The Administration of Douglas Unified School District No. 27 (the “School District”) and George Watkins, an administrator employed by the School District for the 2007-2008 school year, represent, covenant and agree that there is a material dispute between the parties as to what occurred during the 2006 to 2008 school years. In order to resolve this dispute in the most practical manner possible, the parties agree as follows:

1.    George Watkins agrees to resign his position as a principal with the Douglas Unified School District as of January 16, 2008. He agrees to waive all rights to a termination hearing pursuant to statutes and to any contractual and property rights inherent in his position with the District. Mr. Watkins hereby releases and discharges the School District and all School District employees, agents and Board members from any and all liability whatsoever including all claims, demands and causes of action which he has or may ever claim to have by reason of his employment with the School District. Further, Mr. Watkins waives and relinquishes any right or cause of action of any kind whatsoever against the School District or its employees, agents or Board members under any federal or state constitution, any statute, any administrative regulation and/or any common law cause of action. Mr. Watkins agrees not to file any grievances or initiate any administrative proceedings, including, but not limited to a claim with the Arizona Civil Rights Division or the Equal Employment Opportunity Commission, which may be directed against the School District, its employees, agents or Board members, with any federal, state or local public agency or any private organization and to withdraw any such grievances that he may have previously filed.

2.    In return for Mr. Watkins’ resignation, the District agrees that it shall not continue to pursue disciplinary charges against Mr. Watkins nor will it pursue liquidated damages under District Policy GCQC.

3.    While this Settlement Agreement is a full and final settlement of disciplinary action presently pending or contemplated by the District against Mr. Watkins, the parties understand and agree that it shall have no effect on any pending criminal investigation or upon an contemplated civil action by the District or its insurers to attempt to recoup any monetary losses the District believes are attributable to Mr. Watkins’ actions or inactions as a principal for the District. The parties further agree that should Mr. Watkins attempt to seek unemployment insurance payments, claiming that he was, in fact, terminated from employment with the District, that the District shall be entitled to fully defend the claim with the evidence which would have been presented at the termination hearing(s).

4.    It is understood and agreed that neither party shall be entitled to attorney fees with respect to the dispute being resolved by this Settlement Agreement or the negotiation and implementation of this Settlement Agreement. It is also understood and agreed that all personal property belonging to Mr. Watkins was returned to him and that other than the disputed dollar amounts regarding the lanyards and P.E. uniforms, that Mr. Watkins has returned to the District all property belonging to the District that was within his custody and control.

5.    It is specifically acknowledged and agreed by the parties that the School District will pay Mr. Watkins through January 16, 2008.

6.    A copy of Mr. Watkins’ resignation and this Settlement Agreement shall be placed in Mr. Watkins’ personnel file and shall constitute a permanent part of that file. The parties to this Settlement Agreement recognize that any document, including this Settlement Agreement, which the School District Governing Board considers or discusses at a public meeting or upon which the School District Board takes action, as well as minutes of any public meeting of the School District Governing Board, are public documents which must be available for inspection and copying by the public in accordance with or as may be required by Arizona’s public meeting and/or public records laws.

7.    The District shall provide Mr. Watkins with a neutral letter of recommendation, a copy of which is attached to this agreement. In response to inquiries from prospective employers sent directly to the Superintendent’s office, the School District will provide only Mr. Watkins’ job titles and dates of employment. Within seven (7) days after the date this Settlement Agreement is executed, the School District shall issue a memorandum to all of the School District’s employees establishing a protocol that any. inquiries concerning Mr. Watkins be directed to the School District’s Superintendent’s office for handling and response. Unless required to do so by law or court order, the Superintendent’s office will not provide any other information about Mr. Watkins regarding any employment request unless Mr. Watkins has signed a written authorization that specifically allows the School District to discuss his job performance with a potential employer, in which case the School District will respond honestly to inquiries made. This provision in no way limits the District’s ability or the ability of any of its employees to assist with law enforcement investigations or the investigations of the insurance carrier regarding the loss of funds from the school district.

8.    Mr. Watkins is entering into this Settlement Agreement voluntarily and acknowledges that there has been no duress or coercion by the School District. Both parties have had the opportunity to consult with legal counsel or other representatives, and Mr. Watkins agrees that this Settlement Agreement is entered into solely in reliance upon his own knowledge, belief and judgment and not upon representations made by the School District or others on its behalf.

9.    The parties hereto expressly agree that this Settlement Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors, heirs and assigns, subsidiaries, parents, affiliates, officers, agents, servants, and/or those of Mr. Watkins, or any of them, as appropriate.

10.    This Settlement Agreement shall bc governed by and construed in accordance with the internal, substantive law of the State of Arizona without regard to its principles of choice of law. Sole venue for any action to enforce this Settlement Agreement shall be in Cochise County, Arizona.

11.    This Settlement Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof and may not be modified or amended except by written instrument, signed by each of the parties hereto.

12.    Should any provision of this Settlement Agreement be held invalid or held unenforceable, such illegality or unenforceability shall not invalidate the whole of this Settlement Agreement, but rather this Settlement Agreement shall be construed as if it did not contain the illegal part, and the rights and obligations of the parties shall be construed and enforced accordingly.

13.    This Settlement Agreement may be executed in one or more counterparts, each of which is equally admissible in evidence and each of which shall fully bind each party who has executed it. Each of the parties represents and warrants that the persons executing this Settlement Agreement has the requisite authority to represent and bind the particular party.

14.    The prevailing party in any attempt to enforce the terms or conditions of this Settlement Agreement (or defend against same), by arbitration, litigation or otherwise, shall be entitled to recover from the other party its legal costs and reasonable attorneys’ fees incurred in connection with same.

Mr. George Watkins

Gail Zamar, Superintendent

Douglas Unified~ School District No. 27

This Settlement Agreement was approved by the Governing Board at a properly noticed meeting on the 17th day of January,  2008.