EXHIBIT
10.1
SEPARATION AGREEMENT AND RELEASE
OF ALL CLAIMS
THIS SEPARATION AGREEMENT AND RELEASE OF ALL
CLAIMS (the “Agreement”) is entered into between Altair
Nanotechnologies, Inc., a Canadian corporation
(“Altair”), and Jeffrey A. McKinney (“Mr.
McKinney”), an individual, effective as of September 6, 2008
(the “Termination Date”).
Background
Altair has employed Mr. McKinney as Vice
President and Chief Patent Counsel pursuant to the Employment
Agreement entered into as of March 10, 2008 (the “Employment
Agreement”) among Altair, Altairnano, Inc. and Mr.
McKinney. Capitalized terms used but not defined herein
have the meaning set forth for such terms in the Employment
Agreement.
Altair has asked Mr. McKinney to resign and, in
exchange for his agreement to resign, Altair has agreed to provide
Mr. McKinney with the termination benefits described in Section 7.4
of the Employment Agreement, subject to the terms and conditions
set forth therein. In order to resolve all issues
related to the employment of Mr. McKinney with, and the separation
of Mr. McKinney from, Altair and its Affiliates (whether under the
Employment Agreement or otherwise), Altair and Mr. McKinney hereby
agree as follows:
Agreement
1.
Payment to Mr. McKinney. In exchange for Mr.
McKinney’s execution of this Agreement and the covenants and
promises contained herein and in the Employment Agreement, and
subject to the terms and conditions set forth in this Agreement and
the Employment Agreement, Altair shall pay Mr. McKinney the
separation payments required under Section 7.4 of the Employment
Agreement in connection with a termination by Altair of Mr.
McKinney’s employment without Cause during the
Term.
2.
Review and Revocation. Mr. McKinney understands
and agrees that he has 21 days from the date Mr. McKinney receives
this Agreement to consider the terms of and to sign this
Agreement. Mr. McKinney understands that, in his sole
and absolute discretion, Mr. McKinney may sign this Agreement prior
to the expiration of the 21-day period.
Mr. McKinney further acknowledges and
understands that he may revoke this Agreement for a period of up to
7 days after he signs it (not counting the day it is signed) and
that this Agreement shall not become effective or enforceable until
the 7-day revocation period has expired and shall be void ab
initio if revoked by Mr. McKinney during the 7-day revocation
period. To revoke this Agreement, Mr. McKinney must give
written notice stating that he wishes to revoke the Agreement to
John Fallini, Chief Financial Officer, Altair Nanotechnologies,
Inc., 204 Edison Way, Reno, Nevada 89502, Facsimile No.
(775) 856-1619. If Mr. McKinney mails a notice of
revocation to Altair, it must be postmarked no later than 7 days
following the date on which Mr. McKinney signed this Agreement (not
counting the day it was signed) or such revocation shall not be
effective.
3.
Payments and Benefits After Revocation Period.
a. Extended
Medical Coverage.
(1) To
effectuate Mr. McKinney’s continued participation in the
company health benefit plan, as contemplated by Section 7.4(b) of
the Employment Agreement, Mr. McKinney shall complete and return to
Altair those forms necessary to elect continuation coverage under
Altair’s group medical insurance plan pursuant to Sections
601 through 607 of the Employee Retirement Income Security Act of
1974, as amended (“COBRA”), which election forms shall
be provided by Altair to Mr. McKinney. Said health
benefit coverage shall continue until the earlier of (a) eighteen
(18) months from the Termination Date; (b) the date Mr. McKinney
first becomes eligible for coverage under any group health plan
maintained by another employer of Mr. McKinney or his spouse; or
(c) the date such COBRA continuation coverage otherwise terminates
as to Mr. McKinney under the provisions of Altair’s group
medical insurance plan. Nothing herein shall be deemed
to extend the otherwise applicable maximum period in which COBRA
continuation coverage is provided or supersede the plan provisions
relating to early termination of such COBRA continuation
coverage.
(2) If
Mr. McKinney does not elect COBRA continuation coverage or provides
Altair with notice that he no longer wishes to receive or is
ineligible to receive COBRA continuation benefits, then Altair
shall pay to Mr. McKinney an amount equal to the premium payments
that Altair would have paid on behalf of Mr. McKinney under Section
1.a., which amount shall be paid in a lump sum within thirty (30)
days after Altair’s receipt of notice under this
paragraph. Any such payment shall be subject to all
applicable federal and state payroll withholding laws.
(3) The
parties confirm and agree that Altair currently pays 85% of the
cost of providing medical benefits to Mr. Kinney and 50% of the
cost of providing medical benefits to his spouse/family, with the
remaining percentage of the cost of such benefits being paid by Mr.
McKinney through payroll deductions. The parties agree
that, during the period of the medical severance benefit under
Section 7.4(b), each party shall continue to pay the same percent
of Altair’s actual cost of providing the medical severance
benefit (which cost is expected to increase as a result of the
termination of the employment relationship and as a result of
inflation). During the period that Mr. McKinney
continues to receive a severance salary benefit under Section
7.4(a) of the Employment Agreement, Altair shall continue to deduct
any portion of the cost of the medical severance benefit payable by
Mr. McKinney from the periodic severance salary
payments. If Mr. McKinney continues to be entitled
to the medical severance benefit beyond such period, Mr. McKinney
shall pay the entire premium associated with the continuing medical
severance benefit directly to the provider. Following
payment, Mr. McKinney shall submit to Altair reasonable evidence of
payment and a request for reimbursement of Altair’s share of
such premium. Within then (10) business days of receipt
of reasonable evidence of payment and request for reimbursement,
Altair shall reimburse Mr. McKinney in an amount equal to
Altair’s share of such premium.
b.
Salary-Based Severance. Mr. McKinney understands and
agrees that, assuming continuing satisfaction of all conditions
precedent, the payments based upon his annual salary (as more fully
set forth under Section 7.4(a) of the Employment Agreement) shall
commence on Altair’s next regular payroll following the
expiration of the 7-day revocation period set out in Section
2. Mr. McKinney understands that, pursuant to Section
7.6 of the Employment Agreement, Mr. McKinney is not entitled to
any payments or benefits under Section 7.4 of the Employment
Agreement prior to his execution and delivery of this Agreement
(and the passing of the 7-day revocation period) and during any
period during which there is a Covenant Breach (as defined in the
Employment Agreement).
c. Prospectus
Bonus-Based Severance. Mr. McKinney understands and agrees that,
assuming continuing satisfaction of all conditions precedent set
forth in this Agreement and the Employment Agreement, the payment
linked to his prospective bonus (as more fully set forth under
Section 7.4(iii) of the Employment Agreement) shall be a one-time
bonus occurring during January 2009 paid 100% in cash rather than
the cash/stock split as specified in Mr. McKinney’s
Employment Agreement.
d. After
the 7-day revocation period, Altair and Mr. McKinney agree to
negotiate a consulting agreement in good faith, whereby Mr.
McKinney would provide services to Altair in connection with the
transition of Altair projects on which he was most recently
working. In such capacity, Mr. McKinney would only
communicate with Terry Copeland, John Fallini or any other person
designated by Messers. Copeland or Fallini. Mr. McKinney
further understands that the agreement would terminate after one
(1) month. In the furtherance of this objective, Mr.
McKinney will provide Mr. Fallini a status report by no
later than September 6, 2008 listing all the open projects and
activities upon which he is working. This report will
list, at a minimum, the issue, its current status, main contacts,
planned next steps, etc. This report will serve as one
of the major inputs for the negotiation of the above described
consulting agreement.
4.
Release of All Claims. In consideration of the
payments stated in Section 7.4 of the Employment Agreement and
Section 1 above and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Mr.
McKinney, for himself and for his heirs, assigns, and all persons
and entities claiming by, through, or under him, hereby
irrevocably, unconditionally, and completely releases, discharges,
and agrees to hold Altair and its Affiliates (hereinafter referred
to, both individually and collectively, as
“Releasees”), harmless of and from any and all claims,
liabilities, charges, demands, grievances, and causes of action of
any kind or nature whatsoever, including without limitation claims
for contribution, subrogation, or indemnification, whether direct
or indirect, liquidated or unliquidated, known or unknown, which
Mr. McKinney had, has, or may claim to have against Releasees
(hereinafter collectively referred to as
“Claim(s)”).
The release, discharge, and agreement to hold
harmless set forth in this Section 4 includes, without limitation,
any Claim(s) that Mr. McKinney has, had, or may claim to have
against Releasees: (a) for wrongful termination or discharge,
negligent or intentional infliction of emotional distress,
promissory estoppel, fraudulent or negligence inducement,
interference wi
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