EXHIBIT 10.1
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE
AGREEMENT (the “Agreement”) is entered into as of
October 29, 2007, by and between Gregory Clendenin (the
“Employee”) and Sunair Southeast Pest Holdings, Inc., a
Florida corporation (the “Company”).
WITNESSETH:
WHEREAS , the Employee was
employed by the Company to serve as the Chief Executive Officer of
the Company and Middleton Pest Control, Inc.
(“Middleton”), a wholly-owned subsidiary of the
Company, pursuant to an employment agreement dated June 7,
2005 (the “Employment Agreement”);
WHEREAS , the Employee has
decided to retire and has resigned from all positions that he holds
with the Company as an executive officer and employee effective of
October 29, 2007 and will receive compensation pursuant to the
terms and conditions contained herein;
NOW, THEREFORE , Employee and
the Company, intending to be legally bound hereby and in
consideration of the promises contained herein, do hereby agree as
follows:
1. RESIGNATION
. The Employee agrees to resign (i) from his position
as the Chief Executive Officer of the Company, (ii) from his
position as the Chief Executive Officer of Middleton and
(iii) from any other positions that he holds with the Company,
Middleton or any other affiliated companies (“Affiliated
Companies”) of the Company or Middleton, effective as of the
end of the business day on Monday, October 29, 2007 (the
“Resignation Date”). The Employee acknowledges and
agrees that after the Resignation Date, he will not have the
authority to represent or bind the Company, Middleton or any
affiliated companies as an officer or employee.
2.
TERMINATION OF EMPLOYMENT AGREEMENT AND OPTIONS
.
2.1
Employee acknowledges and agrees that this Agreement shall serve to
terminate his employment agreement (“Employment
Agreement”) with the Company dated June 7, 2005, except
as described herein, and this Agreement sets forth all of the
compensation payable to him effective as of the date of this
Agreement.
2.2 The
Employee acknowledges and agrees that except for certain
compensation earned in October, 2007, but not yet paid, the Company
has paid him all wages and any other compensation that is payable
to him under his Employment Agreement, including but not limited to
all salary payments, bonuses, incentive compensation, reimbursement
for his business expenses and vacation pay, to which he is entitled
under the Employment Agreement or otherwise in connection with his
employment with the Company. The Employee further acknowledges
that, except as described in this Agreement, his eligibility to
participate in any of the Company’s benefit programs,
including, but not limited to, participation in (a) the
Company’s bonus plan, described in Section 3(b) and
Exhibit A of the Employment Agreement, (b) employee
benefits plans, such as 401(k), savings, pension, shared and
deferred compensation plans and (c) health insurance benefits,
such as medical, dental, hospitalization, disability, life
insurance and other plans offered to the Company’s
executives, have been terminated as a result of the termination of
the Employment Agreement.
1
2.3 The
Employee agrees that he will have until October 29, 2008, to
exercise any vested options (“Vested Options”) that
have been granted to him by Sunair Services Corporation, a Florida
corporation (“Sunair”), the parent of the Company,
during the term of his employment with the Company. The Employee
acknowledges and agrees that the only Vested Options that he owns
as of the date of this Agreement are as follows: options to
purchase 23,812 shares of Sunair’s common stock at an
exercise price of $ 11.40 per share. The Employee agrees that any
of the Vested Options, listed in this Section 2.2, which the
Employee has not exercised by October 29, 2008 will be deemed
to be cancelled, null and void at the end of the business
day.
2.4 The
Company and the Employee acknowledge the termination of the
Employment Agreement, except for the covenants and obligations set
forth in Sections 7 through 12 of the Employment Agreement,
which by their terms survive the termination of the Employment
Agreement and are incorporated herein by reference. The Employee
acknowledges and agrees that he will comply with the obligations
and covenants set forth in Sections 7 through 12 of the
Employment Agreement for the applicable time periods set forth in
the Employment Agreement. The Employee acknowledges that his
covenants and obligations set forth in the Stock Purchase Agreement
(“Stock Purchase Agreement”) dated June 7, 2005 by
and among the Company, the Employee, Charles P. Steinmetz and
certain trusts associated with the Employee and Charles P.
Steinmetz, which by their terms survive the closing of the Stock
Purchase Agreement, including but not limited to Section 7(d) of
the Stock Purchase Agreement (the “Applicable
Provisions”), continue to apply to him and will remain in
effect until June 6, 2010. The Employee agrees that the
Applicable Provisions of the Stock Purchase Agreement are
incorporated into this Agreement by reference.
2.5 The
Company and the Employee have agreed to enter into a consulting
agreement (“Consulting Agreement”) for a period of
twelve months after the Resignation Date pursuant to which the
Employee will provide consulting services to the Company and the
Affiliated Companies in areas of his expertise and on matters in
which he was involved while employed by the Company.
3.
SEVERANCE PAYMENTS .
3.1
Severance Payment . In consideration of the covenants set
forth herein, the Company agrees to pay the Employee a severance
payment equal to an aggregate of $91,500.00, which represents
(a) a severance payment of $76,500.00 and (b) twelve
months of COBRA reimbursement payments, which is equal to
$15,000.00, to be paid over a six-month period, in accordance with
the Company’s normal payroll practices beginning on
November 16, 2007, and ending on May 16, 2008. All
compensation payable to the Employee hereunder is stated in gross
amounts and shall be subject to all applicable withholding taxes,
other normal payroll and any other amounts required by law to be
withheld.
3.2
Benefits . The Company will provide the Employee with
information regarding any benefits which may
