Exhibit 10.1
SEPARATION AGREEMENT AND
MUTUAL RELEASE
This Separation Agreement and Mutual Release
(this “Agreement”) is made as of the 31st day of
October 2006 by and between NaturalNano, Inc. (the
“Company”) and Michael D. Riedlinger (the
“Executive”). In consideration of the covenants and
undertakings set forth in this Agreement, the Company and the
Executive, intending to be legally bound, covenant and agree as
follows:
I.
Resignation.
The Executive
hereby tenders his resignation as President of the Company and as a
member of the Company’s Board of Directors, effective
immediately. The Company and the Board of Directors hereby accept
such resignation by the Executive, effective immediately. As a
result, the employment of the Executive with the Company will cease
effective as of the date hereof, although the Executive will remain
on the payroll through October 31, 2006.
II.
Compensation and Benefits.
A.
Severance Payments. The Company will provide the Executive with
severance pay in the amount of forty-seven thousand five hundred
dollars ($47,500.00), subject to required state and federal
withholding. Such amount shall be paid in twelve (12) equal
bi-weekly installments of three thousand nine hundred fifty-eight
dollars and thirty-three cents ($3,958.33), less applicable state
and federal withholding, in accordance with the Company’s
customary payroll practices, with the first installment commencing
November 15, 2006. During the time that Executive is receiving the
aforementioned severance payments, the Executive shall use his
commercially reasonable efforts to assist the Company in the
transition to its new President and in the completion of the
additional duties set forth on Exhibit A (the “Additional
Duties”), attached hereto.
B. Health
Care Benefits . The Company shall continue medical and dental
insurance coverage for the Executive until the earlier of (i) April
30, 2007 or (ii) such time as the Executive secures employment
which provides health insurance coverage substantially equivalent
to that provided by the Company on the date hereof. The medical and
dental coverage provided by the Company to the Executive hereby
shall be consistent in all material respects to the coverage
provided to him while an employee of the Company.
C. Stock
Options. The Executive may exercise all options vested as of
the date hereof, in accordance with the terms of that certain
Non-Qualified Stock Option Award Agreement with a grant date of
March 1, 2005 (the “Award Agreement”) and of the
NaturalNano, Inc. 2005 Incentive Stock Plan (the
“Plan”). The Company agrees and acknowledges that
options to purchase 2,000,000 shares of the Company’s Common
Stock at an exercise price of $0.05 per share (post-split), which
options were granted by the Company to the Executive pursuant to
the Award Agreement have become fully vested and are presently
exercisable by the Executive. The Company agrees and acknowledges
that such options may be exercised by the Executive at any time
through March 1, 2015, that being the Expiration Date as set forth
in the Award Agreement, and shall have such other benefits as
provided in, and shall be subject to the terms and conditions of,
the Plan. No additional options will vest subsequent to the date
hereof.
D. Other
Employee Benefit Plans. This Agreement shall not affect the
amount of the Executive’s vested benefits under the employee
benefit plans in which he participates (the ”Vested
Benefits”). The parties also acknowledge that after the date
hereof, the Executive is not eligible to participate in the
Company’s benefit plans except as specifically set forth in
this Agreement.
E.
Payment of Employment Related Expenses. During the
Executive’s employment and prior to the date hereof, the
Executive incurred certain reimburseable expenses, including but
not limited to travel expenses. The Company shall reimburse the
Executive for such expenses which were incurred by him on or before
the date hereof, upon presentation by the Executive to the Company
of reasonably satisfactory statements and invoices, and subject to
the Company’s normal approval process for reimbursement of
expenses.
F. Other
Payments. Except for the Executive’s final paycheck for
his services up to October 31, 2006, except for any earned but
unused vacation pay, and except as is specifically provided herein,
the Executive agrees that he has received all salary, benefits,
bonuses, vacation and sick pay, and all other wages and benefits to
which he was entitled from the Company, and he waives and releases
any claim that he has not received the foregoing payments or
benefits.
G. The
Executive acknowledges and agrees that the payments and insurance
coverage set forth in Section II (A-F) above, exceed any and all
obligations of the Company with respect to the Executive’s
employment, and the termination of his employment with Company, and
constitutes sufficient consideration for the release of claims set
forth in Section III below.
H. The
Executive further agrees that he will not, at any time after the
date hereof, make any remarks or comments, orally or in writing, to
any person or entity which or who have, or could reasonably be
anticipated to have, business dealings with the Company, which
remarks or comments reasonably could be construed to be derogatory
or disparaging the Company or any of its 5% or greater shareholders
known to the Executive, officers, directors, employees, attorneys
or agents, or which reasonably could be anticipated to be damaging
or injurious to the Company’s reputation or good will or to
the reputation or good will of any person associated with the
Company. The Company further agrees that neither it nor any of its
officers, directors, employees, attorneys or agents or anyone
acting under the direction of or with express authority from the
Company will, at any time after the date hereof, make any remarks
or comments, orally or in writing, to any person or entity which or
who have, or could reasonably be anticipated to have, business
dealings with the Executive, which remarks or comments reasonably
could be construed to be derogatory or disparaging the Executive or
any entity with which he may become affiliated, or which reasonably
could be anticipated to be damaging or injurious to the
Executive’s reputation or to the reputation or good will of
any person associated with the Executive.
III.
Mutual
General Release.
A. In
consideration of the undertakings and obligations of the parties,
as set forth herein, and except for those obligations arising out
of this Agreement, the parties hereto, for themselves and for their
respective officers, directors, shareholders, heirs, executors,
administrators, successors and assigns, as the case may be, each
hereby covenant not to s
