EXHIBIT 10.8
SEPARATION AGREEMENT AND RELEASE
by and between
GREEN MOUNTAIN ENERGY RESOURCES L.L.C.
and
XXXXXXX X. XXXX
This SEPARATION AGREEMENT AND RELEASE (the "Agreement"), by and between
Xxxxxxx X. Xxxx ("Hyde") and Green Mountain Energy Resources L.L.C. (the
"Company") shall be effective as of October 6, 1998 (the "Effective Date").
This Agreement is entered into to resolve all matters between Hyde and the
Company concerning Hyde's employment with the Company and the termination of
that employment. As used herein, "the parties to this Agreement" or "the
parties" shall refer collectively to Hyde and the Company.
WHEREAS, the Company has employed Hyde since August 6, 1997 subject to an
Employment Agreement of the same date (the "Employment Agreement"); and
WHEREAS, Hyde has resigned for Good Reason as President of the Company as
of the Effective Date; and
WHEREAS Hyde shall remain an employee of the Company performing such duties
as may be agreed between Hyde and the Company until six months following the
Effective Date (the "Termination Date"); and
WHEREAS, the Company and Hyde desire by this Agreement to fully and finally
compromise, settle, resolve and release all matters relating to Hyde's
employment as President of the Company, the termination of that employment, the
termination of any employment relationship between Hyde and the Company, the
compensation and benefits payable to Hyde under the Employment Agreement, or any
relationship between Hyde and the Company; and
WHEREAS, the entering into of this Agreement is not an admission of
liability by or on the part of any party.
NOW THEREFORE, in consideration of the covenants and mutual promises and
agreements herein contained and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
1. Resignation of Office. The parties agree that Hyde's resignation as
President was with Good Reason and was and shall be effective as of the
Effective Date.
2. Post-Resignation Service. Following Hyde's resignation as President
of the Company, he shall remain an employee of the Company through the
Termination Date. He shall continue to receive the same level of compensation as
described in Section 4.1 (Salary) of the Employment Agreement. The Company
agrees that such compensation shall be paid to Hyde in all events. While Hyde is
an employee of the Company he shall receive such administrative and technical
support from the Company as may be agreed on and approved by the Company in
advance. He shall receive prompt reimbursement from the Company for all
reasonable business expenses incurred on behalf of the Company and approved by
the Company in advance. Hyde hereby resigns from the Management Committee of the
Company effective as of the Enforcement Date (as defined in Section 12 below).
Prior to the Termination Date, Hyde may provide compensable services other
than to the Company without notice to or authorization from the Company so long
as such services do not violate Section 7 hereof. Compensation received by Hyde
in respect of such services shall not cause any reduction in his compensation or
benefits described in this Agreement.
3. Termination Of Employment. The termination of Hyde's service as
President of the Company shall become effective on the Effective Date and he
shall cease to be an employee of the Company as of the Termination Date.
Following the Effective Date, Hyde shall have no further duties,
responsibilities or powers as an employee, officer or executive of the Company
and shall have no further duties, responsibilities or powers, except as shall be
agreed upon in advance between Hyde and the Company. Hyde understands,
acknowledges and agrees that as, of the Termination Date, he shall cease to be
employed by the Company and that he shall not possess any rights or claims to
any future employment with the Company, its parent company, subsidiaries,
affiliates, divisions, successors or related companies.
4. Resignation and Termination Benefits. In consideration of the
execution of this Agreement by the parties and, as a material inducement for
Hyde to execute this Agreement, the Company agrees to provide Hyde with the
following benefits.
A. On the Enforcement Date (as defined in Section 12 below), the Company
shall make an initial payment to Hyde in respect of his resignation as
President (the Initial Resignation Payment) equal to one hundred
forty-two thousand, five hundred dollars ($142,500):
B. On or before December 31, 1998, the Company shall make a contribution
on behalf of Hyde into the proposed management investing -- matching
loan program as may be adopted on behalf of the officers of the
Company (the "Investment Program") or, if the Investment Program is
not in effect as of December 31, 1998, shall make a cash payment
directly to Hyde (the "Second Resignation Payment") equal to one
hundred forty-two thousand, five hundred dollars ($142,500).
C. On the Termination Date, the Company shall make a payment to Hyde in
respect of the termination of his employment (the "Severance Payment")
equal to one hundred forty-two thousand, five hundred dollars
($142,500).
2
D. For the period ending on the Termination Date the Company shall
continue to contribute to the cost of Hyde's participation in such
group medical and dental plans as was the case prior to the Effective
Date (the "Insurance Payments"), provided that Hyde is entitled to
continue such participation under applicable law and plan terms. If
Hyde ceases to be eligible for continued participation in any such
plans, the Company shall pay directly to Hyde the amount of premiums
that it would otherwise have paid to the insurers for Hyde's coverage
pursuant to the immediately preceding sentence had Hyde continued to
be so eligible.
X. Xxxx may invest up to $500,000, net of any contribution made on his
behalf pursuant to Clause B above, in the Investment Program.
F. That portion of Hyde's "Interest Option", as described in the
Operating Management Interest Option Agreement (the "Option
Agreement") between Hyde and the Company effective August 6, 1997,
which has become exercisable as of the Effective Date shall remain
exercisable (and not subject to purchase by the Company at the option
of the Company) through August 6, 2002. The portion of the Interest
Option which has not become exercisable by the Effective Date may
become exercisable and remain exercisable through August 6, 2002 in
the sole discretion of the Company. Hyde shall be entitled to
participate in any opportunity afforded to officers of the Company to
extend or otherwise amend any similar Option Agreement if, as of
August 6, 2002, there has been no Initial Public Offering (as defined
in the Employment Agreement) of the shares of the Company.
X. Xxxx understands, acknowledges and agrees that the Company's
undertakings herein with respect to the Initial Resignation Payment,
the Second Resignation Payment, the Severance Payment and the
Insurance Payments are made in complete satisfaction of any and all
claims for severance pay or any other compensation or benefits to
which Hyde is or may claim to be entitled under the Employment
Agreement.
5. No Other Benefits. The parties acknowledge and agree that other than
the payments and benefits set forth in this Agreement, the Company is not under
any obligation to make or provide any payments or benefits to Hyde. Hyde
expressly represents, acknowledges and agrees that, except as provided in this
Agreement, he is entitled to no wages, compensation, privileges, perquisites,
benefits or payments from the Company other than any rights Hyde may have under
any Company employee benefit plan, as that term is defined in the Employee
Retirement Income Security Act of 1974, as amended.
6. Release of Claims.
X. Xxxx acknowledges that the Company's undertakings herein are a full
and complete remedy and are made in full satisfaction for any an all
claims for damages arising from or related to his employment, his
permanent separation from such employment, or any other act occurring
up to and including the date of this Agreement. Hyde covenants that
he will not at any time commence,
3
maintain, prosecute, participate in as a party, or permit to be filed
by any other person on his behalf, any action, suit or proceeding
(judicial or administrative) seeking damages, reinstatement, or any
financial recovery against the Company, its parent organization, any
of its subsidiaries, affiliates, or related companies or any of its
present or former officers, directors, employees, representatives or
agents, with respect to the terms and conditions of his employment,
his permanent separation from such employment, or with respect to any
act, event or occurrence, or any alleged failure to act, occurring up
to and including the date of this Agreement.
B. In consideration of their mutual agreements herein, the parties
mutually remise, release and forever discharge, and do for each of
their heirs, executors, administrators and assigns, remise, release
and forever discharge each other, and their successors and assigns,
subsidiaries, parent and related companies, and their directors,
officers, representatives, agents, servants, employees, former
employees, of and from any and all manner of action and actions, cause
and causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, costs, attorney's fees, claims and
demands whatsoever, in law or in equity, which against either party or
any other of the above mentioned entities and persons they ever had,
now have, or which their heirs, executors, administrators or assigns,
thereafter can, shall or may have for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to
the date of the date of the document, including, but not in limitation
of the foregoing general terms, any charges, claims, actions and
causes of action, asserted or unasserted, with respect to, or arising
out of, Hyde's employment or the termination of his employment with
the Company.
C. In addition, and not in limitation of the foregoing, Hyde forever
releases and discharges the Company from any liability or obligation
to reinstate or reemploy him in any capacity.
D. Should Hyde die before all payments are made, remaining payments will
continue to be made as described herein to heirs of Hyde, as
determined by law.
E. The Company has carefully explained that this document is a general
release that releases all claims and causes of action which Hyde ever
had, now has, or may have in the future, including, but not limited
to, those relating to his employment and the termination of his
employment. Hyde understands that once he signs the Agreement, he
legally waives and releases any and all rights and claims he may have
under the numerous state and federal laws and regulations regulating
employment, including, without limitation, Title VII of the Civil
Rights Act of 1964, as amended; the Age Discrimination in Employment
Act of 1967, as amended; the Equal Pay Act of 1963, as amended; the
Employee Retirement Income Security Act of 1974, as amended; the
Rehabilitation Act of 1973, as amended; the Fair Labor Standards Act
of 1938, as amended; the Americans with Disabilities Act of 1990, as
amended; the National Labor Relations Act of 1935,
4
as amended; Vermont's Fair Employment Practices laws, and other
statutes, as well as under any common law tort or contract theory,
including, but not limited to, wrongful discharge, breach of oral or
written contract, misrepresentation, defamation, interference with
prospective economic advantage, interference with contractual
relationships, intentional or negligent infliction of emotional
distress, negligence, promissory estoppel, and breach of covenant of
good faith and fair dealing.
7. Non-Competition; Unauthorized Disclosure; Inventions.
A. Non-Competition. Beginning on the Termination Date and continuing
through the second anniversary of the Termination Date, Hyde shall
not, directly or indirectly, own, manage, operate, control or
participate in any manner in the ownership, management, operation or
control of, or be connected as an officer, employee, partner,
director, principal, consultant, agent or otherwise with, or have any
financial interest in, or aid or assist anyone else in the conduct of
any business, venture or activity in the electric or gas green retail
energy business, whether or not the Company is to be compensated for
such participation. Ownership of less than five percent of the
publicly-held securities of any corporation shall not, in and of
itself, constitute a violation of this Section 7.A.
B. Restriction on Taking Employees or Customers. So long as the
restrictions of Section 7.A continue to apply to Hyde, Hyde shall not,
directly or indirectly, (i) recruit or otherwise seek to induce any
employees of the Company or any of its Subsidiaries (as defined in the
Employment Agreement) to terminate his or her employment or violate
any agreement with, or duty to, the Company or any of its
Subsidiaries, and (ii) solicit or encourage any customer of the
Company or any of its Subsidiaries to terminate or materially diminish
its relationship with the Company or any Subsidiary of the Company or
to conduct with himself or any other Person (as defined in the
Employment Agreement), any business, venture or activity which such
customer has conducted at any time with the Company or any of its
Subsidiaries or any of their respective successors.
C. Unauthorized Disclosure; Inventions. The parties to this Agreement
agree that the restrictions on Hyde set forth in Section 7
(Unauthorized Disclosure; Inventions) of the Employment Agreement
shall remain in effect following the Termination Date as if
incorporated herein.
8. Attorneys' Fees. The Company agrees that it shall reimburse Hyde for
the costs of attorney's fees incurred in respect of drafting this Agreement,
such amount not to exceed $5,000.
9. Non-Admission Of Liability. This Agreement is not an admission of
liability, wrongdoing, or unlawful conduct by or on the part of any party. The
parties specifically acknowledge and agree that nothing in this Agreement shall
be construed or deemed to be (a) an admission of liability by the Company of any
acts of wrongdoing whatsoever, whether by omission or commission, against Hyde
or any other entity or person, any such liability and conduct having been and
continuing to be denied, or (b) an admission of liability by Hyde of any acts of
5
wrongdoing whatsoever, whether by omission or commission, against the Company or
any other entity or person, any such liability and conduct having been and
continuing to be denied.
10. Twenty-One (21) Day Waiting Period. Hyde understands and acknowledges
that he has been given a period of twenty-one (21) days from the date he was
first given a copy of this Agreement to carefully study and consider its terms
and decide whether or not to sign this Agreement. Further, Hyde acknowledges
and understands that (a) this is all the time that he needs to think about and
make this decision, (b) he may use as much of this 21 day period as he wishes
prior to signing this Agreement, (c) he may voluntarily decide to sign this
Agreement prior to the expiration of the 21 day period, and (d) to the extent he
decides to sign this Agreement prior to the expiration of the 21 day period, he
waives his right to insist upon the full 21 day period. Further, Hyde
acknowledges and agrees that if he signs this agreement prior to the expiration
of 21 days, he is doing so freely and voluntarily.
11. Opportunity For Review With Counsel. The Company hereby advises Hyde
in writing to talk with his own attorney before executing this Agreement. Hyde
expressly acknowledges that the Company has advised him to consult with an
attorney prior to signing this Agreement. By executing this Agreement, the
parties represent and agree that they fully understand their right to discuss
all aspects of this Agreement with their own attorneys, that they have availed
themselves of this right, that they have carefully read and fully understand all
the provisions of this Agreement, and that they are knowingly and voluntarily
entering into this Agreement.
12. Seven (7) Day Cancellation Period. Hyde may cancel this Agreement
within seven (7) days of signing it. Therefore, this Agreement will not become
enforceable until the eighth day after Hyde signs this Agreement. The eighth day
after Hyde signs this Agreement is called the "Enforcement Date." If the eighth
day is a weekend day or a holiday, the Enforcement Date is the next business
day. Until the Enforcement Date, Hyde has the legal right under Federal law to
cancel this Agreement. The fact that Hyde has signed this Agreement and returned
it to the Company will not prevent Hyde from canceling this Agreement prior to
the Enforcement Date. If Hyde cancels this Agreement, then this Agreement shall
not be effective or enforceable and Hyde shall not be entitled to receive any of
the payments or benefits described above (except for wages, payments and
benefits due and owing to Hyde as a matter of law). If Hyde decides to cancel
this Agreement, he must do so by notifying the Company in writing (by facsimile
or by registered, certified or overnight mail) addressed as follows:
Green Mountain Energy Resources L.L.C.
XX Xxx 0000
00 Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: 802/846-6162
Any written notice to cancel must be delivered to the Company no later than the
day prior to the Enforcement Date. If Hyde has signed and returned this
Agreement and does not give the Company a written notice to cancel before the
Enforcement Date, this Agreement shall become binding on the parties.
6
13. Remedies Upon Breach. Hyde acknowledges and agrees that, in the event
he breaches any of the terms and provisions of this Agreement, nothing herein
shall be construed to preclude or limit the Company from asserting claims or
filing a lawsuit against Hyde for the purpose of (a) enforcing its rights under
this Agreement, (b) recovering moneys paid under this Agreement, or (c) pursuing
any other rights and remedies available under law. The Company acknowledges and
agrees that, in the event it breaches any of the terms and provisions of this
Agreement, nothing herein shall be construed to preclude or limit Hyde from
asserting claims or filing a lawsuit against the Company for the purpose of (a)
enforcing his rights under this Agreement, or (b) pursuing any other rights and
remedies available under law. This Agreement may be introduced as evidence in a
proceeding or court action only for purposes of enforcing its terms or to
evidence the parties intent in executing it.
The parties agree that in the event that either party claims a breach
of this Agreement by the other, should the party that claims the breach fail to
prevail in its claim, it shall reimburse the other party for the reasonable
costs (including reasonable attorney's fees) of that party's defense against
such claim.
14. Waiver of a Breach. A waiver by any party of a breach of any of the
provisions of this Agreement shall not operate or be construed as a waiver of
any other provision of this Agreement or of any subsequent breach of the same or
any other provision of this Agreement. The understandings and representations
of the parties set forth in this Agreement shall survive any breach of this
Agreement and be enforceable by any non-breaching party.
15. Severability. The provisions of this Agreement are severable.
If any portion of this Agreement is held, by a court of competent jurisdiction,
to be invalid or unenforceable or to conflict with any federal, state or local
law, such portion or portions of this Agreement are hereby declared to be of no
force or effect in such jurisdiction, and this Agreement shall otherwise remain
in full force and effect and be construed as if such portion had not been
included. In the event that any provision of this Agreement is held to be
unenforceable for being unduly broad as written, such provision shall be deemed
amended to narrow its application to the extent necessary to make the provision
enforceable according to applicable law and shall be enforced as amended.
16. Entire Agreement. This Agreement is the entire agreement between the
parties with respect to Hyde's employment with the Company, the termination of
that employment, and the compensation and benefits payable to Hyde upon the
termination of his employment with the Company and supersedes and replaces any
and all prior and contemporaneous agreements, representations, promises or
understandings of any kind between the parties, specifically including the
Employment Agreement (except as provided in Section 7 hereof). No modification,
amendment or waiver of any of the provisions of this Agreement shall be
effective unless in writing and signed by both parties.
17. Confidentiality of Agreement; Non-Disparagement. Hyde shall not at
any time talk about, write about or otherwise publicize the terms of this
Agreement or any fact concerning its negotiation, execution or implementation
except with (i) an attorney who may be advising Hyde in connection with this
Agreement, (ii) a financial consultant, tax advisor or executive outplacement
7
counselor; and (iii) Hyde's immediate family (including Hyde's spouse and
children residing with Hyde) provided that such person agree in advance to keep
said information confidential and not to disclose it to others or as necessary
to enforce the terms and conditions hereof or as required by order of a court or
government entity having jurisdiction and authority to require disclosure.
Hyde agrees that at no time will he criticize or disparage: (i) the
Company; (ii) any current or former member, affiliate, subsidiary, partner,
investor or officer of the Company; (iii) in respect of matters related to the
Company, any employee, agent, representative or attorney of the Company; (iv)
any aspect of the Company's business or business practices; or (v) the electric
or gas green retail energy business generally. The Company agrees that neither
it nor anyone acting on its behalf shall at any time disparage or criticize
Hyde.
18. Binding Effect. This Agreement, and all the provisions contained
herein, shall be binding upon, and shall inure to the benefit of, the parties
hereto, and their respective heirs, successors and assigns. The undertakings of
the Company hereunder are solely the obligations of the Company, and do not
constitute obligations or liabilities of any member of the Company or any other
person.
19. Governing Law. This Agreement and any disputes arising under or in
connection with it shall be construed and governed in accordance with the laws
of the State of Vermont.
20. Captions. The captions of the paragraphs of this Agreement are for
convenience only and shall not be considered or referenced in resolving
questions of construction or interpretation.
21. Withholding. All payments required to be made by the Company under
this Agreement shall be net of any tax or other amounts required to be withheld
by the Company under any applicable law or legal requirement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first set forth above.
GREEN MOUNTAIN ENERGY RESOURCES L.L.C.
Dated: 11/4/98 By: /s/ M. Xxxxx Xxxxx
----------------------- -----------------------------------
Name: M. Xxxxx Xxxxx
---------------------------------
Its: President
----------------------------------
8
I have read everything in this Agreement and I understand everything in
this Agreement. I understand that this Agreement is a contract and a legal
document and I have been told by the Company that I should talk to a lawyer
about it before signing it. I understand and have been told by the Company that
I may take 21 days to decide whether or not I want to sign this Agreement. I
acknowledge and agree that if I decide to sign this Agreement prior to
considering it for 21 days, I do so knowingly and voluntarily and by so doing
waive my right to use the full 21 days to consider this Agreement. I hereby
state that I have had all of the time I want and need to talk to a lawyer about
this Agreement before signing it. No one has made me any promises to get me to
sign this Agreement, except for the promises that are written in this Agreement
itself. No one has forced me to sign this Agreement and I sign it of my own free
will. I understand that I can cancel this Agreement within 7 days if I want to.
I hereby accept and agree to all of the terms of this Agreement.
Dated: 11/6/98 /s/ Xxxxxxx X. Xxxx
------------------ -----------------------------------
Xxxxxxx X. Xxxx
State of Vermont
County of Xxxxxxxxxx
Personally appeared before me this 6th day of November, 1998, the above-
named Xxxxxxx X. Xxxx to me known to be the individual described in and who
executed the within foregoing instrument and acknowledged that he signed the
same as his free and voluntary act and deed for the uses and purposes therein
mentioned.
/s/ Xxxxx X. Xxxxxx
----------------------------------
Notary Public
My commission expires: 2/10/99
------------
9
