Exhibit 10.7
RELEASE AND SEVERANCE
AGREEMENT
This RELEASE AND SEVERANCE AGREEMENT
is made and entered into this 28 th day of July, 2005, by and between R.
Jeffrey Macartney (“Macartney”) and Environmental Power
Corporation (together with its former, current and future parents,
agents, officers, directors, employees, successors, predecessors,
and affiliated companies, the “Company”).
RECITALS
A. The Company and Macartney are
parties to that certain letter agreement, dated April 1, 2005,
relating to the terms of his employment with the Company (the
“Employment Letter”).
B. Pursuant to the terms of the
Employment Letter, Macartney is a participant in the
Company’s 2004 Severance Pay Plan (the “Severance
Plan”).
C. The Company and Macartney are
parties to an Employee Proprietary Information and Inventions
Agreement (the “Employee NDA Agreement”).
D. The Company and Macartney are
parties to the following option agreements: (i) that certain
Incentive Stock Option Agreement, dated May 22, 2002, relating to
an option to purchase 14,286 shares of the Company’s common
stock, $0.01 par value per share (the “Common Stock”),
at an exercise price of $4.06 per share (the “2002
Option”), (ii) that certain Incentive Stock Option Agreement,
dated October 29, 2003, relating to an option to purchase 42,857
shares of Common Stock at an exercise price of $6.16 per share (the
“2003 Option”) and (iii) that certain Incentive Stock
Option Agreement, dated June 23, 2004, relating to an option to
purchase 21,429 shares of Common Stock at an exercise price of
$7.63 per share (the “2004 Option”) (it being
acknowledged that the foregoing share numbers and exercise prices
give effect to the 1-for-seven reverse split of the Common Stock
which occurred on November 30, 2004).
E. The Company terminated
Macartney’s employment on June 29, 2005.
F. It is a condition of the
Company’s obligation to make any payments under the Severance
Plan that Macartney agree to execute a release in form satisfactory
to the Company.
G. The Company and Macartney desire
to make certain other arrangements in addition to those provided
for under the Severance Plan.
AGREEMENT
For good and valuable consideration,
including the covenants hereinafter set forth, Macartney and the
Company agree as follows:
1. General Release
Macartney, for the valuable
consideration set forth below, for himself and anyone who may claim
through him, including, but not limited to, his personal
representatives, heirs, and assigns, does hereby irrevocably and
unconditionally release and forever discharge the Company and its
affiliated corporations of any nature, each of their agents,
directors, officers, employees, representatives, attorneys,
predecessors, successors, heirs, executors, administrators and
assigns, and all persons acting by, through, under or in concert
with any of them (collectively “Releasees”) of and from
any and all claims, assertion of claims, expenses, debts, demands,
actions, causes of action, suits, liabilities, and/or expenses
(including attorneys’ fees) of any nature whatsoever, whether
or not now known, suspected or claimed, which they ever had, now
have, or hereafter acquire, both at law and in equity, arising out
of any fact or matter in any way related or connected with
Macartney’s employment with the Company and/or the
termination thereof, including without limiting the generality of
the foregoing, claims by Macartney which are unknown at the present
time, and including, without limitation of the foregoing, any and
all claims arising out of or related to Macartney’s
employment with the Company, the termination of his employment with
the Company, or any alleged violation by the Company or each of
them of any federal, state or local statutes, ordinances or common
laws, including, but not limited to:
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a.
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Claims asserted
directly or indirectly, impliedly or inferentially in
communications between Macartney and the Company and/or that may or
could have been asserted therein;
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b.
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Claims based on
any federal or state statute (including, but not limited to, the
California Fair Employment and Housing Act, Title VII of the Civil
Rights Act of 1964, as amended, the Fair Labor Standards Act, the
Americans with Disabilities Act, the California Labor Code, the
California Civil Code, the Age Discrimination in Employment Act,
the Older Workers Benefits Protection Act and/or any law of the
State of New Hampshire); and
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c.
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Any claim for
attorneys’ fees, cost of prosecution and the like.
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2. Waiver of Rights Under Section
1542 of the California Civil Code
It is understood and agreed by
Macartney that he may have sustained damages, losses, costs or
expenses for which he might have made claim against the Company,
the other Releasees, or any of them, that are presently unknown or
unsuspected, and that such damages, losses, costs or expenses may
give rise to additional damages, losses, costs or expenses in the
future. It is hereby specifically acknowledged by Macartney that
the foregoing release and the waiver set forth below have been
agreed upon and given in light of such facts and that this
Agreement is intended to release the Company, the other Releasees,
and each of them, from potential liability for all such damages,
losses, costs and/or expenses.
IN THIS REGARD, MACARTNEY UNDERSTANDS AND AGREES
AS PART OF THE INDUCEMENT FOR THE CONSIDERATION GIVEN FOR THIS
AGREEMENT THAT HE SPECIFICALLY WAIVES THE PROVISIONS OF SECTION
1542 OF THE CALIFORNIA CIVIL CODE, WHICH SECTION 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 TO HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
3. Forbearance of
Litigation
It is further specifically
acknowledged by Macartney that neither he nor any person,
organization or other entity acting on his behalf has or will file,
charge, claim, sue or cause or permit to be filed any charge, claim
or action for damages or other relief against the Company or any
other Releasee involving any matter occurring in the past up to the
date of this Agreement or involving any continuing effects of
actions or practices which arose prior to the date of this
Agreement or involving or based upon any claims, demands, causes of
action, obligations, damage or liabilities which are the subject of
this Agreement, and that if any such charge, claim, suit, or cause
of action has been filed he will immediately cause it to be
withdrawn or dismissed with prejudice and without costs.
4. Return of Company Property/No
Future Employment
Macartney acknowledges that during
his employment with the Company, he obtained property of the
Company’s and that he created and/or completed, on the
Company’s behalf, documents and/or paperwork that belong to
the Company. Macartney agrees that, except as otherwise provided in
Section 6 below, he will return to the Company with this signed
agreement any such property and paperwork, including but not
limited to (1) all written notes taken over the last 18 months, (2)
all originals and copies of any documents that contain or refer to
any information regarding the Company’s business, (3) all
Company equipment, materials and supplies, (4) all Company records
and (5) all other documents that pertain in any way to the
Company’s business.
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Macartney also agrees not to apply
for employment, reemployment or reinstatement with the Company or
its publicly identified parents, affiliates, or subsidiaries, at
any time in the future, and he further waives and releases forever
any right or rights he might have to such employment, re
