SEPARATION AGREEMENT AND
RELEASE
This Separation
Agreement and Release (the “Agreement”) is dated
March 31, 2009, and is effective on the date described in
Section 15. This Agreement is made as a mutually agreed
compromise between the Parties (as defined below) for the complete
and final settlement of all claims, differences, and alleged causes
of action existing between them as of the Effective
Date.
The Parties to
this Agreement are Synthesis Energy Systems, Inc. (the
“Company”) and David Eichinger (the
“Executive”). The Company and the Executive are
referred to collectively as the “Parties.”
WHEREAS, the
Executive was previously employed as the President and Chief
Executive Officer of the Company, pursuant to that certain
Employment Agreement dated May 30, 2006 (as amended, the
“Employment Agreement”);
WHEREAS, the
Executive and the Company also entered into that certain
Indemnification Agreement dated August 13, 2008 (the
“Indemnification Agreement”);
WHEREAS, the
Parties intend to terminate the Employment Agreement as of the
Effective Date (except with respect to the Executive’s and
the Company’s continuing obligations under Sections 4
— Restrictive Covenants, 9 — Waiver of Breach, 12
— Applicable Law, Jurisdiction, and 13 — Attorney and
Trial Costs of the Employment Agreement, as revised hereby) and
enter into this Agreement;
WHEREAS, the
Parties intend that this Agreement shall operate as a complete and
final settlement of all claims, differences and alleged causes of
action existing between them as of the Effective Date;
WHEREAS, the
Executive has had at least 21 days to consider this
Agreement;
WHEREAS, the
Company has advised the Executive in writing to consult with
independent legal counsel and tax advisors respecting this
Agreement;
WHEREAS, the
Executive has had an opportunity to consult with independent legal
counsel and tax advisors with respect to the terms, meaning and
effect of this Agreement; and
WHEREAS, the
Executive understands that the Company regards the above
representations as material and that the Company is relying on
these representations in entering into this Agreement.
NOW, THEREFORE, in
consideration of the mutual promises and obligations contained and
exchanged in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1.1
“Code” shall mean the Internal Revenue Code of 1986, as
amended, and the notices, rules and regulations
thereunder.
1.2 “Company
and/or its Affiliates” means and includes the Company, its
Affiliates, and all of their predecessors, successors and assigns
and parents, subsidiaries, divisions or other affiliated companies,
partners, partnerships, present and former officers, directors,
employees, stockholders, agents, employee benefit plans or programs
and their fiduciaries, whether in their individual or official
capacities and all of the successors and assigns of the foregoing.
“Affiliates” also includes a person or entity who,
directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the
Company.
1.3 “Date of
Termination” means March 31, 2009.
2.
Termination of the Employment Agreement . The Parties agree
that the Employment Agreement is hereby terminated and of no
further force and effect as of the Effective Date, except with
respect to the Executive’s and the Company’s
obligations under Sections 4 — Restrictive Covenants, 9
— Waiver of Breach, 12 — Applicable Law, Jurisdiction,
and 13 — Attorney and Trial Costs, all of which survive the
termination of the Employment Agreement; provided, that the
following amendments are hereby made to the surviving provisions of
the Employment Agreement: (i) for purposes of Section 4(a) of the
Employment Agreement, the non-public information of the Company
acquired by, or disclosed to, the Executive shall include, but not
be limited to, all information related to the Company’s
intellectual property, including without limitation, its U-GAS
fluidized bed gasification technology, and (ii) the third
sentence of Section 4(b) of the Employment Agreement is replaced in
its entirety with the following: “As of the date hereof, the
Business of the Corporation is to develop projects or provide the
technology for projects that convert coal and coal/biomass fuels
through coal gasification technology to products for the chemicals,
transportation fuels, natural gas, and power markets.” This
Agreement shall have no effect on the Indemnification Agreement,
which is hereby ratified and affirmed and shall remain in full
force and effect.
3. Exchange
of Equity Incentive Awards . The Executive has surrendered for
cancellation all of his currently held options, as set on
Schedule I hereto, and, in exchange, effective as of the date
hereof, the Company has issued a new stock option grant to purchase
700,000 shares of the Company’s common stock, at an exercise
price of $0.66 per share. Such stock option grant shall be fully
vested as of the date hereof and shall be exercisable until
March 31, 2019, the tenth anniversary of the date hereof. Such
grant shall be granted under, and be subject to, the terms of the
Company’s Amended and Restated 2005 Incentive Plan, as
amended.
4. Payments
to the Executive .
4.1 In
satisfaction of the bonus earned by the Executive for his service
to the Company during the year ended December 31, 2008,
effective as of the date hereof, the Company has issued to the
Executive a stock option grant to acquire 68,182 shares of the
Company’s common stock at an exercise price of $0.66 per
share. Such stock option grant shall be fully vested as of the date
hereof and shall be exercisable until March 31, 2019, the
tenth
2
anniversary of
the date hereof. Such grant shall be granted under, and be subject
to, the terms of the Company’s Amended and Restated 2005
Incentive Plan, as amended.
4.2 Provided that
the Executive elects COBRA within the time period required by law,
the Company shall reimburse his payment of his COBRA premiums
through (i) December 31, 2009 or (ii) until the Executive
is eligible to participate in the health insurance plan of another
employer, whichever is sooner.
5. Pay
Through Date of Termination . The Executive acknowledges that
he has received all salary, wages, bonuses, accrued and unpaid
vacation time, sick time or other paid time off earned, and other
compensation earned on or before the Date of
Termination.
6.
Resignation and Acknowledgement by the Executive . Effective
as of the Date of Termination, the Executive hereby resigns from
all positions he holds as a director and officer with the Company
and/or its Affiliates. In connection with his resignation,
Executive acknowledges that he has disclosed all information to the
Company and the Board of which he has knowledge which could be
expected to result in a material adverse effect on the Company, its
business or its results of operations after the Effective
Date.
7. Future
Services of Executive for the Company . If the Company so
requests after the Date of Termination, the Executive agrees to
(i) assist the Company its contemplated transition plans,
including through service as a consultant to the Company, on such
terms and conditions as the Executive and the Company shall
mutually agree; provided that, if Executive’s services as a
consultant shall be requested or required for any period longer
than five days, Executive shall be entitled to receive compensation
for such services equal to a pro-rata portion of his annual base
salary as of the Effective Date, to be pro-rated based upon the
portion of a calendar year that he serves as a consultant, and
(ii) cooperate with the Company in the resolution of any
pending or future litigation that relates to the time during which
the Executive served as an employee of the Company.
8.1 Release by
the Executive . The Executive unconditionally, fully and
forever waives, releases, discharges, agrees to hold harmless, and
promises not to sue the Company and/or its Affiliates, from and for
any claim, action or right of any sort, known or unknown, arising
on or before the Effective Date.
a. This
release includes, but is not limited to, any claim arising out of
or related to the following: any claim for any wages, salary,
compensation, sick time, vacation time, paid leave or other
remuneration of any kind; any claim for additional or different
compensation or benefits of any sort, including any participation
in any severance pay plan; any claim under any stock option grant
issued by the Company to the Executive (other than the grants
pursuant to Sections 3 and 4 hereof), the Company’s
Amended and Restated 2005 Incentive Plan, as amended, or any other
oral or written agreement or plan regarding an equity incentive
award of Executive; any claim of discrimination or retaliation on
the basis of age, race, sex, religion, marital status, sexual
preference, national origin, handicap or disability, veteran
status, or special disabled veteran status; any claim arising under
Title VII of the Civil Rights
3
Act of 1964,
the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Executive Retirement Income Security Act of 1974,
the Americans with Disabilities Act, the Family and Medical Leave
Act, the Fair Labor Standards Act of 1938, the Texas Commission on
Human Rights Act, Chapter 451 of the Texas Labor Code, or the
Texas Payday Law, as such statutes may be amended from time to
time; any other claim based on any statutory prohibition; any claim
arising out of or related to an express or implied employment
contract, any other contract affecting terms and conditions of
employment, or a covenant of good faith and fair dealing; any tort
claim or other claim for personal injury, death or property damage
or loss; any claim for fraud or
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