TERMINATION AGREEMENT
Exhibit
10.9
This
Agreement, entered into August 24, 2006 is between Xethanol Corporation, a
Delaware corporation (the "Company")
and
Xxxxxxxxxxx x’Xxxxxx-Xxxxxx ("Employee").
WHEREAS,
prior to the date of this Agreement, Employee was an employee of the Company
and
served as its Chairman, President and Chief Executive Officer of the
Company;
WHEREAS,
effective as of the date of this Agreement, the Company and Employee have
terminated Employee's employment by the Company and his positions as Chairman,
President and Chief Executive Officer of the Company . The Company and Employee
wish to resolve all claims between them. By this Agreement the parties set
out
the terms and ongoing obligations of the parties with respect to termination
of
Employee’s employment with the Company.
The
parties agree as follows:
1. Termination
of Employment:
a. Termination
as Employee.
The
parties agree that Employee's employment with the Company terminated on August
22, 2006 (the “Termination
Date”).
b. Termination
as Officer.
The
parties agree that Employee's positions as President, Chairman and Chief
Executive Officer of the Company terminated on the Termination
Date.
c. Service
as Director.
Employee shall continue to serve his current term as a Director of the Company
and, as such, shall receive such compensation as the Company may pay to its
independent Directors.
d. Payment
Obligations.
In the
event that Employee materially breaches this Agreement, then the Company shall,
in addition to any other remedies the Company might have, be relieved of its
obligation to pay any of the payments due under this Agreement. In such event,
payments made prior to the termination of Employee’s employment with the Company
shall be deemed adequate consideration for Employee's obligations
hereunder.
2. Settlement
and Release:
a. Employee
Release.
Employee hereby irrevocably and unconditionally releases and discharges the
Company, its past and present subsidiaries, divisions, officers, directors,
agents, employees, successors, and assigns (separately and collectively,
"releasees")
jointly and individually, from any and all claims, known or unknown, which
he,
his heirs, successors or assigns have or may have against releasees and any
and
all liability which releasees may have to him whether denominated as claims,
demands, causes or action, obligations, damages, or liabilities arising from
any
and all bases, however denominated, including but not limited to, any claims
of
discrimination under the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Rehabilitation Act, the Family Medical Leave Act,
the American with Disabilities Act, Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991 or any federal or state civil rights act, claims
for wrongful discharge, breach of contract, or for damages under any federal,
state or local law, rule or regulation, or common law under any theory;
provided, however, that this release does not affect: (1) any claims which
are
based on releasees' willful acts, gross negligence or dishonesty; (2) any claims
for benefits which have vested or shall vest on or before the date of this
Agreement under any of the Company's benefit plans (other than its Employee
Incentive Compensation Plan); (3) any claims for indemnification for acts of
Employee which have occurred or may occur as an officer or employee of the
Company; or (4) any claims which may arise after the execution of this
Agreement. This release is for any relief, no matter how denominated, including,
but not limited to, back pay, front pay, compensatory damages, punitive damages,
or damages for pain and suffering. Employee further agrees that he will not
file
or permit to be filed on his behalf any such claim, will not permit himself
to
be a member of any class seeking relief against the releases, and will not
counsel or assist in the prosecution of claims against the releases, whether
those claims are on behalf of himself or others, unless he is under a court
order to do so.
b. Company
Release.
The
Company hereby irrevocably and unconditionally releases and discharges Employee
and his heirs, successors, and assigns (separately and collectively,
"releasees"),
jointly and individually, from any and all claims, known or unknown, which
it,
its past and present officers, directors, agents, employees, successors, and
assigns have or may have against releasees and any and all liability which
releasees may have to it, whether denominated as claims, demands, causes of
action, obligations, damages or liabilities arising from any and all bases,
however denominated; provided, however, that this release does not affect any
claims which are based on releasees' willful acts, gross negligence or
dishonesty in the performance of duties as an employee of the Company, nor
any
claims which may arise after the execution of this Agreement. The Company
further agrees that it will not file or permit to be filed on its behalf any
claim against Employee which is released hereby.
3. Payments
and Other Compensation:
In the
event that Employee complies in all respects with the terms of this Agreement,
the Company will pay to Employee the amounts and provide Employee with the
other
consideration set forth in this Section 3:
a. Salary
Continuation.
The
Company shall continue to pay Employee his salary and maintain in effect his
benefits that were in effect as of the Termination Date, through September
30,
2006.
b. Lump
Sum Payment.
On the
three month anniversary of the Termination Date, the Company will pay the
employee the sum of One Hundred thousand Dollars ($100,000.00)
c. February
Stock Options.
On
February 28, 2006, the Company granted the Employee an option (:the “February
Options”) to purchase 250,000 shares of the $0.001 par value common stock
(“Common
Stock”)
of the
Company, at a purchase price of $5.56 per share (the “February Options”).
Pursuant to the standard terms and conditions upon which stock options are
granted to its employees by the Company, the portion of such stock options
that
are “Qualified Stock Options” within the meaning of Section 422 of the Internal
Revenue code of 1986, as amended, would ordinarily terminate if not exercised
on
or before 30 days after the Termination Date and the (the “non-qualified stock
options”) balance would ordinarily terminate as of 90 days after the Termination
Date. Employee represents that as of the date of this Agreement he has not
exercised any of the February Options. In the event that Employee complies
in
all respects with the terms of this Agreement, one-half of the February options
shall be treated as non-qualified stock options having a term extending until
the third anniversary of the date of the Termination Date on the same terms
and
conditions as were heretofore in effect, after which date they shall expire
if
not exercised. The balance of the February Options shall be deemed to have
terminated as of the Termination Date.
d. June
Stock Options.
On June
12, 2006, the Company granted the Employee an option to purchase 450,000 shares
of Common Stock at a purchase price of $8.37 per share (the “June Options”).
Those options were not Qualified Stock Options. Pursuant to the standard terms
and conditions upon which stock options are granted to its employees by the
Company, such stock options would ordinarily terminate 90 days after the
Termination Date. Employee represents that as of the date of this Agreement
he
has not exercised any of the June Options. In the event that Employee complies
in all respects with the terms of this Agreement, the term of one-half of the
June options shall be extended until the third anniversary of the Termination
Date on the same terms and conditions as were heretofore in effect, after which
date they shall expire The balance of the June Options shall be deemed to have
terminated as of the Termination Date.
e. Complete
Compensation.
Employee acknowledges that, except for compensation that may be due him at
his
standard rate of compensation for periods prior to the Termination Date, his
right to obtain insurance at his own expense pursuant to the provisions of
Paragraph 4 and the compensation and stock options provided for in this Section
3, he has no right to any form of compensation, bonus, stock option, stock
award
or other compensation of any form or nature from the Company, and that such
unpaid compensation and the payments and stock options provided for in this
section 4 are in full satisfaction of all obligations of the Company to
him.
4. Expenses.
The
Company shall promptly reimburse the Consultant for all appropriately
documented, reasonable business expenses heretofore incurred by the Employee
in
the performance of his duties as an employee of the Company
5. Employee
Benefits:
After
September 30, 2006, Employee shall be entitled to continue his coverage, if
any,
under the Company's group medical and dental plans to the extent provided in,
and subject to his satisfaction of the requirements of, the Company's standard
Health Care Continuation Notice. If Employee chooses to extend any such benefits
through COBRA, Employee will be responsible for completing all required forms
and applications and for the payment of all premiums with respect to such
policies of insurance.
6. Cooperation;
Pending and Future Litigation:
a. Cooperation.
Commencing on the Termination Date, and for a period ending three (3) months
after the Termination Date, Employee shall render such advisory and consulting
services to the Company as it may reasonably request, in order that an orderly
transfer of his duties and responsibilities to other personnel of the Company,
now existing or hereafter hired. Without limiting the foregoing Employee shall
promptly; (but in any event within five (5) business days) deliver to the
Company’s principal offices all papers, records and other materials, whether in
written, printed, digital or other form, that relate to the Company’s business,
including all copies thereof in his possession or under his control. This shall
be a continuing obligation that shall survive the expiration of the three (e)
month consulting period provided for in this Section 6(a). The Company will
maintain such papers, records and other materials in a secure location and
will
provide Employee access to or copies thereof (subject to the confidentiality
provisions of Section 6(b)) to the extent necessary in connection with the
evaluation or defense of any claim made against Employee that relates to his
employment or other involvement with the Company.
.
b. Nondisclosure.
Employee shall not, directly or indirectly, disclose to anyone outside of the
Company any Proprietary Information or use any Proprietary Information other
than pursuant to my employment by and for the benefit of the Company. The term
“Proprietary Information” means any and all trade secrets and any and all data
or information owned by the Company or used by the Company in its business,
whether or not generally known outside the Company, regardless of whether it
was
prepared or developed by or for the Company, received by the Company from any
outside source or developed for a customer or business partner of the Company.
Without limiting the scope of this definition, Proprietary Information includes
all business plans of the Company; all financial information relating to the
Company; all lists of or information relating to suppliers to the Company;
and
any other record or information relating to the present or future business,
product or services of the Company or offered or proposed to be offered by
the
Company to its customers.
c. Pending
Litigation:
Employee agrees to participate in any litigation currently active that is
brought by or against the Company, by giving advice, participating in discovery,
and giving deposition and trial testimony as may be reasonably necessary, as
well as participation in other activities related to such lawsuit.
d. Future
Litigation:
During
his employment and thereafter, Employee also agrees to participate in any future
litigation arising out of events that occurred during the period of his
employment with the Company by giving advice, participating in discovery, and
giving deposition and trial testimony as may be reasonably necessary, as well
as
participation in other activities related to such litigation.
e. Pending
and Future Litigation:
If
Employee is required to participate in either pending or future litigation,
the
Company agrees to reimburse Employee for all out of pocket expenses reasonably
incurred in connection therewith. The Company will attempt to schedule said
participation with the employee's schedule and other commitments in mind. If
Employee is required to devote more than three (3) days in any calendar month
to
the satisfaction of his obligations under subsections 6(c) and 6(d), then the
Company shall pay Employee at a per diem rate of $2000 for each additional
full
or partial day in excess of 3 days so devoted by him.
7. Non-Solicitation:
a. Covenant.
Employee covenants and agrees that during the period ending one (1) year after
the Termination Date, he will not, directly or indirectly, hire, solicit, or
encourage then-current Company employees to apply for employment with any person
or entity: with which Employee is (or intends to be) employed; (b) in which
Employee or a firm in which he is employed, has a financial interest or is
engaged as a consultant, recruiter, independent contractor or otherwise; or
(c)
in which Employee is otherwise substantially financially interested. Employee
further covenants and agrees that he will not provide to any other person or
entity the names of or references (other than a reference requested by the
Company) on any person who is then employed by the Company.
b. Blue
Pencil Clause.
Employee and the Company agree that if in any proceeding, the tribunal shall
refuse to enforce fully any covenants contained herein because such covenants
cover too extensive a geographic area or too long a period of time or for any
other reason whatsoever, any such covenant shall be deemed amended to the extent
(but only to the extent) required by law.
8. Non-Disparagement:
Employee covenants and agrees that after his termination and through the second
anniversary of the Termination Date, he will not, except as specifically
required by law or court process, to satisfy any fiduciary obligations he may
have as a result of his employment by or directorship of the Company, to defend
himself against claims arising from his employment or directorship of the
Company, or as specifically consented to in writing by the Company: (i)
communicate to any person or entity any adverse information, written or oral,
concerning the Company, its officers, directors, employees, attorneys, agents
or
advisers (including without limitation any communication concerning information
that he acquired while he was employed by the Company and that concerns or
relates to the business, operations, prospects or affairs of the Company or
any
of its subsidiaries or affiliates) under circumstances in which there is a
reasonable possibility that such information might be publicly reported or
disclosed or otherwise made available to the public (regardless of whether
the
communication of such information is intended to have or cause that result
or
that result is within his control); or (ii) provide to any person (other than
his attorney or accountant) or entity any information that concerns or relates
to the negotiations or circumstances leading to the execution of this Agreement
or to the terms and conditions hereof or the parties' performance hereunder.
The
parties agree that the term "information" as used in this Section 8 shall have
the broadest possible meaning and shall include matters that are not considered
confidential or proprietary and that constitute beliefs, views and opinions
as
well as facts.
9. Resignation
and Execution of Documents:
Employee will tender his resignation as Chairman, President, Chief Executive
Officer of the Company and in all capacities with respect to any subsidiary
or
affiliate of the Company effective as of the Termination Date, and agrees to
execute the letter of resignation in such form as the Company may reasonably
request. Employee agrees to cooperate with the execution of any documents
required to complete resignation formalities. Employee further agrees to
cooperate with the Company to complete such documentation as is reasonably
necessary to effect his termination from the Company.
10. Continuing
Obligations Regarding Stock Trading:
Employee will be deemed a Corporate Officer for purposes of any restrictions
on
trading in the Company's securities through the Termination Date. He
acknowledges that he is in possession of certain material non-public information
concerning the Company, its business and its financial affairs, and agrees
not
to purchase or sell any of the Company’s securities, or to advise any other
person to do so, until the filing of the Company’s next report on form 10-QSB
with the Securities and Exchange Commission or, if earlier, on the date on
which
he is advised in writing by counsel to the Company that any information that
he
possesses by reason of his employment by and his service and an officer to
the
Company is either obsolete, public or otherwise immaterial, which advice shall
be given promptly after Employee’s request..
11. Effect
on Other Agreements and Plans:
Except
to the extent inconsistent herewith or as expressly provided herein, and except
for changes resulting from the termination of Employee's employment with the
Company, this Agreement shall have no effect upon the parties' respective rights
and obligations under any proprietary rights agreement between the Employee
and
the Company..
12. Entire
Agreement; Amendment:
This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior oral or written
agreements, commitments or understanding with respect to the matters provided
for herein. No amendment, modification or discharge of this Agreement shall
be
valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification, or discharge was
sought.
13. Execution
of Counterparts:
To
facilitate execution, this Agreement may be executed in as many counterparts
as
may be required; and it shall not be necessary that the signatures of, or on
behalf of, each part, or that the signatures of all persons required to bind
any
party, appear on each counterpart; but it shall be sufficient that all such
signatures appear on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in making
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of, or on behalf of, all
of
the parties hereto.
14. Limitation
on Benefit:
It is
the explicit intention of the parties hereto that no person or entity other
than
the parties hereto shall be entitled to bring any action or to enforce any
provision of this Agreement against any of the parties hereto, and the
covenants, undertakings and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, the parties hereto
or their respective successors, heirs, executors, administrators, legal
representatives, and permitted assigns.
15. Binding
Effect:
This
Agreement shall be binding upon and shall insure to the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, legal
representatives and permitted assigns.
16. Severability:
If any
part of any provision of this Agreement shall be determined to be invalid or
unenforceable by reason of the extent, duration or geographical scope thereof,
or otherwise, then the parties agree that the court making such determination
may reduce such extent, duration or geographical scope, or other provisions
thereof, and in its reduced form such part or provision shall then be
enforceable in the manner contemplated hereby.
17. Governing
Law:
This
Agreement and all other disputes or issues arising from or relating in any
way
to the Company’s relationship with Employee and Employee's termination shall be
governed by federal law of the United States of America and the internal laws
of
the State of New York, irrespective of the choice of law rules of any state
or
other jurisdiction.
18. Ambiguities:
The
parties acknowledge that they have reviewed this Agreement in its entirety
and
have had a full opportunity to negotiate its terms, and therefore, waive all
applicable rules of construction that any provision of this Agreement should
be
construed against its drafter and agree that all provisions of the Agreement
shall be construed as a whole, according to the fair meaning of the language
used.
19. Acknowledgements.
a. Employee
acknowledges that he has been given 21 days by the Company to consider this
Agreement. He understands that he may revoke this Agreement for a period of
seven (7) days after signing it by delivering written notice of my revocation
to
the Company and that the Agreement does not become effective or enforceable
until the expiration of such seven (7) day revocation period.
b. Employee
represents that he has read the above Agreement, and is voluntarily signing
this
Agreement after having been advised to seek his own legal counsel, without
threat or coercion, with full knowledge and understanding of its contents,
and
without promise of benefit, except as expressly recited in this
Agreement.
IN
WITHESS WHEREOF, the parties have each executed this agreement as of the date
first set forth above.
| Employee: | ||
| |
|
|
| /s/ Xxxxxxxxxxx x’Xxxxxx-Xxxxxx | ||
|
Xxxxxxxxxxx x’Xxxxxx-Xxxxxx |
||
| Company: | ||
| Xethanol Corporation | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxxxx | |
|
Xxxxx
Xxxxxxxxx,
Acting
Chief Executive Officer
|
||
