New York, New York 10004
00
Xxxxxxxx, Xxxxx 000
Xxx
Xxxx, Xxx Xxxx 00000
February
7, 2008
Xxxx
X.
Xxxxxx
000
Xxxxxxx Xxxxx Xxxxx Xxxx
Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Dear
Xxxx:
This
will
confirm the agreement (the “Agreement”) that has been reached with you in
connection with your separation of employment from MMC
Energy, Inc. (the “Company”).
| 1. |
Your
last day of employment with the Company was December
18, 2007. You and the Company agree that your duties as Chief Executive
Officer ceased upon the Board of Directors of the Company removing
you
from such position on December 9, 2007, and that after December 18,
2007,
you no longer served as an officer of the Company, or any of its
subsidiaries, divisions, joint ventures or other affiliates. Moreover,
you
hereby confirm your resignations from any and all of your positions
as a
director of the Company, and any of its subsidiaries, divisions,
joint
ventures or other affiliates, effective as of the Payment Date (as
defined
in Paragraph 2 below), and
agree that (a) you shall take such further actions as requested by
the
Company to effectuate the foregoing, and (b) such resignation was
not
because of a disagreement with the Company on any matter relating
to the
Company’s operations, policies or
practices.
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| 2. |
(a)
In consideration of your obligations set forth in this Agreement,
including, but not limited to your consent to the General Release
set
forth in paragraph 8 below, the Company hereby agrees to pay you
(i) One
Million One Hundred Thousand dollars ($1,100,000) (gross)
and (ii) Twenty One Thousand, Seven Hundred Sixty-Two dollars ($21,762)
(gross), less all applicable federal, state and local withholding
taxes
and deductions (collectively, the "Severance Payment"), which amount
shall
be paid in a lump sum, pursuant to wire transfer instructions designated
by you, no later than five (5) business days following the Effective
Date
of this Agreement (as defined in paragraph 13 below) (the "Payment
Date").
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|
(b)
In further consideration of your obligations set forth in this
Agreement,
in the event that you elect to receive continuation coverage in
the
Company's medical plan pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
the
Company agrees to pay for the cost of such continuation coverage
for
eighteen (18) months. COBRA continuation coverage shall in all
respects be
subject to the requirements, conditions and limitations of COBRA
and of
the medical plan of the Company, which may be amended from time
to time.
You have notified the Company of your intention to elect COBRA
continuation coverage and will sign such paperwork as is necessary
to
effectuate same.
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3.
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You
acknowledge that the Severance Payment is in lieu of and in full
satisfaction of any amounts that might otherwise be payable under
any
contract, plan, policy or practice, past or present, of the Company,
or
any of its subsidiaries and affiliates, including but not limited
to your
employment agreement of May 2006 (the "Employment Agreement"). You
shall
not be eligible to receive benefits under any employee benefit plans
or
compensation arrangements of the Company, or any of its subsidiaries
or
affiliates, subsequent to December 18, 2007, with the exception of
(a)
your right to elect COBRA continuation coverage, and (b) any vested
benefits you may have in the Company's 401(k) plan as of December
18, 2007
(together with any accrued earnings in
the 401(k) plan to
date). For the avoidance of doubt, the Severance Payment shall not
count
towards your 401(k) contributions.
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| 4. |
In
consideration of the premises and covenants set forth herein, and
for
other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, you hereby assign, convey, or otherwise
transfer to the Company, all rights, title, and interest in any and
all
Intellectual Property Rights, acquired, obtained, created or maintained
in
connection with your employment by or association with the Company,
including, without limitation, Intellectual Property Rights obtained
or
created prior to formation of the Company and subsequently used by
the
Company. For the purpose of this Agreement, "Intellectual Property
Rights"
means: (1) any U.S. or foreign patents, utility models and industrial
designs, and applications (whether provisional or otherwise) therefor
of
all countries of the world (including any and all divisions, requests
for
continued reexamination, continued prosecution applications,
continuations-in-part, reissues, and re-examinations thereof); (2)
any
copyrights and copyrighted works of any country, whether registered
or
unregistered, including website content: (3) any U.S. or foreign
trademarks, whether registered or unregistered, maskworks, trade
dress,
trade names, business names, service marks, brands, marks slogans,
Internet domain names, including but not limited to the names MMC
Energy,
Inc. and MMC Energy, LLC, as well as
other uses specifically directed to the use of the name MMC
Energy (and all variations thereof), and the Internet domain names
xxx.xxxxxxxxx.xxx
and xxx.xxxxxxxxxxxxxxx.xxx,
icons, and logos, and registrations and applications therefor, including
all common law rights and all goodwill associated with any of the
foregoing; (4) any protectible or proprietary interest, whether registered
or unregistered in know-how, trade secrets, database rights, invention
disclosures and applications, software (including source and object
code),
operating manufacturing procedures, designs, specifications and the
like;
(5) any protectible or proprietary interest in any similar intangible
asset of a technical, scientific or creative nature; and (6) any
protectible or proprietary interests in or to any documents or other
tangible media containing any of the foregoing. Upon the Company's
request, you agree that you shall assist the Company or anyone it
designates in filing patent, trademark or copyright applications
worldwide
relating to the Intellectual Property Rights. You are delivering
herewith
executed transfer documentation to cause the transfer to the Company,
as
of the Effective Date, of the domains xxx.xxxxxxxxx.xxx
and xxx.xxxxxxxxxxxxxxx.xxx
and you further agree that you shall execute all papers and take
all other
actions necessary and advisable, in the Company's opinion, to file
and
prosecute such applications and to transfer to the Company all Internet
domain names including but not limited to xxx.xxxxxxxxx.xxx
and xxx.xxxxxxxxxxxxxxx.xxx.
You represent and warrant that you: (1) have the power and authority
to
assign, convey or otherwise transfer full and complete ownership
of such
Intellectual Property Rights to the Company, in accordance with this
Agreement; and (2) have no obligations to any third party (whether
by law
or by contract) that could in any way prohibit or limit you from
assigning, conveying or otherwise transferring full and complete
ownership
to the Intellectual Property Rights, provided
that,
to your knowledge, another entity currently uses the MMC Energy name
in
Europe (see xxxx://xxx.xxxxxxxxx-xxxxxx.xxx/ ), and you represent
that you
have no rights in connection with that entity’s use of the name MMC Energy
and therefore cannot assign or convey any such rights in connection
with
that entity’s use of the name MMC
Energy.
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| 5. |
All
documents (electronic, paper or otherwise), records (electronic,
paper or
otherwise), materials, software, equipment, and other physical property,
and all copies of the foregoing, whether or not otherwise containing
Confidential Information (as defined in Section 12 of the Employment
Agreement), that have come into your possession or been produced
by you in
connection with your employment (“Property”), have been and remain the
sole property of the Company or its subsidiaries or affiliates, as
applicable. You agree that you have returned all such Property to
the
Company (or, to the extent that you have not, that you immediately
will do
so). Without limitation, pursuant to the foregoing paragraph you
shall
return any and all of the Company's computer back-up tapes and other
storage devices (e.g., disk drives, flash drives, CD-Roms, DVD's,
computer
disks, etc.) within two business days after execution of this Agreement
and shall not retain in your possession any copies, duplicates,
reproduction or excerpts of the same. Notwithstanding the foregoing,
the
Company acknowledges that (i) you may retain the Dell laptop computer
currently in your possession and the Dell desktop computer currently
in
your possession, and (ii) the Company agrees to send to you, and
you may
retain, any hard copies and electronic files in its possession relating
to
Newmarket Power Company and MMC Energy Fund, provided
that
the Company reserves the right to retain in its sole discretion any
copies
of the same.
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| 6. |
You
agree to keep the terms of this Agreement confidential and not to
disclose
the Agreement or the terms thereof to any person, except (a) to your
immediate family (including Xxxxxx Xxxxxx) and as may be required
for
obtaining legal or tax advice; (b) for the filing of income tax returns
or
required financial disclosures; (c) to a prospective employer from
whom
you are seeking subsequent employment; or (d) as may be required
by law or
in any proceeding to enforce this Agreement. In the case of any disclosure
to immediate family or a legal or tax advisor, you shall require
any
person receiving such information to maintain its confidentiality.
You
acknowledge that the Company is a reporting company under the Securities
Exchange Act of 1934 and will be required to make disclosure of the
terms
of this Agreement and/or file this agreement as an exhibit to its
public
filings.
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| 7. |
You
agree not to make, or knowingly cause to be made, any statement or
communication, written or oral, with the intention of (a) disparaging
or
otherwise impugning the business or management of the Company or
any of
its subsidiaries or affiliates, or any of their respective officers,
directors, agents, counsel, representatives or employees, or (b)
interfering with, impairing or disrupting the normal operations of
the
Company or any of its subsidiaries or affiliates. The Company agrees
that
it will not knowingly permit its senior officers and directors to
make, or
knowingly cause to be made, any statement or communication, written
or
oral, with the intention of disparaging or otherwise impugning you,
your
business or your reputation and the Company shall advise its senior
officers and directors of this
obligation.
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| 8. |
(a)
You, your heirs, successors, and assigns, hereby knowingly and voluntarily
remise, release and forever discharge the Company and its subsidiaries
and
affiliates, together with all of their respective current and former
officers, directors, partners, shareholders, employees, representatives,
attorneys, agents, and each of their predecessors, successors and
assigns,
and any and all employee pension or welfare benefits plans of the
Company,
including current and former trustees and administrators of these
plans,
and each of their predecessors, successors and assigns (collectively,
the
"Releasees"), from any and all debts, demands, actions, causes of
actions,
accounts, covenants, contracts, agreements, claims, damages, omissions,
promises, and any and all claims and liabilities whatsoever, of every
name
and nature, known or unknown, suspected or unsuspected, both in law
and
equity (“Claims”), which you ever had, now have, or may hereafter claim to
have against the Releasees by reason of any matter, cause or thing
whatsoever arising from the beginning of time to the time you sign
this
Agreement (the "General Release"). This General Release of Claims
shall
apply to any Claim of any type, including, without limitation, any
and all
Claims of any type that you may have arising under the common law,
under
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991,
the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Americans With Disabilities Act of 1990,
the
Family and Medical Leave Act of 1993, the Employee Retirement Income
Security Act of 1974, the Xxxxxxxx-Xxxxx Act of 2002, the Equal Pay
Act,
the Rehabilitation Act of 1973, the New York State and City Human
Rights
laws, and the New York Labor Law, each as amended, and any other
federal,
state or local statutes, regulations, ordinances or common law,
or under any policy, agreement, contract, understanding or promise,
written or oral, formal or informal, between any of the Releasees
and you,
including but not limited to the Employment Agreement, and shall
further
apply, without limitation, to any and all Claims in connection with,
related to or arising out of your employment, or the termination
of your
employment, with the Company, and all Claims for alleged tortious,
defamatory or fraudulent conduct; provided,
however,
that nothing contained in this Agreement shall (i) impair any vested
benefits you may have in the Company's 401(k) plan as of December
18, 2007
(together with any accrued earnings in the 401(k) plan to
date);
or
(ii) be construed to prohibit you from bringing appropriate proceedings
to
enforce this Agreement. You hereby represent and warrant that you
have not
filed or caused to be filed any complaints, charges or lawsuits against
the Company or any of the Releasees, and that no such complaints,
charges
or lawsuits are pending. By signing this General Release, you further
represent that you will not be entitled to any personal recovery
in any
action or proceeding that may be commenced on your behalf arising
out of
the matters released hereby.
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(b)
The Company, on behalf of itself and its subsidiaries, hereby
knowingly
and voluntarily remises, releases and forever discharges you,
your heirs,
successors and assigns, from any and all Claims, which it ever
had, now
has, or may hereafter claim to have against you by reason of
any matter,
cause or thing whatsoever arising from the beginning of time
to the time
you sign this Agreement, including, without limitation, any and
all Claims
of any type that it may have arising under any federal, state
or local
statutes, regulations, ordinances or common law, or under any
policy,
agreement, contract, understanding or promise, written or oral,
formal or
informal, between the Company or any of its subsidiaries and
you, and
shall further apply, without limitation, to any and all Claims
in
connection with, related to or arising out of your employment,
or the
termination of your employment, with the Company, and
all Claims for alleged tortious or defamatory conduct;
provided,
however,
that nothing contained in this Agreement (i) shall release you
from any
Claims for fraud, theft, embezzlement or intentional breach of
fiduciary
duty, or contribution action(s) in connection with any such Claims,
whether brought by the Company or any other entity or person;
or (ii) be
construed to prohibit the Company from bringing appropriate proceedings
to
enforce this Agreement. The Company acknowledges that it has
no present
intention to bring any Claims against you, including any Claims
of the
nature described in clause (i) above.
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9.
|
You
hereby represent and warrant that, with the exception of Xxxxx Xxxxx
of
McGuireWoods LLP, former attorneys for the Company, you do not have
knowledge of any illegal actions or omissions by any current or former
officer, director, employee, agent, attorney, consultant or representative
of the Company (including yourself) through the date of the execution
of
this Agreement that were (individually or collectively) in any way
knowingly or intentionally improper, harmful or detrimental to the
Company, its business and/or its shareholders, including, without
limitation, violations of any laws, regulations or accounting policies
or
principles, the taking of unreasonable tax positions, or the furnishing
of
inaccurate statements, invoices or other reports to any person or
entity.
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| 10. |
You
agree to cooperate fully with the Company and its subsidiaries and
affiliates concerning reasonable requests for information about the
business of the Company or its subsidiaries or affiliates or your
involvement and participation therein, and any information required
to be
disclosed in the Company’s public filings; the defense or prosecution of
any claims or actions now in existence or which may be brought in
the
future against or on behalf of the Company or its subsidiaries or
affiliates which relate to events or occurrences that transpired
while you
were employed by the Company; and in connection with any investigation
or
review by any federal, state or local regulatory, quasi-regulatory
or
self-governing authority (including, without limitation, the Securities
and Exchange Commission) as any such investigation or review relates
to
events or occurrences relating to business matters or other work-related
issues that transpired while you were employed by the Company, including
but not limited to (i) the potential FERC filing against the CAISO
in
regards to the Company's ability to provide spinning reserve services,
including providing a sworn affidavit as to your direct involvement
in
this matter, following up with Company's FERC counsel and, if required,
testifying at FERC; and (ii) the Company's obligations pursuant to
subpoenas issued in the action captioned Securities
and Exchange Commission v. Zehil,
et al., 07 Civ 1439 (LAP). Your full cooperation shall include, but
not be
limited to, being available to meet and speak with officers or employees
of the Company and/or its counsel at reasonable times and locations,
executing accurate and truthful documents and taking such other actions
as
may reasonably be requested by the Company and/or its counsel to
effectuate the foregoing. The Company shall notify you in writing
as
promptly as practicable and at least ten (10) business days prior
to the
requested date of your consultation or providing documentation (or,
if
such notice is not possible under the circumstances, with as much
prior
notice as is possible). A copy of any such notification shall be
sent to
Xxxxxxxxxx & Xxxxx LLP, attention of Xxxxxx X. Xxxxx, 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, XX 00000. The Company further agrees to reimburse
you for
any reasonable, out-of-pocket travel, hotel and meal expenses incurred
in
connection with your performance of obligations pursuant to this
paragraph
for which you have obtained prior, written approval from the Company;
provided
that
if
you have submitted a request for prior, written approval to the Company
and the Company has not responded to such request, your obligations
under
this paragraph 10 relating to such reimbursement request will not
be
required to be performed unless and until you receive a response
from the
Company. In the event that you provide your services for a total
of more
than fifteen (15) days, the Company shall pay you for your services
for
each additional day in excess of fifteen (15) days an amount equal
to the
daily equivalent of your $225,000 per
annum
base salary in effect on your last day of employment, provided
that
you notify the Company in writing at such time as you believe that
you
have provided in excess of fifteen (15) days, and not to incur any
additional time unless (i) approved in writing by the Company, or
(ii) if
compelled to by legal/administrative
process.
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| 11. |
Nothing
in this Agreement is intended to or shall preclude you from providing
truthful testimony on any non-privileged subject matter in response
to a
valid subpoena, court order, regulatory request or other judicial,
administrative or legal process or otherwise as required by law,
in which
event you shall notify the Company in writing as promptly as practicable
after receiving any such request of the anticipated testimony and
at least
ten (10) business days prior to providing such testimony (or, if
such
notice is not possible under the circumstances, with as much prior
notice
as is possible) so that the Company may seek a protective order or
other
appropriate remedy, and you agree to cooperate with the Company in
any
effort the Company undertakes to obtain a protective order or other
remedy. If such a protective order or other remedy is not obtained,
or the
Company waives compliance with this Agreement, you shall furnish
only that
portion of such subject matter that is legally required and shall
exercise
all reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded to the subject matter to be
disclosed.
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| 12. |
The
Company has advised you to consult with an attorney (including tax
counsel) of your choosing prior to signing this Agreement, and you
have
availed yourself of such right. You understand and agree that you
have the
right and have been given the opportunity to review this Agreement
and,
specifically, the General Release in paragraph 8 above, with an attorney,
and in this regard you have consulted with Xxxxxxxxxx & Xxxxx LLP in
connection with your signature of this Agreement. You also understand
and
agree that the Company is under no obligation to offer you this Agreement
and that you are under no obligation to consent to the General Release.
You acknowledge and agree that the payment offered by the Company
and set
forth in paragraph 2 above and other consideration set forth in this
Agreement is sufficient consideration to require you to abide with
your
obligations under this Agreement, including but not limited to the
General
Release. You represent that you have read this Agreement, including
the
General Release set forth in paragraph 8, and understand its terms
and
that you enter into this Agreement freely, voluntarily, and without
coercion. The Company acknowledges and agrees that the resolution
of the
matters under the Employment Agreement and your obligations set forth
in
this Agreement are sufficient consideration to require the Company
to
abide by its obligations under this
Agreement.
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| 13. |
You
acknowledge and represent that you have been given at least twenty-one
(21) days during which to review and consider the provisions of this
Agreement and, specifically, the General Release set forth in paragraph
8
above, although you may sign and return it sooner if you so desire.
You
further acknowledge and represent that you have been advised by the
Company that you have the right to revoke this Agreement for a period
of
seven (7) days after signing it. You acknowledge and agree that,
if you
wish to revoke this Agreement, you must do so in a writing, signed
by you
and received by the Company no later than 5:00 p.m. Eastern Time
on the
seventh (7th) day of the revocation period. If no such revocation
occurs,
the General Release and this Agreement shall become effective on
the
eighth (8th) day following your execution of this Agreement (the
“Effective Date”). You further acknowledge and agree that, in the event
that you revoke this Agreement, it shall have no force or effect,
and you
shall have no right to receive any of the payments or benefits provided
for hereunder.
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| 14. |
The
Company confirms and you acknowledge that you were granted options
to
purchase shares of the Company ("Options") pursuant to the Company's
2006
Stock Option Plan, as amended or restated from time to time (the
"Option
Plan"), and that this Agreement is not intended to enlarge, reduce,
modify
or otherwise alter any and all rights and/or obligations you may
have with
respect to the exercise of such Options in accordance with the terms
and
conditions of the Option Plan. The Company further confirms that
your
separation of employment shall be treated like a termination for
"Good
Reason" for purposes of Section 9(d)(iv)(B) of the Employment Agreement.
To the extent permitted by law and applicable regulations, on the
third
month anniversary of the Payment Date, the Company shall cause to
be
removed the restrictive transfer legend on the following shares held
by
you: MMC Energy, Inc., Certificate #671, 25,000 shares; MMC Energy,
Inc.,
Certificate #585, 24,291 shares; MMC Energy, Inc., Certificate #640,
461,534 shares.
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| 15. |
It
is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under
the
laws and public policies applied in each jurisdiction in which enforcement
is sought. In the event that any one or more of the provisions of
this
Agreement shall be held to be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions
shall
not in any way be affected or impaired thereby. Moreover, if any
one or
more of the provisions contained in this Agreement shall be held
to be
excessively broad as to duration, scope, activity or subject, such
provisions shall be construed by limiting or reducing them so as
to be
enforceable to the maximum extent compatible with applicable
law.
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| 16. |
No
waiver by either party of any breach by the other party of any condition
or provision of this Agreement to be performed by such other party
shall
be deemed a waiver of any other provision or condition at the time
or at
any prior or subsequent time. This Agreement and the provisions contained
in it shall not be construed or interpreted for or against either
party
because that party drafted or caused that party's legal representative
to
draft any of its provisions.
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| 17. |
You
and the Company shall enter into the Indemnity Agreement in the form
attached as Exhibit A hereto, provided
that
the amount of directors and officers liability coverage for you shall
not
be less than $5,000,000.
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| 18. |
The
terms described in this Agreement set forth the entire agreement
and
understanding of the parties and supersede all prior agreements,
arrangements and understandings, written or oral, between the parties,
including but not limited to the Employment Agreement, provided,
however, that
Sections 9(d)(iv)(B) (Termination of Service; Accelerated Vesting),
12
(Confidential Information), 13 (Non-Competition And Non-Solicitation),
14
(Dispute Resolution), 15 (Notice), 16 (Personal Guaranty) and 17
(Miscellaneous) of the Employment Agreement shall not be superseded
but
rather shall remain in full force and effect as if restated
herein. You
acknowledge and agree that you are not relying on any representations
or
promises by any representative of the Company concerning the meaning
or
any aspect of this Agreement. This Agreement may not be altered or
modified other than in writing signed by you and an authorized
representative of the Company, and shall be governed by and construed
and
enforced in accordance with the laws of New York, without reference
to its
choice of law rules.
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| 19. |
The
Company’s offer to you of this Agreement is not, and shall not be
construed as, any admission
of liability or of any improper conduct on the part of the Company
or any of the Releasees, all of which the Company specifically
denies.
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| 20. |
This
Agreement may be executed in counterparts, each of which shall be
deemed
an original but all of which together shall constitute one and the
same
instrument.
|
If
the
above sets forth our agreement as you understand it and consent to it, please
so
signify by executing the enclosed copy of this letter and return it to me at
the
address listed above.
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Very
truly yours,
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||
| |
|
|
| /s/ Xxxxx Xxxxxx | ||
| By: Xxxxx Xxxxxx | ||
| Title: Chief Financial Officer | ||
Agreed
to
and Accepted:
/s/
Xxxx X.
Xxxxxx
Xxxx
X.
Xxxxxx
Dated:
2/7/08
