RESIGNATION AND COMPROMISE AGREEMENT
Exhibit 10.63
THIS RESIGNATION AND COMPROMISE AGREEMENT (the “Agreement”) made and entered into effective
August 6, 2007, by and between Syntroleum Corporation (the “Company”) and Xxxx Xxxxxxxx (the
“Executive”) and TI Capital Management (“TI”) (each individually, a “Party” and collectively, the
“Parties”).
W I T N E S S E T H:
WHEREAS, the Executive presently serves the Company in several capacities, including as a
consultant pursuant to the terms of the Consulting Agreement between the Company and TI dated
October 1, 2003, as amended, (the “Consulting Agreement”) (a summary of the amendments are attached
hereto as Attachment “A”), as a director and member of the Board of Directors of the
Company, and as an employee; and
WHEREAS, the parties mutually desire to arrange for Executive’s resignation from the Company
under certain terms; and
WHEREAS, in consideration of the mutual promises contained herein, the parties hereto are
willing to enter into this Agreement upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein,
the mutual benefits to be gained by the performance thereof and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:
1. Resignation from All Positions.
(A) Effective as of the close of business on August 31, 2007 (the “Separation Date”),
the Executive will separate as an employee of the Company, resigning any and all positions
he holds as an employee with the Company or any of its affiliates and/or subsidiaries, and
the Executive hereby agrees to sign and deliver the letter included herein Attachment
“C”, evidencing his resignation from all positions with the Company. The Executive
shall remain as an employee until the Separation Date subject to the terms of this
Agreement. Executive shall not perform any work on behalf of the Company between the
Resignation Date (defined below) and the Separation Date. Failure to sign and deliver the
letter referenced above will render this Agreement and all attachments null and void.
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(B) Effective as of the close of business on the date that this Agreement is signed by
both Parties and the seven day revocation period referred to in Section 3(D) below has
expired without revocation by the Executive (the “Resignation Date”), the Executive will
resign as a director and member of the Board of Directors of the Company, and the Executive
hereby agrees to sign and deliver the letter included herein Attachment “C”,
evidencing his resignation from the Board of Directors of the Company. Failure to sign and
deliver the letter referenced above will render this Agreement and all attachments null and
void.
(C) As of the Resignation Date, the Executive, TI, and the Company mutually agree to
terminate their services as a consultant to the Company under the Consulting Agreement, and
the Executive and TI hereby agree to sign and deliver the letter included herein
Attachment “B”, evidencing the mutual assent of the Parties to terminate all
services under the Consulting Agreement and waiving all of the Executive’s and TI’s rights
to compensation and reimbursement of expenses under the Consulting Agreement. Failure to
sign and deliver the letter referenced above will render this Agreement and all attachments
null and void. Additionally, as of the Resignation Date Executive and TI will fully and
completely dismiss, with prejudice to the right to refile, that certain lawsuit and all
claims asserted thereunder styled “TI Capital Management, LLC, a Delaware limited liability
company; and Xxxx Xxxxxxxx, an individual, Plaintiffs, v. Syntroleum Corporation, a Delaware
Corporation; Xxxx Xxxxxx, an individual; and DOES 1-100, Defendants” (the “Lawsuit”).
2. Special Payments:
(A) Payment. In consideration of Executive and TI’s agreement to enter into
this Agreement, the Company agrees to pay by wire transfer to the account specified in the
lump sum of $1,393,550 within fifteen (15) days of the Resignation Date. Failure to pay
within such time period will render this Agreement and all attachments null and void.
(B) Additional Compensation for Eligible Projects. Executive shall earn and
receive additional compensation for those certain listed Projects, (as defined in
Attachment “E”) in accordance with the conditions stated in Attachment “E”.
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(C) Transfer of Equipment. The Company agrees to assign and transfer ownership
of certain items in the form of Attachment “D” to the Executive. The
Company will discontinue all phone and data services to such devices thirty (30) days
after execution of this Agreement. All items are to be provided to the Executive in current
condition on an “AS IS, WHERE IS” basis, without any further obligation of support by the
Company or any of its vendors.
3. Mutual General Release: For and in consideration of good and valuable
consideration:
(A) Executive and TI hereby voluntarily, knowingly and willingly release, acquits and
forever discharge the Company, and each of its respective subsidiary corporations, and each
of their former, current and future parents, subsidiaries, divisions, affiliates,
predecessors, successors and assigns and each of their current, former and future agents,
employees, officers, directors, shareholders, joint venturers, attorneys, representatives,
insurers, owners, servants, employee benefit plans and the fiduciaries and agents of such
plans from any and all claims, demands, actions, liabilities, damages, costs or expenses of
any kind or nature whatsoever which they have now or may have, whether known or unknown,
foreseen or unforeseen, whether based on oral or written communications, including without
limitation, any and all claims asserted or which could have been asserted in the Lawsuit,
any employment related discrimination or harassment claims under the Americans with
Disabilities Act; Title VII of the Civil Rights Act; the Age Discrimination in Employment
Act of 1967, as amended, (“ADEA”) and the Older Workers Benefit Protection Act of 1990
(“OWBPA”), which prohibit discrimination in employment on the basis of age; the Civil Rights
Act of 1866, as amended; the Civil Rights Act of 1991; the Energy Reorganization Act, as
amended, 42 U.S.C. §5851; the Pregnancy Discrimination Act of 1978; the Employee Retirement
Income Security Act of 1974, as amended (29 U.S.C. §§ 1001, et seq.); the Family Medical
Leave Act; the California Fair Employment and Housing Act; the California Family Rights Act;
the Fair Labor Standards Act; the New York State Human Rights Law, the New York City Human
Rights Law, the Administrative Code of the City of New York, the Employment Retirement
Income Security Act, Workers Adjustment and Retraining Notification Act, the Occupational
Safety and Health Act; the California Constitution, the California Labor Code or under
common law, contract, tort, defamation, slander, wrongful termination, or
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any other state, federal or international regulatory, statutory or common law including
claims in connection with workers’ compensation or “whistle blower” statutes. Executive and
TI hereby release any and all claims they have ever had up to and including the date of
Executive and TI’s execution of this Agreement, including, without limitation, those arising
out of or in any way related to Executive and/or TI’s employment or consulting services with
the Company or the Executive’s service and resignation as a director of the Company or the
termination of that employment, service as a director, or TI’s and Executive’s consulting
services. Nothing contained in this Agreement, however, shall impact Executive or TI’s
rights in any vested interest or benefit of Executive or TI under any benefit plans of the
Company.
(B) OLDER WORKERS’ BENEFIT PROTECTION ACT, LIMITED REVOCATION AND EFFECTIVE DATE. To
comply with the Older Workers’ Benefit Protection Act of 1990 (the “Act”), Company has
advised Employee, by and through this Agreement, of the legal requirements of this Act and
fully incorporates the legal requirements by reference into this Agreement as follows: (a.)
This Agreement is written in xxxxxx’x terms, and Executive understands and comprehends its
terms; (b.) Executive has been advised of his right to consult an attorney to review the
Agreement, of your choosing and cost; (c.) Executive has not waived any of his rights or
claims that may arise after the date the waiver is executed; (d.) Executive is receiving
consideration beyond anything of value to which he is already entitled; and (e.) Executive
acknowledges that he has had a reasonable period of time within which to review and consider
this Agreement.
EXECUTIVE SPECIFICALLY ACKNOWLEDGES AND AGREES THAT BY EXECUTING THIS
AGREEMENT, HE IS WAIVING ALL RIGHTS OR CLAIMS, IF ANY, THAT HE HAS OR MAY
HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS AMENDED. EXECUTIVE
FURTHER ACKNOWLEDGES AND AGREES THAT HIS WAIVER OF SUCH RIGHTS OR CLAIMS IS
KNOWING AND VOLUNTARY.
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(C) It is a condition hereof, and it is Executive and TI’s intention in the execution
of the General Release in subparagraph 3(A), above, that the same shall be effective as a
bar to each and every claim hereinabove specified, and in furtherance of this intention,
Executive and TI hereby expressly waive any and all rights and benefits conferred upon
Executive and TI by Section 1542 of the California Civil Code (or by the statutes or common
law of any jurisdiction which have the same effect as Section 1542), which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of
executing the Release, which if known by him or her must have
materially affected his or her settlement with the debtor.
(D) The Executive understands that entering into this waiver and release is an
important legal act. The Executive acknowledges that the Company has advised him in writing
to consult an attorney before entering this waiver and release. The Executive understands
that, in order to be paid the consideration set forth in Section 2 , he must sign (and
return to Xxxxxxx X. Xxxxxxxx, Senior Vice President and General Counsel) this Agreement,
including this waiver and release before 5 p.m. on August ___, 2007. The Executive
acknowledges that he has been given TWENTY-ONE (21) days to consider whether to sign the
Resignation and Compromise Agreement and whether to enter into this waiver and release. The
Executive further understands that for a period of 7 calendar days following the date that
he executes this Resignation and Compromise Agreement, including this waiver and release,
Executive may revoke his acceptance of the benefits of the Resignation and Compromise
Agreement, provided that his written statement of revocation is received on or before that
seventh day by Xxxxxxx X. Xxxxxxxx, Senior Vice President and General Counsel to Syntroleum
Corporation, 0000 Xxxxx 00xx Xxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, facsimile number: (000)
000-0000, in which case the Resignation and Compromise Agreement, including the waiver and
release will not become effective. In the event the Executive revokes his acceptance of
this Agreement, the Company shall have no obligation to provide Executive any of the consideration
pursuant to Sections 2, 3, 4 or 7 of this Agreement. The Executive understands that failure
to revoke his acceptance of this Agreement within 7 calendar days from the date he sign this
Agreement will result in this Agreement, including the waiver and release being permanent
and irrevocable.
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(E) The Company, on behalf of itself and its parents, subsidiaries, divisions,
affiliates, predecessors, successors and assigns and each of their current, former and
future agents, employees, officers, directors, shareholders, insurers, joint venturers,
attorneys, representatives, owners and servants, hereby voluntarily, knowingly and willingly
releases, acquits and forever discharges Executive and TI from any and all claims, costs or
expenses of any kind or nature whatsoever, whether known or unknown, foreseen or unforeseen,
whether pursuant to oral or written communication, which the Company ever had, now has or
hereinafter may have, up to and including the date of Company’s execution of this Agreement,
including, without limitation, those arising out of or in any way related to Executive’s
employment with Company, the termination of that employment, Executive’s service and
resignation as a Director of the Company as well as Executive and TI’s consulting services
and the termination of such services.
(F) It is a condition hereof, and it is the Company’s intention in the execution of the
General Release in subparagraph 3(C), above, that the same shall be effective as a bar to
each and every claim hereinabove specified, and in furtherance of this intention, the
Company hereby expressly waives any and all rights and benefits conferred upon the Company
by Section 1542 of the California Civil Code (or by the statutes or common law of any
jurisdiction which has the same effect as Section 1542), which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of
executing the Release, which if known by him or her must have
materially affected his or her settlement with the debtor.
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(G) The Company represents and warrants that it has not assigned or transferred, or
purported to assign or transfer, to any person, firm, corporation or entity
any claim or
other matter released by this Agreement. The Company agrees to indemnify Executive and TI
and anyone else released by this Agreement and hold them harmless against any claims, costs
or expenses, including, without limitation, attorneys’ fees actually paid or incurred,
arising out of, related to or in any manner whatsoever connected with any such transfer or
assignment or purported or claimed transfer or assignment. In addition, nothing in the
release contained in this paragraph 3 is intended to release the Company’s obligations, if
any, to indemnify Executive or TI from liability for any act or omission by Executive or TI
arising out of or related to the performance of his or its duties as a consultant, director
or employee on behalf of the Company.
4. Further Consideration and Discontinuation of Benefits
(A) Health Plan Coverage Continuation. The Executive and his qualifying
dependents, but not including TI, may be eligible for continuation coverage for medical and
dental+vision benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”). In the event the Executive elects continuation coverage under COBRA and subject
to the Company’s ability to amend or terminate its benefit plans at any time, the Company
will pay the health insurance premiums until August 31, 2008 (the first twelve (12) months
of his COBRA coverage). Executive shall receive, by separate letter, notice of his COBRA
rights. He shall comply with the obligations of his administrative duties as set forth by
the administrator of his COBRA benefits. Executive shall be responsible, should he elect to
continue his COBRA benefits, for the premiums after August 31, 2008, months thirteen (13)
through eighteen (18) of his eighteen month COBRA coverage.
(B) Options and Restricted Stock. The Executive shall have the right to
exercise any stock, warrants or options granted by the Company during his services as a
director, employee, or consultant (as listed in Attachment “F”) subject to the terms and
conditions of the grant agreement for such stock. The Executive acknowledges that, in
exchange for the benefits granted above under Section 2(A) and the conditions of Section 3
of this Agreement, the Company shall have no further obligation to issue any of its common
stock to the Executive or TI.
(C) Bonuses. The Executive acknowledges that, in exchange for the benefits
granted above under Section 2(A) and the conditions of Section 3 of this Agreement, the
Company shall have no further obligation to pay any bonuses to the Executive, or TI, that
would otherwise be payable to employees of the Company for their performance based upon
services rendered in 2007 or any years beyond.
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(D) Compensation to Directors. The Executive acknowledges that, in exchange
for the benefits granted above under Section 2(A) and the conditions of Section 3 of this
Agreement, the Company shall have no further obligation to pay any compensation to the
Executive, or TI, that would otherwise be payable to directors of the Company for their
performance based upon services rendered in 2007 or any years beyond. Company shall,
however, reimburse any and all expenses owed to Executive as a result of his service as a
member of the Board of Directors of the Company in accordance with the Company’s policy for
reimbursement to directors.
(E) Paid Leave. The Executive acknowledges that, in exchange for the benefits
granted above under Section 2(A) and the conditions of Section 3 of this Agreement, the
Company shall have fulfilled its obligation to pay compensation for earned, unused vacation
(150.83 hours) or sick leave (80 hours) to the Executive, or TI, that would otherwise be
payable to employees of the Company at the time of their separation from service to the
Company.
(F) 401(k) Plan. The Executive acknowledges that, in exchange for the benefits
granted above under Section 2(A) and the conditions of Section 3 of this Agreement, the
Company shall have no further obligation to pay any compensation to any 401(k) Plan of the
Executive, or TI, that would otherwise be payable to employees of the Company.
Notwithstanding the foregoing sentence, the Executive’s rights under the Syntroleum 401(k)
Plan, as well as any other deferred compensation plan or arrangement of the Company in which
the Executive has participated during his service as an employee, shall be subject to the
terms and conditions for participation in such plans. Nothing contained in this Agreement
shall impact any vested interest or benefit of Executive or TI in such plans.
5. Continuing Obligations of the Executive. As a material inducement to the Company
to enter into this Agreement, the Executive and TI hereby agree to the following for the benefit of
the Company.
(A) Without any further obligation to or restriction by the Executive or TI, the
Company may contact, engage, conduct business, and effect transactions with any Person
previously introduced by the Executive or TI to the Company. “Person” means, as used in
connection with this Agreement, any natural person, corporation, joint venture,
partnership,
limited liability company, firm, association, trust, government, governmental agency or any
other entity, other than the Parties.
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(B) Executive acknowledges that the services he may render to the Company are of a
special and unusual character with a unique value to the Company, which cannot adequately be
compensated by damages in an action at law. In view of the unique value to the Company of
the services of Executive and because of the confidential Trade Secret Information (as
defined herein) obtained by or disclosed to Executive during his relationship with the
Company, as set forth above, and as a material inducement to the Company to enter into this
Agreement and to pay to Executive the compensation and benefits stated in Section 2,
Executive covenants and agrees that:
(1) For a period of one (1) year after the Separation Date (the
“Non-Competition Period”), the Executive and TI will neither directly nor
indirectly:
(a) start or participate or assist (as a proprietor, partner,
shareholder, lender, investor, director, employee, consultant, independent
contractor or otherwise) in starting any Competing Business (as defined
herein);
(b) assist any existing Competing Business in the design, development
or manufacture of any Competing Product (as defined herein), whether as a
proprietor, partner, shareholder (except as a holder of 5% or less of the
outstanding voting securities or income interest), lender, investor (except
as a holder of 5% or less of the outstanding voting securities or income
interest), director, employee, consultant, independent contractor or
otherwise;
(c) sell or assist in the sale of any Competing Product to any
Competing Business.
(d) solicit, recruit, hire or attempt to solicit, recruit or hire,
directly or by assisting others, any other employee of the Company for
employment to commence during the Non-Competition Period; or
(e) become employed by a former employee of the Company.
(2) Because Company actively pursues opportunities throughout the world and is
engaged in a world-wide oriented business the Executive and TI acknowledge the
reasonableness of having no geographic limitation hereunder.
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(3) As used in this Agreement,
(a) “Competing Business” means the design, manufacture or sale of a
Competing Product by Rentech, Sasol, World GTL, Mossgas, Neste, UOP, Xxxxx
XX, or Statoil and/or any affiliates of the foregoing Persons by which such
foregoing Persons are engaged in the design, manufacture or sale of a
Competing Product.
(b) “Competing Product” means any product (including, without
limitation, any chemical formula or process) which is marketed in
competition with any product, process, component or technology (including
catalysts) for the production of synthetic fuels or lubricants which was
marketed or under development by the Company during the time Executive held
a position with the Company as director or employee or TI was a consultant
to the Company.
(c) “Trade Secret Information” means information, including, but not
limited to, any formula, pattern, compilation, program, device, method,
technique or process, that: (i) derives independent economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. For purposes of
this Agreement, “Trade Secret Information” includes both information
disclosed to Executive or TI by the Company and information developed by the
Executive or TI in the course of their relationship with the Company. Such
Trade Secret information does not include any information which was known to
Executive or TI prior to serving as a consultant, director or employee of
the Company.
(C) Except as provided herein, the Parties mutually agree that the terms and conditions
of this Agreement are to remain confidential, and the Parties shall not disclose the terms
of this Agreement to any third party. The Executive or TI will not be in breach of the
covenant contained above solely by reason of responding to any request for information,
including but not limited to giving testimony or producing documents, that is compelled by
process of law, provided, however, that the Executive or TI first notifies the General
Counsel of the Company to the extent time reasonably permits and allows the General Counsel
to participate in any such contact, unless the Executive or TI has a good faith belief that
the law requires otherwise. Such obligation of confidentiality will not
apply to those
terms and conditions which the Company discloses to the public through any filings made with
the Securities and Exchange Commission or the Nasdaq.
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(D) All documents, encoded media, and other tangible items provided to the Executive or
TI by the Company, or prepared, generated or created by Executive or others on behalf of the
Company, are the property of the Company. Within ten (10) days of the Resignation Date,
Executive and TI will promptly deliver to the Company all such documents, media and other
items in his possession, including all complete or partial copies, Board materials,
recordings, abstracts, notes or reproductions of any kind made from or about such materials
or information contained therein. Nothing contained in this paragraph 5(D) shall require
Executive or TI to return or destroy any portion of the materials related to the
gas-to-liquids (GTL) barge (“GTL Barge Study”) which is owned jointly by the Company, TI and
Dragados Industrial, S.A. Executive and TI has neither claim nor any right, title or
interest in any trademark, service xxxx or trade name owned or used by the Company, except
to the extent applicable for the GTL Barge Study.
(E) The Executive and TI agree that their obligations of confidentiality to the Company
in accordance with the terms of that certain confidentiality agreement dated August 14, 2003
(the “Confidentiality Agreement”) shall continue and be extended by this Agreement, and such
Confidentiality Agreement shall terminate December 31, 2011 and the definition of
“Confidential Information” contained therein shall include any and all information relating
to the Company’s businesses provided to Executive as a result of his consulting, employee
and/or director positions with the Company, unless expressly excluded in such
Confidentiality Agreement.
6. Assistance with Investigations and Other Legal Proceedings. Until the Separation
Date and without additional cost to the Company for the services of the Executive or TI, the
Executive or TI will furnish such information and proper assistance as may be reasonably
necessary in connection with any investigation undertaken by the management of the Company or
the Board of Directors (or a subcommittee thereof), including appearing in person, if necessary, at
times and places with reasonable advance notice as requested by the Company. In addition, the
Executive and TI agree that for a period of three (3) years after the Separation Date, the
Executive and TI will furnish such information and proper assistance as may be reasonably necessary
in connection with any litigation or other legal proceedings in which the Company or any affiliate
or subsidiary is then or may become involved; provided, however, that the parties agree to
negotiate a reasonable rate of compensation for any such services. The Executive and TI agree not
to knowingly initiate contact with any party in litigation with Syntroleum or with any person, firm
or governmental entity investigating Syntroleum for the purpose of assisting
such person, firm or
governmental entity with such litigation with or investigation of Syntroleum, without first
notifying Syntroleum’s General Counsel to the extent time reasonably permits and allowing the
General Counsel to participate in any such contact, unless the Executive or TI has a good faith
belief that the law requires otherwise.
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7. Reference; Nondisparagement. The Parties mutually agree to refrain from any
criticisms or disparaging comments about the Executive, TI and/or the Company (including any
current or former officer, director or employee of the Company). Notwithstanding the forgoing,
this paragraph imposes no limitation on the Executive’s rights as a shareholder of the Company, or
on any parties’ rights to enforce this Agreement. Nothing in this Agreement shall apply to or
restrict in any way the communication of information by any Party to any state or federal law
enforcement agency, or require notice to any Party thereof in such event, and no Party will be in
breach of the covenants contained above solely by reason of responding to any request for
information, including but not limited to giving testimony or producing documents, that is
compelled by process of law or exercising any of its rights under this Agreement. Upon execution
of this Agreement, the Parties agree to release a mutually agreeable public statement regarding
Executive and TI’s separation from the Company; no public statement shall be released absent
approval by both Parties, except as may be required by law or the rules or regulations of a stock
exchange upon which the securities of the Company may be listed.
8. Non-Alienation. The Executive and TI shall not have any right to pledge,
hypothecate, encumber, anticipate, or in any way create a lien upon any amounts provided in
Attachment E of this Agreement, and no payments or benefits due thereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts or by operation of
law. So long as the Executive lives, no person, other than the parties hereto, shall have any
rights under or interest in this Agreement or the subject matter hereof. Upon the death of the
Executive, his
executors, administrators, devisees or heirs, in that order, shall have the right to enforce
the provisions hereof.
9. Amendment of Agreement. This Agreement may not be modified or amended except by an
instrument in writing signed by the Parties hereto. Each of the Company, TI and the Executive
agree that verbal communications by one party to the other Party regarding the terms of this
Agreement, and any modification or amendment hereto, shall not be enforceable unless and until
presented in an instrument in writing signed by the Parties hereto.
10. Waiver. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement,
except by written instrument of the Party charged with such waiver or estoppel.
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11. Notices. All notices or communications hereunder shall be in writing, addressed
as follows:
(A) |
To the Company: | |
| Syntroleum Corporation | ||
| 0000 Xxxxx 00xx Xxxx Xxxxxx | ||
| Xxxxx, XX 00000-0000 | ||
| Attention: General Counsel | ||
| Fax: (000) 000-0000 | ||
(B) |
To the Executive and TI: | |
| TI Capital | ||
| X.X. Xxx 00000 | ||
| Xxx Xxxxxxx, XX 00000 | ||
| Fax: (000) 000-0000 |
All such notices shall be conclusively deemed to be received and shall be effective; (i) if sent by
hand delivery, upon receipt, (ii) if sent by telecopy or facsimile transmission, upon confirmation
of receipt by the sender of such transmission or (iii) if sent by registered or certified mail, on
the fifth day after the day on which such notice is mailed.
12. Tax Withholding. In instances where a taxable event involves options or stock,
the Executive may elect to have the withholding obligations satisfied by the withholding of shares
of stock otherwise deliverable to the Executive or provided by the Executive to the extent allowed
by, and in accordance with the terms of, the applicable incentive plan and governing laws and
regulations.
13. Drafting. The covenants contained herein shall not be construed in favor of or
against the other party but shall be construed as if all parties prepared this Agreement.
14. Agreement Not To Be Used As Evidence. This Agreement shall not be admissible as
evidence in any proceeding except one in which a party to this Agreement seeks to enforce this
Agreement or alleges this Agreement has been breached, or one in which a court or administrative
agency of competent jurisdiction orders Executive or the Company to produce this Agreement. If a
court or administrative agency orders production of this Agreement or disclosure of the terms of
this Agreement is sought and reasonable advance notice is provided, Executive, TI or the Company
shall immediately notify the other Parties of same and shall cooperate with any efforts to obtain a
protective order from that court or agency preventing such production or requiring that this
Agreement be produced or filed only under seal and that other parties to any such proceedings and
their counsel shall not disclose the existence or terms of this Agreement for purposes not related
to the proceeding in which this Agreement was ordered to be produced.
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15. Severability. If any provision of this Agreement is held to be invalid, illegal
or unenforceable, in whole or part, such invalidity will not affect any otherwise valid provision,
and all other valid provisions will remain in full force and effect.
16. Titles. The titles and headings preceding the text of the sections and
subsections of this Agreement have been inserted solely for convenience of reference and do not
constitute a part of this Agreement or affect its meaning, interpretation or effect.
17. Governing Law; Venue.
(A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF. The Company, TI, and the Executive each irrevocably waive, to the
fullest extent allowed by law, any objection either of them may have to the laying of venue
of any such suit, action or proceeding in New York County, New York based upon a claim that
such court is inconvenient or otherwise an objectionable forum. Any process in any action,
suit or proceeding arising out of or relating to this Agreement may, among other methods, be
served upon the Company, TI or the Executive by delivering it or mailing it to their
respective addresses set forth herein. Any such delivery or mail service shall be deemed to
have the same force and effect as personal service in the State of New York.
(B) Arbitration. Any dispute arising out of or in connection with this
Agreement, including any question regarding its existence, validity or termination, shall be
submitted to binding arbitration in New York, New York with the American Arbitration
Association. In the event that any party pursues arbitration to remedy any breach of this
Agreement by any other party, the prevailing party shall be entitled to recover from the
losing party the reasonable costs and attorneys’ fees the prevailing party incurs through
such arbitration, in addition to any other legal and/or equitable relief to which the
prevailing party may be entitled. In such circumstances, however, all obligations under
this Agreement, including, without limitation, the Mutual Release in Paragraph 3, above,
shall remain in full force and effect.
18. Entire Agreement. This Agreement, together with Attachments constitutes
the entire agreement of the parties with respect to the subject matter hereof, and the terms,
conditions and obligations of this Agreement expressly supersedes all prior agreements, except as
expressly provided herein.
14
| RESIGNATION AND COMPROMISE AGREEMENT | CONFIDENTIAL |
19. 409A Compliance. The parties acknowledge that all payments and benefits provided
under this Agreement and the Consulting Agreement are intended to meet the requirements and
restrictions of the nonqualified deferred compensation rules contained in Section 409A of the
Internal Revenue Code of 1986, as amended (to the extent applicable thereto).
20. EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT; THAT EXECUTIVE HAS HAD
AT LEAST 21 DAYS IN WHICH TO CONSIDER AND RETURN THIS AGREEMENT; THAT EXECUTIVE HAS HAD AN
OPPORTUNITY TO CONSULT WITH AN ATTORNEY, OF EXECUTIVE’S CHOICE AND COST, IN CONNECTION WITH THIS
AGREEMENT; THAT EXECUTIVE FULLY UNDERSTANDS THE TERMS, CONDITIONS, AND SIGNIFICANCE AND
CONSEQUENCES OF THIS AGREEMENT; AND THAT EXECUTIVE HAS EXECUTED THIS AGREEMENT KNOWINGLY AND
VOLUNTARILY, AND OF EXECUTIVE’S OWN FREE WILL.
IN WITNESS WHEREOF, the parties have executed this Agreement in multiple counterparts, all of
which shall constitute one agreement, effective as of the date and year first above written.
| SYNTROLEUM CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Xxxxxxx X. Xxxx | ||||
| Chairman of the Board & Chief Research Officer | ||||
| EXECUTIVE and TI Capital Management |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Xxxx Xxxxxxxx | ||||
15
Attachment
“A”
AGREEMENTS WHICH ARE TERMINATED AND SUPERSEDED,
EXCEPT WHERE EXPRESSLY INDICATED IN THIS AGREEMENT
AGREEMENTS WHICH ARE TERMINATED AND SUPERSEDED,
EXCEPT WHERE EXPRESSLY INDICATED IN THIS AGREEMENT
CONFIDENTIAL
The Executive and the Company agree that the following documents shall be terminated and the
obligations of each Party under such documents shall be superseded by this Agreement, except as
specified in this Agreement.
1) The Consulting Agreement between the parties dated October 1, 2003, as amended by:
a) Amendment #1 dated October 15, 2003
b) Amendment #2 dated February 2, 2004
c) Amendment #3 dated October 3, 2004
d) Amendment #4 dated Xxxxx 00, 0000
x) Xxxxxxxxx #5 dated February 13, 2006
| 2) | All outstanding invoices from Executive, TI or a Person affiliated with Executive or TI , are
hereby cancelled, and the Company shall have no further obligation to pay any such invoices
except as expressly provided for in this Agreement. |
A - 1
Attachment
“B”
TERMINATION OF CONSULTING AGREEMENT
NON-CONFIDENTIAL
August [•], 2007
Re: Confirmation of Termination of All Consulting Agreements
Dear Sir/Madam:
By affixing my signature to this letter, I hereby terminate any and all consulting
arrangements between TI Capital Management and Syntroleum Corporation, including all of its
affiliates and/or subsidiaries that are in existence as of the date of this correspondence. The
termination includes the consulting agreement between TI Capital Management and Syntroleum
Corporation dated October 1, 2003, including its amendments of October 15, 2003 (Amendment #1),
February 2, 2004 (Amendment #2), October 3, 2004 (Amendment #3), March 21, 2005 (Amendment #4) and
February 13, 2006 (Amendment #5) (collectively the “Consulting Agreement”). Furthermore, I agree
that, in addition to terminating the Consulting Agreement, all outstanding, unpaid invoices from TI
Capital Management are hereby cancelled. As of the date of this correspondence, no Party shall
have any obligations to the other under the terms of the Consulting Agreement.
Sincerely,
TI CAPITAL MANAGEMENT
Xxxx Xxxxxxxx
[Title]
[Title]
ACCEPTED:
SYNTROLEUM CORPORATION
By |
||||
Its |
||||
B - 1
Attachment “C”
RESIGNATION FROM OFFICES
(TO BE PRINTED ON SYNTROLEUM LETTERHEAD)
(TO BE PRINTED ON SYNTROLEUM LETTERHEAD)
NON-CONFIDENTIAL
August [•], 2007
Attn.: Secretary of the Corporation
Re: Confirmation of resignation from all positions and offices held in Syntroleum Corporation, and all of its affiliates and/or subsidiaries |
Dear Sir/Madam:
By affixing my signature to this letter, I hereby resign from any and all positions and/or
offices previously held in Syntroleum Corporation, all of its affiliates and/or subsidiaries that
are in existence as of the date of this correspondence. My resignation includes, without
limitation, any position as a director, officer, agent, consultant or trustee in any of the
entities of Syntroleum Corporation (its affiliates and/or subsidiaries). My resignation from all
positions held in the Company, except as an employee, shall become effective as of August [•],
2007. My resignation as an employee shall become effective on August 31, 2007.
Sincerely,
Xxxx Xxxxxxxx
C - 1
Attachment “D”
EQUIPMENT TO BE TRANSFERRED TO THE EXECUTIVE
CONFIDENTIAL
The Company agrees to assign and transfer ownership of these certain items listed below to the
Executive on the later of thirty (30) days of execution of this Agreement or within a reasonable
period thereof as required to coordinate with the third party vendors of the Company. Syntroleum
GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS AND DELIVERS unto Executive and TI, its
successors and assigns, effective as of the date hereof, certain of Syntroleum’s equipment as more
particularly described below. All items are to be provided to the Executive in current condition
on an “AS IS, WHERE IS” basis, without any further obligation of support by the Company or any of
its vendors.
1) 2 RIM Blackberrys
2) Dell laptop serial number D620 – BMBB4B1
3) Dell laptop serial number D620 – 6MBB4B1
4) Dell laptop serial number C400 – 6R0P311
D - 1
Attachment “E”
ADDITIONAL COMPENSATION
CONFIDENTIAL
Executive shall earn and receive additional compensation for the Projects listed below subject
to the following conditions:
1) Projects.
| a) | Executive shall earn and receive the additional compensation set forth below on
Project(s) (as defined herein) with any of the following individuals or entities (“Project
Participants”): |
| i) | SINOPEC (China Petroleum & Chemical Corporation) |
||
| ii) | Petronas (Petroliam Nasional Berhad) |
||
| iii) | Petrobras (Petróleo Brasileiro SA) |
||
| iv) | Bluewater Energy Services, B.V. |
||
| v) | The first individual or entity who makes payment of any Fee for a
commercial GTL Fixed Unit or GTL Mobile Unit from, or, in the alternative, for a
transfer of the Syntroleum GTL technology to, such individual or entity (the “Unnamed
Person”). |
| b) | For purposes of this Agreement, the following terms shall have the meanings ascribed
herein: |
| i) | GTL Fixed Unit” means a commercial scale land based or platform based facility. |
||
| ii) | “GTL Mobile Unit” means a commercial scale barge or floating, production,
storage and offtake vessel. For the avoidance of doubt the fact that a particular barge
has been grounded or that a portion of the pre-treatment, storage or other facilities
related to the gas to liquids capability are located onshore or on a separate platform
shall not disqualify a barge or vessel as a GTL Mobile Unit so long as the
Xxxxxxx-Tropsch gas to liquids facilities are mounted on such barge or vessel. |
||
| iii) | “Project” means the execution of a site license agreement, technology transfer
agreement, or other agreement by the Company or any of its subsidiaries or
affiliates with an individual or entity to utilize the proprietary Xxxxxxx-Tropsch
processing technology of the Company in a GTL Fixed Unit or GTL Mobile Unit which
includes the use of the Autothermal Reforming Reactor (ATR) technology, Xxxxxxx-Tropsch
Reactor (FTR) technology, product refining and upgrading (Synfining®) technology, and
Xxxxxxx-Tropsch catalyst technology (the “Syntroleum Xxxxxxx-Tropsch Process”). Agreements relating to coal-to-liquids or biomass-to-liquids are expressly
excluded. |
E - 1
Attachment “E”
ADDITIONAL COMPENSATION
CONFIDENTIAL
2) Additional Compensation.
| a) | Subject to the conditions stated below, the Executive shall receive three percent (3%)
of the first net cash received by Company or any of its subsidiaries or affiliates for
payment of the Fee for a GTL Fixed Unit or GTL Mobile Unit Project by a Project
Participant listed above in Paragraph 1 of this Attachment “E” with a minimum payment to
Executive of $1,500,000 per Project. |
| i) | The “Fee” shall be those upfront fees paid for access to the Syntroleum
Xxxxxxx-Tropsch Process and shall not include (1) any royalty paid per unit of
production over the life of the plant and (2) any fees for time and material in
preparing a process design package or work with any contractors of the licensee. The
“Fee” for a transfer of Syntroleum GTL technology shall be those fees paid within one
(1) year of the date of the technology transfer agreement or other agreement
and shall not include (1) any royalty paid per unit of production over the life of the
plant and (2) any fees for preparing a process design package or work with any
contractors of the recipient of the technology transfer. The Company agrees that it
will not structure the terms of any Projects with the Project Participants so as to
intentionally reduce or limit the “Fee” for the purpose of reducing the payment to
Executive under this Attachment “E.” |
||
| ii) | The forgoing obligation shall only burden cash received by the Company or any
of its affiliates or subsidiaries from a Project Participant for a Project, and the
compensation due the Executive shall be due and payable by the Company or its
affiliates or subsidiaries after receipt of such payment from such Project Participant. |
||
| iii) | The Company may, at its sole discretion, elect to convert the net cash payment
from a Project Participant to an equity position in the Project, or any other non-cash
consideration. In such an event, the Executive shall remain eligible to receive the
payment for such Project, subject to the minimum payment provision set forth in section
2(a) of this Attachment E. |
||
| iv) | If the gross payment by a Project Participant for a Project is subjected to
in-country taxation, thereby reducing the total received by the Company or any of its
affiliates or subsidiaries, the amount due the Executive shall be 3% of such reduced
amount, subject to the minimum payment provision set forth in section 2(a) of this
Attachment E. |
E - 2
| v) | It is understood that the Company will not exercise any rights to terminate
this Agreement or any Projects for the purpose of avoiding payment of compensations
under this Attachment E to Executive. Should the Company elect to forfeit a Fee on a
Project, Executive is eligible for compensation as if the Fee was paid, subject to the
minimum payment provision set forth in section 2(a) of this Attachment E. |
| b) | The Company is obligated to provide written notice to Executive within thirty (30) days
of the closing of each and every transaction with the Project Participants advising
Executive of the terms of the transaction and the Company’s good faith determination of
whether it constitutes a Project that meets the conditions for the Executive to receive
payment under of Paragraph 2(a). The Company shall make payment to the Executive within
thirty (30) days of receipt of one of the following notifications: |
| i) | Notification of Mutual Agreement. Executive shall notify the Company in
writing that he agrees with its determination that a Project has occurred obligating
the Company to make payment to Executive under Paragraph 2(a); or |
||
| ii) | Notification of Independent Auditor Opinion. Should Executive dispute the
Company’s determination of whether a Project has occurred, Executive shall give written
notice to the Company within ten (10) days of receipt of the Company’s determination.
The Company and Executive agree that an independent auditor mutually agreeable to both
parties shall review the terms of the agreement and provide a good faith opinion as to
whether a Project has occurred obligating the Company to make payment to Executive
under Paragraph 2(a). The independent auditor shall notify the Company and Executive
simultaneously, in writing, of such good faith opinion. The Company and Executive shall
each pay half of the costs for such independent audit. |
E - 3
Attachment “E”
ADDITIONAL COMPENSATION
CONFIDENTIAL
3) Project Support.
| a) | The Executive shall be reasonably available to the Company on an as needed basis to
support the development of the Projects. When the assistance of the Executive is required
by the Company, the Company shall pay the Executive, within thirty (30) days after receipt
of a monthly invoice for the services of the Executive, in accordance with the following: |
| i) | The Executive is eligible to earn $2,500.00 per day of consulting rendered; |
||
| ii) | The Company will reimburse the reasonable travel costs of the Executive,
subject to Executive remitting invoices and receipts to the Company, in accordance with
the Company travel policies in effect at the time and the general accounting practices
of the Company. |
4) Option to Terminate on Change of Control.
| a) | In the event of a Change of Control of the Company, the Executive shall have the option
to terminate the Additional Compensation under this Attachment “E” and receive a lump sum
payment of $2 million from the Company within forty-five (45) days of the Executive’s
written exercise of such option. The Executive shall exercise such option within fifteen
(15) days of notice being provided by the Company to its shareholders and the general
public of the closing of the event of Change of Control. Failure to exercise such
option within the fifteen day period shall be deemed an election to not receive the $2
million lump sum payment. For purposes of this Agreement “Change in Control” shall be
deemed to occur if: |
| i) | any person (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company ) or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 shall become the beneficial owner of
25% or more of the shares of common stock then outstanding after giving effect to such
acquisition; provided, however, that no Change of Control shall be deemed to occur for
purposes of this subsection (1) if: (a) such person or group shall become such a
beneficial owner solely as a result of an acquisition by a person or group directly
from the Company or through a underwritten offering by the Company or (b)
notwithstanding such acquisition of such ownership level, a change of the Incumbent
Board as stipulated in subsection (2) below has not occurred; |
||
| ii) | individuals who, as of Agreement Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the Agreement
Effective Date a) due to the ordinary attrition of the Incumbent Board and
not part
of a change or planned change of any beneficial ownership interest in the common stock
of the Company and b) whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board; or |
E - 4
| iii) | majority of the shareholders of the Company approve a reorganization, merger or
consolidation unless, upon completion of such reorganization, merger or consolidation,
(i) more than 50% of the then outstanding shares of common stock of the Company
resulting from such reorganization, merger or consolidation and the combined voting
power of the then outstanding common stock of the Company is then beneficially owned,
directly or indirectly, by all or substantially all of the persons who were the
beneficial owners of the outstanding common stock immediately prior to such
reorganization, merger or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or consolidation, of the
outstanding common stock and (ii) at least a majority of the members of the board of
directors of the entity resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the Agreement Effective Date. |
5) Term.
| a) | The Executive’s eligibility to earn the additional compensation granted under this
Attachment “E” shall be available until the earlier to occur of: |
| i) | A mutual termination, in writing by the parties; |
||
| ii) | Executive’s exercise of the option to terminate in the event of a Change of
Control under section 4 of this Attachment “E”; or |
||
| iii) | On December 31, 2011 at 1700 hours central daylight time (GMT-6). |
E - 5
Attachment “F”
Syntroleum Corporation |
OUTSTANDING AND EXERCISABLE BY PRICE | Page: | 1 | |||
| AS OF 7/10/2007 | File: | Osprice | ||||
| Date: | 7/10/2007 | |||||
| Time: | 12:50:18 PM |
| Option | Expiration | Remaining | Option | Shares | Shares | |||||||||||||||||||||||||||
| Name | Number | Date | Date | Life in Years | Price | Outstanding | Exercisable | |||||||||||||||||||||||||
Warrants |
||||||||||||||||||||||||||||||||
Xxxxxxxx, Xxxx |
00000804 | 9/7/2004 | 11/4/2007 | 0.32 | $ | 4.5000 | 300,000 | 300,000 | ||||||||||||||||||||||||
| 300,000 | 300,000 | |||||||||||||||||||||||||||||||
Xxxxxxxx, Xxxx
|
00000766 | 4/26/2004 | 11/4/2007 | 0.32 | $ | 5.0000 | 170,000 | 170,000 | ||||||||||||||||||||||||
| 170,000 | 170,000 | |||||||||||||||||||||||||||||||
Xxxxxxxx, Xxxx
|
00000942 | 2/23/2005 | 11/4/2007 | 0.32 | $ | 5.2500 | 500,000 | 500,000 | ||||||||||||||||||||||||
| 500,000 | 500,000 | |||||||||||||||||||||||||||||||
| Subtotal | 970,000 | 970,000 | ||||||||||||||||||||||||||||||
Options |
||||||||||||||||||||||||||||||||
Xxxxxxxx, Xxxx |
00000764 | 2/2/2004 | 2/2/2014 | 6.57 | $ | 5.2500 | 3,429 | 3,429 | ||||||||||||||||||||||||
| 3,429 | 3,429 | |||||||||||||||||||||||||||||||
Xxxxxxxx, Xxxx |
00000837 | 1/1/2005 | 1/1/2015 | 7.48 | $ | 8.0300 | 2,242 | 2,242 | ||||||||||||||||||||||||
| 2,242 | 2,242 | |||||||||||||||||||||||||||||||
| Subtotal | 5,671 | 5,671 | ||||||||||||||||||||||||||||||
| Total | 975,671 | 975,671 | ||||||||||||||||||||||||||||||
F - 1
