Exhibit 10.9


 


Execution Copy


 


SEPARATION AGREEMENT
AND RELEASE


 


This
SEPARATION AGREEMENT AND RELEASE (this “Agreement”) is made and entered into as of the 30th day of
April, 2009, by and between Broadwind Energy, Inc. (the “Company”) and Matthew
Gadow (the “Executive”).


 


WHEREAS, the Executive
and the Company desire to fully and amicably settle all issues between them,
including, but not limited to, any issues arising out of Executive’s employment
with the Company as Chief Financial Officer pursuant to that amended and
restated employment agreement by and between the Company and Executive dated November 12,
2008 (the “Employment Agreement”) and
the end of that employment and the termination of the Employment Agreement;


 


NOW,
THEREFORE, for and in consideration of the mutual promises
contained herein, and for other good and sufficient consideration, receipt of
which is hereby acknowledged, the Executive and the Company (sometimes
hereafter referred to as the “Parties”),
intending to be legally bound, agree as follows:


 


Section 1.                                          Separation and Termination of
Employment Agreement.  Except as otherwise specifically set forth
herein, the Employment Agreement and Executive’s employment with the Company
shall end effective as of the close of business on the April 30, 2009 (the
“Separation Date”).  The parties acknowledge that Executive has
resigned from employment and any and all officerships, directorships, committee
memberships and all other elected or appointed positions, of any nature, that Executive
held immediately prior to the Separation Date with the Company and/or any of
its affiliates, all effective as of the close of business on the Separation
Date and that the Company has fully accepted such resignation.


 


Section 2.                                          Benefits.  In consideration for the promises made in
this Agreement, the Parties agree to the following (the “Severance Benefits”):


 


(a)                                  Final Pay.  No later than the Company’s regular pay date
following the Separation Date the Company shall pay Executive (i) all
accrued and unpaid base salary as of the Separation Date; and (ii) accrued
but unused vacation pay (stipulated by the parties to be equal to one hundred and
four (104) hours).


 


(b)                                  Severance Payments.  The Company agrees
to pay to Executive an aggregate gross amount of two hundred twenty-five
thousand dollars ($225,000), which shall be paid in substantially equal monthly
installments (or more frequently, based upon the Company’s standard payroll
practices) during the nine (9) month period beginning on the Separation
Date.  Executive shall not be obligated
to seek other employment or take any other action by way of mitigation or
offset of the amounts of payments to Executive under any provisions of this
Agreement, and the Executive shall not be required to pay or credit the Company
any amounts the Executive may receive from such alternative employment or
related income.


 


(c)                                  Expenses.  The Executive
shall submit any expense reports to the Company no later than ten (10) days
following the Separation Date, and shall be


 





















 


reimbursed in accordance with
applicable Company policies and procedures for authorized expenses incurred
through the Separation Date.


 


(d)                                  COBRA Continuation.  The Company shall pay
on behalf of Executive the required premiums for up to twelve (12) months of
continuing coverage under the Company’s existing health programs pursuant to
the health care continuation rules of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), provided that Executive remains eligible
for and elects to receive such COBRA continuation for such period following the
Separation Date.  Any period of
continuation coverage hereunder shall be credited against Executive’s
continuation coverage rights under COBRA. 
If Executive continues, to the extent permitted by law, to avail himself
of continuation coverage under COBRA following the expiration of the twelve (12)
month period referred to in this Section 2(d),
Executive shall bear the full cost of any such continuation coverage.  The Company’s obligation to reimburse Executive
under this Section 2(d) is
conditioned on Executive’s timely and correct completion of any and all COBRA
election forms as may be required by the Company or its third-party insurer.


 


(e)                                  Outplacement.  Executive shall be
provided with outplacement services through the Executive (12 Month) Program
with Challenger, Gray & Christmas, Inc. (the “Program”). 
These services shall be paid for in full by the Company, shall be
available to Executive immediately following the Separation Date and begin when
Executive officially starts the Program.


 


(f)                                    Stock Options.  Executive’s eighty
thousand (80,000) vested and outstanding stock options, awarded pursuant to the
Stock Option Agreement  dated October 22,
2007  under the Company’s 2007
Equity Incentive Plan (the “2007 EIP”)
shall remain exercisable through January 31, 2010 at which time they shall
expire if unexercised.  All unvested
stock options held by Executive as of the Separation Date shall be forfeited as
of the Separation Date.  Executive
acknowledges and agrees that he is not entitled to receive any additional
equity awards of any type from the Company, under the 2007 EIP or otherwise.  The Parties acknowledge and agree that the
Company makes no assurance that any portion of the foregoing option award shall
retain its status as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”).


 


(g)                                 Executive Acknowledgement.  The Executive
acknowledges that, subject to fulfillment of all obligations provided for
herein, Executive has been fully compensated by the Company under the Company’s
policies, practices, and rules, and any applicable law, and that nothing is
owed to Executive with respect to salaries, benefits or any other form of
compensation whether pursuant to the Employment Agreement or otherwise.  The Executive further acknowledges and agrees
that the Severance Benefits referred to in this Section 2 are consideration for the Executive’s promises
contained in this Agreement, and that the Benefits are above and beyond any
wages, salary, severance, or other sums to which the Executive is entitled from
the Company absent executing this Agreement.


 


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(h)                                 Executive acknowledges and agrees that all payments made,
and the benefits provided, pursuant to this Agreement shall be subject to all
applicable tax withholding and reporting requirements.


 


Section 3.                                          Termination of Benefits.  Except as provided
in Section 2 above, Executive’s
participation in all employee benefit (pension and welfare) and
compensation plans will cease as of the Separation Date.  Nothing contained herein shall limit or
otherwise impair Executive’s right to receive pension or similar benefit
payments which are vested as of the Separation Date  under any applicable tax qualified pension or other tax
qualified or non-qualified benefit plans, pursuant to the terms and conditions
of the applicable plan.


 


Section 4.                                          Mutual Release.


 


(a)                                  For valuable consideration, the adequacy of which is hereby
acknowledged, Executive on behalf of himself and the other Executive Releasors
(as defined below) releases and forever discharges the Company and the other
Company Releasees (as defined below) from any and all Claims (as defined below)
which Executive now has or claims, or might hereafter have or claim, whether
known or unknown, suspected or unsuspected (or the other Executive Releasors
may have, to the extent that it is derived from a Claim which Executive may
have), against the Company Releasees based upon or arising out of any matter or
thing whatsoever, from the beginning of time to the Separation Date and shall
include, without limitation, Claims arising out of or related to Executive’s
employment with the Company and the end thereof, the Employment Agreement and
the termination thereof and Claims arising under (or alleged to have arisen
under) (i) The Age Discrimination in Employment Act of 1967, as amended; (ii) Title
VII of the Civil Rights Act of 1964, as amended; (iii) The Civil Rights
Act of 1991; (iv) Section 1981 through 1988 of Title 42 of the United
States Code, as amended; (v) the Employee Retirement Income Security Act
of 1974, as amended; (vi) the Immigration Reform and Control Act of 1986,
as amended; (vii) the Americans with Disabilities Act of 1990, as amended;
(viii) the National Labor Relations Act, as amended; (ix) the
Occupational Safety and Health Act of 1970, as amended; (x) any state or
local anti-discrimination law; (xi) any other local, state or federal law,
regulation or ordinance; (xii) any public policy, contract, tort, or
common law; or (xiii) any allegation for costs, fees, or other expenses
including attorneys’ fees incurred in these matters.  Executive further releases any rights to
recover damages or other personal relief based on any claim or cause of action
filed on Executive’s behalf in court or any agency.  Notwithstanding the above, Executive
Releasors do not release any claim (i) duly filed pursuant to the group
welfare and retirement plans of the Company, (ii) duly filed pursuant to
any policy of liability insurance or the Company’s by-laws and (iii) duly
filed with the Equal Employment Opportunity Commission or Illinois Department
of Human Rights (or participation in any such claim); provided, however, with respect to this
subpart (iii), Executive Releasors acknowledge that, because they are waiving
all claims for monetary damages and any other form of personal relief in this
Agreement, Executive Releasors may only seek and receive non-personal forms of
relief through any such claim with a government agency.  Nothing herein precludes Executive Releasors
from enforcing rights under this Agreement or from bringing any and all
applicable 


 


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claims to enforce same,
including without limitation, with respect to Executive’s right to exercise his
stock option award pursuant to Section 2(f).


 


(b)                                  For purposes of this Section 4,
the terms set forth below shall have the following meanings:


 


(i)                                     The term “Claims”
shall include any and all rights, claims, demands, debts, dues, sums of money,
accounts, attorneys’ fees, experts’ fees, complaints, judgments, executions,
actions and causes of action of any nature whatsoever, cognizable at law or
equity.


 


(ii)                                  The term “Company
Releasees” shall include the Company and its affiliates and their
current, former and future officers, directors, trustees, members, employees,
shareholders, partners, attorneys, agents, assigns and administrators and
fiduciaries under any employee benefit plan of the Company and of any affiliate,
and insurers, and their predecessors and successors.


 


(iii)                               The term “Executive
Releasors” shall include Executive, and his family, heirs,
executors, representatives, agents, insurers, administrators, successors,
assigns, and any other person claiming through Executive.


 


(c)                                  The Company does hereby knowingly and voluntarily release
and forever discharge Executive from all Claims known or unknown, fixed or
contingent, which it ever had, now has, or may have, or which it hereafter can,
shall, or may have, from the beginning of time through the Separation Date,
including without limitation those arising out of or related to Executive’s
employment or separation from employment with the Company; provided nothing herein precludes the
Company from enforcing its rights under this Agreement; provided, further, that the Company does
not release or discharge any future claims against Executive arising out of any
acts or omissions of Executive (a) that as of the date of this Agreement
are known to Executive, which Executive fails to fully disclose to the Company,
and that have a material adverse future impact on the Company, or (b) that
are fraudulent or dishonest.


 


Section 5.                                          Representations by Executive.  Executive warrants that Executive is legally competent to execute
this Agreement and that Executive has not relied on any statements or
explanations made by the Company or its attorney.  Moreover, Executive hereby acknowledges that Executive
has been afforded the opportunity to be advised by legal counsel regarding the
terms of this Agreement, including the release of all claims and waiver of
rights set forth in Section 4.  After being so advised, and without coercion
of any kind, Executive freely, knowingly, and voluntarily enters into this
Agreement.


 


Section 6.                                          Mutual Non-Disparagement and Employment
References/Inquiries.    The Company and Executive agree that, at
all times following the signing of this Agreement, they shall not engage in any
disparagement or vilification of the other, and shall refrain from making any
false, negative, critical or otherwise disparaging statements, implied or
expressed, concerning the other, including, but not limited to, job
performance, the management style, methods of doing business, the quality of
products and services, role in the community, treatment 


 


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of
employees or the circumstances and events regarding Executive’s employment
separation.  Executive acknowledges that
the only persons whose statements may be attributed to the Company for purposes
of this Agreement not to make disparaging statements shall be each member of
the Board of Directors of the Company and each of the Company’s senior executive
officers.  The parties further agree to
do nothing that would damage the other’s business reputation or good will.  The Chief Executive Officer of the Company
shall draft and sign a letter of reference for Executive’s use following the Separation
Date.  Inquiries from prospective
employers or job search firms (including, but not limited to Challenger, Gray &
Christmas, Inc.) regarding Executive will be directed to Robert Paxton,
the Company’s Senior Vice President, Human Resources, who will respond that,
according to Company policy, he is only permitted to confirm dates of employment
and last position held.


 


Section 7.                                          Mutual No Admissions.   The Company denies
that it or any of its employees or agents has taken any improper action against
Executive, and Executive agrees that this Agreement shall not be admissible in
any proceeding as evidence of improper action by the Company or any of its
employees or agents.  Likewise, Executive
denies that he has taken any improper action against the Company, and the
Company agrees that this Agreement shall not be admissible in any proceeding as
evidence of improper action by Executive.


 


Section 8.                                          Company Property.


 


(a)                                  The Executive represents and warrants that he has, as
of the date hereof, returned to
the Company all information, property, and supplies belonging to the Company
and/or
its affiliates, including without limitation, any company autos, keys (for
equipment or facilities), laptop computer and related equipment, cellular
phone, smart phone or PDA (including SIM cards), security cards, corporate
credit cards, and the
originals and all copies of all files, materials, or documents (whether in
tangible or electronic form) containing Confidential Information or relating to
the Company’s and/or its affiliates’ business.


 


(b)                                  Executive agrees that he shall not, at any time on or after
the date hereof, directly or indirectly use, access or in any way alter or
modify any of the databases, e-mail systems, software, computer systems or
hardware or other electronic, computerized or technological systems of the
Company.  Executive acknowledges and agrees
that any such conduct by Executive would be illegal and would subject Executive
to legal action by the Company, including without limitation claims for damages
and/or appropriate injunctive relief.


 


Section 9.                                          Assistance with Claims.  Executive agrees,
for the period beginning on the Separation Date, and continuing for a
reasonable time thereafter (but for a period of not less than twenty-four (24)
months after the Separation Date), to assist the Company in the defense of any
claims that may be made against the Company, and to assist the Company in the
prosecution of any claims that may be made by the Company, to the extent that
such claims may relate to services performed by Executive for the Company and
to the extent such assistance will not cause Executive to be exposed to information
that would be deemed material inside information which would preclude Executive
from selling his Company stock unless directly related to a claim which
includes Executive as an officer of the Company.  The Company will consult with 


 


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Executive,
and make reasonable efforts to schedule such assistance so as not to materially
disrupt Executive’s business and personal affairs.  Executive agrees, unless precluded by law, to
promptly inform the Company if Executive is asked to participate (or otherwise
become involved) in any lawsuits involving such claims that may be filed
against the Company.  Executive also
agrees, unless precluded by law, to promptly inform the Company if Executive is
asked to assist in any investigation (whether governmental or private) of the
Company that may relate to services performed by Executive for the Company,
regardless of whether a lawsuit has then been filed against the Company with
respect to such investigation.  The
Company agrees to reimburse Executive for all reasonable out-of-pocket expenses
associated with such assistance, including travel and hotel expenses, if any.


 


Section 10.                                   Restrictive Covenants.  Notwithstanding
anything herein to the contrary, the terms, conditions and restrictions set
forth in Section 5 of the Employment Agreement shall survive the
termination of the Employment Agreement and remain in full force and effect as
provided therein as if fully restated herein; provided,
however, that subsections (c) and (d) of Section 5 of
the Employment Agreement shall remain in full force and effect for nine (9) months
following the Separation Date rather than eighteen (18) months as provided in
the Employment Agreement.  Executive may
submit written request to the Company for waiver of the restrictions set forth
in subsection (d) of Section 5 of the Employment Agreement for
specific opportunities, and the Company shall reasonably consider such request
and respond in writing within ten (10) business days, with the Company’s
response final and binding on Executive.


 


Section 11.                                   Press Release.  To the extent that
the Company decides to issue a “Press Release”
regarding Executive’s departure, it shall be done in consultation with Executive
and Executive’s comments shall be given reasonable consideration, though the
Company shall retain full and absolute discretion to determine the final
language of such Press Release, provided it is not critical of Executive.


 


Section 12.                                   Confidentiality.  Executive agrees to keep the existence and the terms of this
Agreement confidential, except for Executive’s immediate family members or Executive’s
legal or tax advisors in connection with services related hereto and except as
may be required by law or in connection with the preparation of tax returns; provided, however, that this Section 12 shall be inapplicable at any time following
public disclosure of this Agreement by the Company.


 


Section 13.                                   Non-Waiver.  One Party’s waiver of a breach of this Agreement by the
other Party shall not be construed or operate as a waiver of any subsequent
breach by either Party of the same or of any other provision of this Agreement.


 


Section 14.                                   Choice of Law.  This Agreement is
executed pursuant to and shall be governed by the substantive law of the State of
Illinois without regard to choice-of-law principles of any jurisdiction.


 


Section 15.                                   Arbitration.  With the exception
of the enforcement of the provisions of Section 5 of the Employment
Agreement, incorporated by reference herein, Executive and the Company agree
that any claim arising out of or relating to this Agreement or the breach
thereof, shall be resolved to the fullest extent permitted by law by final,
binding and confidential arbitration in accordance with the Employment
Arbitration Rules of the Judicial Arbitration & 


 


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Mediation
Association in Chicago, Illinois and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction
thereof.  The prevailing party in any
arbitration shall be entitled to recover such parties’ reasonable attorneys’
fees and other related expenses (including the actual fee paid to the
arbitrator) from the non-prevailing party.


 


Section 16.                                   Entire Agreement.  This Agreement sets
forth the entire agreement of the Parties, and shall be final and binding as to
all claims that have been or could have been advanced on behalf of Executive
pursuant to any claim arising out of or related in any way to Executive’s employment
with the Company and the end of that employment and termination of the
Employment Agreement.


 


Section 17.                                   Counterparts.  This Agreement may
be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
Agreement.  Facsimile transmission of any
executed original document shall be deemed to be the same as the delivery of
the executed original.


 


Section 18.                                   Enforcement.  The provisions of
this Agreement shall be regarded as divisible and separable and if any
provision should be declared invalid or unenforceable by a court of competent
jurisdiction, or as the result of arbitration, if applicable, the validity and
enforceability of the remaining provisions shall not be affected thereby.  Furthermore, if the scope of any restriction
or requirement contained in this Agreement is too broad to permit enforcement
of such restriction or requirement to its full extent, then such restriction or
requirement shall be enforced to the maximum extent permitted by law, and the Parties
hereby consent and agree that any court of competent jurisdiction, or
arbitration, if applicable, may so modify such scope in any proceeding brought
to enforce such restriction or requirement.


 


Section 19.                                   Code Section 409A.  Executive
acknowledges and agrees that he shall be solely responsible for any additional
taxes, penalties or interest that may be imposed by Section 409A of the
Code, on the Severance Benefits if any such tax, penalty or interest is imposed
by the Internal Revenue Service.


 


Section 20.                                   Miscellaneous.  The headings used
in this Agreement are for convenience only, shall not be deemed to constitute a
part hereof, and shall not be deemed to limit, characterize or in any way
affect the construction or enforcement of the provisions of this
Agreement.  Wherever from the context
that it appears appropriate, each term stated in either the singular or plural
shall include the singular and the plural and the pronouns stated in either the
masculine, feminine or the neuter gender shall include the masculine, feminine
and neuter, and the words “include,” “includes” and “including” shall mean “include,
without limitation,” “includes, without limitation” and “including, without
limitation,” respectively.  The subject
matter and language of this Agreement have been the subject of negotiations
between the parties and their respective counsel, and this Agreement has been
jointly prepared by their respective counsel. 
Accordingly, this Agreement shall not be construed against either party
on the basis that this Agreement was drafted by such party or its counsel.  This Agreement shall be binding upon and
inure to the benefit of the Executive and Executive’s heirs and personal
representatives and the Company and its successors, representatives and
assigns.


 


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IN
WITNESS WHEREOF,
this Agreement has been duly executed as of the dates set forth below.


 


	
  MATTHEW GADOW

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Matthew Gadow

  	
   

  	
  Date:

  	
  April 30, 2009

  
	
  Matthew Gadow

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BROADWIND ENERGY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ J. Cameron Drecoll

  	
   

  	
  Date:

  	
  April 30, 2009

  
	
  By:

  	
  J. Cameron Drecoll

  	
   

  	
   

  
	
  Its:

  	
  Chief Executive Officer

  	
   

  	
   

  



 


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