SEVERANCE AGREEMENT, MUTUAL RELEASE AND CONSULTING AGREEMENT
THIS
SEVERANCE AGREEMENT, MUTUAL RELEASE AND CONSULTING AGREEMENT
(the
"Agreement") is entered into by and between
Allen J. Rothman, residing at 582
7th Street, Brooklyn, New York, 11215
("Rothman"), and US Energy Systems, Inc.,
a Delaware corporation, having an office at
One North Lexington Avenue, White
Plains, New York 10601 (the "Company"). In
consideration of the mutual promises,
benefits, covenants and agreements
hereinafter set forth and for good and
valuable consideration, the sufficiency of
which is hereby acknowledged, and
intending to be legally bound hereby,
Rothman and the Company (collectively, the
"Parties") hereto agree as follows:
1.
Termination of Employment. The Company and Rothman agree that
the
Employment Agreement (as defined) and each
party's obligations to the other
thereunder shall, except as otherwise
expressly provided herein, terminate and
be of no further force or effect as of
11:59 PM New York City time on the day
preceding the Effective Date (as defined).
The term "Employment Agreement" means
that the employment agreement dated as of
August 20, 2001 between the Parties,
as amended through the Execution Date (as
defined). The term "Execution Date"
means the date this Agreement is fully
executed by the Parties. Rothman
acknowledges that he has resigned all
positions with the Company and its
subsidiaries effective as of the Effective
Date.
2.
Benefits, Options, Restricted Stock.
(a) The parties agree that the Company shall, at its sole cost
and expense continue to provide Rothman's
health care benefits as offered by the
Company as of the Execution Date until such
time as Rothman's health care
benefits with Countryside (as defined) are
effective, but in no event shall such
obligation extend more than six months
after the Execution Date. Rothman will
use all reasonable efforts to cause his
Countryside benefits to become effective
as quickly as possible. Rothman hereby
waives any and all rights under COBRA and
will execute such other documents and
instruments as the Company deems
appropriate to effect such waiver.
(b) The Parties have agreed that all of Rothman's options to
acquire Company common stock (other than
options that have previously expired),
all of which are vested, will continue to
be exercisable and will expire on the
terms and conditions set forth in the
agreement, instrument and/or plan
governing same.
(c) Rothman has received a grant of unvested restricted stock
units of the Company ("RSU's") entitling
him, upon satisfaction of the terms and
conditions of his Officer's Restricted
Stock Unit Award Agreement (the "RSU
Agreement"), to 108,696 shares of Company
common stock. The Parties acknowledge
and agree that notwithstanding anything to
the contrary in the RSU Agreement,
all of the RSU's will vest fully effective
January 1, 2005, and subject to
Rothman's compliance with Section 5 of the
RSU Agreement, if and to the extent
applicable, and the Company's 2000
Executive Incentive Compensation Plan, the
Company will cause the underlying shares of
Common Stock to be delivered to
Rothman. The Company will take promptly all
commercially reasonable actions
required to permit the transfer by Rothman
of the shares of Common Stock
underlying the RSU's, subject to applicable
law and regulations.
-1-
<PAGE>
3. No
Other Severance Obligations.
(a) Rothman agrees that as of the Effective Date, the Company
will
have no further obligations pursuant to
Sections 2 through 6 of the Employment
Agreement.
(b) Rothman agrees that he shall not make any claim for
unemployment
benefits with the New York State Department
of Labor or any other governmental
authority with respect to the termination
of his relationship with the Company.
(c) Rothman agrees that, except to the extent otherwise
expressly
provided by this Agreement, he will at the
conclusion of the Consulting Period
(as defined) return to the Company all of
the Company's tangible assets that
Rothman used in connection with the
performance of his duties under the
Employment Agreement and under this
Agreement, including without limitation,
cell phones, computers and personal digital
assistants.
4.
Release. In consideration for the payments and other benefits set
forth
in, among other things, Section 2 herein,
Rothman hereby releases and forever
discharges the Company, and each and every
entity controlling, controlled by or
under common control with the Company, and
all affiliates, predecessors in
interest, and divisions of the foregoing,
and each of their respective officers,
directors, shareholders, agents, members,
managers, employees, attorneys,
representatives, successors and assigns
(together with the Company, the
"Releasees") from any and all manner of
claims, cross-claims, demands, causes of
action, obligations, damages or liabilities
whatsoever of every kind and nature,
at law or in equity, known or unknown, and
whether or not discoverable, which he
has, had or may have for any period prior
to and including the date hereof,
including, but not limited to, any claim
for alleged violation of Title VII of
the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment
Act of 1967, as amended, the Older Workers
Benefit Protection Act of 1990, the
Family and Medical Leave Act, the Americans
With Disabilities Act, the Fair
Labor Standards Act, the Employment
Retirement Security Act of 1974, the New
York State Human Rights Law (NYS Executive
Law ss.296, et seq.), the New York
City Administrative Code, and the New York
State Labor Law, as each may have
been amended from time to time, and all
other matters arising out of any
federal, state or local law, rule or
regulation, and any and all claims for
attorney's fees, costs and disbursements,
and for any and all other common law
claims, whether in contract, tort or
otherwise. Nothing contained in this
paragraph 4 shall prevent Rothman from
enforcing the terms of this Agreement.
The release by Rothman herein does not
include the release of any claims (i)
arising after the Effective Date to the
extent such claims relate to the
Company's 401(K) plan in which Rothman
participated or (ii) relating to
Rothman's right to indemnification and
advancement of expenses, if any, under
the Company's by-laws, as amended, or the
Delaware General Corporation Law.
-2-
<PAGE>
5. No
Claims by the Company. The Company represents and warrants that
it
has not filed any claim against Rothman as
of the date of it has executed this
Agreement. The Company and its
subsidiaries, successors and assigns, release and
forever discharge Rothman from and against
any and all claims, suits, actions,
causes of action, judgments, damages,
expenses, debts, obligations, promises,
covenants, agreements, contracts,
endorsements, controversies or demands of any
nature whatsoever, whether at law,
admiralty or in equity, whether known or
unknown, suspected or unsuspected, whether
held directly or obtained by
subrogation, assignment or otherwise,
against Rothman that the Company had, now
has or hereinafter may have for, upon or by
reason of, any matter, cause or
thing whatsoever, arising out of the
Rothman's employment with the Company,
except for Rothman's gross negligence,
malfeasance, violation of law or
intentional misconduct (collectively,
"Gross Negligence"). Nothing contained in
this Section 5 shall prevent the Company
from enforcing the terms of this
Agreement.
6. No
Claims by Rothman. Rothman represents and warrants that he has
not
filed any claim against the Company or any
of the Releasees as of the date he
has executed this Agreement. If Rothman
files or participates in any legal or
administrative proceeding based on claims
that he has released herein, the
Company's obligation to perform any of its
obligations or promises referred to
herein shall be waived, and the Company
shall be entitled to cease payments
under this Agreement, recover the full
amount of all payments provided to
Rothman hereunder, and seek attorney's
fees, costs and disbursements and any
other relief, whether monetary or
equitable.
7.
Acknowledgement. Rothman represents and acknowledges that he
has
carefully read and fully understands all of
the terms and provisions of this
Agreement and is knowingly and voluntarily
entering into this Agreement without
coercion.
8. No Age
Discrimination. As required by the Age Discrimination in
Employment Act and the Older Workers
Benefit Protection Act of 1990, Rothman
acknowledges that he has been advised of
his right to consult with an attorney
before signing this Agreement and has had
at least twenty-one (21) days in which
to consider the terms set forth in this
Agreement. Rothman understands that this
Agreement may be revoked by him within
seven (7) days after the day of execution
(the "Revocation Period"), that this
Agreement shall not become effective or
enforceable until the day after the
Revocation Period has passed. The term
"Effective Date" shall mean the day after
the Revocation Period has passed.
9.
Successors; Entire Agreement. This Agreement shall be binding upon
and
inure to the benefit of the Parties and
their personal representatives,
successors, and assigns; provided, however,
that none of the
