Document:

EX 10.3 EMPLOYMENT AGREEMENT

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into this 15th day of November, 2005, by and between LiqTech NA, Inc., a Delaware corporation (the “Company”), and Donald S. Debelak (the “Employee”).

RECITALS

WHEREAS, the Company’s business is the manufacture and sale of diesel particulate filters; and

WHEREAS, the Employee formerly sold such diesel particulate filters as a commissioned sales representative for LiqTech S/A, a Danish corporation and a major shareholder in the Company; and

WHEREAS, the Company has offered the Employee a management position with the Company, and the Employee has accepted such position; and

WHEREAS, the Employee is a minority shareholder in the Company; and

WHEREAS, the Company wishes to restrict the Employee’s ability to disclose certain confidential information and trade secrets of the Company, and to restrict his ability to compete with the Company following the Employee’s termination; and

WHEREAS, the Company has offered the Employee new, substantial and valuable consideration, consisting of a guaranteed salary and a severance package that the Employee would not otherwise be entitled to, in exchange for his execution of this Agreement; and

WHEREAS, the Company and the Employee have engaged in negotiations over the terms and conditions of this Agreement; and

WHEREAS, the Employee acknowledges that he has had an opportunity to consult with independent legal counsel of the Employee’s choosing with regard to the terms of this Agreement, or has been advised by the Company of his right to seek such consultation, and that the Employee has entered into this Agreement pursuant to such independent legal consultation or notwithstanding his decision not to seek such consultation, as the case may be.

 

NOW THEREFORE, in consideration of the promises and the mutual covenants hereinafter set forth, the Company and the Employee agree as follows:

ARTICLE I

Employment and Duties

1.1

Employment and Duties.  The Company hereby employs the Employee to fulfill the duties of Chief Executive Officer, reporting to the Company’s Board of Directors, and the Employee hereby accepts such employment.  The Employee further agrees to devote his full time and best efforts to the interests of the Company, and shall perform such duties as are reasonably assigned to him by the Company’s Board of Directors, including employment with and performance of services for any successor of the Company, as may be directed by the Company.  The Employee, at all times during employment with the Company, shall comply with the Company’s rules, regulations, policies and directives as the same may be in effect from time to time.  The Employee specifically agrees to sign, from time to time, and to comply with, any and all standard written policies of the Company concerning sexual harassment, discrimination, use of alcohol and/or controlled substances on the job, confidential matters, trade secrets, intellectual property, or other job-related matters.  

1.2

Other Business Activities.  The Employee will not, without the express written permission of the Company, engage in any substantial private business activities, whether or not the same are entered into for profit, outside or separate from the Employee’s employment with the Company in any field that would require the Employee’s personal services.  Nothing contained in this Section shall prohibit the Employee from being a passive owner of not more than five percent (5%) of the outstanding stock of any class of a corporation which is publicly traded, so long as the Employee has no active participation in the business of such corporation.

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1.3

Term of Employment.  Subject to the provisions for termination hereinafter set forth in Article III, the term of this Agreement and performance of the Employee’s services shall commence on November ___, 2005 (the “Effective Date”), and shall continue for a period of three (3) years thereafter (“Initial Term”) unless sooner terminated as provided herein.  

Following the Initial Term, the Company’s Board of Directors has the option to extend the term of the Employee’s employment (the “First Option”).  At least thirty (30) days prior to the conclusion of the Initial Term, the Company’s Board of Directors shall notify the Employee in writing as to whether it intends to exercise the First Option.  The Employee shall notify the Company in writing within fifteen (15) days thereafter whether he wishes to accept the First Option.  In the event the Company’s Board of Directors elects to exercise the First Option and the Employee agrees to the First Option, the Employee shall provide and perform the services and duties described in Section 1.1 herein for a period of three (3) years thereafter (the “First Option Term”).  The Employee’s employment during the First Option Term is subject to the provisions for termination hereinafter set forth in Article III.  

Following the First Option Term, the Company’s Board of Directors has the option to extend the term of the Employee’s employment (the “Second Option”).  At least thirty (30) days prior to the conclusion of the First Option Term, the Company’s Board of Directors shall notify the Employee in writing as to whether it intends to exercise the Second Option.  The Employee shall notify the Company in writing within fifteen (15) days thereafter whether he wishes to accept the Second Option.  In the event the Company’s Board of Directors elects to exercise the Second Option and the Employee agrees to the Second Option, the Employee shall provide and perform the services and duties described in Section 1.1 herein for a period of three (3) years thereafter (the “Second Option Term”).  The Employee’s employment during the Second Option Term is subject to the provisions for termination hereinafter set forth in Article III.    

Following the Second Option Term, or if any of the options following the Initial Term are not exercised by the Company or agreed to by the Employee as provided herein, this Agreement (except those covenants, restrictions, and obligations which expressly survive the termination of this Agreement) shall expire and the performance of the Employee’s services shall continue on an at-will basis, and either party shall have the right to terminate the Employee’s employment for any reason at any time upon thirty (30) days’ prior written notice.

1.4

Board of Directors.  As of the date of this Agreement, the Employee has been elected to the Company’s Board of Directors and shall continue to serve as a director until his successor is elected by the Company shareholders, or until his resignation or disqualification.  Employee agrees that any termination of his employment, including but not limited to any termination under Article III of this Agreement, will also serve to terminate his position as a Company director.  Employee shall not be provided additional compensation for his service as a director of the Company.

1.5

No Expectation of Continuing Employment.  The Employee agrees that notwithstanding his position as a shareholder in the Company, the Employee has no expectation of continuing employment with the Company or any successor to the Company, except as provided for and limited by this Agreement.

ARTICLE II

Compensation and Fringe Benefits

2.1

Compensation and Fringe Benefits.  For all the services rendered by the Employee to the Company in any capacity, the Employee shall be compensated by the Company in accordance with this Article II.

2.2

Annual Compensation.  The Company shall pay the Employee an annual salary of One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00), less withholdings required by federal, state and local laws or with the consent of the Employee (the “Annual Compensation”).  This salary shall be paid in accordance with the Company’s current payroll practices and shall be prorated to reflect employment from the Effective Date.  The Company’s Board of Directors may adjust the Employee’s Annual Compensation with the Employee’s consent.  

2.3

Bonus.  In addition to the Annual Compensation described in Section 2.2 herein, the Employee may be eligible to receive a bonus annually based upon achieving certain profitability levels (the “Bonus”).  The Company’s Board of Directors has sole discretion in determining if the Employee is eligible for the Bonus and the amount of the Bonus, if any, that he shall receive.

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2.4

Other Fringe Benefits.  The Employee shall be entitled to participate in and to be covered by any accident insurance, health insurance, life insurance, long-term disability insurance, short-term disability insurance, hospitalization or other employee benefit plans, if any, effective with respect to the corporate officers of the Company, but only to the extent the Employee shall be eligible and qualify under the terms for participation in or coverage by such plans.

2.5

Reimbursement of Authorized Expenses.  In connection with the business of the Company, the Employee may incur reasonable travel, entertainment and other business expenses.  When the Employee is authorized to incur such expenses, the Company will reimburse the Employee for all such expenditures, subject to receipt of appropriate expense documentation from the Employee.  The Employee agrees to repay or reimburse the Company, on demand, for any expenses that are disallowed as a deduction for federal, state or local income tax purposes.

2.6

Vacations.  The Employee shall be entitled each year to such vacation as is permitted by and in accordance with the vacation policies of the Company.

ARTICLE III

Termination of Employment

3.1

Termination of Employment.  The Employee’s employment hereunder shall automatically terminate if the Employee dies during the term of this Agreement.  In addition, the Employee’s employment is terminable by the Company in its sole discretion, or by the Employee, in accordance with Sections 3.2 through 3.5 of this Agreement.

3.2

Permanent Disability.  The Company may terminate the Employee’s employment as a result of the Employee’s “Permanent Disability,” which for purposes of this Agreement shall mean the inability of the Employee, due to illness, accident or any other physical or mental incapacity, to discharge or perform his normal and customary day-to-day business and employment obligations and functions on behalf of the Company, with or without reasonable accommodation, for at least One Hundred (100) business days (calendar days minus Saturdays, Sundays and national holidays), in the aggregate, within any given period of One Hundred Twenty-Five (125) consecutive business days.

3.3

Termination by the Company For Cause.  The Company may terminate the Employee’s employment for Cause effective immediately upon written notice to the Employee.  The term “Cause” as used in this Agreement shall include (a) conviction of the Employee for a felony or other crime of moral turpitude by a court of competent jurisdiction; (b) the written confession by the Employee to the commission of a felony or other crime of moral turpitude; (c) embezzlement or misappropriation of funds of the Company; (d) the Employee’s breach of any of the covenants contained in Articles VI, VII or VIII of this Agreement; (e) intentional failure by the Employee to perform any of his duties and responsibilities under this Agreement; (f) conduct by the Employee which is detrimental to the Company’s reputation or goodwill; (g) dishonesty in connection with the performance of services to the Company; and (h) violation of the Company’s written policies or rules including, but not limited to, the Company’s policies regarding sexual harassment, discrimination, use of alcohol and/or controlled substances on the job, confidential matters, trade secrets, intellectual property, or related matters.

3.4

Termination by the Company Without Cause.  The Company may terminate the Employee’s employment without Cause upon thirty (30) days’ prior written notice to the Employee. 

3.5

Resignation by the Employee.  The Employee may terminate his employment upon thirty (30) days’ prior written notice to the Company (the “Resignation Notice Period”).

ARTICLE IV

Payment In The Event Of Termination of Employment

4.1

Death or Permanent Disability of the Employee.  In the event the Employee’s employment terminates as a result of his death or Permanent Disability, as described in Section 3.1 and 3.2 of this Agreement, the Employee will not be entitled to any Annual Compensation or benefits following the date on which the Employee ceases to perform his employment duties on behalf of the Company, except as expressly required by applicable law.

4.2

Termination by the Company For Cause.  If the Employee’s employment is terminated by the Company for Cause, as described in Section 3.3 of this Agreement, the Company will pay the Employee his Annual Compensation and benefits only through the date he ceases to perform his employment duties on behalf of the Company, and the Employee will not be entitled to any other compensation or benefits, except as expressly required by applicable law.

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4.3

Termination by the Company Without Cause.  If the Employee’s employment is terminated by the Company without Cause during the Initial Term, the First Option Term, or the Second Option Term, the Company shall pay the Employee the Annual Compensation and benefits described in Article II through the termination date specified in the Company’s advance written notice to the Employee.  In addition, the Company shall continue to pay the Employee, as and for severance pay, his Annual Compensation for a period of twelve (12) weeks thereafter and to continue the same health insurance coverage he enjoyed while employed, if any, so long as the Employee executes, returns to the Company, and does not rescind or revoke, a release of claims in favor of the Company in the form attached hereto as Exhibit A within twenty-one (21) calendar days of receiving the Company’s advance written notice of termination.  In addition, for purposes of calculating the “consideration” period described in Section 4 of Exhibit A, the Employee shall be deemed to have received the Release upon his receipt of the Company’s advance written notice of termination.

4.4

Resignation by the Employee.  

(a)

If the Employee’s employment is terminated by the Employee, the Company shall pay the Employee his Annual Compensation and benefits through the date he ceases to perform his employment duties on behalf of the Company.  The Employee will not be entitled to any other compensation or benefits following the date on which the Employee ceases to perform his employment duties on behalf of the Company, except as expressly required by applicable law.

(b)

Notwithstanding anything to the contrary in this Agreement, the Company reserves the right to pay the Employee his full Annual Compensation and benefits during the Resignation Notice Period described in Section 3.5 of this Agreement, and to relieve the Employee of his employment duties immediately upon delivery of said termination notice or at any time during the Resignation Notice Period.

ARTICLE V

Definition of Protective Covenant Terms

5.1

Invention.  The term “Invention” means every invention, device, design, apparatus, machine, practice, process, method, product, composition of matter, improvement, algorithm, proprietary software or computer code of any kind, idea, discovery, work of authorship, literary composition, copyrightable work, copyright, derivative work, patent, trademark, trade name, service mark, trade secret, formulae, technique, know-how, and data, whether or not patentable or copyrightable, invented, made, or conceived or first reduced to practice or learned by the Employee, either alone or jointly with others, during the period of the Employee’s employment by the Company (whether or not during normal working hours), or that resulted from tasks assigned to the Employee by the Company or resulted from the use of premises, equipment, or resources owned, leased, or contracted for by the Company.

5.2

Invents, Invented.  “Invents” or “Invented” means developed, perfected, devised, conceived, created, reduced to practice, written, or improved.

5.3

Confidential Information and Trade Secrets.  “Confidential Information and Trade Secrets” means all information or compilation of information pertaining to the Company or its customers, suppliers, or vendors, which the Company considers or treats as confidential (whether or not such information satisfies the definition of a “trade secret” under applicable law) and which the Employee creates, learns, and/or has access to in the course of performing duties for the Company.  Examples of Confidential Information and Trade Secrets include but are not limited to:

a.

The Company’s method for manufacturing silicon carbide ceramic filters for applications such as cleaning of exhaust gases from diesel engines, and in other applications, including but not limited to the following:

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the identity and amount of ingredients used;

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the percentages and proportions of ingredients used;

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the order in which ingredients are added and combined;

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the process(es) utilized when specific ingredients are added or combined;

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the stiffness required to meet customer filtration requirements;

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the specific extrusion process utilized for making particular honeycombs;

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the airflow required to prevent warping of products after they are extruded;

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the details of the Company’s furnace firing cycle, including temperatures utilized, firing times, waiting times, drying times, and cooling times;

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the specific steps for manufacturing and perfecting the Company’s technology to meet particular customer specifications;

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the identity and characteristics of the anchoring layer applied to the filter prior to application of catalyst coating; and

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all other information not publicized in the Company’s written literature regarding the specific techniques and processes utilized by the Company to manufacture its extruded silicon carbide ceramic filters.

b.

The Company’s research and development, engineering, works in progress, methods, technology, processes, practices, procedures, product formulas, product specifications, process parameters, know-how, manufacturing processes, fabrication techniques, quality management practices, inspection techniques, and all blueprints, technical plans, specifications, diagrams, flow charts, drawings, and sketches containing or reflecting such matters;

c.

Information, records, data, notes, reports, brochures, and proposals concerning the Company’s sales activities and strategies, marketing activities and strategies, servicing activities and strategies, strategic business planning activities, and competitive relationships with other firms;

d.

Information concerning the Company’s past, present, or potential customers, including but not limited to:

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customer names and identities;

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customer addresses;

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customer e-mail addresses;

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telephone numbers; 

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the identity of key contact persons and decision-makers;

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the specific contact information for key contact persons and decision-makers, such as their e-mail addresses and direct dial phone numbers;

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account information;

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customer budgets, purchasing history, and payment history;

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customer costing and pricing, including the specific markups and discounts charged by the Company to its individual customers;

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the soot loading levels of the customer’s diesel furnace(s), the porosity and air flow at a given soot loading level, and the exact product configuration, dimensions, size, and tolerance of the customer’s equipment;

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the custom changes and adaptations made by the Company to its manufacturing techniques in order to satisfy specific customer criteria; and

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all information concerning the demands, requirements, specifications, and quality concerns of such customers.

e.

Information concerning the Company’s past, present, or potential vendors and suppliers, including but not limited to names, addresses, e-mail addresses, and telephone numbers, account information, payment history, contracts, agreements, and negotiations, and the identity, quantity and prices of products and services purchased by the Company from its vendors and suppliers;

f.

Information, lists, records, data, notes, reports, and proposals regarding the Company’s pricing of its products and services, including price lists, price schedules, price practices, and pricing strategies;

g.

Information, records, data, notes, reports, and proposals concerning the Company’s finances, profit margins, profitability, budgets, accounting, and legal matters; 

h.

Information obtained from the Company’s customers under a duty of confidentiality, including information that such customers intend to keep confidential regarding their own products, methods, and manufacturing techniques; 

i.

All other information which derives independent economic value from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, excluding information in the public domain through no fault of the Employee except as a result of the proper performance of the Employee’s duties under this Agreement; and  

j.

All other information and compilations of information designated or treated as Confidential by the Company (whether or not marked “CONFIDENTIAL” or the like) or owned by, proprietary to, developed by, for, or about the Company’s business, or the business of any of its clients, customers, suppliers, or vendors, regardless of whether such information constitutes a “trade secret” under applicable law.

ARTICLE VI

Confidential Information and Trade Secrets

6.1

No Use or Disclosure.  The Employee acknowledges that during the term of employment with the Company, the Employee will be given access to or may become acquainted with, or develop Confidential Information and Trade Secrets.  The Employee agrees not to use or disclose (directly or indirectly) any Confidential Information and Trade Secrets of the Company at any time or in any manner, during or after employment with the Company, except as required in the course of employment with the Company.  The Employee agrees not to use or disclose any Confidential Information and Trade Secrets for the Employee’s own benefit or to the disadvantage of the Company.  The Employee shall use reasonable and prudent care to safeguard and protect and prevent the unauthorized use and disclosure of such Confidential Information and Trade Secrets.

6.2

Protection of Manufacturing Techniques.  Without limiting the generality of the foregoing, the Employee specifically agrees not to use or disclose to any competitor or customer any information regarding the Company’s method for manufacturing silicon carbide ceramic filters for applications such as cleaning of exhaust gases from diesel engines.  These methods are a highly guarded secret and would be invaluable to a competitor or customer of the Company.  The Employee understands that these methods should be kept in the strictest confidence and never discussed or disclosed outside of the Company.

6.3

Protection of Information Received from Customers.  Without limiting the generality of the foregoing, the Employee also specifically agrees not to use or disclose to anyone information that has been entrusted to the Company by its customers.  In many cases, the Company’s customers have established a business relationship with the Company with an understanding or contractual obligation that the Company will maintain certain customer information confidential.  This includes the confidentiality of the customer’s products, designs, configurations, dimensions, methods, manufacturing techniques, tolerances, and proprietary catalyst coatings applied by the customer in order to meet certain performance standards at particular temperatures.  The Employee is responsible for ensuring that all customer information is handled securely and confidentially.

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6.4

Restrictions on Information Provided to Customers.  The Employee has been advised, and understands, that the Company’s competitive survival depends upon providing unique products to customers who might not purchase such items from the Company if such products could be manufactured directly by the customer.  The Employee may be required to communicate with engineers, purchasing agents, and other representatives of the Company’s customers who may ask the Employee to explain the specific manufacturing methods utilized by the Company.  The Employee hereby agrees not to divulge any Confidential Information and Trade Secrets even when the Company’s customers have requested that the Employee disclose such information.  

6.5

Handling and Return of Property.  All Confidential Information and Trade Secrets, documents, property, and equipment relating to the business of the Company, whether prepared by the Employee or otherwise coming into the Employee’s possession, are the exclusive property of the Company, and must not be removed from its premises except as required in the course of the Employee’s employment with the Company.  All such Confidential Information and Trade Secrets, documents, property, and equipment must be returned to the Company when the Employee leaves its employment.  If either the Employee or the Company terminate the employment relationship, the Employee will immediately deliver to the Company all property and Confidential Information and Trade Secrets, including work in progress, originals and copies of business forms, computer files, diskettes, source codes, manuals, training materials, catalogs, customer lists, employee lists, vendor lists, financial information, computer equipment, office equipment, product designs, product samples, pricing schedules, and all other materials in the Employee’s possession or control which belong to the Company or contain information subject to this Agreement.

6.6

No Disclosure or Use From Others.  The Employee agrees that the Employee has not brought and will not bring with the Employee to the Company or use in the performance of the Employee’s responsibilities at the Company any materials or documents of a former employer or other third party, other than LiqTech S/A, that are not generally available to the public, unless the Employee or the Company have obtained written authorization from the former employer or third party for their possession and use.

6.7

Continuing Obligation.  The obligations of this Section are continuing and survive the termination of the Employee’s employment with the Company for any reason.  The Employee acknowledges the Company’s right to prohibit the Employee’s use and disclosure of Confidential Information and Trade Secrets and that the rights created by this Agreement are in addition to all other rights which the Company has to prevent the disclosure of such Confidential Information and Trade Secrets, including but not limited to, the Company’s rights under the Minnesota Uniform Trade Secrets Act, Minnesota Statutes, Chapter 325C.

ARTICLE VII

Inventions

7.1

Disclosure and Assignment of Inventions.  The Employee agrees to promptly inform and to disclose to the Company all Inventions which the Employee Invents or Invented (either alone or jointly with others) while in the employment of the Company.  The Employee further agrees to assign and transfer, and hereby does assign and transfer to the Company, all Inventions, any applications the Employee makes for patents or copyrights in any country regarding the Inventions, and any patents or copyrights granted to the Employee in any country regarding the Inventions.  Such Inventions shall be the exclusive property of the Company.  The Employee acknowledges that the Employee does not have, nor has the Employee ever had, claim of any right, title or interest in any inventions owned or used by the Company.  The Employee states that the Employee has not invented any application related to silicon carbide ceramic filters prior to accepting employment by the Company.   

7.2

Works Made for Hire.  The Employee acknowledges that all original works of authorship which have been made or are made by the Employee (solely or jointly with others) within the scope of the Employee’s employment and which are protectable by copyright have been created or are being created at the instance of the Company and are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. § 101).  If such laws are inapplicable or in the event that such works, or any part thereof, are determined by the Copyright Office or a court of competent jurisdiction not to be works made for hire under the United States copyright laws, Section 7.1 of this Agreement shall operate as an irrevocable and unconditional assignment by the Employee to the Company of all of the Employee’s right, title and interest (including, without limitation all rights in and to the copyrights throughout the world, including the right to prepare derivative works and the right to all renewals and extensions) in the works for the copyright term(s).

7.3

Certain Inventions Excluded.  Pursuant to Minnesota Statutes Section 181.78, “Agreements Relating to Inventions,” the Employee is advised that Sections 7.1 and 7.2 of this Agreement do not apply to any Invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on the Employee’s own time, and (1) which does not relate directly to the Company’s business or to the Company’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the Employee for the Company.

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7.4

Employee Assistance.  The Employee agrees to assist the Company in obtaining, maintaining, and from time to time enforcing patents or copyrights or other analogous protection in any and all countries on any Inventions assigned by the Employee to the Company under this Agreement that the Company, in its sole discretion, seeks to patent or copyright.

7.5

Appointment of Agent.  The Employee irrevocably appoints the Company and its duly authorized officers and agents to act as the Employee’s agent and attorney in fact to perform all acts necessary to obtain and/or maintain patents or copyrights to any Inventions assigned by the Employee to the Company under this Agreement if (i) the Employee refuses to perform those acts; (ii) the Employee is unavailable, within the meaning of the United States Patent and Copyright Laws; or (iii) the Company is unable, after reasonable effort, to secure the Employee’s signature on any patent, copyright or other analogous protection relating to an Invention.

ARTICLE VIII

Covenants Not to Compete or Solicit.

8.1

Restrictions on the Employee.  While employed by the Company, during all periods that the Employee owns stock in the Company, and for a period of two (2) years following termination of employment with the Company for any reason, whether voluntarily or involuntarily, the Employee shall not, directly or indirectly, without the prior written consent of the Company, in any manner, either personally, as an owner, shareholder, member, partner, affiliate, part of a joint venture, independent contractor, agent, servant, employee, representative, or through any employer, corporation, company, firm, organization, or any other entity:

a.

Render services to, accept employment with, be employed by, own, manage, operate, control, participate in, or be connected in any manner with:

(1)

any past or present customer that has purchased the Company’s extruded silicon carbide ceramic filters;

(2)

any prospective customer of the Company with whom the Employee has had contact while employed by the Company, or to whom the Company has made a specific proposal, or from whom the Company has accepted a request for proposal or purchase order;

(3)

any business, employer, or entity that produces or sells vehicles, portable generating systems, or other devices that utilize a diesel emission system that contains a diesel particulate filter; 

(4)

any industrial ceramics manufacturer that produces products with high temperature vacuum filters; 

(5)

any supplier of the Company that has provided to the Company the components of any binders or cements used by the Company in its extruded silicon carbide ceramic filters; or

(6)

any employer, person or organization which is engaged in the research, development, production, marketing, leasing, licensing, selling, or servicing of a product or service which competes with the business, products, or services of the Company (including, but not limited to, extruded silicon carbon ceramic filters).

b.

Call upon, solicit, divert or take away, or attempt to solicit, divert or take away, the business or patronage of any customer (or prospective customer with whom the Company has had contact) of the Company during the period that the Employee was employed by the Company, in connection with a product or service that competes with the business, products, or services of the Company;

c.

Request, advise, or entice any suppliers or vendors of the Company, whose identities became known to the Employee during the term of this Agreement, to cease doing business with the Company, or to provide services or products to the Employee or a third party that would impair the Company’s relationship with such vendor or supplier or its ability to obtain necessary supplies;

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d.

Employ, retain the services of, or offer to employ or retain the services of (whether as an employee, independent contractor, consultant or otherwise) any individual who provided services to the Company (whether as an employee, independent contractor, consultant or otherwise) within the two-year period preceding the termination of the Employee’s employment, or request, advise, or entice any such individual to leave the employment of or association with the Company for any reason.

The Employee acknowledges that, due to the worldwide market for the Company’s products, and the ability to manufacture or market products in competition with the Company from any location in the world, the damage caused to the Company would be substantial if the Employee engaged in any of the above activities anywhere in the world.  Given the limited number of customers who purchase the Company’s products, the limited number of competitors to the Company, and the limited number of vendors providing supplies and materials to the Company, the Employee agrees that the above restrictions are reasonable in scope even though they apply anywhere in the world.

8.2

Exceptions to Non-Compete Restrictions.  

The restrictions contained in Section 8.1 shall not prevent the Employee from owning up to one percent (1%) of a publicly held the Company that competes with the Company, as long as the Employee does not otherwise violate the terms of this Agreement.  

The restrictions contained in Section 8.1 shall not prevent the Employee from accepting employment with a large diversified organization with separate and distinct divisions that do not compete, directly or indirectly, with the Company, on the following conditions:  Prior to accepting such employment, the Employee and the Employee’s new employer must provide the Company with the following separate written assurances, satisfactory to the Company:  (1) that the Employee will not provide any of the Company’s Confidential Information and Trade Secrets (as defined in this Agreement) to the new employer; (2) that the Employee will not render any services, directly or indirectly, to any division or business unit that competes, directly or indirectly, with the Company; (3) that both the Employee and the new employer agree that the Employee will not violate any of the terms of this Agreement; and (4) that the new employer agrees that, in the event the Employee does violate any provisions of this Agreement, the new employer will accept joint liability for that breach, and agrees that it also shall be subject to the remedies set forth in this Agreement including, without limitation, liability for full injunctive relief, full accounting, and the full recovery of the Company’s attorney’s fees, costs, and expenses as set forth in this Agreement.

8.3

No Competitive Planning.  While employed by the Company, the Employee agrees not to undertake any planning or preparation to engage in activities that are in violation of Section 8.1 of this Agreement.

8.4

No Conflicting Agreements.  The Employee represents that the Employee has no agreements with or obligations to any former employer or other third party that would interfere with the Employee’s compliance with this Agreement and the Employee further agrees not to enter into such agreements or obligations.

8.5

Acknowledgement.  The Employee acknowledges and represents to the Company that the restrictions contained in this Section have been fully negotiated, that the Employee has had the opportunity to be represented by the Employee’s own legal counsel in connection with the drafting of this Agreement, that the covenants of the Company under this Agreement are adequate and fair consideration for the Employee’s agreement to be bound by this Section, and that the Employee possesses adequate skill, ability, and experience to gain other employment upon termination of this Agreement without violating the covenants contained in this Section.

ARTICLE IX

Miscellaneous

9.1

Recitals.  The Recitals detailed on page 1 of this Agreement are true.

9.2

Notices.  All notices given hereunder shall be in writing, and shall be personally served or sent by registered or certified mail, return receipt requested.  Notices to the Company shall be given to the Company at its corporate headquarters, which as of the date of this Agreement is 1804 Buerkle Road, White Bear Lake, Minnesota 55110.  Notices to the Employee shall be addressed to the Employee at the Employee’s residence address as the same appears on the records of the Company.  Notices to the Company or the Employee shall be sent to such other addresses as the Company or the Employee shall specify in writing to the other.  A copy of any notice to the Company shall be sent to Trepanier & MacGillis P.A., Attn:  James C. MacGillis, Esq., 8000 Flour Exchange Building, 310 Fourth Avenue South, Minneapolis, Minnesota 55415.

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9.3

Entire Agreement.  This Agreement is the entire agreement between the parties concerning the subject matter hereof, and supersedes and replaces any existing agreement between the parties hereto relating to the Employee’s employment, and the Company and the Employee hereby acknowledge that there are no other agreements or understandings of any nature, oral or written, regarding the Employee’s employment, apart from this Agreement.

9.4

Rules of Construction.  Each party has participated in the drafting of this Agreement; accordingly, any uncertainty or ambiguity shall not be interpreted against any one party.

9.5

Modification of Agreement.  No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by the Employee and the Company.

9.6

Waiver.  No waiver by either party hereto at any time of any breach of or noncompliance with any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent time.  No failure on the part of the Company to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder by the Company preclude any other or further exercise thereof or the exercise of any other right.

9.7

Severability.  It is agreed and understood by the parties hereto that if any part, term or provision of this Agreement is held unenforceable in the jurisdiction in which either party seeks enforcement of the Agreement, this Agreement shall be construed as if not containing the invalid provision or provisions.  Invalidity or unenforceability of any portion or provision of this Agreement shall not affect the validity or enforceability of the remaining provisions of this Agreement, which shall remain in full force and effect, and shall govern the rights and obligations of the parties hereto.

9.8

Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota, without regard to its choice of law provisions.  By executing this Agreement, the parties do hereby agree and submit to personal jurisdiction in the State of Minnesota for the purposes of any suit or proceeding arising out of this Agreement, or the performance or interpretation thereof, and agree that such suit or proceeding shall be venued in Hennepin County, Minnesota.

9.9

Attorney’s Fees.  In the event of any legal proceeding arising out of this Agreement, or the performance or interpretation thereof, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs from the other party.

9.10

Binding Effect and Assignment.  This Agreement shall inure to the benefit of and be binding upon the Employee and the Company and their respective heirs, executors, representatives, estates, successors and assigns, including any successor or assign to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise; provided, however, that this Agreement is personal in nature and the Employee, or any beneficiary or legal representative of the Employee, shall not assign all or any portion of the Employee’s rights or obligations under this Agreement.

9.11

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

9.12

Headings.  The headings in this Agreement are inserted for convenience or reference only, and are not a part of this Agreement.

10

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above.

COMPANY

LIQTECH NA, INC., 

  a Delaware corporation

By: /s/ Lasse Andreassen                                       

Lasse Andreassen

Title:

Director, on behalf of the Board of Directors

EMPLOYEE

/s/ Donald S. Debelak                                       

Donald S. Debelak

11

 

EXHIBIT A

RELEASE OF CLAIMS

1.

Definitions.  Specific terms I use in this Release of Claims (“Release”) have the following meanings:

a.

“I, me, my, mine,” as used herein, shall at all times mean Donald S. Debelak and anyone who has or obtains any legal rights or claims through said named person.

b.

“Company,” as used herein, shall at all times mean LiqTech NA, Inc., a Delaware corporation, its parent corporations, subsidiaries, successors and assigns, partners, insurers, any affiliated and predecessor or management companies, their affiliated and predecessor or management companies, their successors and assigns, and the present and former officers, directors, shareholders, partners, employees, attorneys, and agents of any of them, any persons acting by, through, under or in concert with them, all in their official and individual capacities, and the current and former trustees or administrators of any pension, welfare, or other employee benefit plan of Company, in their official and individual capacities.

c.

“My Claims,” as used herein, mean any and all claims, liens, demands, causes of action, controversy, losses, damages, costs, expenses, and liabilities that I, my heirs, executors, administrators, successors, and assigns now have, ever had or may hereafter have against Company, whether known or unknown, suspected or unsuspected, contingent or noncontingent, whether concealed or hidden, by reason of any fact, matter, event, act, omission, transaction, occurrence, cause or thing whatsoever occurring at any time up to and including the date of this Release, without regard to the subsequent discovery or existence of such different or additional facts, including, but not limited to, claims for:  breach of contract; breach of express or implied promise; breach of the covenant of good faith and fair dealing; equitable estoppel; promissory estoppel; unjust enrichment; quantum meruit; constructive trust; quasi-contract; payment of wages, commissions, bonus, reimbursements, sick pay, vacation pay, holiday pay, paid time off, employee leave, employee benefits, insurance, pension, or other compensation; fraud or misrepresentation; violation of any federal, state, and/or local law, regulation or rule, including but not limited to, the state and federal Constitutions, the Minnesota Human Rights Act, Minnesota Statute Section 181.81 (which prohibits age discrimination), the Minnesota Personnel Records Act, the Minnesota Government Data Practices Act, the Minnesota Whistleblower Statute, the Minnesota Drug and Alcohol Testing in the Workplace Act, the Minnesota Minority Shareholder Rights Act; the Minnesota Fair Labor Standards Act; the Minnesota Labor Relations Act, the Minnesota Public Employee Labor Relations Act, the Minnesota Termination of Sales Representatives Act, the Minnesota Veterans Preference Act, state and federal prevailing wage laws, state and federal employee polygraph laws, state and federal OSHA laws, state and federal equal pay laws, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Civil Rights Act of 1871, the Americans with Disabilities Act, the Rehabilitation Act, the Age Discrimination in Employment Act, the Judiciary and Judicial Procedure Act, the National Labor Relations Act, the Vietnam Era Veterans Readjustment Act, the Uniformed Services Employment and Re-employment Rights Act, the Employee Retirement Income Security Act, the Consolidated Omnibus Budget Reconciliation Act, the Family and Medical Leave Act, the state and federal Fair Labor Standards Act, the Worker Adjustment and Retraining Notification Act, the Fair Credit Reporting Act, the Consumer Credit Protection Act, and all other federal, state, and/or local civil rights laws prohibiting discrimination, reprisal, retaliation, or other unlawful activity on the basis of race, color, creed, marital status, sex, age, religion, national origin, disability, pregnancy, sexual orientation, political affiliation, status with respect to public assistance, membership in local commission, or any other protected class status; sexual harassment; defamation, slander, and libel (including compelled self-publication); intentional or negligent infliction of emotional distress; negligence; breach of fiduciary duty; wrongful termination of employment; constructive discharge; conversion; invasion of privacy; fraudulent inducement; negligent hiring, retention, training, and/or supervision; tortious interference with contractual relations or prospective business advantage; assault; battery; false imprisonment; all other claims for unlawful employment practices; all claims for attorney’s fees, costs, disbursements, fees, interest, or other payments; and all other common law, legal, equitable or statutory claims (whether on a contract, tort, or other theory), whether they could be brought directly by me on my own behalf or by any other person, agency, or organization on my behalf.

1

 

2.

Agreement to Release My Claims.  

a.

On behalf of myself, my attorneys, heirs, executors, administrators, successors and assigns, I agree to release, discharge, and give up all My Claims against Company through the date I sign this Release in exchange for the severance pay Company has agreed to pay me for signing this Release pursuant to Section 4.3 of the Employment Agreement between me and Company dated November ___, 2005.  I agree to release and discharge Company not only from any and all of My Claims that I could make on my own behalf, but also from those claims that may or could be brought by any other person or organization on my behalf.  I hereby expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights, and benefits of any statute, regulation, or principle of common law which might otherwise render a general release unenforceable with respect to My Claims. 

b.

I have not caused or permitted to be served, filed, or commenced any lawsuits, charges, complaints, actions, notices, or other demands against Company with any federal, state, or local judicial or administrative agency or body based on My Claims.  

c.

In the event that any such charges, complaints, actions, notices, or other demands against Company have been or are asserted, I agree that this Release shall act as a total and complete bar to my re-employment or to recovery of any relief or sum or amount whatsoever from Company, whether labeled award, liability, damages, judgment, backpay, front pay, wages, fine, or penalty, or otherwise resulting directly or indirectly from any lawsuit, remedy, charge, or complaint, whether brought privately by me or by anyone else, including any federal, state, or local judicial or administrative agency or body, whether or not on my behalf or at my request.  

d.

This Release shall not affect any of My Claims (i) for earned but unpaid Annual Compensation under the Employment Agreement; or (ii) which could be made under any employee welfare benefit plan or any pension or retirement plan through Company.

e.

Notwithstanding anything to the contrary in this Release, nothing contained herein shall be construed as a waiver of any right which, as a matter of public policy or under applicable law, cannot be released under this Release.

3.

Non-Admission.  Even though Company is paying me to release My Claims, Company does not admit that it is responsible or legally obligated to me.  In fact, Company denies that it is responsible or legally obligated to me or that it has engaged in any wrongdoing.

4.

Consideration Period and Rescission of Release.  

a.

I understand that I may take up to twenty-one (21) calendar days after receiving this Release to consider whether I wish to sign this Release.  In addition, I understand that I may rescind (i.e., revoke and cancel) my release of claims arising under the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., within seven (7) calendar days of signing this Release.  I understand that I also may rescind (i.e., revoke and cancel) my release of claims arising under the Minnesota Human Rights Act, Minn. Stat. § 363.01 et seq., within fifteen (15) calendar days of signing this Release.  

b.

I understand that to be effective, the rescission/revocation must be in writing and delivered to Company, in care of:

Trepanier & MacGillis P.A.

Attn:  James C. MacGillis, Esq.

8000 Flour Exchange Building

310 Fourth Avenue South

Minneapolis, MN 55415

either by hand or by mail within the respective rescission/revocation periods.  If sent by mail, the rescission must be (i) postmarked within the respective rescission/revocation periods as stated above; (ii) properly addressed, as stated above; and (iii) sent by certified mail, return receipt requested.

c.

In the event I exercise any right of rescission or revocation, neither Company nor I will have any rights or obligations whatsoever under this Release, nor shall I be entitled to any severance pay pursuant to Section 4.3 of the Employment Agreement.

3

 

5.

Acceptance Period.  I have been informed that the terms of this Release shall be open for acceptance by me for a period of twenty-one (21) calendar days after receiving it, during which time I may consider whether or not to accept this Release and seek legal counsel to advise me regarding the same.  I agree that changes to this Release, whether material or immaterial, will not restart this acceptance period.

6.

Voluntary and Knowing Action.  I have read this Release carefully and understand and agree to all of its terms.  I have been advised to consult with my own attorney regarding this Release and have had an opportunity to discuss this Release with my own attorney.  I have had an adequate amount of time to consider whether to sign this Release.  In agreeing to sign this Release, I have not relied on any statements or explanations made by Company or its attorneys.  I am voluntarily entering into this Release to effectuate my separation from employment with Company and I intend this Release to be legally binding.

IN WITNESS WHEREOF, I have executed this Release by my signature below.

___________________________________

Donald S. Debelak

Subscribed and sworn to before me

this ____ day of ____________, ______.

_________________________________

Notary Public

4exhibit10_1.htm

EXHIBIT 10.1

 

TRANSITION AGREEMENT

 

This Transition Agreement ("Transition Agreement") is entered into as of October 11, 2011 by and between CHARTER COMMUNICATIONS, INC. (the “Company”) and MICHAEL J. LOVETT (the “Executive”).

 

WHEREAS, Executive and the Company (the “Parties”) previously entered into an employment agreement dated August 1, 2007, as amended and restated in the Amended and Restated Employment Agreement, dated February 1, 2010 (“Employment Agreement”); and

 

WHEREAS, Executive has indicated his desire to resign as chief executive officer and a director of the Company and the Parties desire to revise the terms and conditions of their relationship as set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Company and Executive agree as follows:

 

1.           Separation from Employment.  Executive hereby submits his resignation from employment with the Company and as a director of the Company to be effective April 30, 2012, subject to potential earlier resignation from positions (but not employment) as provided in Section 2 (the “Separation Date”).  The Company hereby accepts such resignation.  Executive acknowledges that he is not resigning for Good Reason as defined in the Employment Agreement.  Executive agrees that he will not resign as of an earlier date without the consent of the Company.

 

2.           Transition Period.  From the date of execution of this Transition Agreement through the Separation Date, Executive will continue as President and Chief Executive Officer of the Company and continue to have the duties and responsibilities commensurate with that position as described in Section 3 of the Employment Agreement and will transition his duties and responsibilities to such person(s) as the Board may identify (the “Transition Period”).  The Company reserves the right to revise and or otherwise limit Executive’s positions, duties and responsibilities and where those duties are performed during the Transition Period.   Executive hereby resigns from any and all executive, director, officer or other positions with the Company or its affiliates, including (without limitation) his position as a director of the Company and his position on any Board committees upon the expiration of the Transition Period or on such earlier date as the Board may direct during the Transition Period.

 

3.           Compensation.  During the Transition Period:

 

(a)           Salary.  Executive shall continue to earn his current Annual Base Salary during his employment.

 

(b)           Benefits.  Except as provided herein, Executive shall continue to participate in such benefit programs as are generally made available to other senior executives.

 

  

  

  

 

(c)           Annual Bonus.  Provided Executive remains an employee through the date of payment thereof, Executive will  receive his 2011 Bonus, to the extent earned based on the targets relating thereto, with such bonus to be paid at the time annual bonuses of 2011 generally are paid to other senior employees of the Company.  Executive  acknowledges that he will not earn any 2012 Bonus.

 

(d)           Amounts Under Certain Plans.  The following will apply to Executive’s rights with respect to awards under the Company’s plans described below.  Executive will receive a $1,000,000 payment under the Company’s Cash Incentive Program, provided he continues to be employed by the Company through November 30, 2011, and Executive acknowledges and agrees that he will receive no further payments under such program.  With respect to unvested awards under the Company’s option plans, Executive will vest in those options that would otherwise vest while he remains an employee of the Company during the Transition Period.  With respect to Executive’s 2010 Restricted Stock Emergence grant, Executive will receive the 50,911 shares of Common Stock that are due to vest on November 30, 2011, provided Executive remains an employee of the Company through November 30, 2011, and the unvested remainder of such emergence grant of 50,911 shares of Common Stock will be forfeited.  Executive will also receive the payment of $172,985 of the performance cash grant that vests on March 18, 2012, provided Executive remains an employee of the Company through March 18, 2012.  All options, restricted stock awards  or other grants or awards with respect to equity, options, cash or option property that have not vested as of the termination of Executive’s employment shall be forfeited.

 

4.           Payments Upon Termination of Employment For Any Reason.  Upon the termination of Executive’s employment, regardless of the reason or date of termination, Executive shall be entitled to:

 

	
  

	
(a)

	
the payment of his Annual Base Salary through the date of such termination (to the extent not previously paid);

	
  

	
(b)

	
a lump sum payment in respect of accrued but unused vacation days at his per-business-day Annual Base Salary in effect as of the date of such termination; and

	
  

	
(c)

	
the reimbursement for all timely and appropriately submitted and approved business expenses reasonably incurred by him in accordance with Company policies.

5.           Termination Prior to the Expiration of the Transition Period.  Executive’s employment hereunder may be terminated prior to the expiration of the Transition Period by the Company or Executive without any breach of this Transition Agreement under the following circumstances:

 

                (a)           Death.  Executive’s employment hereunder shall automatically terminate upon Executive’s death.  Any payments due Executive upon termination due to death, will be paid to Executive’s designated beneficiary or trust, located at such address, as Executive may designate by notice to the 

  

2

  

Company from time to time or, if Executive fails to give notice to the Company of such a beneficiary, Executive’s estate.  Notwithstanding the preceding sentence, the Company will have no duty, in any circumstances, to attempt to open an estate on behalf of Executive, to determine whether any beneficiary designated by Executive is alive or to ascertain the address of any such beneficiary, to determine the existence of any trust, to determine whether any person purporting to act as Executive’s personal representative (or the trustee of a trust established by Executive) is duly authorized to act, in that capacity, or to locate or attempt to locate any beneficiary, personal representative, or trustee.

 

	
  

	
(b)

	
Disability.  If Executive has incurred a Disability as that term is defined in  the Employment Agreement, the Company may give Executive written notice of its intention to terminate Executive’s employment.  In such event, Executive’s employment with the Company shall terminate effective on the 14th day after delivery of such notice to Executive, provided that within the 14 days after such delivery, Executive shall not have returned to full-time performance of Executive’s duties.

	
  

	
(c)

	
Cause.  The Company may terminate Executive’s employment hereunder for Cause, as that term is defined in  the Employment Agreement, only for circumstances that occur during the Transition Period.  Such termination shall be effective immediately upon delivery of notice to Executive after complying with any procedural requirements set forth in Section 1 of the Employment Agreement.

	
  

	
(d)

	
Termination Without Cause; No Termination for Good Reason.  If the Company terminates Executive’s employment without Cause, as that term is defined in the Employment Agreement, Executive would be entitled to the payments and benefits so provided in the Employment Agreement (it being understood that only a complete termination of employment of Executive, and not any modification of Executive’s positions, duties or responsibilities, or where such duties are performed as contemplated by Section 2 or other change or action,  shall constitute such a termination without Cause). No termination of employment of Executive shall under any circumstances constitute a termination for Good Reason, as such term is defined in the Employment Agreement.

6.           Additional Amounts Relating to Termination of Employment.  Upon termination of Executive’s employment, the Company will pay Executive (in addition to compensation to which he is entitled to under Section 3) only such compensation, and shall be required to relinquish funds or rights, as applicable, as provided herein.  

 

                                  (a)           Termination of Executive by Company for Cause.    If Executive is terminated for Cause,  as defined in the Employment Agreement, Executive shall remain obligated to repay the Retention Bonus on the terms provided in Section 7 of the Employment Agreement.  Executive 

 

  

3

  

further acknowledges that if he is terminated for Cause, he will forgo any entitlement to any unpaid bonus or option, restricted stock or other awards, whether vested or unvested.

	
  

	
(b)

	
Termination due to Executive’s Death, Disability or Expiration of the Transition Period.  If Executive’s employment is terminated due to Executive’s death,  Disability, as defined in the Employment Agreement, or expiration of the Transition Period, Executive (or his estate) shall also be entitled to:

 (i) a lump sum payment (net after deduction of taxes and other required withholdings) equal to eighteen (18) times the monthly cost, at the Separation Date, for Executive to receive under COBRA, the paid health, dental and vision benefits now being provided for Executive and his family.  This amount will be paid to Executive (or, if applicable, his estate)within thirty (30) days after the Separation Date and will be grossed up for tax purposes at the time of payment (it being understood that Executive acknowledges that he must make an election under COBRA in order to have those health, vision and dental benefits to continue, and that he will pay any respective premiums as required by coverage;

(ii) payment of his 2011 Bonus in the amount it is earned as provided in Section 3; and

(iii) only in the case of a termination as the result of the expiration of the Transition Period, payments of an aggregate of $2,600,000, to be made in 39 equal bi-weekly installments at the same time as salary payments are normally paid to senior executives of the Company such payments to commence on the first such payday for Company senior executives that is at least six months and one day following the expiration of the Transition Period; provided, that Executive fully complies in the reasonable determination of the Company with Executive’s post-termination obligations hereunder, including (without limitation) his obligations described in Section 14.

	
  

	
Notwithstanding anything to the contrary herein, the Company will not be obligated to make any of the foregoing payments unless Executive or (in the case of his death) the representative of his estate has executed and delivered to the Company a supplemental release in the form attached hereto on or near the Separation Date and such supplemental release has become effective.  In addition, upon the effectiveness of such supplemental release, the Company will waive any rights it has to seek repayment pursuant to Section 7 of the Employment Agreement of any portion of the Retention Bonus previously paid to Executive.

  

4

  

 

7.           Released Parties.  The term "Released Parties" as used in this Transition Agreement includes:  (a) the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities (whether or not they are wholly owned); and (b) the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed in subpart (a) above; and (c) the predecessors, successors, and assigns of each entity listed in subparts (a) and (b) above.

 

8.           Release of All Claims.  Executive, and anyone claiming through Executive or on Executive’s behalf, hereby waives and releases the Company and the other Released Parties with respect to any and all claims, whether currently known or unknown, that Executive now has or has ever had against the Company or any of the other Released Parties arising from or related to any act, omission, or thing occurring or existing at any time prior to or on the date on which Executive signs this Transition Agreement.  Without limiting the generality of the foregoing, the claims waived and released by Executive hereunder include, but are not limited to:

 

(a)           all claims arising out of or related in any way to Executive’s employment, compensation, other terms and conditions of employment, or termination from employment with the Company, including without limitation all claims for any compensation payments, bonus, severance pay, equity, or any other compensation or benefit, and all claims to date arising under the Employment Agreement;

 

(b)           all claims that were or could have been asserted by Executive or on his behalf:  (i) in any federal, state, or local court, commission, or agency; or (ii) under any common law theory (including without limitation all claims for breach of contract (oral, written or implied), wrongful termination, defamation, invasion of privacy, infliction of emotional distress, tortious interference, fraud, estoppel, unjust enrichment, and any other contract, tort or other common law claim of any kind); and

 

(c)           all claims that were or could have been asserted by Executive or on his behalf under:  (i) the Age Discrimination in Employment Act, as amended; or (ii) any other federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law, including without limitation under any of the following laws, as amended from time to time:  Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981 & 1981a, the Americans with Disabilities Act, the Equal Pay Act, the Employee Retirement Income Security Act, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, the Missouri Human Rights Act, chapter 213 R.S. Mo.

 

Nothing in this Transition Agreement shall waive or release:  (a) any claim that cannot be waived or released by law; provided, however, that Executive is waiving his right to receive any monetary or other recovery should any agency pursue such claim on his behalf; (b) any claim to enforce this Transition Agreement; (c) any claim for any vested benefits to which Executive is otherwise entitled pursuant to the terms and conditions of any of applicable benefit plans;   (d) any claim for workers’ compensation or unemployment insurance benefits; or (e) any claim, if any, to indemnification under any applicable law, any Company by-laws, or any director and 

 

  

5

  

 

officer insurance, it being understood and agreed that this Transition Agreement does not create or expand upon any such rights (if any) to indemnification.

 

To the fullest extent permitted by law, Executive further promises never to file, prosecute or pursue any lawsuit based on a claim purportedly released by this Transition Agreement, or (absent court order) to assist others in filing or prosecuting similar claims against the Company or any Released Party.  Executive understands and agrees that nothing in this Transition Agreement precludes him from filing a charge of discrimination under applicable federal or state law, although he has personally released such claims with regard to matters and facts occurring prior to this date.  Executive specifically acknowledges and agrees that he is not entitled to severance or any other benefits under the Special One-Time Severance Plan or other severance plan or contract, or to any payments following termination of his employment under or by reason of the Employment Agreement, and that payments and benefits described in this Transition Agreement are in lieu of any severance or other benefits to which Executive may be entitled under such plan or any other policy, program, plan or agreement and satisfy and are in lieu of any payments to which Executive may be entitled under the Employment Agreement or any other such plan, policy, program or arrangement, and Executive specifically waives any rights he may have under that plan and any such agreement, if any.

 

9.           No Other Actions or Claims.  Executive represents and warrants that:  (a) Executive has not filed or initiated any legal or other proceedings against any of the Released Parties; (b) no such proceedings have been initiated against any of the Released Parties on Executive’s behalf; (c) Executive is the sole owner of the claims that are released in Section 8 above; (d) none of these claims has been transferred or assigned or caused to be transferred or assigned to any other person, firm or other legal entity; and (e) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Transition Agreement.

 

10.           No Other Payments or Benefits.  Except as expressly provided in this Transition Agreement, Executive acknowledges and agrees that he is not entitled to and will not receive any other compensation, payments, benefits, or recovery of any kind from the Company or the other Released Parties, including without limitation any bonus, severance, equity or other payments or any amounts under the Employment Agreement.  In the event of any further proceedings whatsoever based upon any matter released herein, Executive hereby waives, and agrees that Executive shall not have and the Released Parties shall not be liable for, any further monetary or other recovery of any kind arising out of or related to any such matter, including without limitation any costs, expenses and attorneys' fees incurred by or on behalf of Executive.

 

11.           Other Agreements.  Except to the extent otherwise provided herein, Executive waives his rights to all compensation and benefits provided in the Employment Agreement, but acknowledges that he remains subject to and bound by all obligations he undertook in that Employment Agreement.

 

12.           Return of Property.  Executive will return to the Company on or prior to the termination of his employment with the Company all files, memoranda, documents, records (electronic or hard copy), credit cards, keys, all laptops and other computer equipment, blackberries and similar devices, cell phones, equipment, badges, keys and other access codes or 

 

  

6

  

 

cards, vehicles, Confidential Information (as defined in the Employment Agreement) and any other property of the Company then in his possession or control; provided that, Executive represents and warrants that he has not and will not, make any copies of Company files residing on his laptop computer or other equipment accessible to him.  If for some reason Executive does not have at least five days advance notice of a termination or pending termination of employment, Executive will make such return of property not more than five days after becoming aware of such termination or pending termination of employment,  Executive also will reveal to the Company at the Company’s request all access codes to any computer or other program or equipment.

 

13.           Cooperation.  During and following his employment with the Company, Executive shall cooperate fully with the Company and the other Released Parties in transitioning his responsibilities as requested by the Company, and shall cooperate fully in any administrative, investigative, litigation or other legal matter(s) that may arise or have arisen involving the Company or any of the other Released Parties and which in any way relate to or involve Executive’s employment with the Company.  Executive's obligation to cooperate hereunder shall include, without limitation, meeting and conferring with such persons at such times and in such places as the Company and the other Released Parties may reasonably require, and giving truthful evidence and truthful testimony and executing and delivering to the Company and any of the other Released Parties any truthful papers reasonably requested by any of them.  Executive shall be reimbursed by the Company for reasonable out-of-pocket expenses that Executive incurs in rendering cooperation after his termination of employment pursuant to this Section 13.

 

14.           Confidential and Proprietary Information/Non-Competition and Non-Interference.  Executive explicitly reaffirms his obligations under and agrees to remain bound by and comply with Sections 16, 17 and 18 of the Employment Agreement and agrees that those provisions continue to apply to him, notwithstanding termination of employment, the reason for termination of employment, or any act, promise, decision, fact or conduct occurring prior to this date.  The “Restricted Period” for purposes of Section 18 of the Employment Agreement shall end (a) for (and solely for) purposes of Section 18(b)(i) and (ii) of the Employment Agreement on the second anniversary of the Separation Date and (b) for (and solely for) the purposes of Section 18(b)(iii) of the Employment Agreement on the first anniversary of the Separation Date.  In addition, Executive agrees that for the period commencing as of the date of this Transition Agreement and terminating on the second anniversary of Executive’s Separation Date, Executive agrees that he will not, directly or indirectly, for Executive’s own benefit or for the benefit of any other person or entity other than the Company, solicit for employment, hire or otherwise retain for services, or authorize, assist or participate in any such solicitation, hiring or retention, as an employee, a consultant or otherwise,  any individual that is a direct report of Executive as of the date hereof, whether or not such individual is employed by the Company as of the date of such solicitation, hiring or retention, nor will Executive (i) discuss with any such individual his or her leaving the employ of the Company or engaging in a business activity in competition with the Company or (ii) otherwise interfere with the relationship between any such individual and the Company.  Executive agrees to notify any third party with whom Executive may become employed or retained to provide services or to enter into any business or contractual relationship with, of the restrictions hereunder and under Sections 16, 17 and 18 of the Employment Agreement prior to accepting such new employment.  The Company is also authorized to advise any third party with whom Executive may become employed or otherwise retained to provide 

 

  

7

  

 

services, or enter into any business or contractual relationship with, or whom Executive may contact for any such purpose, of the existence of this Transition Agreement and the Employment Agreement and their terms, and the Company shall not be liable for doing so.

 

15.           Remedies.  The Parties acknowledge and agree that a breach by a Party of any provision of this Transition Agreement will result in immediate and irreparable harm to the other Party (and, in the case of the Company, its affiliates) for which full damages cannot readily be calculated and for which damages are an inadequate remedy.  Accordingly, each Party agrees that the other Party (including, in the case of the Company, its affiliates) shall be entitled to injunctive relief to prevent any such actual or threatened breach or any continuing breach (without posting a bond or other security), without limiting any other remedies that may be available to such Party.  In connection with any action or proceeding relating to the enforcement of this Agreement the prevailing Party (including, in the case of the Company, its affiliates) shall be entitled to recover against the other Party the reasonable costs and expenditures, including but not limited to reasonable attorneys' fees, incurred in connection with such action or proceeding. 

 

16.           Withholding; Compliance with IRS Code Section 409A.  All amounts and benefits payable under this Transition Agreement shall be reduced by any and all required or authorized withholding and deductions.  It is intended that any amounts payable under this Transition Agreement will be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and treasury regulations relating thereto, so as not to subject Executive to the payment of any interest and tax penalty which may be imposed under Section 409A of the Code, and this Transition Agreement shall be interpreted and construed accordingly; provided, however, that the Company and the other Released Parties shall not be responsible for any taxes, penalties, interest or other losses or expenses incurred by Executive due to any failure to comply with Section 409A of the Code.  The timing of the payments or benefits provided herein may be modified to so comply with Section 409A of the Code.  All references in this Transition Agreement to Executive’s termination of employment and to termination on the Separation Date shall mean a separation from service within the meaning of Section 409A of the Code.  Each payment under this Transition Agreement as a result of the separation of Executive’s service shall be considered a separate payment for purposes of Section 409A of the Code.  Notwithstanding any other provision in this Transition Agreement, if on the date of Executive’s separation from service (as defined in Section 409A of the Code) (i) the Company is a publicly traded corporation and (ii) Executive is a “specified employee,” as defined in Section 409A of the Code, then to the extent any amount payable under this Transition Agreement upon Executive’s separation from service constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, that under the terms of this Transition Agreement would be payable prior to the six (6) month anniversary of Executive’s separation from service, such payment shall be delayed until the earlier to occur of (x) the first day of the seventh month following Executive’s separation from service or (y) the date of Executive’s death. Any reimbursement payable to Executive pursuant to this Transition Agreement shall be conditioned on the submission by Executive of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Executive within thirty (30) days following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which Executive incurred the reimbursable expense.  Any amount of expenses eligible for reimbursement or in-kind benefit provided during a calendar year shall not affect the amount of 

 

  

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expenses eligible for reimbursement or in-kind benefit to be provided during any other calendar year.  The right to reimbursement or to an in-kind benefit pursuant to this Transition Agreement shall not be subject to liquidation or exchange for any other benefit. The Company will not report any payments made to Executive hereunder as subject to the additional tax under Section 409A of the Code unless it concludes in good faith that such reporting is required and shall consult with Executive prior to making any such reporting.

 

17.           Nondisparagement.  The Company and Executive shall continue to comply with the provisions of Section 20 of the Employment Agreement relating to mutual nondisparagement, it being understood that nothing shall prohibit a Party from giving truthful testimony or information to law enforcement entities, administrative agencies or courts or in any other legal proceedings as required by law, including, but not limited to, assisting in an investigation or proceeding brought by governmental or regulatory body or official related to alleged violations of any law relating to fraud or any rule or regulation of the Securities and Exchange Commission.

 

18.           No Admission.  Nothing in this Transition Agreement is intended to or shall be construed as an admission by the Company or any of the other Released Parties that any of them violated any law, interfered with any right, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Executive or otherwise.  The Company and the other Released Parties expressly deny any such illegal or wrongful conduct.

 

19.           FCRA; Purchase and Sale of Company Securities, Indemnification.  The Parties explicitly reaffirm their respective obligations under Sections 21, 22 and 23 of the Employment Agreement.

 

20.           Taxes.  Executive acknowledges and agrees that Executive is solely responsible for all federal, state, local, and other taxes, interest, and penalties, if any, with respect to the payments made pursuant to this Transition Agreement.  Executive further agrees that  Executive shall indemnify, defend and hold harmless the Company and the other Released Parties for and against any and all claims and liabilities (including but not limited to any liability or expense for interest, penalties, and attorneys’ fees) incurred by the Company or any of the other Released Parties with respect to or arising out of any such payments, including, but not limited to, any liability relating to withholding or not withholding from such amounts or any portion thereof.

 

 21.           Entire Agreement, Amendment, Waiver and Headings/ Capitalized Terms.  This Transition Agreement and the related provisions of the Employment Agreement embody the entire agreement and understanding of the Parties with regard to the matters described herein and supersede any and all prior and/or contemporaneous agreements and understandings, oral or written, between the Parties regarding such matters, provided that nothing in this Transition Agreement shall limit or release Executive from any other obligation regarding confidentiality, intellectual or other property, or post-employment competitive activities that Executive has or may have to the Company or any of its affiliates.  This Transition Agreement may be modified only in a written agreement signed by both Parties, and any Party's failure to enforce this Transition Agreement in the event of one or more events which violate this Transition Agreement shall not constitute a waiver of any right to enforce this Transition Agreement against 

 

  

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subsequent violations.  The Section headings used herein are for convenience of reference only and are not to be considered in construction of the provisions of this Transition Agreement.  Capitalized terms not defined herein have the meaning ascribed to them in the Employment Agreement.

 

22.           Assignment.  This Transition Agreement is enforceable by the Company and its affiliates and may be assigned or transferred by the Company to, and shall be binding upon and inure to the benefit of, any parent or other affiliate of the Company or any person which at any time, whether by merger, purchase, or otherwise, acquires all or substantially all of the assets, stock or business of the Company or of any division thereof.  Executive may not assign any of his rights or obligations under this Transition Agreement.

 

23.           Governing Law.  This Transition Agreement shall be construed and interpreted in accordance with the internal laws of the State of Missouri, without regard to its choice of law rules.

 

24.           Arbitration.  The Parties incorporate by reference the Arbitration provisions of Section 32 of the Employment Agreement and intend it to fully apply to any dispute arising under this Transition Agreement.

 

25.           Severability.  Whenever possible, each provision of this Transition Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Transition Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Transition Agreement.

 

26.           Counterparts.  This Transition Agreement may be executed in two counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.

 

27.           Notices.  Any written notice required by this Transition Agreement will be deemed provided and delivered to the intended recipient when (a) delivered in person by hand; or (b) the day after being sent via overnight courier.  In each case when such notice is properly address to the following address and with all postage and similar fees having been paid in advance:

 

If to the Company:                                Charter Communications, Inc.

                 Attn:  General Counsel

                    12405 Powerscourt Drive

                    St. Louis, MO 63131

 

If to Executive:                                Michael J. Lovett

                   _____________________

                   _____________________

 

with a copy to:  Arlen Brammer

                                                                            Arlen L. Brammer, P.C.

 

  

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                                                                           5690 DTC Blvd., Suite 550E

                                                                           Greenwood Village, CO 80111

 

 

28.           ACKNOWLEDGMENTS.  EXECUTIVE ACKNOWLEDGES, UNDERSTANDS, AND AGREES THAT:   (a) EXECUTIVE HAS READ AND UNDERSTANDS THE TERMS AND EFFECT OF THIS TRANSITION AGREEMENT; (b) EXECUTIVE RELEASES AND WAIVES CLAIMS UNDER THIS TRANSITION AGREEMENT KNOWINGLY AND VOLUNTARILY, IN EXCHANGE FOR CONSIDERATION IN ADDITION TO ANYTHING OF VALUE TO WHICH EXECUTIVE ALREADY IS ENTITLED; AND (c) EXECUTIVE HEREBY IS AND HAS BEEN ADVISED OF EXECUTIVE’S RIGHT TO HAVE EXECUTIVE’S ATTORNEY REVIEW THIS AGREEMENT (AT EXECUTIVE’S COST) BEFORE SIGNING IT.

 

THE PARTIES STATE THAT THEY HAVE READ AND UNDERSTAND THE FOREGOING AND KNOWINGLY AND VOLUNTARILY INTEND TO BE BOUND THERETO:

 

MICHAEL J. LOVETT                                                                CHARTER COMMUNICATIONS, INC.

 

 

/s/ Michael J. Lovett                                                                   By:  /s/ Robert E. Quicksilver

 

Date: October 11, 2011                                                               Title:  Executive Vice President and Chief Administrative Officer

 

       Date:  October 11, 2011

 

 

 

 

  

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SUPPLEMENTAL RELEASE

 

CHARTER COMMUNICATIONS, INC. (the “Company”) and MICHAEL J. LOVETT ( “Executive”) hereby enter into this Supplemental Release ("Release") in accordance with the Transition Agreement between the Company and Executive dated as of [October ____, 2011] (the “Agreement”).  Capitalized terms not expressly defined in this Release shall have the meanings set forth in the Agreement:

 

1.           The Executive understands and agrees that the Executive’s execution of this Release within 21 days after (but not before) the Separation Date , without revocation thereof as provided therein, is among the conditions precedent to the Company’s obligation to provide any of the benefits set forth in Section 6 of the Transition Agreement.  The Company will provide such payments or benefits in accordance with the terms of the Agreement once the conditions set forth therein and in this Release have been met.  Executive acknowledges that he would not be entitled to payments and benefits set forth in Section 6 of the Transition Agreement absent the execution and effectiveness of this Release.

 

2.           The term "Released Parties" as used in this Release includes:  (a) the Company and its past, present, and future parents, divisions, subsidiaries, partnerships, affiliates, and other related entities (whether or not they are wholly owned); and (b) the past, present, and future owners, trustees, fiduciaries, administrators, shareholders, directors, officers, partners, agents, representatives, members, associates, employees, and attorneys of each entity listed in subpart (a) above; and (c) the predecessors, successors, and assigns of each entity listed in subparts (a) and (b) above.

 

3.           Executive, and anyone claiming through Executive or on the Executive’s behalf, hereby waive and release the Company and the other Released Parties with respect to any and all claims, whether currently known or unknown, that the Executive now has or has ever had against the Company or any of the other Released Parties arising from or related to any act, omission, or thing occurring or existing at any time prior to or on the date on which the Executive signs this Release.  Without limiting the foregoing, the claims waived and released by the Executive hereunder include, but are not limited to:  (a) all claims arising out of or related in any way to the Executive’s employment, compensation, other terms and conditions of employment, or termination from employment with the Company, including without limitation all claims for any compensation payments, bonus, severance pay, equity, or any other compensation or benefit, and all claims arising under Executive’s Employment Agreement with the Company dated February 1, 2010; (b) all claims that were or could have been asserted by Executive or on Executive’s behalf in any federal, state, or local court, commission, or agency, or under any contract, tort or other common law theory; and (c) all claims that were or could have been asserted by Executive or on his behalf under:  (i) the Age Discrimination in Employment Act; and (ii) any other federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law, including without limitation under any of the following laws, as amended from time to time:  Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981 & 1981a, the Americans with Disabilities Act, the Equal Pay Act, Employee Retirement Income Security Act, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Missouri Human Rights Act, chapter 213 R.S. Mo.

 

  

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Nothing in this Release shall waive or release:  (a) any claim that cannot be waived or released by law; (b) any claim to enforce the Transition Agreement; (c) any claim for any vested benefits to which Executive is otherwise entitled pursuant to the terms and conditions of any of applicable benefit plans; (d) any claim for workers’ compensation or unemployment insurance benefits; or (e) any claim, if any, to indemnification under any applicable law, any Company by-laws, or any director and officer insurance, it being understood and agreed that this Release does not create or expand upon any such rights (if any) to indemnification.

 

4.           Executive confirms that the Executive has not filed any legal or other proceeding(s) against any of the Released Parties, is the sole owner of and has not transferred the claims released herein, and has the full right to grant the releases and agreements in this Release.  In the event of any further proceedings based upon any released matter, none of the Released Parties shall have any further monetary or other obligation of any kind to Executive.

 

5.           EXECUTIVE ACKNOWLEDGES, UNDERSTANDS, AND AGREES THAT:   (a)  EXECUTIVE HAS READ AND UNDERSTANDS THE TERMS AND EFFECT OF THIS RELEASE; (b) EXECUTIVE RELEASES AND WAIVES CLAIMS UNDER THIS RELEASE KNOWINGLY AND VOLUNTARILY, IN EXCHANGE FOR CONSIDERATION IN ADDITION TO ANYTHING OF VALUE TO WHICH THE EXECUTIVE ALREADY IS ENTITLED; (c) EXECUTIVE HEREBY IS AND HAS BEEN ADVISED OF EXECUTIVE’S RIGHT TO HAVE EXECUTIVE’S ATTORNEY REVIEW THIS RELEASE (AT THE EXECUTIVE’S COST) BEFORE SIGNING IT; (d) EXECUTIVE HAS TWENTY-ONE (21) DAYS IN WHICH TO CONSIDER WHETHER TO EXECUTE THIS RELEASE; AND (e) WITHIN SEVEN (7) DAYS AFTER THE DATE ON WHICH EXECUTIVE SIGNS THIS RELEASE, THE EXECUTIVE MAY, AT THE EXECUTIVE’S SOLE OPTION, REVOKE THE RELEASE UPON WRITTEN NOTICE TO THE COMPANY’S GENERAL COUNSEL, AND THE RELEASE WILL NOT BECOME EFFECTIVE UNTIL THIS SEVEN-DAY REVOCATION PERIOD HAS EXPIRED WITHOUT ANY REVOCATION BY EXECUTIVE (THE “EFFECTIVE DATE”).  IF EXECUTIVE REVOKES THIS RELEASE, IT SHALL BE NULL AND VOID, AND EXECUTIVE WILL NOT RECEIVE THE PAYMENTS OR BENEFITS UNDER SECTION 6 OF THE TRANSITION AGREEMENT.

 

THE PARTIES STATE THAT THEY HAVE READ AND UNDERSTAND THE FOREGOING AND KNOWINGLY AND VOLUNTARILY INTEND TO BE BOUND THERETO:

 

MICHAEL J. LOVETT                                                                CHARTER COMMUNICATIONS, INC.

 

_______________________________                                                                By:____________________________________

 

Date: __________________________                                                                Title: _________________________________

 

                                       Date:__________________________________

 

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