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Exhibit 10.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE (this “
Agreement
”), dated as of May 16, 2008, is made and entered into by and
between Kronos Advanced Technologies, Inc., a Nevada corporation
(the “ Company
”), and Daniel R. Dwight, an individual resident of the State
of Massachusetts (“ Dwight
”).
WHEREAS, Dwight is a stockholder, officer, director and
employee of the Company;
WHEREAS, Dwight is a party to the following agreements with
the Company: Employment Agreement, dated November 15,
2001 (“ Employment
Agreemen t”); a Promissory Note, dated March 31, 2004
made by the Company in favor of Dwight (“ Note ”);
Stock Option Agreement, dated June 19, 2007 (“ Stock Option
Agreement ”); and Indemnification Agreement, dated
August 11, 2000 (“ Indemnification
Agreement ”);
WHEREAS, in connection with the foregoing, Dwight and the
Company desire to evidence in writing the terms and conditions of
such termination.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements, and
conditions set forth herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1.
EMPLOYMENT
TERMINATION. Dwight will take his five (5) weeks
of accrued vacation beginning on May 19, 2008 and continuing until
June 20, 2008. Dwight’s Company employment will
end on June 20, 2008 (“ Termination
Date ”) and by executing this Agreement, Dwight
resigns as an officer and director of the Company effective as of
the date hereof. During his employment, Dwight
participated in certain Company-provided benefits, and he also
purchased his own health, life and disability insurance benefits
through third-party insurance companies, for which he was
reimbursed by the Company (“ Third-Party Benefit
Plans ”). As of the Termination Date, any
entitlement Dwight had or might have had under a Company-provided
benefit plan shall cease, except as required by law. The
Termination Date shall be the qualifying event under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“ COBRA
”)
. Dwight understands that his rights and continued
participation in those Company-sponsored plans will be governed by
the terms of such plans, and that Dwight generally will become
ineligible for those plans on the Termination
Date. Thereafter, Dwight will be able to purchase
continued coverage under certain of such Company-provided plans and
to continue his current health and other benefits with his existing
Third-Party Benefit
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Plans;
provided, however, that to the extent Dwight purchases
continuation coverage under certain of Company-provided and/or
continues his benefits under his Third-Party Benefit Plans,
the Company shall reimburse Dwight for such coverage on a
monthly basis during the 12-month period after the Termination
Date within thirty (30) days of Dwight’s written
reimbursement request for such benefits. By
executing this Agreement both parties acknowledge and agree
that the Employment Agreement is hereby terminated and of no
further force and effect; provided,
however, that the parties acknowledge and agree that Sections
4 (Confidentiality/Covenant Against Unfair Competition), 5
(Company Property) and 8 (Indemnification) thereof shall
survive such termination and remain in full force and effect
in accordance with the terms thereof. Dwight agrees
that all provisions of that certain Voting Agreement dated as
of June 20, 2007, by and among Dwight, the Company and the
other parties thereto (“ Voting
Agreement ”) shall continue to be in full force
and effect after the Termination Date.
2. PAYMENTS
AND BENEFITS.
(a)
Severance
Payment . The Company shall pay to Dwight
twenty-four equal severance payments each in the amount of
Nine Thousand Three Hundred Seventy-Five Dollars ($9,375.00),
minus applicable federal, state, and local tax withholdings,
the first payment of which shall be paid on the first
regularly scheduled payroll period following the Termination
Date, and each subsequent payment shall be paid immediately
thereafter in accordance with the Company’s regular
payroll procedures until the entire severance payment is paid
in full. At the appropriate time, as required by
law, the Company shall issue an IRS Form W-2 reflecting such
payments. Such payments will not be taken into
account in determining Dwight’s rights or benefits under
any other program.
(b)
Loan
Repayment . Within ten (10) days of the
execution of this Agreement by all parties, the Company shall
repay to Dwight the aggregate amount of the outstanding
principal and all accrued interest on the Note as of the date
hereof, which is Fifty Nine Thousand Nine Hundred Eighty-Six
and 29/100 Dollars
($59,986.29). Upon receipt of payment of the Note
in full, Dwight shall return to the Company for cancellation
all documentation, including, without limitation, the Note and
any other document, evidencing indebtedness owed by the
Company to Dwight.
3. RELEASE.
(a) Dwight
releases ( i.e. , gives up)
all known and unknown claims that Dwight presently has
(i.e., has
as of the
date hereof) against the Company, all current and
former parents, subsidiaries, related companies, partnerships,
joint ventures, or other affiliates, and, with respect to each
of them, their predecessors and successors; and, with respect
to each such entity, all of its past, present, and future
employees, officers, directors, stockholders, owners,
representatives, assigns, attorneys, agents, insurers,
employee benefit programs (and the trustees, administrators,
fiduciaries, and insurers of
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such
programs), and any other persons acting by, through, under or
in concert with any of the persons or entities listed in this
section, and their successors (“ Released
Parties ”), except claims that the law does not
permit Dwight to waive by signing this
Agreement. For example, Dwight is releasing all
common law contract, tort, or other claims he might have, as
well as all claims he might have under the WARN Act, the Age
Discrimination in Employment Act (“ ADEA
”), Title VII of the Civil Rights Act of 1964, Sections
1981 and 1983 of the Civil Rights Act of 1866, the Americans
With Disabilities Act (ADA), the Employee Retirement Income
Security Act of 1974 (“ ERISA
”), and similar state or local laws.
Notwithstanding
the forgoing, Dwight is not releasing any rights or
claims related
to indemnification, which rights are set forth in Section 8 of
the Employment Agreement and the Indemnification
Agreement.
(b) The
Company hereby acknowledges and agrees that as of the
Termination Date it has no knowledge of any claims it may have
against Dwight.
4.
COOPERATION
REQUIRED. If requested by the Company after May
16, 2008 and until the date that is six (6) months after the date
hereof, Dwight shall cooperate with the Company or any affiliate
for up to twenty (20) hours per month in effecting a smooth
transition of his responsibilities to others (“ Transition
Services ”). The first eight (8) hours in
each month that Dwight works performing Transition Services shall
be at no cost to the Company, but to the extent Dwight works more
than eight (8) hours in any month performing any such Transition
Services and/or provides other consulting services as may be
requested by the Company (i.e., consulting services that
are not Transition Services) , he will be paid an hourly
rate of Three Hundred Dollars ($300) for each such hour that he
works.&nb
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