stock certificates are identified in Exhibit A hereto; C. if Atlantic Gulf has possession of the Stock Certificates referenced in paragraph d.ii.C. above and you have not already executed stock powers in blank for all of such Stock Certificates, you agree to do so on or before December 31, 2000; and D. upon cancellation of your two $199,000 Notes in accordance herewith, Atlantic Gulf will return both $199,000 Notes to you, marked "canceled." Absent a default or breach by you hereunder, Atlantic Gulf agrees not to enforce any provisions of the two $199,000 Notes before December 31, 2000. J. Larry Rutherford August 17, 1999 Page 5 e. For federal income tax purposes,: i. you will be deemed to have: A. sold the shares of stock of Atlantic Gulf securing the $600,000 Note (i.e., the shares purchased with the proceeds of the $600,000 Loan) to Atlantic Gulf for the $600,000 principal amount of the $600,000 Note in full satisfaction of the $600,000 Loan; and B. if the Recourse Loans are canceled in accordance with paragraph d.ii. above, sold the shares of stock of Atlantic Gulf securing the $199,000 Notes (i.e., the shares purchased with the proceeds of the Recourse Loans) to Atlantic Gulf for their fair market value ("FMV"), based on the closing price of such shares on the cancellation date, in partial satisfaction of the Recourse Loans; and ii. Atlantic Gulf will be deemed to have: A. received the shares described in clause e.i.A. above in full satisfaction of the $600,000 Loan; and B. if the Recourse Loans are canceled in accordance with paragraph d.ii above, received the shares described in e.i.B. above in partial satisfaction of the Recourse Loans and canceled or forgiven the excess of the principal amount of the Recourse Loans over the FMV of the shares of stock described in clause e.i.B. above. f. From and after the Termination Date, you (i) agree to continue as a director, and non-executive Chairman ("Chairman") of the Board of Atlantic Gulf, but (ii) to resign as a director and officer of all of the subsidiaries and affiliates of Atlantic Gulf as to which you are then serving as a director and/or officer. Furthermore, on the Termination Date, you agree to deliver to the Board (A) a signed letter of resignation (dated as of the Termination Date) as a director and officer addressed to the board of directors of each of the subsidiaries and affiliates of Atlantic Gulf of which you are a member and/or officer, which resignation letter shall be effective upon delivery, and (B) a signed, but undated, letter of resignation as a director and Chairman to the Board, which resignation letter shall be effective upon the earlier to occur of (Y) the date you instruct the Board to date such letter or (Z) the date the Board elects, in its sole and absolute discretion, to date such letter. So long as you continue to serve as a director and/or Chairman of J. Larry Rutherford August 17, 1999 Page 6 the Board, you will receive no compensation for such service other than the compensation expressly provided for in this letter agreement. You understand and agree that you will have no legal authority to bind the Company without the prior written consent of the Board. g. During the period that you continue to receive Base Salary pursuant to paragraph 1.b. above, you agree to be available to provide, at reasonable times and upon reasonable notice, up to 40 hours of consulting services per month to the Company, the Board and members of senior management and the Board. If such consulting services require travel or the incurrence by you of other expenses, Atlantic Gulf will reimburse you for such travel (in the case of air travel, by coach class only) and other reasonable and necessary expenses, upon the submission of proper written substantiation therefor (in the manner and form determined by Atlantic Gulf), based on its employee expense reimbursement policy in effect at the time you incur such expenses. h. From and after the Termination Date, you shall cease to be eligible to participate in any and all Company employee benefit programs; provided, however, that during the period that you continue to serve as a director and/or Chairman, you will continue to be eligible to participate in the Company's medical, dental and life insurance programs ("Insurance Programs") on the same terms as in effect for you on the Termination date. You hereby authorize Atlantic Gulf to deduct and withhold directly from the payment(s) referred to in paragraph 1.b above your share of any premiums with respect to such insurance coverage until such time as you give Atlantic Gulf written instructions to terminate your participation in such Insurance Programs. You acknowledge and agree that Atlantic Gulf shall have no obligation to (i) maintain such Insurance Programs in place and may discontinue such Insurance Programs at any time for any reason as to all employees, without liability to you, or (ii) to pay any premiums with respect to your Insurance Programs if such premiums exceed the payment(s) referred to in paragraph 1.b above. i. You shall be entitled to COBRA coverage promptly following the termination of your Company health insurance coverage under paragraph 2.h above. j. During the period that you continue to serve as a director and/or Chairman, you will be permitted to continue to use your existing leased Company automobile on the same terms as in effect on the Termination Date; provided, however, that on the date on which you cease to serve as a director and Chairman you shall (i) provide Atlantic Gulf with written confirmation from the leasing company (in form and substance satisfactory to Atlantic Gulf, in its sole discretion) that you have assumed all of the remaining liabilities with respect to your leased Company automobile from and after the Termination Date and that the Company has been released J. Larry Rutherford August 17, 1999 Page 7 from any and all such liabilities or (ii) return your leased Company automobile to Atlantic Gulf, after which you will have no further liability to the Company with respect thereto. k. Except as otherwise specifically provided for herein, all of your employee benefits in effect on the Termination Date shall cease on the Termination Date. l. You agree that, before January 1, 2001, you will not, without the prior written consent of the Board: i. (A) acquire an equity interest, directly or indirectly, in whole or in part, in any real estate project owned, directly or indirectly, in whole or in part, by the Company on the Termination Date or any real estate project in which the Company acquires an ownership interest, directly or indirectly, in whole or in part, on or before December 31, 2000 (all such real estate projects referenced in this 2.l.i being collectively referred to herein as the "Projects"), (B) acquire a debt interest, directly or indirectly, in whole or in part, in any such Project, (C) acquire an equity or debt interest, directly or indirectly, in any entity that acquires an equity or debt interest, directly or indirectly, in whole or in part, in any such Project or (D) accept or assume a position, directly or indirectly, as an employee, officer, director, agent, consultant, partner, member, security holder, creditor or otherwise with any person or entity that acquires an equity or debt interest, directly or indirectly, in whole or in part, in any such Project; and ii. engage in, directly or indirectly, or have any interest, directly or indirectly, in any person or entity (including an interest, directly or indirectly, as a shareholder, lender, partner, member, employee, officer, director, agent, consultant, security holder, creditor or otherwise) in any person or entity that engages in, competition with the Company within (A) a 100 mile radius of the Company's Chenoa Project located in Aspen/Glenwood Springs, Colorado, so long as the Company continues to own an equity interest, directly or indirectly, therein, and (B) a 25 mile radius of the Company's West Bay Club Project, located in Lee County, Florida, so long as the Company continues to own an equity interest, directly or indirectly, therein. m. You acknowledge and confirm that the restrictive covenants contained in paragraph 2.l above (the "Restrictive Covenants") are reasonably necessary to protect the legitimate business interests of the Company and are not overbroad, overlong or unfair and are not the result of overreaching, duress or coercion of any kind. You further acknowledge and confirm that your full, uninhibited and faithful observance of each of the Restrictive Covenants will not cause you any undue hardship, financial or otherwise, and that enforcement of each of the Restrictive Covenants will not impair your ability to obtain employment commensurate with your J. Larry Rutherford August 17, 1999 Page 8 skill level and terms otherwise generally acceptable to you. You further acknowledge and confirm that your special and unique knowledge of the Projects is such as would cause the Company serious and possibly irreparable injury and/or loss if you were to use such ability and knowledge to the benefit of a competitor of the Company and/or person or entity acquiring an interest, directly or indirectly, in whole or in part, in any of the Projects in violation of the Restrictive Covenants. n. You recognize and acknowledge that a breach by you of the Restrictive Covenants will cause irreparable harm and damage to the Company, the monetary amount of which may be impossible to ascertain. As a result, you further recognize and acknowledge that the Company shall be entitled to injunctive relief enjoining and restraining any violation of the Restrictive Covenants by you or your affiliates, employer, partners, associates, members or agents, either directly or indirectly, and that such rights to injunctive relief shall be cumulative and in addition to whatever other remedies at law or in equity the Company may possess with respect to such violation(s). o. You hereby represent and warrant that, as of the Termination Date, you do not own any equity or debt interest of the type described in paragraph l.i and/or l.ii. above. 3. On August 16, 1999, Atlantic Gulf provided you with a copy of this Agreement and explained to you that it constitutes a legal waiver and release of any rights and claims that you may have under any contract and under all federal, state and local laws and regulations prohibiting employment discrimination or otherwise regulating employment or claims related to employment, including, without limitation, Title VII of the Civil Rights Act of 1964, the Equal Employment Opportunity Act of 1972, the Age Discrimination in Employment Act of 1967 ("ADEA"), the Americans with Disabilities Act of 1990, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act of 1988, and 42 U.S.C. Section 1981. You acknowledge that you intend to waive and release any and all such rights and claims you may have under any contract or agreement and under the statutes, laws and regulations cited above or any other applicable statute, law or regulation (with the exception of any claims that may arise under the ADEA after the date that you sign this Agreement). You understand and acknowledge that this Agreement does not constitute an admission by the Company (a) of any violation of any statute, law, regulation, order or other applicable authority, (b) of any breach of any contract, actual or implied, or (c) of any commission of any tort. 4. In exchange for the consideration described herein, on behalf of yourself and your executors, administrators, representatives, trustees, heirs, subrogees, guardians, conservators, J. Larry Rutherford August 17, 1999 Page 9 agents, successors and assigns, you hereby release and discharge Atlantic Gulf, its subsidiaries, affiliates, divisions and related companies, and each of their respective successors and assigns, their past and present principals, directors, officers, representatives, shareholders, employees, agents, partners and their respective heirs, executors, and administrators, from any and all claims, complaints, contracts, liabilities, obligations, demands, debts, damages, losses, costs, expenses, attorneys' fees, rights of action and causes of action, of any kind or character whatsoever, at law or in equity, whether known or unknown, suspected or unsuspected (collectively, "Claims"), with respect to, or arising out of, your employment or the termination of your employment with the Company; provided however that the Claims released under this paragraph 4. shall not include, or apply to, (a) any Claims related to the enforcement of any provision of this Agreement or (b) or Indemnification Claims (as defined below). Indemnification Claims shall mean all and any of your rights and benefits to indemnification and similar benefits under Delaware law and the law of the jurisdictions of organization of any subsidiary or affiliate of the Company, under the respective charters and bylaws of the Company and its subsidiaries and affiliates, and under any directors and officers insurance policies maintained by the Company, in each instance in respect of you being a current or former director, and/or former officer, of the Company and its affiliates and subsidiaries. 5. In exchange for the consideration described herein, on behalf of itself, its subsidiaries, affiliates, divisions and related companies, and each of its/their respective successors and assigns, its/their past and present principals, directors, officers, representatives, shareholders, employees, agents, partners and its/their respective heirs, executors, and administrators, representatives, trustees, heirs, subrogees, guardians, conservators, agents, successors and assigns, the Company hereby releases and discharges you and your executors, administrators, representatives, trustees, heirs, subrogees, guardians, conservators, agents, successors and assigns, from any and all Claims with respect to, or arising out of, your employment or the termination of your employment with the Company or your position as a director or officer of the Company or any of its subsidiaries or affiliates; provided, however, that the Claims released under this paragraph 5. shall not include, or apply to, (a) any Claims with respect to, or arising out of, your own gross negligence or intentional or willful misconduct, (b) any Claims related to the enforcement of any provision of this Agreement, and (c) any Claims related to the enforcement of any provisions of your Employment Agreement that, by their terms, survive the termination of your Employment Agreement. 6. The Company represents and warrants to you that, at all times during the five-year period ending on the Termination Date, you have been covered by (a) the Company's Directors and Officers Insurance policies (subject to any exceptions contained therein for excluded acts), (b) the indemnification provisions under Delaware corporate law and the law of the jurisdictions of J. Larry Rutherford August 17, 1999 Page 10 organization of any subsidiary or affiliate of the Company of which you served as an officer and/or director (subject to any exceptions contained therein for excluded acts) and (c) the indemnification provisions contained in the respective charters and bylaws of the Company and its subsidiaries and affiliates (subject to any exceptions contained therein for excluded acts), in each instance in respect of your service as a director and/or officer of Atlantic Gulf and its affiliates and subsidiaries during such five-year period. The Company further represents and warrants to you that the indemnification described in the immediately preceding sentence shall remain in place with respect to your service as a director of Atlantic Gulf following the Termination Date on the same terms, to the same extent, for the same period and for the same acts as are applicable to the other directors of Atlantic Gulf following the Termination Date. 7. Neither you nor the Company will at any time (a) disclose the terms or existence of this Agreement or any fact concerning its negotiation, execution or implementation or concerning your employment or termination of employment with the Company, except as may be required by law, statute or regulation, or in connection with a valid and effective subpoena or order issued by a court of competent jurisdiction or by a governmental body, or in connection with any financing, sale of the Company (through a stock or asset sale), merger or other restructuring transaction entered into by the Company, but only to the extent required, or (b) denigrate, disparage, impugn or defame the Company, its services or business conduct or reputation or that of any of its principals, directors, officers, employees, partners or agents, on the one hand, or you, on the other hand. 8. Upon the request by Atlantic Gulf for the return of all property of the Company then in your possession, you will immediately return such property, including, without limitation (and to the extent applicable), leased vehicles (subject to your rights under paragraph 2.j. above), home office equipment, computers, building keys and passes, memoranda (including e-mail memoranda addressed to you or on which you were copied or otherwise in your possession), sales brochures, credit cards, telephone charge cards, manuals, courtesy parking passes, customer lists and customer contacts, sales information, diskettes, intangible information stored on diskettes, business or marketing plans, reports, projections, software programs and data compiled with the use of those programs, tangible copies of trade secrets and confidential information, and any and all other property or information held or used by you in connection with your employment with the Company. 9. You acknowledge that the Company advised you to consult with an attorney before signing this Agreement and that you had sufficient opportunity to consult with an attorney after receiving a copy of this Agreement and before signing it. Furthermore, you acknowledge that the Company advised you that you are entitled to a period of twenty-one (21) days from the date of J. Larry Rutherford August 17, 1999 Page 11 this Agreement to consider the proposal herein and seven (7) days after the execution hereof to revoke your agreement to the terms hereof. In signing this Agreement, you have relied only on the promises contained herein and not on any other promises made by the Company. 10. By signing this Agreement, you acknowledge that you are entering into this Agreement voluntarily and with full knowledge of its significance, meaning and binding effect. You have seven (7) days to revoke this Agreement after you sign it. This Agreement will not become effective or enforceable until eight (8) days after the date you sign it. 11. This Agreement (a) represents the entire agreement of the parties with respect to the subject matter hereof, (b) may not be amended, modified or rescinded except in writing, signed by both Atlantic Gulf and you, and (c) is governed by and shall be construed in accordance with the law of the State of Florida, excluding its laws regarding choice of law. In the event of any dispute arising out of this Agreement or any action to enforce the terms hereof, the costs incurred by the prevailing party in connection with such dispute or action (including reasonable attorneys' fees and out-of-pocket costs) shall be paid by the party not prevailing in such dispute or action. 12. YOU AND THE COMPANY EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF ANY PARTY HERETO. 13. The parties hereby agree that, with respect to all litigation referred to in the immediately preceding paragraph 12, venue shall be exclusively within Miami-Dade County, Florida. J. Larry Rutherford August 17, 1999 Page 12 If you are in agreement with the terms and conditions of this letter agreement, please sign and date all three enclosed original signature pages to this letter agreement, keep one signed signature page for your records and return the other two signed signature pages to Joel Goldman at Atlantic Gulf. ATLANTIC GULF COMMUNITIES CORPORATION, for and on behalf of itself and all of its subsidiaries and affiliates By:_____________________________________ Name (Print): James DeFrancia Title: Authorized Director, for and on behalf of the Board of Directors of Atlantic Gulf Communities Corporation AGREED TO AND ACCEPTED BY: - ----------------------------------- J. LARRY RUTHERFORD Date:______________________________ cc: Joel Goldman, Esq. John Ruppert, Esq. James DeFrancia EXHIBIT A STOCK CERTIFICATES* - ---------------------------------------------------------------------------- STOCK CERTIFICATE NO. NO. OF SHARES PURCHASE PRICE AMOUNT ADVANCED - ---------------------------------------------------------------------------- AG 104202 4,700 $ 3.62620 $ 17,043.14 - ---------------------------------------------------------------------------- AG 104202 9,500 3.97700 37,781.50 - ---------------------------------------------------------------------------- AG 104217 8,000 4.13281 33,062.48 - ---------------------------------------------------------------------------- AG 104217 14,000 4.41520 61,812.80 - ---------------------------------------------------------------------------- AG 104217 4,000 4.25000 17,254.50 - ---------------------------------------------------------------------------- AG 104312 5,000 3.87500 19,692.00 - ---------------------------------------------------------------------------- AG 104312 5,720 2.12500 12,334.47 - ---------------------------------------------------------------------------- AG 104312 29,280 2.12500 63,138.78 - ---------------------------------------------------------------------------- AG 104312 50,000 2.06250 104,692.00 - ---------------------------------------------------------------------------- AG 10,700 2.31250 25,082.63 - ---------------------------------------------------------------------------- AG 104348 5,800 1.00000 5,985.75 - ---------------------------------------------------------------------------- AG 104307 282,352 2.12500 599,998.00 - ---------------------------------------------------------------------------- TOTAL 429,052 $997,878.05 - ---------------------------------------------------------------------------- * The shares evidenced by Certificate No. AG 104307 were purchased with the proceeds of the $600,000 Loan. All of the other shares were purchased with the proceeds of the Recourse Loans. EX-10.2(C) 3 EXHIBIT 10.2(C) ATLANTIC GULF COMMUNITIES CORPORATION 2601 South Bayshore Drive Miami, Florida 33133 August 17, 1999 Richard S. Ackerman 433 Plaza Real, Suite 335 Boca Raton, Florida 33432 Re: Terms of Employment ------------------- Dear Richard: We are pleased to confirm that Atlantic Gulf Communities Corporation (the "Company") has offered you the position of Chief Executive Officer ("CEO"), subject to the terms of this letter (the "Letter Agreement"). Your employment hereunder commences as of the date hereof and will continue until December 31, 1999 (the "Employment Term"). You will report only to the Board of Directors of the Company. The Company will pay you a base salary at the rate of $35,000 per month, pro rated for partial months, in accordance with the usual payroll practices of the Company; provided that, if you and the Company are unable to reach an agreement for any reason whatsoever on the terms of an extension of the Employment Term at least 30 days prior to the end thereof, you will be paid an additional amount, retroactive to the commencement of the Employment Term, equal to $15,000 per month, pro rated for partial months, in a lump sum within 10 days following the expiration of the Employment Term. While you are employed by the Company, you will devote substantially all of your business time and efforts to the performance of your duties hereunder, provided, however, you will be allowed to manage your personal investments both active and inactive (including real estate transactions) to the extent that they do not materially interfere with your duties as CEO. While you are employed by the Company, you will be entitled to participate, to the extent eligible thereunder, in all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, savings, pension, profit sharing and deferred compensation plans and any and all Richard S. Ackerman August 17, 1999 Page 2 other employee welfare or benefit plans as are presently and hereinafter offered by the Company to its executives. The Company will also maintain at all times during the Employment Term Officer and Director liability insurance coverage for you, in the same aggregate amount and under the same terms as are maintained for the Company's other senior officers and directors, and will otherwise indemnify you and hold you harmless to the fullest extent permitted by Delaware law for all losses and expenses incurred by you as a result of any suits or proceedings relating to your service as an officer, director and employee of the Company. The Company will also reimburse you for all reasonable and necessary expenses incurred by you in the course of, and pursuant to, the business of the Company; provided, however, that any costs of commuting to and from Boca Raton, Florida, and the Company's offices in Miami, Florida, and any costs and expenses of lodging in Miami, Florida, will be born by you. The Company will also reimburse you for all reasonable legal fees (at your attorney's standard rates) and disbursements incurred by you in connection with entering into this Letter Agreement, as soon as is practicable following your presentation to the Company of reasonable documentation thereof. You agree not to disclose, communicate, use to the detriment of the Company or for the benefit of any other person(s) or misuse in any way any Confidential Information of the Company. For purposes of this Agreement, "Confidential Information of the Company" means information disclosed to you or known by you as a consequence of or through your employment by the Company prior to or after the date hereof and not generally known about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict you from disclosing Confidential Information to the extent required by law. At all times while you are employed by the Company and for a period of 12 months after the termination of your employment with the Company for any reason, you shall not, directly or indirectly, for yourself or for any other person or entity employ or attempt to employ, or solicit the employment of, or enter into any contractual arrangement with, any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months. Richard S. Ackerman August 17, 1999 Page 3 YOU AND THE COMPANY EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF OR IN CONNECTION WITH THIS LETTER AGREEMENT AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF ANY PARTY HERETO. The parties hereby agree that, with respect to all litigation referred to in the immediately preceding paragraph, venue shall be exclusively within Palm Beach County, Florida. This Letter Agreement will be governed by, and construed under and in accordance with, the internal laws of the State of Delaware without reference to rules relating to the conflicts of laws. This Letter Agreement contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Letter Agreement will be valid unless made in writing and signed by the parties hereto. Very truly yours, ATLANTIC GULF COMMUNITIES CORPORATION By: ________________________ Name: James DeFrancia Title: Authorized Director Agreed: - ---------------------------- Richard S. Ackerman -----END PRIVACY-ENHANCED MESSAGE-----