SEPARATION AGREEMENT AND RELEASE OF ALL
CLAIMS
This
SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS (“
Agreement ”)
is made and entered into between Charles McArthur, his heirs and
assigns (hereinafter “
McArthur ”)
and United Fuel & Energy Corporation (hereinafter
“
United ”)
for the consideration and mutual promises hereinafter stated, as
follows:
RECITALS
WHEREAS ,
McArthur is presently employed by United pursuant to the terms of
an Amended and Restated Executive Employment Agreement dated
October 5, 2007 (the “
Employment Agreement ”);
and
WHEREAS ,
United and McArthur have mutually agreed that it is in the
Parties’ best interests to terminate the employment
relationship and the Employment Agreement pursuant to the terms
identified herein, as opposed to those identified in the Employment
Agreement;
THEREFORE, McArthur
and United hereby enter into this Agreement for the consideration
and mutual promises stated herein as follows:
1.
Separation :
The Parties acknowledge that McArthur has resigned his position as
United’s President and Chief Executive Officer and as a
member of United’s Board of Directors as of June 10, 2008. In
addition, McArthur has resigned from all of his officer and
director positions from each of United’s subsidiaries as of
June 10, 2008. McArthur and United agree that the Employment
Agreement shall terminate, and McArthur’s employment with
United shall also terminate, as of August 31, 2008 (the
“
Effective Date of Separation ”).
McArthur agrees that all benefits of employment with United will
terminate as of the Effective Date of Separation, unless
specifically provided to the contrary in this Agreement or by law.
McArthur shall continue to be paid his current base salary of
$325,000 per annum consistent
with United’s normal payroll practices through the Effective
Date of Separation.
2.
Payment Following Separation :
As
consideration in support of this Agreement, should McArthur execute
this Agreement and not revoke it as permitted in Paragraph 20,
United shall pay to McArthur the amount of four hundred thirty
three thousand three hundred thirty three dollars ($433,333) (the
“
Separation Payment ”),
less applicable payroll deductions and withholding, payable in
thirty-two (32) semi-monthly payments consistent with
United’s normal payroll practices beginning on United’s
first regularly scheduled payroll date in September, 2008, and
ending on United’s last regularly scheduled payroll date in
December, 2009. By signing this Agreement, McArthur acknowledges
the sufficiency of the Separation Payment as consideration for this
Agreement. Payment of the Separation Payment shall constitute full
satisfaction of any obligation to McArthur by United arising out of
or in any way related to his employment, the termination of his
employment and/or the termination of the Employment Agreement, and
McArthur further acknowledges and agrees that he is not owed any
additional amounts by United arising out of or related to his
employment, including, without limitation, bonuses, accrued but
unused vacation or sick leave or expense
reimbursements.
3.
Continuation of Health and Life Insurance
Benefits :
McArthur understands and agrees that, except as otherwise provided
herein, United shall cease making payments for his health and life
insurance premiums as of the Effective Date of Separation. McArthur
acknowledges that he will receive notification that he may continue
coverage under United’s health insurance program as provided
by the Consolidated Omnibus Budget Reconciliation Act of 1985
(“
COBRA ”).
For purposes of COBRA coverage, the Effective Date of Separation or
other date of employment termination will constitute the date of
the qualifying event. McArthur acknowledges and agrees that he
shall be responsible for taking all steps necessary to elect
continuation of health insurance as provided by COBRA and that he
shall be solely responsible for payment of any and all health
insurance premiums due as a result of his election to continue such
coverage. Notwithstanding the foregoing, should McArthur execute
this Agreement and not revoke it as permitted in Paragraph 20, and
should McArthur further timely elect to continue health insurance
through COBRA, United will pay McArthur’s COBRA premium for
individual and dependent coverage for the period of time from July,
2008, through December, 2009; thereafter, McArthur may continue his
insurance as provided by COBRA by making any and all insurance
premium payments that may be required. In addition to paying health
insurance premiums as provided in this Paragraph, United shall also
pay life insurance premiums for the same period of time identified
in this Paragraph for life insurance benefits in an amount equal to
those currently provided by United to McArthur as of the Effective
Date of Separation.
4.
Stock Options and Grants :
Upon the Effective Date of Separation, all restrictions on any
restricted stock grants issued to McArthur by United shall lapse
and all stock options and grants granted to McArthur by United
shall become fully vested and exercisable. The expiration dates for
all of McArthur’s outstanding stock options shall be amended
to provide that such options shall remain exercisable following the
Effective Date of Separation until January 3, 2011. All such stock
options shall expire as of the 5:00 p.m. Central time on January 3,
2011. McArthur acknowledges and agrees that his stock options that
currently qualify as incentive stock options shall no longer
qualify for incentive stock option treatment as a result of the
foregoing extension of the expiration date and that United shall
not be held responsible for any failure of such stock options to
qualify for incentive stock option treatment.
5.
Other Employee Benefits :
McArthur understands and agrees that this Agreement does not modify
the Parties’ rights and obligations under any employee
benefit plans. McArthur further understands and agrees that his
right to receive benefits as provided in any of United’s
employee benefit plans shall be determined solely as provided by,
and in accordance with, the terms and conditions of the applicable
benefit plans as they may currently exist or as they may be
modified in the future.
6.
Release, Assignment of All Claims and Covenant Not to Sue -
McArthur :
It is agreed and understood by McArthur that this Agreement shall
resolve any and all obligations and disputes between McArthur and
United, its past,
present and future directors, officers, managers, members,
shareholders, representatives, subsidiaries, related companies,
insurance carriers, agents, servants, employees, successors,
assigns, predecessors, assignors, heirs, legatees, insurers and
(collectively, the “
United Released Parties ”)
.
McArthur, with full understanding of the contents and legal effects
of this Agreement, completely and voluntarily releases the United
Released Parties from any and all claims, rights, demands,
liabilities and causes of action, of any character, known or
unknown, asserted or unasserted, in law or in equity, of any
nature, that he may have against them that arose or may have arisen
in whole or in part before the date of this Agreement, including
but not limited to any and all:
| |
a.
|
Claims
related to McArthur’s employment with United and the
termination of his employment with United;
|
| |
b.
|
Claims
arising under contract, tort or common law, including, but not
limited to, breach of contract, promissory estoppel, detrimental
reliance, fraud, wrongful discharge, false imprisonment, assault,
battery, intentional infliction of emotional distress, defamation,
slander, libel, fraud, invasion of privacy, breach of the covenant
of good faith and fair dealing, breach of fiduciary duty,
conversion and tortious interference with any type of third-party
relationship, as well as any and all damages that may arise out of
any such claims, including, without limitation, claims for economic
loss, lost profits, loss of capital, lost wage earning capacity,
emotional distress, mental anguish, personal injuries, punitive
damages, or future damages;
|
| |
d.
|
Claims
arising under state or federal constitution, state or federal
statute, city ordinance or public policy, including, but not
limited to, the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1001
et seq .
(“
ERISA ”)
and claims involving employment discrimination of any form and/or
harassment (including, but not limited to, claims under the Age
Discrimination in Employment Act, 29 U.S.C. § 621
et seq .,
Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C.
§ 2000e
et seq .,
the Civil Rights Act of 1870, 42 U.S.C. § 1981, and/or the
Texas Commission on Human Rights Act, Tex. Lab. Code Ann. §
21.001
et seq .);
|
| |
e.
|
Claims
of retaliation of any nature, including, but not limited to, the
anti-retaliatory provisions of the statutes identified in
Subparagraph (d) of this Paragraph and claims under
Tex.
Lab. Code Ann .
§ 451.001
et seq .;
and
|
| |
f.
|
NEGLIGENCE
OF ANY KIND, INCLUDING WITHOUT LIMITATION GROSS NEGLIGENCE, AGAINST
THE UNITED RELEASED PARTIES BASED UPON THE ACTION OR INACTION OF
THE UNITED RELEASED PARTIES.
|
(collectively
the “
Claims ”).
It is also understood and agreed by McArthur that this Agreement
may be pleaded as, and shall constitute an absolute and final bar
to, any and all suits now pending, or which may hereafter be filed
or prosecuted by McArthur, or anyone claiming by, through or under
McArthur against the United Released Parties, arising out of or
connected with any of the Claims. Additionally, McArthur covenants
not to sue and agrees that at no time subsequent to the execution
of this Agreement will he permit the filing or maintenance, in any
state, federal or foreign court, or before any local, state,
federal or foreign administrative agency, or any other tribunal, of
any charge, claim or action of any kind arising out of or in any
way related to the Claims, although the Parties agree that the
Claims do not include any cause of action or claim related to
action or inaction following the date on which this Agreement was
fully executed by the Parties, including any claim relating to the
breach of this Agreement. Finally, it is understood and agreed by
McArthur that this Agreement shall be construed as broadly and
all-encompassing as permitted by law and that it is the intent of
the parties that this Agreement shall fully and finally resolve all
existing claims that McArthur has against United; if it is found in
contravention of the Parties’ intent that a claim has not
been so released, McArthur agrees that any such claim is hereby
assigned to United. Notwithstanding the foregoing, the parties
expressly agree th
|
