SEPARATION AGREEMENT
This
Separation Agreement (the “Agreement”), made and entered into as of the
31st
day of
July 2007, by and between 02Diesel Corporation, a Delaware corporation (the
“Company”), and Xxxxxxx X. Xxxxx (the
“Executive”).
WITNESSETH
WHEREAS,
the
Executive has been employed by the Company since July 1, 2005 as the Chief
Operating Officer pursuant to an Employment Agreement by and between Executive
and the Company, dated the 9th
day of
June 2005, (the “Employment Agreement”); and
WHEREAS,
the
Company desires to terminate Executive’s employment without Cause in accordance
with Section 6.2(b) of the Employment Agreement;
WHEREAS,
the
Company and Executive have determined that it is in their respective best
interest to enter into this Agreement on the terms and conditions as set forth
herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
1.
Termination
of Employment.
Executive’s employment with the Company is terminated by the Company without
cause effective July 31, 2007 (the “Termination Date”). Such termination will
include termination from all positions Executive may hold as an employee,
officer, director, plan administrator or trustee.
2.
Restricted
Stock.
As of
the Termination Date 166,667 shares of Company Restricted Stock granted to
Executive will vest and as of July 31, 2008 (or an earlier date if Executive
and
the Company agree), an additional 166,666 shares of Company Restricted Stock
granted to the Executive will vest. Executive is responsible for payment of
any
taxes that arise from the vesting of the Company Restricted Stock.
3.
Stock
Options.
The
Options awarded Executive to purchase 1,450,000 shares of Company Stock will
have fully vested as of the Termination Date and Executive will have thirty
(30)
days from the Termination Date to exercise the Options to purchase all or less
than all of the 1,450,000 shares of Company Stock. Thirty (30) days after the
Termination Date the Options, to the extent unexercised, will
expire.
4.
Restrictions
on Transfer of Company Stock.
Executive agrees not to sell, transfer, assign, pledge, encumber or otherwise
divest himself of ownership or control of all or any part of his Company stock
for a period of one year from the effective date of this Agreement, without
the
consent of the Company.
5.
Severance
Payments and Benefits.
For the
one year period following the Termination Date, Company will pay Executive
his
current annual Base Salary, less statutory deductions and withholdings, payable
in accordance with the Company’s normal payroll practices and Executive shall
continue to receive family medical and dental coverage at the Company’s expense.
As soon as reasonably practicable following the Termination Date and in
accordance with the Company’s normal payroll practices, Company will pay
Executive for one week’s vacation.
6.
Transition
Services.
Executive will make himself available to the Company for up to a total of 20
business days and will be reasonably available by telephone as needed, at no
additional cost to the Company, to assist with the transition of his
responsibilities and relationships to others designated by the Company.
7.
Continuing
Obligations.
Executive acknowledges that, except as expressly modified by this Agreement,
all
obligations of Executive under the provisions of the Employment Agreement,
including but not limited to, the return of Company property, the protection
of
Confidential Information (as defined in the Employment Agreement), inventions
discovered by Executive, non-competition and non-solicitation, and
non-disparagement, remain in effect following the termination of Executive’s
employment, and that the Executive will comply with those provisions.
8.
General
Release.
Executive
hereby expressly waives, releases, acquits and forever discharges the Company
and its divisions, subsidiaries, affiliates, parents, related entities,
partners, officers, directors, shareholders, investors, executives, managers,
employees, agents, attorneys, representatives, successors and assigns
(hereinafter collectively referred to as “Releases”), from any and all claims,
demands, and causes of action which Executive has or claims to have, whether
known or unknown, of whatever nature, which exist or may exist on Executive’s
behalf from the beginning of time up to and including the date of this
Agreement. As used in this paragraph, “claims,” “demands,” and “causes of
action” include, but are not limited to, claims based on contract, whether
express or implied, defamation, wrongful termination, estoppels, equity, tort,
retaliation, intellectual property, personal injury, spoliation of evidence,
emotional distress, public policy, wage and hour law, statute or common law,
claims for severance pay, claims related to stock options and/or fringe
benefits, claims for attorneys’ fees, vacation pay, debts, accounts,
compensatory damages, punitive or exemplary damages, liquidated damages, and
any
and all claims arising under any federal, state, or local statute, law, or
ordinance prohibiting discrimination on account of race, color, sex, age,
religion, sexual orientation, disability or national origin, including but
not
limited to, the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964 as amended, the Americans with Disabilities Act, the Family
and Medical Leave Act or the Employee Retirement Income Security
Act.
9.
Consideration
Period.
Executive acknowledges that he has been provided with a period of twenty-one
(21) days to consider the terms of the Company’s offer and that this Agreement
reflects negotiated changes. Executive agrees that any changes to the offer,
whether material or immaterial, will not restart the running of the 21-day
period.
10.
Revocation
Period.
Executive acknowledges that he shall have seven (7) days after signing this
Agreement to revoke it if he chooses to do so.
11.
Effective
Date.
This
Agreement shall take effect on the first business day following the expiration
of the Revocation Period, provided that Executive chooses not to revoke it
(“Effective Date”).
12.
Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and
assigns.
13.
Headings.
The
headings contained in this Agreement are not a part of the Agreement and are
included solely for ease of reference.
14.
Integration
and Modification.
Executive declares and represents that no promise or agreement has been made
to
him other than those expressed herein. Except as stated herein and in the
Employment Agreement (as modified hereby), this Agreement and the Employment
Agreement constitute the entire agreement of the parties and supersedes all
prior understandings, whether oral or written, between them. Any modification
of
this Agreement must be made in writing and signed by all parties.
15.
Severability.
If any
provision of this Agreement is or shall be declared invalid or unenforceable
by
a court of competent jurisdiction, the remaining provisions shall not be
affected thereby and shall remain in full force and effect.
16.
Governing
Law.
Except
to the extent any such laws are preempted by Federal law, the parties agree
that
the terms of this Agreement shall be governed by the laws of the State of
Delaware without giving effect to the choice of laws principles of any state,
and that either party may pursue its or his respective rights hereunder in
any
court of competent jurisdiction.
IN
WITNESS WHEREOF, and with the intention of being legally bound hereby, the
parties have executed this Agreement on the dates noted below.
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/s/ Xxxxx X.
Xxxxxxx
Witness
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/s/
Xxxxxxx X.
Xxxxx
Xxxxxxx
J. Xxxxx
Date:
August 1, 2007
O2
DIESEL
CORPORATION
BY:
/s/
Xxxx
Xxx
Name: Xxxx
Xxx
Title:
Chief
Executive Officer
Date:
August 1, 2007
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