Exhibit 10.57
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General
Release (this “Agreement”) is hereby entered into by
and between Erik A. Lopez, Sr., an individual (the
“Executive”), and Commerce Energy Group, Inc., a
Delaware corporation, on behalf of itself and all of its
subsidiaries (collectively, the “Company”).
Recitals
A. The Executive has been
employed by the Company pursuant to an Employment Agreement by and
between the Company and the Executive effective as of
March 26, 2007, as amended by Amendment No. 1 dated as of
October 5, 2007 (the “Employment Agreement”),
serving as Senior Vice President and General Counsel of the
Company;
B. On September 4, 2007,
the Executive voluntarily tendered his resignation as Senior Vice
President and General Counsel of the Company; and
C. The Executive’s
employment with the Company and any of its parents, direct or
indirect subsidiaries, affiliates, divisions or related entities
(collectively referred to herein as the “Company and its
Related Entities”) will be ended on the terms and conditions
set forth in this Agreement.
Agreement
In consideration of the mutual
promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1.
Effective Date . This Agreement shall be effective on
October 5, 2007 (the “Effective Date”).
2.
End of Employment . The Executive confirms that he
voluntarily tendered his resignation as Senior Vice President and
General Counsel of the Company on September 4, 2007, and the
Executive hereby resigns from each and every other position he held
with the Company and its Related Entities, including as an
employee, officer and/or director of each of its Related Entities,
effective on October 5, 2007, and the Executive’s
employment with the Company and its Related Entities has ended or
will end, effective as of 5:00 p.m. PDT, on October 5, 2007
(the “Termination Date”).
3.
Continuation of Benefits After the Termination Date . Except
as expressly provided in this Agreement or in the plan documents
governing the Company’s employee benefit plans, after the
Termination Date, the Executive will no longer be eligible for,
receive, accrue, or participate in any other benefits or benefit
plans provided by the Company and its Related Entities, including,
without limitation, medical, dental and life insurance benefits,
and the Company’s 401(k) retirement plan; provided, however,
that nothing in this Agreement shall waive the Executive’s
right to any vested amounts in the Company’s 401(k)
retirement plan, which amounts shall be handled as provided in the
plan.
4.
COBRA Benefits . The Executive shall have the right to
continue coverage under the Company’s group medical, dental
and vision plans at his own expense in accordance with the
provisions of COBRA.
5.
Normal Salary Through Termination Date . Within one business
day after the Termination Date, the Company shall pay the Executive
the prorated portion of his salary earned through the Termination
Date, and for all accrued, unused vacation days.
6.
Severance Payments . In return for the Executive’s
promises in this Agreement, the Company will provide Executive with
a severance payment in the total gross amount of $200,000.00
(“Severance Payment”), less required withholdings and
authorized deductions, and will accelerate the vesting of a portion
of the Executive’s restrictive stock pursuant to
Section 8 of this Agreement. The foregoing cash amount shall
be paid in a lump sum by direct deposit upon the later to occur of
(a) the Termination Date, or (b) the next business day
after the Company has received both a signed original of this
Agreement from Executive and a copy of a written communication from
the Executive to the Occupational Safety and Health Administration
(“OSHA”) (i) informing OSHA that he has settled
all disputes with the Company and that he believes the settlement
is a fair resolution of the matters raised in his administrative
complaint, (ii) enclosing a copy of this Agreement, and
(iii) withdrawing the Executive’s complaint filed with
OSHA and designated as Case No. 9-3290-07-065 (the
“Administrative Complaint”) and requesting OSHA to
promptly approve the settlement and dismiss the Administrative
Complaint. In addition, the Executive shall be entitled to keep as
his own the following Company provided equipment: the laptop
computer used by the Executive during his employment by the
Company, which is currently in possession of the Company, and one
BlackBerry device, which is currently in possession of the
Executive. The Executive shall be solely responsible for all
service fees required to utilize such equipment following the
Termination Date. The receipt of the equipment by the Executive
shall also be subject to applicable state and federal withholding
taxes.
7.
Cancellation of Stock Options . The Executive acknowledges
that he has been granted options to purchase 45,000 shares of the
common stock of the Company (“Common Stock”) with the
exercise price per share being the Fair Market Value (as defined in
Commerce Energy Group, Inc. 2006 Stock Incentive Plan) of the
Common Stock on the Grant Date (as defined in the Executive’s
Employment Agreement)(the “Options”), none of which
have yet vested. The parties hereto agree that the Options or other
rights to purchase securities of Commerce shall be cancelled as of
the Termination Date.
8.
Acceleration of Vesting of Portion of Restricted Stock . The
Executive acknowledges that he has been granted restricted stock
representing 60,000 shares of Common Stock (the “Restricted
Shares”), none of which have yet vested pursuant to a
restricted share award agreement dated March 27, 2007 (the
“Restricted Share Agreement”). The Executive hereby
agrees that 10,000 of the 60,000 Restricted Shares shall be
cancelled and forfeited as of the Termination Date. Effective as of
the Termination Date, the Restricted Share Agreement is hereby
amended as follows: “Number of Shares Subject to Award”
in Section 1 shall read “50,000” and
“Vesting” in Section 1 shall read “50,000
shares shall vest on January 2, 2008.” All other terms
of the Restricted Share Agreement shall remain in full force and
effect. As further consideration for the Company’s promises
in this Agreement, specifically including this
-2-
Section 8, the Executive shall use all reasonable efforts to
obtain, and shall cooperate with the Company in obtaining,
dismissal of the Administrative Complaint by OSHA on or before
January 2, 2008.
9.
Acknowledgement of Total Compensation and Indebtedness . The
Executive acknowledges and agrees that the cash payments under
Sections 5 and 6, the receipt of the equipment under
Section 5 and the accelerated vesting of Restricted Shares
under Section 8 of this Agreement extinguish any and all
obligations for monies, or other compensation or benefits that the
Executive claims or could claim to have earned or claims or could
claim is owed to him as a result of his employment by the Company
and its Related Entities through the Termination Date, under the
Employment Agreement or otherwise.
10.
Tax Consequences . The Executive acknowledges that
(a) the Company has not made any representations to him about,
and that he has not relied upon any statement in this Agreement
with respect to, any individual tax consequences that may arise by
virtue of any payment provided under this Agreement, including, but
not limited to, the applicability of Section 409A of the
Internal Revenue Code, and (b) he has or will consult with his
own tax advisors as to any such tax consequences.
11.
Status of Related Agreements and Future Employment .
(a)
Agreements Between the Executive and the Company .
The Executive and the Company agree that, in addition to this
Agreement, (i) the Employment Agreement, (ii) the
Indemnification Agreement dated as of March 26, 2007 (the
“Commerce Indemnification Agreement”), (iii) the
Restricted Share Agreement, and (iv) the Stock Option Award
Agreement dated March 27, 2007 (the “Stock Option
Agreement”), are the only other executed agreements between
the Company and the Executive.
(b)
Termination of Employment Agreement . The parties
hereto agree that the Employment Agreement shall be terminated as
of the Termination Date. Notwithstanding the termination of the
Employment Agreement, the Executive acknowledges that the duties
and obligations set forth in Section 6 of the Employment
Agreement extend beyond the Termination Date. In the event that any
provision of this Agreement conflicts with Section 6 of the
Employment Agreement, the terms and provisions of the section(s)
providing the greatest protection to the Company and its Related
Entities shall control.
(c)
Indemnification Agreement and Indemnification .
Notwithstanding the termination of the Employment Agreement or any
provision of this Agreement, the Executive and the Company
acknowledge and agree that the Commerce Indemnification Agreement
shall remain in full force and effect in accordance with its
terms.
(d)
Termination of Stock Option Agreement . The parties
hereto agree that the Stock Option Agreement shall be terminated as
of the Termination Date.
(e)
Amendment of Restricted Share Agreement . The parties
hereto agree that the Restricted Share Agreement shall be amended
as set forth in Section 8 above effective upon the Termination
Date.
-3-
12.
Releases
(a)
Release by the Executive . Except as otherwise expressly
provided in this Agreement, the Executive, for himself and his
heirs, executors, administrators, assigns, affiliates, successors
and agents (collectively, the “Executive’s
Affiliates”) hereby fully and without limitation releases and
forever discharges the Company and its Related Entities and each of
their respective agents, representatives, shareholders, owners,
officers, directors, employees, consultants, attorneys, auditors,
accountants, investigators, affiliates, successors and assigns
(collectively, the “Company Releasees”), both
individually and collectively, from any and all waivable rights,
claims, demands, liabilities, actions, causes of action, damages,
losses, costs, expenses and compensation, of whatever nature
whatsoever, known or unknown, fixed or contingent, which the
Executive or any of the Executive’s Affiliates has or may
have or may claim to have against the Company Releasees by reason
of any matter, cause, or thing whatsoever, from the beginning of
time to the Effective Date (“ Executive Claims”),
including, without limiting the generality of the foregoing, any
Executive Claims arising out of, based upon, or relating to the
recruitment, hiring, employment, relocation, remuneration,
investigation, or termination of the Executive by any of the
Company Releasees, the Executive’s tenure as an employee
and/or an officer of any of the Company Releasees, any agreement or
compensation arrangement between the Executive and any of the
Company Releasees (including, without limitation, the Employment
Agreement), or any act or occurrence in connection with any actual,
existing, proposed, prospective or claimed ownership interest of
any nature of the Executive or the Executive’s Affiliates in
equity capital or rights in equity capital or other securities of
any of the Company Releasees, to the maximum extent permitted by
law. The Executive specifically and expressly releases any
Executive Claims arising out of or based on: the Corporate and
Criminal Fraud Act of 2002; the California Fair Employment and
Housing Act, as amended; Title VII of the Civil Rights Act of 1964,
as amended; the Americans With Disabilities Act; the National Labor
Relations Act, as amended; the Equal Pay Act; ERISA; any provision
of the California Labor Code; the California common law on fraud,
misrepresentation, negligence, defamation, infliction of emotional
distress or other tort, breach of contract or covenant, violation
of public policy or wrongful termination; state or federal wage and
hour laws; or any other state or federal law, rule or regulation
dealing with the employment relationship or operating a publicly
held business. Nothing contained in this Section 12(a) or any
other provision of this Agreement shall (a) release or waive
any right that Executive has to indemnification and/or
reimbursement of expenses by the Company with respect to which
Executive may be eligible as provided in Section 11(c), above,
(b) release or waive any right that the Executive has under
the Restricted Share Agreement as amended by Section 8 of this
Agreement, or (c) prohibit the Executive from participating in
the investigations of any non-waivable charge or complaint with any
state or federal agency that does not include a request for
monetary relief on behalf of the Executive.
(b)
Releases by the Company . The Company and its Related
Entities hereby fully and without limitation release and forever
discharge the Executive and his heirs, assigns, agents and
attorneys (collectively, the “Executive Releasees”),
individually and collectively, from any and all rights, claims,
demands, liabilities, actions, causes of action, damages, losses,
costs, expenses and compensation, of whatever nature, known or
unknown, fixed or contingent, which the Company and its Related
Entities has or may have or may claim to have against the Executive
Releasees by reason of any matter, cause or thing whatsoever
from
-4-
the
first date the Executive was an employee, officer or director of
the Company and its Related Entities to the Effective Date
(“Company Claims”). Notwithstanding the foregoing,
nothing contained in this Section 12(b) or any other provision
of this Agreement shall constitute a release or waiver of
(a) any right or claim t
|
