Exhibit 10.1
SEPARATION AGREEMENT AND
GENERAL MUTUAL RELEASE OF CLAIMS
This Separation Agreement and General
Mutual Release of Claims dated as of June 15, 2007 (this
“Agreement”) is made between Save the World Air, Inc.
(the “Company”) and Bruce H. McKinnon, an individual
(“McKinnon”). The Company and McKinnon are sometimes
referred to collectively herein as the “Parties”.
WHEREAS, McKinnon wishes to resign as
Chief Executive Officer (“CEO”) of the Company, for
personal reasons; and
WHEREAS, the Company wishes to accept
the resignation of McKinnon as CEO of the Company; and
WHEREAS, the Parties wish to provide
for clarity, finality and certainty as to the basis for
McKinnon’s resignation, and the terms of cash and non-cash
compensation to which McKinnon is entitled following such
resignation; and
WHEREAS, McKinnon wants to release
any and all claims that he may have or which exist, or may exist,
by him against the Company, known and unknown, including but not
necessarily limited to, all known and unknown claims arising out of
McKinnon’s service to the Company as CEO of the Company or
any subsidiary thereof (individually, a “Subsidiary”
and collectively the “Subsidiaries”) except as
specifically provided for herein; and
WHEREAS, the Company wants to release
any and all claims that it may have or which exist, or may exist,
by it against McKinnon, known and unknown, including, but not
necessarily limited to, all known and unknown claims arising out of
McKinnon’s service to the Company as CEO of the Company or
any Subsidiary thereof, except as specifically provided for
herein;
THEREFORE, in consideration of the
promises in this Agreement, the adequacy of which is acknowledged,
the Parties agree as follows:
1. Resignation
1.1 Resignation as CEO.
McKinnon hereby tenders his resignation as Chief Executive Officer
of the Company and each Subsidiary under that certain Employment
Agreement dated October 5, 2005 between the Company and
McKinnon (the “Employment Agreement”), such
resignations to take effect upon the appointment by the Board of
Directors of the Company (the “Board”) of his
successor, but in no event later than July 31,2007.
1.2 Resignation from Other
Offices . McKinnon hereby tenders his resignation from any and
all other offices he holds with the Company and each Subsidiary,
other than the office of President of the Company, such
resignations to take effect upon the appointment by the Board of
his successor, but in no event later than July 31, 2007. Mr.
McKinnon is not tendering his resignation as President of the
Company and shall continue to serve as President of the Company,
with all the rights, privileges, prerogatives
1
and
responsibilities attendant thereto, including without limitation,
compensation therefor, until he has resigned, been removed by the
Board or the Employment Agreement has terminated.
1.3 Resignation as Director .
McKinnon hereby tenders his resignation as a director of each
Subsidiary effective July 31, 2007. McKinnon is not tendering
his resignation as a director of the Company and shall continue to
serve as a director of the Company with all the rights, privileges,
prerogatives and responsibilities attendant thereto, including
without limitation, compensation therefore.
2. Compensation
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2.1 |
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No Reduction in Salary . Notwithstanding the provisions
of Section 1 above, each component of McKinnon’s
compensation under the Employment Agreement shall remain unchanged
for the period commencing the date hereof and continuing thereafter
to and including December 31, 2007 (the “Remaining
Term”), which period constitutes the remaining term of the
Employment Agreement, all such amounts to be paid in accordance
with the Company’s normal pay policies applicable to senior
officers of the Company; provided, however, that the Company may
not declare a moratorium on any payment hereunder to McKinnon as
part of cash management by the Company, or any other reason,
without McKinnon’s prior written consent. All compensation
under the Employment Agreement that has been accrued but is, as of
the date of this Agreement unpaid, as well as all subsequent
payments that may become accrued and not paid, shall be paid to
McKinnon as soon as reasonably practicable, taking into account the
Company’s available cash and other operating requirements,
but in no event shall such sums be paid later than the first to
occur of (i) the consummation of a financing transaction in
which at least $2,000,000. gross proceeds are received by the
Company and (ii) August 31, 2007 All sums paid hereunder
shall be subject to appropriate withholding as required by
applicable laws and regulations. |
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2.2 |
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Compensation . Pursuant to the Employment Agreement,
McKinnon shall remain eligible for and be entitled to any
additional amounts, in the form of cash or non-cash compensation,
as the Compensation Committee of the Board, or the Board, may
determine, in their sole and absolute discretion, or nothing as
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