AGREEMENT AND COMPLETE
AND
FULL GENERAL
RELEASE
Dana A. Marshall (“Executive”) and
Applied Energetics, Inc., (the “Company”), have agreed
to conclude their employment relationship. The parties
have agreed that, based upon Executive’s past service to
Company and the parties’ mutual desire to amicably conclude
the employment relationship, that Executive and Company enter into
this Agreement and Complete and Full General Release
(“Agreement”). In consideration of the sum
to be paid and other promises set out in this Agreement, the
receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties agree to the following
terms (capitalized terms used herein and not otherwise defined
herein shall have the same meanings as ascribed to such terms in
the Employment Agreement entered into on August 18, 2008 by and
between the Company and the Executive, as amended (the
“Employment Agreement”)):
1.
Conclusion of Employment. Executive’s
employment by Company will terminate on March 31, 2009
(“Separation Date”). Executive hereby
terminates his position as Chairman of the Board, Chief Executive
Officer and President (a reporting a person and a named executive
officer with respect to the Company under the federal securities
laws) and director and any other positions he holds with the
Company or any subsidiary of the Company. Executive and
the Company hereby waive any and all rights to receive notice of
termination of Executive’s employment under the Employment
Agreement.
2.
Payment Upon Separation; Consideration for Executive’s
Agreements. Assuming the Executive does not revoke
this Agreement within the revocation period set forth in Paragraph
6, below, in consideration for executing this Agreement and
complying with its terms, Executive will receive as severance
payments from the Company pursuant to Section 5.4.2 of the
Employment Agreement (i) $135,000 upon the expiration of the
revocation period set forth in Section 6 and (ii) twelve (12)
monthly payments of $29,167 per month, less appropriate tax
withholdings and authorized deductions, commencing on the first
Company pay date subsequent to the expiration of the revocation
period. Notwithstanding the vesting and exercisability
schedule in any stock option agreement between the Company and the
Executive, all unvested stock options granted by the Company to the
Executive shall vest and become exercisable upon the expiration of
the revocation period and all other unvested equity awards shall
vest upon the expiration of the revocation period.
The Company shall assume Executive’s
obligations under (i) the lease for the residence rented by
Executive in Tucson, Arizona pursuant to the Employment Agreement
through the expiration of the lease term on September 30, 2009 and
(ii) the lease for the automobile leased by Executive pursuant to
the Employment Agreement through the expiration of the lease term
on September 25, 2009. Executive represents and warrants
to the Company that a true and correct copy of the lease have been
delivered to the Company. Executive shall vacate the
premises covered by the residential lease and deliver all sets of
keys to such premises and the original lease to the Company on or
before May 31, 2009, and leave such premises in good
condition. Executive shall deliver the automobile in
good condition and all sets of keys and the original registration
and the original lease to such automobile to the Company upon
execution of this Agreement. The Company agrees to
indemnify and hold harmless Executive for all losses, liabilities,
expenses and claims under the leases described in this Section 2
(other than for damages caused to the leased premises or automobile
by Executive).
Initials: Executive
_________ Company _________
3.
Health Insurance Transitional Support. Company
will comply with its obligations and provide all required notices
to Executive of Executive’s rights under the Consolidated
Omnibus Budget Reconciliation Act ("COBRA").
4.
Confidentiality. Executive agrees to keep the
terms of this Agreement strictly confidential. Executive
may only disclose the information in this Agreement to
Executive’s immediate family, attorney(s) and/or tax
advisor(s) unless ordered to do so by a duly authorized subpoena
issued by an appropriate agency or court of law.
5.
Confidential Information; Non-solicitation and
Cooperation. Executive acknowledges, it
agrees and reaffirms that he remains bound by the provisions of
Sections 7 and 8 of the Employment Agreement, which sections are
incorporated herein and remain in full force and effect.
6.
Waiver of Claims. Executive, individually and on
behalf of Executive’s estate, heirs, personal
representatives, and assigns hereby release, remise and forever
discharge the Company of and from any and all actions, causes of
action, claims, debts, dues, accounts, accountings, losses,
liabilities, contracts, commitments, rights, obligations, damages,
costs and expenses, including without limitation litigation
expenses and attorneys fees, of any nature whatsoever, whether
known or unknown, liquidated or contingent, whether now existing or
hereafter arising, (each individually a “Claim” and all
of the foregoing collectively called “Claims”), which
Executive had, now has, or may in the future have, including
without limitation any Claims: (a) for libel, slander, defamation,
or tortuous interference with actual or prospective business or
contractual relations, which are based in whole or in part on any
facts, circumstances or events which are now existing or which
occurred on or prior to the date hereof, or (b) for breach of
contract, wrongful discharge, non-payment of wages or
other
