SEPARATION AGREEMENT AND RELEASE
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (the “Agreement”), is made and entered as of
the 14th day of April, 2008 (the “Effective Date”), by and between Avantair,
Inc. (the “Company”) and Xxxx Xxxxxx (the “Executive”).
WHEREAS,
the
Executive was an employee of the Company holding the position of Chief Financial
Officer, and was a member of the Board of Directors of the Company;
and
WHEREAS,
the
Company and the Executive severed their employment relationship with the
Executive on April 11, 2008 (the “Separation Date”);
NOW,
THEREFORE,
in
consideration of the promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Company and the Executive, intending to be legally bound hereby, agree as
follows:
1. Other
than for the payment of salary and benefits through the Separation Date, which
the Company agrees to pay, the Executive acknowledges that he is entitled to
no
damages, payments, benefits, compensation, remuneration, back pay, front pay,
costs, expenses or fees of any kind as a result of his employment with the
Company and/or the termination of that employment, except as provided in this
Agreement.
2. Simultaneously
with the delivery by Executive to Company of an executed copy of this Agreement,
Company shall deliver to Executive (a) warrants for One Cent ($.01) exercisable
for an aggregate of Two Hundred Thousand (200,000) shares of the Company’s
common stock and (b) a stock certificate for Thirty-Three Thousand Three Hundred
Thirty-Four (33,334) shares of the Company’s common stock.
3. In
consideration for the Executive’s promises contained herein, and in
full
satisfaction of the Company’s obligations, if any, described in the Employment
Agreement between the Executive and the Company (the “Employment Agreement”),
the
Company shall:
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a.
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within
a reasonable time, not to exceed ten (10) days from the Effective
Date,
pay the Executive an amount equal to eight (8) months pay at the
Executive’s salary on the Separation Date;
and
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b.
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reimburse
the Executive for all premiums for COBRA benefits upon presentation
of
documentary evidence of payment of same by the Executive, for a period
of
eight (8) months from the date of this Agreement or until such time
that
Executive obtains employment providing health benefits, whichever
time
period is shorter, and the Executive agrees to notify the Company
immediately of any employment during this eight (8) month period
which
provides health insurance benefits.
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4. Executive
agrees not to transfer by any method any or all of the shares of the Company’s
stock under his ownership or control for a period of six (6) months following
the date this Agreement becomes effective, subject to its terms (“Trading
Restriction Period”). Notwithstanding the prior sentence, however, the Trading
Restriction Period shall become null and void should Xxxxx
X.
Xxxxxx, Chairman of the Board of the Company, Xxxxxx X. Xxxxxxxx, a director
of
the Company, or Xxxxxx X. Xxxxx, Chief Executive Officer of the Company transfer
by any method any or all of their respective shares during the Trading
Restriction Period.
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5. At
the
conclusion of the Trading Restriction Period, Executive’s unrestricted shares
shall be freely tradable in the open market, subject to the Company’s “Right of
First Refusal” described in Paragraph 6 below, and in compliance with applicable
securities laws.
6. For
a
twelve (12) month period following the conclusion of the Trading Restriction
Period, the Company shall have a superior right to that of any third party
to
purchase the Executive’s shares of the Company’s common stock (“Right of First
Refusal”). The Company shall have five (5) days after Executive provides notice
of his intent to sell his shares in the open market or pursuant to a bona fide
offer in a private transaction, to exercise its Right of First Refusal, in
accordance with the following provisions:
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a.
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If
the Executive intends to sell his shares in the open market, such
sale(s)
shall be limited to 20,000 shares during any two-week period and
the
notice Executive provides to the Company pursuant to this Paragraph
6
shall state that Executive intends to sell his shares in the open
market.
If the Company exercises its Right of First Refusal in response to
Executive’s notice of his intent to sell the shares in the open market,
the Company shall pay Executive the higher of (a) the market price
of the
Executive’s shares at 4:00 p.m. Eastern Standard Time on the day Executive
provides notice of his intent to sell his shares and (b) the highest
market price of Executive’s shares during the period from the time
Executive provides notice of his intent to sell his shares and the
Company
exercises its Right of First
Refusal;
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b.
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In
the event the Executive desires to sell any or all of his shares
in
private transaction, the notice Executive provides to the Company
pursuant
to this Paragraph 6 shall state that Executive intends to sell his
shares
pursuant to a bona fide offer in a private transaction and further
shall
provide sufficient facts to afford the Company notice of the number
of
shares to be sold and the purchase price of those shares. If the
Company
exercises its Right of First Refusal in response to Executive’s notice of
his intent to sell any or all of his shares in a private transaction,
the
Company shall pay the same price per share, and purchase all of the
shares
encompassed by the bona fide offer;
and
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c.
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Any
transfer of Executive’s shares made in violation of this Agreement shall
be null and void.
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7. Neither
party’s performance of its obligations under this Agreement shall be construed
or interpreted as an admission of any wrongdoing, fault, or
liability.
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8. In
addition to the parties’ obligations described in Paragraphs 1-7 above, the
parties’ obligations under this Agreement are further expressly conditioned upon
the following:
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a.
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The
Executive’s
delivery to the Company of one copy of this Agreement, properly executed
by the Executive and containing his original signature, along with
further
execution and/or delivery by the Executive of any and all other documents
necessary to effectuate the provisions of this
Agreement;
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b.
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The
Executive’s agreement to cooperate fully with the Company’s reasonable
requests for assistance from the Executive in transitioning his duties
and
responsibilities as former Chief Financial Officer of the Company
to the
Company’s designee(s) to ensure an orderly transition of those
responsibilities for a period of eight (8) months following execution
of
this Agreement provided, however, that (i) the Company reimburses
the
Executive for all reasonable expenses incurred in connection with
the
Executive’s performance of his obligations under this Paragraph 8(b), only
when such expenses have been pre-approved by an officer or director
of the
Company prior to the Executive incurring any such expense, (ii) the
Executive will not have any responsibility for the accuracy of internal
or
external financial statements and (iii) the Company hereby indemnifies,
and agrees to hold harmless, the Executive with respect to any claim
or
liability arising from, or relating to such assistance, only upon
a final
determination by a court of competent jurisdiction that any liability
for
such claim is not the result of Executive’s own negligent or intentionally
wrongful conduct.
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c.
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The
Executive’s representation that he has not instituted, and will not
institute in the future, any actions, suits, claims, appeals, grievances,
arbitration, complaints or charges with any court, tribunal or federal,
state or city agency or other remedial body against the Company,
its
principals and/or affiliates
relating to matters arising out of or involving the Executive’s employment
with the Company, or the termination of that employment; except that
nothing in this Agreement precludes the Executive from instituting
a
claim, charge, suit, action or appeal for the purpose of enforcing
his
contractual rights under this
Agreement;
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d.
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The
Executive’s agreement not to solicit or contact any person concerning the
maintenance of any claims or actions whatsoever against the Company,
its
principals and/or affiliates; except that nothing
in
this Agreement precludes the Executive from responding to legal process.
The Executive further agrees that in the event the Executive or his
counsel is served with a subpoena order or other legal process seeking
disclosure of information rendered confidential by this Agreement,
Executive or his counsel will inform the Company by telephone on
the date
on which the Executive becomes aware such subpoena or legal process
is
served and provide the Company’s counsel a copy of such subpoena or legal
process no later than the third business day from the date that Executive
or his counsel receives same. Executive further agrees that neither
he nor
his counsel will voluntarily comply with any such subpoena or legal
process until affording the Company a reasonable opportunity to oppose
the
disclosure sought by the subpoena or legal process; provided, however,
that nothing herein shall prevent such disclosure if a court of competent
jurisdiction orders such disclosure after the Company’s application to
prevent same is denied, or if the Company authorizes such disclosure.
In
the event such subpoena or legal process requires an immediate response
such that it is impracticable to provide the Company with the opportunity
to oppose such disclosure as described herein, then Executive’s
obligations under this paragraph are limited to providing notice
to the
Company by facsimile or email as soon as practicable.
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e.
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The
Executive’s representation and warranty that he has not actually or
purportedly, in whole or in part, assigned or transferred to any
person or
entity any claim which the Executive may have had or has against
the
Company or its principals, agents, officers, employees, attorneys
and/or
affiliates, and accordingly hereby agrees to indemnify, defend and
hold
harmless the Company for any claim based upon or arising out of such
assignment or transfer;
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f.
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The
Executive’s agreement
that he shall comply with Paragraph 7 of the Employment Agreement,
“Non-Competition, Non-Solicitation” for a period of sixteen (16) months,
provided, however, that the Executive shall not be required to comply
with
Paragraph 7 of the Employment Agreement, “Non-Competition,
Non-Solicitation” after a Change of Control or upon Sale of the Company;
and the terms “Change-in-Control” and “Sale of the Company” in this
Agreement shall mean the acquisition by another entity and/or person
of
all or substantially all of the assets of the
Company.
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g.
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The
Executive’s agreement that he shall, within a reasonable time, not to
exceed ten (10) days, return all property of the Company to the Company
and the term “property” in this Paragraph 8(g) shall include, but not be
limited to any and all Company confidential information as that term
is
defined in the Employment
Agreement;
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h.
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The
Executive’s agreement that he shall comply with Paragraph 8 of the
Employment Agreement, “Protection of Confidential Information”;
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i.
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The
Executive’s agreement that he shall provide the Company with notice that
he is resigning as a director and as Chief Financial Officer of the
Company simultaneously with his execution of this Agreement, in the
form
attached hereto as Exhibit A;
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j.
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The
Executive’s employment with the Company is not being terminated for
“Cause. The Executive is not being removed as a director of the Company
for “Cause.” The Executive is resigning as a director and officer of the
Company to pursue other interests. The Company’s Form 8-K filing with the
SEC providing notice of Executive’s termination shall state only that “Mr.
Xxxx Xxxxxx, the Company’s Chief Financial Officer, has departed the
Company, and resigned his position as a director of the Company,
effective
April 11, 2008”;
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k.
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The
parties’ agreement that they will not say, write or cause to be said or
written, directly or indirectly, any statement that may be considered
defamatory, negative, critical, malicious, belittling, unfavorable,
pejorative, deprecatory, derogatory or disparaging with respect to
the
Executive or the Company, its principals, agents, officers, employees,
attorneys and/or affiliates to any third party;
and
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l.
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The
Company’s agreement that in response to any inquiries from prospective
employers of the Executive, or anyone else, the Company shall state
only
the dates of the Executive’s employment with the Company and that the
Executive served as the Company’s Chief Financial Officer, and as a member
of the Board of Directors of the
Company.
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9. In
consideration for the above, and except with respect to the performance of
obligations contained in this Agreement, the Executive, on behalf of himself
and
all heirs, personal representatives, and assigns does hereby fully, completely
and unconditionally forever release and discharge the Company and its
successors, assigns, current and former employees, directors, officers,
trustees, shareholders, members, agents, parents, affiliates, subsidiaries,
representatives, insurers, attorneys, independent contractors and all other
related or affiliated persons and entities (the “Company Releasees”) of and from
any and all liability, claims, causes, demands, obligations, actions, contracts,
promises, agreements, damages, attorneys’ fees, costs, liabilities, rights and
allegations of whatever kind and nature, known or unknown, whatsoever from
the
beginning of the world to the date of this Agreement, including, but not limited
to, such matters based on, arising out of, or related to the Executive’s
employment with the Company or the termination of that employment. This release
includes, but shall not be limited to, any and all claims for breach of
contract, implied or express; impairment of economic or business opportunity;
intentional or negligent infliction of emotional distress; false arrest;
assault; battery; false imprisonment; prima facie tort; defamation; libel;
slander; negligent termination; malicious prosecution; or any other tort,
whether intentional or negligent; or any claim or cause of action known or
unknown under Title VII of The Civil Rights Act of 1964; the Equal Pay Act;
the
Fair Labor Standards Act; the Employment Retirement Income Security Act of
1974
(except as to claims pertaining to vested benefits under an employee benefit
plan); the Rehabilitation Act of 1973; the Civil Rights Acts of 1866 and 1871;
the Civil Rights Act of 1991 (Public Law 102-106, 105 Stat. 1071-1100); the
Americans With Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the False Claims Act; the Labor Management Relations Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act of 1990; the United States Constitution or any other federal, state, county
or municipal statute or ordinance relating to employment or any claims growing
out of any restrictions on the Company’s right to terminate its employees,
including, but not limited to, claims relating to wages, bonuses, contract
or
wrongful discharge. This Agreement covers claims of which the Executive
currently may or may not have knowledge; provided, however, that this release
specifically excludes a release of any and all of the Company’s obligations
under this Agreement and of any and all obligations of the Company under its
certificate of incorporation, its by-laws, the laws of its state of
incorporation or the applicable laws, if any, of any state in which the Company
does business to indemnify Executive with respect to his acts or admissions
as
an employee or director of the Company.
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10. In
consideration for the above, the Company, on behalf of itself and all heirs,
personal representatives, and assigns, by execution of this Agreement, does
hereby fully, completely and unconditionally forever release and discharge
the
Executive and his heirs, successors, assigns, current and former agents,
affiliates, representatives, insurers, attorneys, independent contractors and
all other related or affiliated persons and entities (“Executive Releasees”) of
and from any and all liability, claims, causes, demands, obligations, actions,
contracts, promises, agreements, damages, attorneys’ fees, costs, liabilities,
rights and allegations of whatever kind and nature, known or unknown, whatsoever
from the beginning of the world to the day of the date of this Agreement,
including, but not limited to, such matters based on, arising out of, or related
to the Executive’s employment with the Company or the termination of that
employment and any and all claims for breach of contract, implied or express;
impairment of economic or business opportunity; intentional or negligent
infliction of emotional distress; false arrest; assault; battery; false
imprisonment; prima facie tort; defamation; libel; slander; negligent
termination; malicious prosecution; or any other tort, whether intentional
or
negligent; United States Constitution or any other federal, state, county or
municipal statute or ordinance relating to employment; provided, however, that
this release specifically excludes a release of any and all of the Executive’s
obligations under this Agreement and further specifically excludes a release
of
any claims the Company may not release in accordance with its certificate of
incorporation, its by-laws, the laws of its state of incorporation or the
applicable laws, if any, of any state in which the Company does
business.
11. Any
breach of this Agreement by either of the parties shall be considered a material
breach. In the event of such a breach or threatened breach, the other party
shall be entitled to appropriate injunctive relief, including an immediate
temporary restraining order and/or permanent injunction without the necessity
of
posting a bond. The prevailing party shall be entitled to recover reasonable
attorneys’ fees incurred in seeking relief for any such breach.
12. The
Executive acknowledges and agrees that in the event of any breach by the
Executive of Paragraphs 8(b), 8(f), 8(h) or 8(k) above, the Company shall be
entitled to the immediate return of all monies paid to the Executive under
Paragraph 3(a) above.
13. Both
parties acknowledge that they understand that this Agreement is a legally
binding agreement and have reviewed it with legal counsel before executing
the
Agreement.
14. Both
parties represent and acknowledge that in executing this Agreement, they do
not
rely, and have not relied, upon any representation not set forth herein, made
by
the
other
party or
any of
their respective employees, agents, or attorneys with regard to the subject
matter, basis or fact of this Agreement or otherwise.
15. Both
parties acknowledge that this Agreement is intended to address and cover any
rights they may
have
under the governing law. The parties’ signatures below will confirm that they
are entering into this Agreement freely and with a full understanding of its
terms and effect, including that they are giving up their respective rights
to
bring any claim against the
other
in accordance with Paragraphs 9 and 10 respectively above.
16. The
Executive acknowledges that he has been given twenty-one (21) days during which
to consider this Agreement and that he executes this Agreement freely and
voluntarily and that he is under no duress at the time of his
execution.
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17. This
Agreement shall be construed in accordance with, and governed by, the law of
the
State of New York, without regard to New York’s choice of law
rules.
18. The
parties consent to the exclusive jurisdiction of the federal or state courts
of
the State of New York to resolve any and all disputes arising out of or relating
to this Agreement; the parties agree that the prevailing party in any such
dispute shall be entitled to recover reasonable attorneys’ fees
19. This
Agreement sets forth the entire agreement between the parties and supersedes
any
and all prior or contemporaneous agreements or understandings between them
pertaining to the subject matter hereof. This Agreement may be modified only
by
a subsequent and written instrument, executed by all parties.
20. This
Agreement shall become effective when the Agreement has been signed by each
of
the parties.
21. This
Agreement may be executed in counterparts and as so executed shall constitute
one agreement, binding on all parties.
22. If
any
provision of this Agreement or the application thereof becomes or is declared
by
a court of competent jurisdiction to be illegal, void or unenforceable, the
remainder of this Agreement will continue in full force and effect; except
that
if the releases contained herein are declared illegal, void or unenforceable
by
a court of competent jurisdiction, the entire Agreement shall become a nullity
and any amounts paid in consideration hereunder shall be returned to the
Company. The parties further agree to replace any other illegal, void or
unenforceable provision of this Agreement with a legal, valid, and enforceable
provision that will achieve, to the extent possible, the economic, business,
and
other purposes of such illegal, void or unenforceable provision.
23. There
are
no third-party beneficiaries to this Agreement.
IN
WITNESS THEREOF,
the
undersigned have executed this Agreement on the dates noted below.
| ON BEHALF OF AVANTAIR, INC. | |||
| /s/ Xxxx Xxxxxx | /s/ Xxxxxx X. Xxxxx | ||
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Xxxx Xxxxxx |
Xxxxxx
X. Xxxxx
Chief
Executive Officer
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| April 14, 2008 | April 14, 2008 | ||
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Date
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Date
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7
EXHIBIT
A
8
April
11,
2008
Xx.
Xxxxxx X. Xxxxx
Chief
Executive Officer
0000
Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
Dear
Xxxxx:
Effective
immediately, I hereby resign my positions as a director and Chief Financial
Officer of Avantair, Inc.
Sincerely,
/s/
Xxxx
Xxxxxx
Xxxx
Xxxxxx
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