Exhibit 10.23
EXHIBIT 10.23
RELEASE AGREEMENT
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This RELEASE AGREEMENT ("Agreement") is made and entered into by and
between Xxxx Xxxxx, an individual (hereinafter "PERRY"), and Enova Systems,
Inc., a California corporation (hereinafter, the "ENOVA").
RECITALS
X. XXXXX was employed as the Chief Executive Officer of ENOVA until
August 17, 2004.
X. XXXXX continues to serve ENOVA as Vice Chairman of the Board of
Directors.
X. XXXXX and ENOVA desire to confirm their agreement regarding PERRY's
transition from the position of Chief Executive Officer of ENOVA all on
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and promises herein
contained, the parties agree as follows:
AGREEMENTS
1. Lump Sum Payment: ENOVA will pay XXXXX x xxxxx amount of $75,924.18
(Seventy-Five Thousand Nine Hundred Twenty-Four Dollars and Eighteen Cents).
This sum will be paid to PERRY within three (3) business days after this
Agreement becomes effective and enforceable as set forth in Paragraph 14 below,
whichever is later. This amount is subject to payroll tax withholding.
2. Salary Continuation: In consideration for the release terms
described herein, ENOVA continued to pay PERRY his salary of Ten Thousand
Dollars ($10,000.00) per month through the end of December 2004. This amount was
paid to PERRY according to ENOVA's regular payroll practices, and was subject to
payroll tax withholding. PERRY also continued to be eligible for and received
the employee benefits which he has enjoyed as an employee of ENOVA through
December 31, 2004.
3. Payment For Health Insurance Coverage: In further consideration for
the release terms described herein, for health insurance coverage for the period
January through December 2005, ENOVA will pay PERRY for the lesser of:
(a) the cost of continuation coverage for ENOVA's group plan
under COBRA for the period, or
(b) the premium cost actually incurred by PERRY for any
replacement health coverage obtained by PERRY.
Provided PERRY timely elects continuation coverage under COBRA, payment of this
benefit will be made by ENOVA paying PERRY's monthly premium for COBRA coverage
until such time as PERRY provides ENOVA with written notice to ENOVA's Chief
Executive Officer that he has secured replacement coverage. In addition, ENOVA
will pay premiums on life insurance carried by ENOVA on behalf of PERRY as the
beneficiary in the amount of $171.60 per month for the twelve months during
2005.
4. Office And Telephone: In further consideration for the release terms
described herein, for so long as PERRY remains a member of the Board of
Directors of ENOVA, he will with prior consent of the Chief Executive Officer be
able to use a visiting office available for Board members' use at ENOVA's place
of business. The office will be furnished with basic office furniture and a
telephone.
5. Continuing Service On Board Of Directors: Notwithstanding any other
provision of this Agreement, ENOVA confirms that nothing herein is intended to
deprive PERRY of any benefit to which he may be entitled as a member of the
Board of Directors of ENOVA, including but not limited to such indemnification
afforded each member of the Board of Directors as in existence from time to time
pursuant to Enova's Bylaws, Articles of Incorporation and contractual
arrangements. For so long as PERRY remains a member of the Board of Directors of
ENOVA, he shall be entitled to receive such fees and reimbursement for expenses
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as are generally available to other members of the Board by virtue of their
status as a Board member.
6. Limitation On Sale Of Stock: Except as expressly permitted in this
Paragraph, PERRY agrees that he will not, prior to the earlier of (a) January 1,
2006 or (b) six months after ENOVA receives additional capital funding of at
least Five Million Dollars ($5,000,000.00); sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of (collectively,
"Transfer") any shares of ENOVA stock which he presently owns or has the right
to acquire so long as each Director and Executive Officer of ENOVA is subject to
similar transfer restrictions. During this period, before PERRY shall Transfer
any such shares, PERRY shall notify ENOVA in advance of any such Transfer to
ascertain if the Directors and Executive Officers of ENOVA are at such time
permitted to transfer their shares in ENOVA. Notwithstanding the foregoing,
prior to January 1, 2006, PERRY may gift up to Ten Thousand Dollars ($10,000.00)
of stock to each of five (5) children or grandchildren of his.
7. Termination Of Participation And Entitlement: PERRY acknowledges
that the compensation and benefits set forth above collectively exceed the
compensation and benefits to which he was entitled to receive. at any time..
PERRY acknowledges that upon payment of the amounts and benefits set forth in
Paragraphs 1, 2 and 3 above, ENOVA is not and shall not be obligated to pay any
additional money, compensation, or benefits to him except as expressly provided
herein. Except for PERRY's existing equity ownership in ENOVA as set forth on
Exhibit A attached hereto and as otherwise specifically set forth herein,
PERRY's participation in and entitlement to any and all other compensation,
stock, stock options, fringe benefits, and employee benefit plans of ENOVA
ceased as of December 31, 2004. ENOVA confirms that PERRY retains all rights
under COBRA and Cal-COBRA. PERRY acknowledges that it is his intent and
understanding that he will be entitled to no benefits or payments of any kind
beyond those which are expressly provided for in this Agreement. PERRY confirms
that no other compensation or benefits are due to him.
8. General Release Of All Claims: As a material inducement to ENOVA to
enter into this Agreement, each of PERRY; on behalf of himself, his heirs, and
assigns on the one hand and ENOVA on the other; hereby releases and forever
discharges - except as expressly set forth in Paragraphs 5 and 12 herein - the
other party and their respective current and former shareholders, officers,
directors, trustees, employees, agents, assigns, representatives, attorneys,
insurers, and all persons or entities acting by, through, under or in concert
with any of them (collectively "Releasees"), to the full extent permitted by law
of and from any and all liabilities, claims, obligations, promises, agreements,
demands, damages, actions, charges, complaints, cost, losses, debts and expenses
(including attorney's fees and costs actually incurred), causes of action of
every kind, known or unknown, disclosed or undisclosed, matured or unmatured,
including, but not limited to, all claims under state, federal, or common law,
whether based in contract, tort, statute or otherwise, including claims of
discrimination, in any way related to PERRY's employment by ENOVA and the
termination of such employment which are unrelated to any claims involving state
or federal securities laws(collectively, "Claims").
9. Express Release Of Claims For Age Discrimination: Without limiting
the scope of Paragraph 8, PERRY specifically acknowledges that this Release
Agreement includes, without limitation, any and all Claims and rights he may
have under the federal Age Discrimination in Employment Act which prohibits
discrimination against employees because of their age. PERRY understands that,
as a result of his signing this Agreement, he will be barred from pursuing any
claims for age discrimination against Releasees.
10. Covenant Not To Pursue Complaints: As a further material inducement
to ENOVA to enter into this Agreement, PERRY represents that he will not
initiate, file, prosecute or pursue any claim, complaint or charge against the
Releasees with any agency or body that licenses, regulates, or otherwise
monitors the activities of Releasees; or with any other local, state or federal
agency or court based on any occurrences arising from or relating to his
employment by ENOVA. If any such association, agency or court assumes
jurisdiction of any complaint, claim or charge against the Releasees on behalf
of PERRY, he will request such association, agency, or court to withdraw from
the matter.
11. Waiver Of Unknown Claims: In order to provide a full release of all
Claims, including those which are unknown and unsuspected, PERRY and ENOVA
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hereby waive all rights under California Civil Code Section 1542, which section
reads as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor.
12. No Admission Of Liability: The parties acknowledge and agree in
good faith that this Agreement is the result of a compromise and shall never at
any time or for any purpose be considered as an admission of liability or
responsibility of the parties hereby released, who continue to deny such
liability and to disclaim such responsibility.
13. Consideration Period And Advice Of Counsel: PERRY acknowledges that
he has been afforded twenty-one (21) days to consider this Release Agreement,
its benefits, and its consequences. He understands that he has the option of
signing this Agreement at any time before the end of the twenty-one (21) day
period, but that any election to do so is completely within his discretion.
PERRY further acknowledges that he has been advised that he may seek the advice
of an attorney before signing this Release Agreement, and that he has had a full
and adequate opportunity to do so.
14. Revocation Period: It is understood and agreed by PERRY that he
will have seven (7) days after signing this Release Agreement to revoke it. The
Agreement will not become effective and enforceable until this revocation period
has expired. No payment to PERRY under Paragraphs 1, 2 or 3 above will be due
earlier than three (3) business days after the Agreement becomes effective and
enforceable.
15. No Reliance On Other Representations: PERRY and ENOVA represent and
acknowledge that in executing this Agreement, neither party has relied upon any
representation or statements made by any of the Releasees with regard to the
subject matter, basis, or effect of this Agreement or otherwise beyond those
expressly contained herein. PERRY and ENOVA represent that each has carefully
read and fully understands all provisions of this Agreement, and that each is
voluntarily entering into this Agreement after adequate time to consider its
terms.
16. Miscellaneous: In further consideration of this Agreement, PERRY
and ENOVA agree as follows:
(a) The terms mentioned in the preceding paragraphs of this
Agreement are the entire and only consideration for it, and each party shall be
responsible for payment of his or its own attorney's fees, costs, and legal
expenses, if any;
(b) The language of all parts of this Agreement shall in all
cases be construed as a whole, according to its fair meaning, and not strictly
for or against any of the parties;
(c) This Agreement is entered into in the State of California
and shall be construed and interpreted in accordance with its law;
(d) The various provisions of this Agreement are severable and
if any is unenforceable, at law or in equity, that provision may be severed,
leaving the others remaining in full force and effect;
(e) Paragraph headings contained in this Agreement are for
convenience only and shall not be considered for any purpose in construing the
Agreement;
(f) This Agreement contains the entire agreement between the
parties to it with regard to the matters set forth in it and shall be binding
upon and inure to the benefit of the executors, administrators, personal
representatives, heirs, successors and assigns of each;
(g) This Agreement fully supersedes any and all negotiations,
and all prior written, oral, or implied agreements or understandings between the
parties pertaining to the subject matters hereof; and
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(h) This Agreement may only be modified by a written agreement
identified as an amendment/modification to this Agreement and signed by the
parties hereto.
PLEASE READ CAREFULLY. THIS RELEASE
AGREEMENT INCLUDES A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS.
DATED: ___________________ XXXX XXXXX
__________________________________________
DATED: ___________________ ENOVA SYSTEMS, INC.
By: _____________________________________
Xxxxx Xxxxxx, Chief Executive Officer
REMAINDER OF PAGE INTENTIONALLY BLANK
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