SETTELEMENT AGREEMENT AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this "Agreement") is made and
entered into as of August 1, 1997, by and between KENETECH CORPORATION (the
"Company"), a Delaware corporation, and XXXXXXXX X. XXXXXXX (the "Employee"), an
individual employed by the Company.
RECITALS
A. The Company and the Employee are parties to an Employment Agreement dated
April 12, 1996 (the "Employment Agreement").
B. The Employee and the Company have certain disputes concerning the
Employment Agreement.
C. The Employee and the Company desire to terminate the Employment Agreement
and to compromise, settle and release fully and finally all outstanding
matters relating to the Employment Agreement.
D. Subject to the terms and conditions of this Agreement, upon such
termination of the Employment Agreement, the Employee shall be employed by
the Company as an at-will employee.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable consideration, the Company and
the Employee agree as follows:
1. Terms of Settlement.
(a) In consideration of the agreements by the Employee provided herein,
including, without limitation, the releases by the Employee in Section
2 below, the Company agrees as follows:
(i) In full satisfaction of any claims by the Employee in connection
with his employment or the termination of the Employment
Agreement (but subject to Sections 6(e), (f) and (g) below),
including, but not limited to, any claims for compensation,
bonuses, severance payments or benefits, change in control
benefits, out-placement services or any other payments under the
Employment Agreement, the Company shall pay to the Employee a
lump sum amount equal to $175,000.00, less all applicable
deductions, within five (5) business days following the execution
of this Agreement.
(ii) Upon termination of the Employment Agreement, the Employee shall
be employed as an at-will employee of the Company as its Chief
Financial Officer and a Vice President on the same terms and
conditions as other at-will employees of the Company, including
the right to participate in all employee benefit plans of the
Company available to other at-will employees of the Company.
(iii)The Company shall deduct and withhold, from the compensation
payable to the Employee under this Agreement, any and all
Federal, State and local income and employment withholding taxes
and any other amounts required to be deducted or withheld by the
Company under any applicable statute or regulation.
(b) The Employee agrees that nothing in this Agreement shall confer upon
the Employee any right to continue as an employee of the Company for
any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company (or any direct or
indirect subsidiary employing the Employee), which rights are
expressly reserved by the Company, to terminate the Employee's
employment at any time for any reason whatsoever, with or without
cause.
2. Mutual Releases.
(a) Release By The Employee. Except as to any claims arising out of rights
provided under this Agreement, in consideration of the agreements set
forth herein and upon indefeasible payment in full of all amounts
payable to Employee under Section 1 of this Agreement, the Employee
hereby irrevocably and unconditionally releases, acquits and forever
discharges for himself and his heirs, executors, administrators,
agents, successors and assigns, the Company and any related entity and
their stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions,
and subsidiaries, and all persons acting by, through, under or in
concert with any of them (collectively, the "Company Releasees"), or
any of them, from any and all charges, complaints, claims, assertions
of claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorneys' fees
and costs actually incurred) of any nature whatsoever, whether known
or unknown, suspected or unsuspected, arising directly or indirectly
out of the Employment Agreement, which the Employee or his heirs,
executors, administrators, agents, successors or assigns, now has, or
ever claimed to have, or could claim against each or any of the
Company Releasees, including, without limitation, any of the
following: claims in equity or law for wrongful discharge, and
personal injury claims, claims under federal, state or local laws
prohibiting discrimination on account of age, national origin, race,
sex, disability, religion and other protected classifications, or
claims under the Civil Rights Acts of 1866 and 1871, as amended, Title
VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, as amended,
the Employee Retirement Income Security Act of 1974, as amended, the
Americans with Disabilities Act of 1990, the Family Medical and Leave
Act, the California Fair Employment and Housing Act or any comparable
law of any other State.
(b) Release By The Company. Except as to any claims arising out of rights
provided under this Agreement, in consideration for the agreements set
forth herein, the Company hereby irrevocably and unconditionally
releases, acquits and forever discharges for itself and its agents,
successors and assigns, the Employee and his successors and assigns
(collectively, the "Employee Releasees"), or any of them, from any and
all charges, complaints, claims, assertions of claims, liabilities,
obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and
expenses (including attorneys' fees and costs actually incurred) of
any nature whatsoever, known or unknown, suspected or unsuspected,
arising directly or indirectly out of any interactions between the
Company and the Employee Releasees, arising out of the Employment
Agreement, which the Company now has, or ever claimed to have, or
could claim against each or any of the Employee Releasees.
3. Waiver of Unknown Claims. The Employee acknowledges that he is aware that
he may hereafter discover claims or facts different from or in addition to
those he now knows or believes to be true with respect to the matters
herein released, and except as to any claims arising out of the rights
provided under this Agreement, he agrees that the releases set forth above
shall be and remain in effect in all respects a complete general release as
to the matters released and all claims relative thereto which may exist or
may heretofore have existed, notwithstanding any such different or
additional facts. The Employee acknowledges that he has considered the
possibility that he may not fully know the number or magnitude of all of
the claims which he has or may have against the Company and the Company
Releasees and, except as set forth in this Agreement, intends to assume the
risk that he is releasing unknown claims. The Employee acknowledges that he
has been informed of Section 1542 of the Civil Code of the State of
California and, except as set forth in this Agreement, he does hereby
expressly waive and relinquish all rights and benefits which he has or may
have under such Section, which 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."
The Employee understands and acknowledges the significance and consequences
of such specific waiver of Section 1542 and hereby assumes full
responsibility for any injuries, damages or losses that he may incur as the
result of such waiver.
4. Indemnification and Insurance. To the extent permitted by applicable law,
the Company agrees that all rights to indemnification from the Company
existing under the law and under the Company's certificate of incorporation
and by-laws as of the date hereof, in favor of the Employee as an officer,
employee, or agent of the Company shall survive this Agreement and shall
continue in full force and effect with respect to any liability for any
acts or omissions by the Employee during the period of his employment by
the Company. The Company further agrees that, for so long as it maintains
directors' and officers' liability insurance that covers any employees of
the Company, it shall include the Employee among the insured employees;
provided, however, that this Agreement shall not be construed or implied as
an obligation to continue to maintain directors' and officers' liability
insurance for active or former employees for any period of time.
5. Non-disclosure Agreements. The Employee acknowledges that any
confidentiality, proprietary or ownership rights or nondisclosure
agreement(s) in favor of the Company or the Company Releasees which he may
have entered into in connection with his employment (the "Nondisclosure
Agreement(s)") by the Company, are understood to survive, and do survive,
the termination of his Employment Agreement, and accordingly nothing in
this Agreement shall be construed as terminating, limiting or otherwise
affecting any such Nondisclosure Agreement(s) or the Employee's obligations
thereunder.
6. General Provisions.
(a) The Employee represents and acknowledges that in executing this
Agreement, he does not rely and has not relied upon any
representation, inducement agreement or statement not set forth herein
made by any of the Company Releasees or by any of the Company
Releasees' agents, representatives or attorneys with regard to the
subject matter of this Agreement.
(b) The provisions of this Agreement are severable, and if any part of it
is found to be unenforceable, the other provisions shall remain fully
valid and enforceable. This Agreement shall survive the termination of
any arrangements contained herein.
(c) The Company and the Employee mutually agree that neither may assign
this Agreement, or any rights or obligations under this Agreement, to
any person or entity without the express prior written approval of the
other.
(d) This Agreement sets forth the entire agreement between the Company and
the Employee and supersedes any and all prior agreements or
understandings between the Company and the Employee pertaining to the
subject matter hereof. The Employment Agreement shall be null and void
upon execution of this Agreement. This Agreement shall inure to the
benefit of and be binding upon the successors in interest and assigns
of each party except as otherwise provided herein.
(e) With respect to the Asset Sale Compensation Agreement between the
Employee and KENETECH Windpower, Inc. ("KWI"), now debtor in
possession, dated as of May 20, 1996, as it may be amended from time
to time, the parties hereto agree that nothing herein shall be deemed
to alter or amend such agreement insofar as KWI's obligations to the
Employee are concerned.
(f) Nothing herein shall amend or alter any Incentive Stock Option
Agreement between the Employee and the Company or the Grant of Stock
Option between the Employee and the Company dated as of April 12,
1996, or any grant of stock options thereunder.
(g) Notwithstanding anything to the contrary in this Agreement, the
Employment Agreement and all payments due thereunder shall be
reinstated, and the release by the Employee hereunder shall be null
and void, if at any time payment, or any part thereof, of any amount
under this Agreement is rescinded or must otherwise be restored or
returned by the Employee upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for the Company, all as though such payment
hereunder had not been made.
(h) The effect, intent and construction of this Agreement shall be
governed by the laws of the State of California, without giving effect
to the conflict of laws rules thereof.
(i) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original.
IN WITNESS WHEREOF, the Company and the Employee have duly executed this
Agreement as of the date first set forth above.
KENETECH CORPORATION
By_________________________ ___________________________
Name: Xxxx X. Xxxxxx XXXXXXXX X. XXXXXXX
Title: President and Chief Executive Officer
