SEPARATION AGREEMENT AND RELEASE
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (the “Agreement”), is made and entered as of
the 12th day of March, 2007 (the “Effective Date”), by and between MMC Energy,
Inc. (the “Company”), on the one hand, and Xxxxxx Xxxxx (the “Executive”), on
the other hand.
WHEREAS,
the
Executive was an employee of the Company holding the position of President
and
Chief Operating 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 the date first written above;
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. 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. In
consideration for the Executive’s promises contained herein, if, upon the
expiration of the revocation and cancellation period (the “Revocation Period”)
described in Paragraph 16 below, the Executive has not revoked this Agreement
and has properly executed and delivered this Agreement as described in Paragraph
8(a) below, then in consideration thereof, the Company shall pay following
amounts to the Executive:
|
a.
|
Within
a
reasonable time, not to exceed ten (10) days from the date of the
Agreement, the Company shall pay the Executive $300,000 in
full satisfaction of all of the below categories described in the
Employment Agreement between the Executive and the Company, dated
May
2006:
|
|
i.
|
Executive’s
base salary through the Scheduled Termination Date, which is May
15,
2009;
|
|
ii.
|
Vacation
days that the Executive would have accrued through the Scheduled
Termination Date; and
|
|
iii.
|
Severance
payments to Executive.
|
|
b.
|
In
addition, the Company shall pay for continued coverage under the
health
and life insurance plans in which the Executive was a participant
immediately prior to his last date of employment with the Company
(each,
an “Existing Plan” and collectively, the “Existing Plans”), or, in the
event that any such Existing Plan does not permit coverage of the
Executive following his last date of employment with the Company,
under
health and life insurance plans that provide substantially similar
coverage to the Existing Plans, through the earlier of the Scheduled
Termination Date or until the Executive obtains other
employment.
|
|
c.
|
In
addition, the Company
shall pay the unpaid 2006 Annual bonus to the Executive in the amount
of
$87,500, which amount shall include the previously stated bonus amount
of
$24,062.
|
|
d.
|
In
addition, the Company shall pay any earned but unpaid base salary
and
unused vacation days accrued through the Executive’s last day of
employment with the Company, which date shall be March 12, 2007,
which
amount is to be calculated according to the records of the Company
and
paid in full to the Executive.
|
3. The
Executive’s options to purchase the Company’s common stock shall expire on the
date of the termination of the Executive’s employment, which date shall be March
12, 2007.
4. At
the
time of the next underwritten public offering of common stock, the Executive
shall offer 100% of his shares in such public offering with Executive as a
“selling stockholder” under the related registration statement, which commitment
shall be subject to a minimum floor sale price of $1.00 per share for each
of
the 4,097,088 shares owned by the Executive (such minimum floor sale price
to be
appropriately adjusted basis for any stock splits or reverse stock splits or
combination and the like, which may occur). In such event, Executive would
be
required to execute such agreements and documents as are customary in connection
with being a selling stockholder in an underwritten public offering. Executive’s
participation shall be subject to a standard underwriters’ cutback permitting
the exclusion of Executive’s shares if the lead underwriter advises Executive
such cutback is necessary for marketing reasons (the “Underwriter’s Cutback”).
Upon the execution of this Agreement, Executive shall also be obligated to
sign
the lock-up agreement in the form attached hereto as Exhibit B (the “Lock-Up
Agreement”) in favor of the underwriters restricting sales of Executive’s shares
not sold in the public offering for the full period of the required
underwriters’ lock-up following the consummation of an underwritten offering.
The Lock-Up Agreement would apply to all Executive’s shares excluded pursuant to
the Underwriter’s Cutback and all Executive’s shares that are otherwise not sold
in the public offering, except that, the Company agrees to use commercially
reasonable efforts to limit the term of Executive’s lock-up period to ninety
(90) days following consummation of such underwritten offering (subject to
extension in regulatory circumstances as specifically described in the Lock-Up
Agreement). In the event that shares held by other stockholders of the Company
(together with the Executive, the “Selling Stockholder”) are included in the
public offering and the lead underwriter advises the Executive and the Company
that some or all of the shares to be sold by the Selling Stockholders should
be
excluded from the public offering for marketing reasons, then the Company agrees
that it shall use commercially reasonable efforts to arrange for such cut-back
to be made on a pro rata basis among the Selling Stockholders (based upon the
number of shares that each such Selling Stockholder proposes to include in
the
public offering); provided,
however,
that the
Executive recognizes and agrees that the Company is subject to Section 3(c)
of
that certain Registration Rights Agreement, dated May 15, 2006 (the
“Registration Rights Agreement”), that obligates the Company to give priority on
cut-backs to any Selling Stockholder party to the Registration Rights Agreement.
The Lock-Up Agreement shall expire if the public offering is not consummated
on
or before September 30, 2007.
2
5. Subject
to the Lock-Up Agreement, in the event the Company does consummate an
underwritten public offering on or before September 30, 2007, and/or the
Executive does not sell all of his shares in such offering because such offering
does not meet the minimum floor price of $1.00 per share or for any other
reason, then the Executive’s remaining shares shall then be freely tradable in
the open market promptly following the later of the expiration of the
underwriters’ lock-up period or the expiration of the Lock-Up Agreement, subject
to the limitations set forth in Rule 144 of the Securities Act of 1933, as
amended, and compliance with applicable securities laws. If the Lock-Up
Agreement expires as contemplated by the final sentence of Section 4 above
or
otherwise and the Executive still holds shares of the Company’s common stock,
then upon the subsequent written demand of the Executive,
the
Company shall as soon as is reasonably practicable file with the SEC a
registration statement relating to the resale by the Executive of all of his
remaining shares and the Company shall use its commercially reasonable efforts
to cause such registration statement to be declared effective as soon as
reasonably practicable thereafter; provided,
however,
that the
Company shall not be obligated to effect any such registration or keep such
registration effective: (i) in any particular jurisdiction in which the Company
would be required to qualify to do business as a foreign corporation or as
a
dealer in securities under the securities or blue sky laws of such jurisdiction
or to execute a general consent to service of process in effecting such
registration, qualification or compliance, in each case where it has not already
done so or (ii) during any Blackout Period (as defined in the Registration
Rights Agreement); provided,
however,
that the
foregoing commitment to file and maintain an effective registration statement
shall not apply to any shares held by the Executive that may be resold
immediately without registration under Rule 144 of the Securities Act of 1933
if
the Company’s counsel is willing to render a customary opinion to such effect,
subject to the Executive making representations to such counsel as are
customarily made in such context.
6. In
no
event shall Executive be permitted to “block” any underwritten public offering.
Executive shall be required to sell the entirety of his shares in any such
public offering provided such public offering is consummated at a price to
the
public of at least $1.00 per share (to be appropriately adjusted basis for
any
stock splits or reverse stock splits or combination and the like, which may
occur).
7. The
Company’s performance of its obligations under this Agreement shall not be
construed or interpreted as an admission of any wrongdoing, fault, or liability
by the Company.
8. The
parties’ obligations under this Agreement are expressly conditioned upon the
following:
|
a.
|
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;
|
3
|
b.
|
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;
|
|
c.
|
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;
|
|
d.
|
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 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;
|
|
e.
|
The
Executive’s agreement
that he shall perform all obligations under Section 13 of the Employment
Agreement, “Non-Competition and Non-Solicitation,” except that such
obligations shall only extend to the states of California, Arizona
and
Nevada and to certain named entities with whom the Company has material
contracts, as set forth on the attached Exhibit A. The Executive’s
obligations under Section 13 of the Employment Agreement shall continue
for a period of one (1) year from the date of Executive’s resignation as
President and Chief Operating Officer, and as a member of the Board
of
Directors of the Company;
|
|
f.
|
The
Executive’s agreement that Section 12 of the Employment Agreement,
“Confidential Information,” shall survive the termination of Executive’s
employment and the execution of the Agreement;
|
|
g.
|
The
parties’ agreement that (1) the Executive’s employment with the Company is
not being terminated for “Cause,” (2) the Executive is not being removed
as a Director of the Company for “Cause” and (3) the Executive is
resigning as a director and officer of the Company in order to pursue
other interests and not as the result of any
disagreement;
|
|
h.
|
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 and/or affiliates to any
third
party;
|
4
|
i.
|
The
Company’s agreement that in response to any inquiries from prospective
employers of the Executive, the Company shall state only the dates
of the
Executive’s employment with the Company and that the Executive served as
the Company’s President and Chief Operating Officer, and as a member of
the Board of Directors of the Company;
and
|
|
j.
|
The
Company’s agreement that upon execution of the Agreement, the Company
shall undertake good faith efforts to obtain an expedited release
of the
Executive’s personal guaranty relating to the Loan and Security Agreement
with TD Banknorth; and
|
|
k.
|
The
Executive’s agreement to return all MMC files and materials, regardless of
the format in which such files and materials exist, to MMC, including,
but
not limited to, MMC files currently stored on the Executive’s home
computer which files the Executive agrees to provide to MMC in “disk
format” and which files the Executive agrees to delete from his home
computer, the Executive acknowledging that he is entitled to no payment
from MMC hereunder until such files and materials are provided as
described herein.
|
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, by execution of this
Agreement, 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 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, 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.
5
10. In
consideration for the above, and except with respect to the performance of
obligations contained in this Agreement and the Lock-Up Agreement, the Company,
on behalf of itself and all 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
by execution of this Agreement, does hereby fully, completely and
unconditionally forever release and discharge Executive and all heirs, and
personal representatives 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. 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; fraud; intentional or negligent infliction of emotional distress;
prima facie tort; defamation; libel; slander; or any other tort, whether
intentional or negligent; or any claim or cause of action known or
unknown.
11. The
Executive acknowledges and agrees that in the event of a breach of paragraph
8(e) or 8(f) above, the Company shall be entitled to appropriate injunctive
relief, including an immediate temporary restraining order and/or permanent
injunction without the necessity of the Company posting a bond.
12. The
Executive acknowledges that he understands that this Agreement is a legally
binding agreement and that the Company advised him to review it with legal
counsel of his choice before executing the Agreement.
13. The
Executive represents and acknowledges that in executing this Agreement, he
does
not rely, and has not relied, upon any representation not set forth herein,
made
by the
Company or
any of
its employees, agents, or attorneys with regard to the subject matter, basis
or
fact of this Agreement or otherwise.
14. The
Executive acknowledges that this Agreement is intended to address and cover
any
rights he may
have
under the governing law. The Executive’s signature below will confirm that he is
entering into this Agreement freely and with a full understanding of its terms
and effect, including that he is giving up his right to bring any claim against
the
Company in
accordance with Paragraph 9 above.
15. 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.
16. The
Executive shall have a period of seven (7) calendar days from the date he signs
this Agreement to revoke and cancel this Agreement (the “Revocation Period”).
Any revocation and cancellation must be in writing, signed by the Executive
and
delivered in duplicative originals to the Company before the close of business
of the seventh (7th) calendar day following the date the Executive signs this
Agreement. This Agreement shall in no event become effective until such seven
(7) day period passes.
6
17. The
construction of this Agreement shall be in accordance with, and governed by,
the
law of the State of New York, without regard to New York’s conflict 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.
19. This
Agreement sets forth the entire agreement between the parties hereto and
supersedes any and all prior 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, subject to its terms including, without
limitation, the terms of Paragraphs 8(a), 8(k) and 16 above, 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.
IN
WITNESS THEREOF,
the
undersigned have executed this Agreement on the dates noted below.
| /s/ Xxxxxx Xxxxx | |||
|
Xxxxxx Xxxxx |
|||
|
Date:
March 12, 2007
|
|||
|
ON
BEHALF OF MMC ENERGY, INC.
|
|||
| /s/ Xxxx Xxxxxx | |||
|
Xxxx Xxxxxx, CEO |
|||
|
Date:
March 12, 2007
|
7
EXHIBIT
A
Xxxxxxx
Energy Consultants LLC
Calpine
Power Services LLC
Camelot
Technologies Group, Inc.
DLA
Piper
US LLP
Xxxxxxx
Xxxxxxx
Xxxxxxx
(Electronic Reliability Services, Inc.)
PPM
Energy Incorporated
Pro
Energy Services, LLC
RCAT
(Incorporated)/Resource Catalyst
Xxxxxx
Xxxxxxx
Sulzer
Hickham, Inc.
Trimark
Associates, Inc.
Wood
Group Generator Services
Wood
Group Xxxxx Xxxxxxx
Xxxxxx
Xxxxxxx Group Inc
ZGlobal
Engineering & Energy Solutions
8
EXHIBIT
B
[Lock-Up
Agreement]
9
