EXHIBIT 10.6
AMENDED SEPARATION AGREEMENT
THIS AMENDED SEPARATION AGREEMENT ("AGREEMENT") is made and entered
into as of March 21, 2005, by and between Xxxxxx Xxxxxx ("EXECUTIVE"), National
Coal Corp., a Florida Corporation ("PARENT"), and National Coal Corporation, a
Tennessee corporation (the "COMPANY").
RECITALS
A. Executive's employment with Parent and the Company will be
terminated effective March 31, 2005 (the "EFFECTIVE DATE").
B. Executive, Parent and the Company want to settle fully and
finally all differences or potential differences between them, including all
differences or potential differences which arise out of or relate to Executive's
employment or resignation of employment with Parent and the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Executive, Parent and the Company understand and agree as
follows:
1. EXECUTIVE'S RESIGNATION OF ALL POSITIONS WITH PARENT AND THE
COMPANY.
Executive hereby resigns any and all of his positions as an
officer, director or employee with Parent and the Company as of the Effective
Date. These positions include Chief Financial Officer and director of Parent and
the Company. Prior to the Effective Date, Executive shall continue to perform
his obligations to Parent and the Company, including, without limitation, (i)
assisting with the audit of Parent's financial statements for fiscal 2004, (ii)
preparation and filing of the Form 10-KSB, (iii) assisting with Parent's efforts
to list its shares for trading on the Nasdaq Stock Market, and (iv) otherwise
performing those services which are customarily performed by a chief financial
officer of a publicly traded company.
2. SEVERANCE BY THE COMPANY, CONTINUING SALARY AND MEDICAL
BENEFITS.
(a) The Company agrees that provided that at least eight
days have elapsed between the Company's receipt of an original executed copy of
this Agreement and the Effective Date, and provided that Executive has continued
to perform his obligations to the Company and Parent up to the Effective Date
and has not revoked the release contained in SECTION 6(c) of this Agreement, it
will: (i) continue paying Executive's current base salary, as it is set forth in
Executive's employment agreement with the Company dated July 1, 2004 and as
amended October 1, 2004 (the "EMPLOYMENT AGREEMENT"), less all applicable
deductions/withholdings, for a period ending on the Effective Date; (ii) pay
Executive on the Effective Date the cash value of all accrued but unused
vacation as of the Effective Date less all applicable deductions/withholdings;
(iii) pay Executive severance pay in the aggregate amount of $145,000 which
shall be payable either in one lump sum April 1, 2005, or at the sole discretion
of the
Company, two payments in the amounts of $72,500.00 on April 1, 2005 and
$72,500.00 on or before May 1, 2005; and (iv) pay for the continuation of
medical benefits for Executive and his family at existing levels from and after
the date of this Agreement and until the earlier of (x) March 31, 2006 and (y)
the date any subsequent employer of Executive offers to pay for medical benefits
that are comparable to those provided by and paid for by the Company on the
Effective Date. Executive shall notify the Company within 3 business days of
procuring such new employment of the name and address of Executive's new
employer and the date employment will commence
(b) In addition, Parent agrees that provided that at
least eight days have elapsed between the Company's receipt of an original
executed copy of this Agreement and the Effective Date, and provided that
Executive has not revoked the release contained in SECTION 6(c) of this
Agreement, Executive's Stock Option Agreement, dated March 24, 2004, between
Parent and Executive (the "OPTION AGREEMENT") is hereby amended: (i) to provide
for the continued vesting of options to purchase 56,250 shares of the Common
Stock of the Company, which shares shall vest in full and become exercisable on
January 1, 2006 notwithstanding termination of Executive's employment before
that date; and (ii) to allow Executive to exercise vested options under the
Option Agreement (including those that vest on January 1, 2006) from and after
the Effective Date until March 24, 2014.
(c) Executive acknowledges that upon execution of this
Agreement, the terms described in this SECTION 2 shall constitute full and
complete satisfaction of any and all amounts properly due and owing to Executive
as a result of his employment with the Company and/or his resignation from that
employment and that in the absence of this Agreement, Executive would not be
entitled to some or all of such payments.
3. NON-ADMISSION OF DISCRIMINATION OR WRONGDOING.
(a) This Agreement is entered into as a compromise of
disputed claims, and thus, the parties hereto expressly recognize that the
making of this Agreement shall not in any way be construed as an admission that
the Parent or Company or any individual has any liability to or acted wrongfully
in any way with respect to Executive or any other person. The Parent and Company
specifically deny that they have any liability to or that they have done any
wrongful, harassing and/or discriminatory acts against Executive or any other
person on the part of themselves, or their subsidiaries, affiliates,
predecessors, successors, officers, employees or agents.
(b) Executive understands and agrees that he has not
suffered any discrimination in terms, conditions or privileges of his employment
based on age, race, gender, religious creed, color, national origin, ancestry,
physical disability, mental disability, medication condition, marital status,
sexual orientation and/or sexual or racial harassment. Executive understands and
agrees that he has no claim for employment discrimination under any legal or
factual theory.
2
4. EMPLOYMENT AGREEMENT
Executive expressly acknowledges and agrees that
notwithstanding anything in this Agreement to the contrary, Section 4
(Noncompetition) and Section 5 (Confidential Information) of the Employment
Agreement shall survive the execution and delivery of this Agreement and
termination of Executive's employment. All other provisions of the Employment
Agreement shall terminate and be of no further force or effect from and after
the Effective Date.
5. NO LAWSUITS OR CLAIMS.
Executive on the one hand, and Parent and Company on the other
hand, each promises never to file a lawsuit, administrative complaint, or charge
of any kind with any court, governmental or administrative agency or arbitrator
against the other, including officers, directors, agents or employees of the
Parent and Company, asserting any claims that are released in this Agreement.
Executive on the one hand, and Parent and Company on the other hand, each
represents and agrees that, prior to signing this Agreement, each has not filed
or pursued any complaints, charges or lawsuits of any kind with any court,
governmental or administrative agency or arbitrator against the other including
officers, directors, agents or employees of the Company, asserting any claims
that are released in this Agreement.
6. COMPLETE RELEASE. [Xxxx, need a paragraph from Company
releasing Exec]
(a) In consideration of the covenants and promises
contained herein and subject to the consideration set forth above in SECTION 2,
Executive hereby knowingly and voluntarily releases, absolves and discharges the
Parent and Company and, as applicable, their partners, attorneys, agents,
officers, administrators, directors, employees, affiliates, representatives,
and/or assigns and successors, past and present (collectively the "RELEASEES")
from all rights, claims, demands, obligations, damages, losses, causes of action
and suits of all kinds and descriptions, legal and equitable, known and unknown,
that Executive may have or ever have had against the Releasees from the
beginning of time to the date of execution of this Agreement, including, but not
limited to, any such rights, claims, demands, obligations, damages, losses,
causes of action and suits arising out of, during or relating to Executive's
employment and/or his resignation therefrom. The matters that are the subject of
the releases referred to in this paragraph shall be referred to collectively as
the "RELEASED MATTERS." This includes, but is not limited to, claims for
employment discrimination, wrongful termination, constructive termination, and
violation of public policy, breach of any express or implied contract, breach of
any implied covenant, fraud, intentional or negligent misrepresentation,
emotional distress, or any other claims relating to Executive's relationship
with the Parent and Company.
(b) Executive acknowledges and agrees that this Agreement
represents a compromise of known and unknown, asserted and unasserted, and
actual and potential claims, and that neither this Agreement nor any compliance
herewith or consideration given pursuant hereto, shall be construed as an
admission by the Parent or Company of any liability whatsoever, including, but
not limited to, any liability for any violation by the Parent or Company of any
right of Executive or of any person arising under any law, statute, duty,
contract, covenant, or
3
order, or any liability for any act of age discrimination or other impermissible
form of harassment or discrimination by the Parent or Company against Executive
or any other person, as prohibited by any state or federal statute or common
law, including, but not limited to: (i) Title VII of the Civil Rights Act of
1964, 42 U.S.C. ss. 2000e; (ii) the Americans With Disabilities Act, 42 U.S.C.
xx.xx. 12101 ET SEQ.; (iii) the Age Discrimination in Employment Act, 29 U.S.C.
xx.xx. 623 ET SEQ.; (iv) the Family and Medical Leave Act; 29 U.S.C. xx.xx. 2611
ET SEQ.; (v) the California Fair Employment and Housing Act; Cal. Gov't Code
xx.xx. 12940 ET SEQ.; (vi) the California Workers' Compensation Act; Cal. Lab.
Code xx.xx. 3600 ET SEQ.; (vii) the Fair Labor Standards Act; 29 U.S.C. xx.xx.
201 ET SEQ.; (viii) the Consolidated Omnibus Budget Reconciliation Act of 1985;
42 U.S.C. xx.xx. 201 ET SEQ.; (ix) Executive Order 11141 (age discrimination);
(x) Section 503 of the Rehabilitation Act of 1973; 29 U.S.C. ss. 701 ET. SEQ.;
(xi) the Employee Retirement Income Security Act of 1974, 29 U.S.C. xx.xx. 1001
ET SEQ.; and (xii) the laws established by the California Division of Labor
Standards Enforcement, e.g., Cal. Lab. Code xx.xx. 200-272, and that all such
liability is expressly disputed and denied.
(c) Executive further understands and acknowledges that:
(1) this Agreement constitutes a voluntary
waiver of any and all rights and claims he has against the Releasees as of the
date of the execution of this Agreement, including rights or claims arising
under the Federal Age Discrimination in Employment Act of 1967 ("ADEA"), 29
U.S.C. xx.xx. 621 ET SEQ., as amended by the Older Workers' Benefit Protection
Act of 1990, except for any allegation that a breach of this Act occurred
following the Effective Date;
(2) he has waived rights or claims pursuant to
this Agreement in exchange for consideration, the value of which exceeds the
payment or remuneration to which he was already entitled;
(3) he is hereby advised that he may consult
with an attorney of his choosing concerning this Agreement prior to executing
it;
(4) he has been afforded a period of at least
twenty-one (21) days to consider the terms of this Agreement, and in the event
he should decide to execute this Agreement in fewer than twenty-one days, he has
done so with the express understanding that he has been given and declined the
opportunity to consider this Agreement for a full twenty-one days; and
(5) he may revoke this SECTION 6(c) of the
Agreement at any time during the seven (7) days following the date of execution
of this Agreement, and this SECTION 6(c) of the Agreement shall not become
effective or enforceable until such revocation period has expired. Executive
further understands and acknowledges that he may revoke only SECTION 6(c) of
this Agreement as it relates to any claim pursuant to the Federal Age
Discrimination in Employment Act, and that such revocation, if any, will not
affect the effectiveness or enforceability of any other of the Released Matters
as they are described in SECTION 6(c).
(d) In consideration of the covenants and promises
contained herein and subject to the consideration set forth above in SECTION 2,
Parent and Company hereby knowingly
4
and voluntarily release, absolve and discharge Executive and, as applicable, his
attorneys, agents, representatives, and/or assigns and successors, past and
present (collectively the "EXECUTIVE RELEASEES") from all rights, claims,
demands, obligations, damages, losses, causes of action and suits of all kinds
and descriptions, legal and equitable, known and unknown, that the Parent or
Company may have or ever have had against the Executive Releasees from the
beginning of time to the date of execution of this Agreement, including, but not
limited to, any such rights, claims, demands, obligations, damages, losses,
causes of action and suits arising out of, during or relating to Executive's
employment and/or his resignation therefrom. The matters that are the subject of
the releases referred to in this paragraph shall be referred to collectively as
the "EXECUTIVE RELEASED MATTERS." This includes, but is not limited to, claims
for employment discrimination, wrongful termination, constructive termination,
violation of public policy, breach of any express or implied contract, breach of
any implied covenant, fraud, intentional or negligent misrepresentation,
emotional distress, or any other claims relating to Executive's relationship
with the Parent and Company.
7. UNKNOWN CLAIMS.
Executive on the one hand, and Parent and Company on the other
hand, each acknowledges that there is a risk that subsequent to the execution of
this Agreement, each may incur or suffer damage, loss or injury to persons or
property that is in some way caused by or connected with Executive's employment
or his resignation therefrom, but that is unknown or unanticipated at the time
of the execution of this Agreement. Executive on the one hand, and Parent and
Company on the other hand, each does hereby specifically assume such risk and
agrees that this Agreement and the releases contained herein shall and do apply
to all unknown or unanticipated results of any and all matters caused by or
connected with Executive's employment or his resignation therefrom, as well as
those currently known or anticipated.
8. OWNERSHIP OF CLAIMS.
Executive represents and warrants that no portion of any of
the Released Matters and no portion of any recovery or settlement to which
Executive might be entitled has been assigned or transferred to any other
person, firm, entity or corporation not a party to this Agreement, in any
manner, including by way of subrogation or operation of law or otherwise. If any
claim, action, demand or suit should be made or instituted against the Releasees
or any of them because of any such purported assignment, subrogation or
transfer, Executive agrees to indemnify and hold harmless the Releasee(s)
against such claim, action, suit or demand, including necessary expenses of
investigation, attorneys' fees and costs.
9. ASSUMPTION OF RISK; INVESTIGATION OF FACTS.
(a) Executive hereby expressly assumes the risk of any
mistake of fact or that the true facts might be other than or different from the
facts now known or believed to exist, and it is Executive's, as well as the
Parent's and Company's express intention to forever settle, adjust and
compromise any and all disputes between and among the parties hereto including
the
5
Releasees, finally and forever, and without regard to who may or may not have
been correct in their respective understandings of the facts or the law relating
thereto.
(b) In making and executing this Agreement, Executive
represents and warrants that he has made such investigation of the facts and the
law pertaining to the matters described in this Agreement as he deems necessary,
and Executive has not relied upon any statement or representation, oral or
written, made by any other party to this Agreement with regard to any of the
facts involved in any dispute or possible dispute between the parties hereto, or
with regard to any of his rights or asserted rights, or with regard to the
advisability of making and executing this Agreement.
10. NO REPRESENTATIONS.
Executive represents and agrees that no promises, statements
or inducements have been made to him, which caused him to sign this Agreement
other than those expressly stated in this Agreement.
11. NON-DISPARAGEMENT.
Executive on the one hand, and Parent and Company on the other
hand, each agrees that the other will refrain from taking actions or making
statements, written or oral, which disparage or defame the goodwill or
reputation of any party to this Agreement including the Parent and Company,
and/or their directors, officers, executives and employees or which could
adversely affect the morale of other employees of the Parent or Company and that
Executive shall not demean or disparage the Parent or Company in any
communications or other dealings with any existing or potential employees,
customers, vendors and/or stockholders.
12. SUCCESSORS.
This Agreement shall be binding upon Executive and upon his
heirs, administrators, representatives, executors, successors and assigns, and
shall inure to the benefit of the Parent and Company, and to their
administrators, representatives, executors, successors and assigns.
Additionally, this Agreement shall be binding upon the Company and the Parent
and upon their administrators, representatives, successors and assigns, and
shall inure to the benefit of Executive and to his heirs, administrators,
representatives, executors, successors and assigns.
13. ARBITRATION.
(a) Any claim or controversy arising out of or relating
to this Agreement or any breach thereof between Executive and the Parent and
Company shall be submitted to arbitration in Knoxville, Tennessee, before an
experienced employment arbitrator licensed to practice law in Tennessee and
selected in accordance with the Model Employment Arbitration Procedures of the
American Arbitration Association, as the exclusive remedy for such claim or
controversy. Either party desiring to arbitrate shall give written notice to the
other party within a reasonable period of time after the party becomes aware of
the need for arbitration. The decision of the arbitrator shall be final and
binding. Judgment on any award rendered by such arbitrator may be entered in any
court having jurisdiction over the subject matter of the controversy. The
6
prevailing party shall receive an award of costs and expenses related to the
arbitration, including reasonable outside attorneys' fees. The fees and costs of
the arbitrator and the cost of any record or transcript of the arbitration shall
be borne by the losing party.
(b) Should Executive on the one hand or the Parent and
the Company on the other hand, institute any legal action or administrative
proceeding with respect to any claim waived by this Agreement or pursue any
dispute or matter covered by this paragraph by any method other than said
arbitration, the responding party shall be entitled to recover from the other
party all damages, costs, expenses and reasonable outside attorneys' fees
incurred as a result of such action.
14. TENDER OF SEVERANCE PAYMENTS AS A CONDITION TO CHALLENGE THIS
AGREEMENT.
Should Executive attempt to challenge the enforceability of
this Agreement, as a further limitation on any right to make such a challenge,
Executive shall initially submit to the Company the total proceeds provided to
him in connection with this Agreement plus interest at the standard statutory
rate, and invite the Company to retain such monies and agree with Executive to
cancel this Agreement. In the event the Parent and Company accept this offer,
the Company shall retain such monies and this Agreement shall be canceled. In
the event the Parent and Company do not accept such offer, the Parent and
Company shall so notify Executive and shall place such monies into an
interest-bearing escrow account pending resolution of the dispute between
Executive, and the Parent and Company as to whether this Agreement shall be set
aside and/or otherwise rendered unenforceable.
15. CONSULTATION WITH COUNSEL; REASONABLE TIME TO CONSIDER
AGREEMENT; VOLUNTARY PARTICIPATION IN THIS AGREEMENT.
Executive represents and agrees that he has been advised of
the opportunity to review this Agreement with an attorney, that he has had the
opportunity to thoroughly discuss all aspects of his rights and this Agreement
with an attorney to the extent Executive elected to do so, that he has carefully
read and fully understands all of the provisions of this Agreement, that he has
been given a reasonable period of time to consider signing this Agreement, and
that he is voluntarily entering into this Agreement.
16. SEVERABILITY AND GOVERNING LAW.
(a) Should any of the provisions in this Agreement be
declared or be determined to be illegal or invalid, all remaining parts, terms
or provisions shall be valid, and the illegal or invalid part, term or provision
shall be deemed not to be a part of this Agreement.
(b) This Agreement is made and entered into in the State
of Tennessee and shall in all respects be interpreted, enforced and governed
under the laws of Tennessee, without regard to the conflicts of laws principles
thereof.
17. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between and
among the parties pertaining to the subject matter hereof and the final,
complete and exclusive expression of the
7
terms and conditions of their agreement. Any and all prior agreements,
representations, negotiations and understandings made by the parties, oral and
written, express or implied, are hereby superseded and merged herein.
18. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one agreement.
19. ATTORNEYS' FEES.
In any action or other proceeding to enforce rights hereunder,
the prevailing party shall receive an award of costs and expenses related to
such proceeding, including reasonable outside attorneys' fees.
20. COOPERATIVENESS.
All parties have cooperated in the drafting and preparation of
this Agreement, and it shall not be construed more favorably for or against any
party.
21. AMENDMENT.
This Separation Agreement has been re-executed as an Amended
Separation Agreement to correct the number of option shares of
stock of the Parent granted to the Executive pursuant to the
intended agreement of the Parties.
8
IN WITNESS WHEREOF, the parties hereto have duly executed this
Separation Agreement as of the date first above written.
EXECUTIVE:
/s/ Xxxxxx Xxxxxx
------------------------------
Xxxxxx Xxxxxx
NATIONAL COAL CORP.,
a Florida corporation
By: /s/ Xxx X. Xxx
------------------------------------
Name: Xxx X. Xxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
NATIONAL COAL CORPORATION,
a Tennessee corporation
By: /s/ Xxx X. Xxx
------------------------------------
Name: Xxx X. Xxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
