Document:

Exhibit
      10.1

    

    

    SEPARATION
      AGREEMENT AND MUTUAL RELEASE

     

    This
      Separation Agreement and Mutual Release (this “Agreement”) is made as of the
      31st day of October 2006 by and between NaturalNano, Inc. (the “Company”) and
      Michael D. Riedlinger (the “Executive”). In consideration of the covenants and
      undertakings set forth in this Agreement, the Company and the Executive,
      intending to be legally bound, covenant and agree as follows:

     

    I.    Resignation.

    

    The
      Executive hereby tenders his resignation as President of the Company and as
      a
      member of the Company’s Board of Directors, effective immediately. The Company
      and the Board of Directors hereby accept such resignation by the Executive,
      effective immediately. As a result, the employment of the Executive with the
      Company will cease effective as of the date hereof, although the Executive
      will
      remain on the payroll through October 31, 2006.

    

    II.    Compensation
      and Benefits.

    

    A.    Severance
      Payments. The
      Company will provide the Executive with severance pay in the amount of
      forty-seven thousand five hundred dollars ($47,500.00), subject to required
      state and federal withholding. Such amount shall be paid in twelve (12) equal
      bi-weekly installments of three thousand nine hundred fifty-eight dollars and
      thirty-three cents ($3,958.33), less applicable state and federal withholding,
      in accordance with the Company’s customary payroll practices, with the first
      installment commencing November 15, 2006. During the time that Executive is
      receiving the aforementioned severance payments, the Executive shall use his
      commercially reasonable efforts to assist the Company in the transition to
      its
      new President and in the completion of the additional duties set forth on
      Exhibit A (the “Additional Duties”), attached hereto.

    

    B.    Health
      Care Benefits.
      The
      Company shall continue medical and dental insurance coverage for the Executive
      until the earlier of (i) April 30, 2007 or (ii) such time as the Executive
      secures employment which provides health insurance coverage substantially
      equivalent to that provided by the Company on the date hereof. The medical
      and
      dental coverage provided by the Company to the Executive hereby shall be
      consistent in all material respects to the coverage provided to him while an
      employee of the Company.

     

    C.    Stock
      Options.
      The
      Executive may exercise all options vested as of the date hereof, in accordance
      with the terms of that certain Non-Qualified Stock Option Award Agreement with
      a
      grant date of March 1, 2005 (the “Award Agreement”) and of the NaturalNano, Inc.
      2005 Incentive Stock Plan (the “Plan”). The Company agrees and acknowledges that
      options to purchase 2,000,000 shares of the Company’s Common Stock at an
      exercise price of $0.05 per share (post-split), which options were granted
      by
      the Company to the Executive pursuant to the Award Agreement have become fully
      vested and are presently exercisable by the Executive. The Company agrees and
      acknowledges that such options may be exercised by the Executive at any time
      through March 1, 2015, that being the Expiration Date as set forth in the Award
      Agreement, and shall have such other benefits as provided in, and shall be
      subject to the terms and conditions of, the Plan. No additional options will
      vest subsequent to the date hereof. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    D.    Other
      Employee Benefit Plans. This
      Agreement shall not affect the amount of the Executive’s vested benefits under
      the employee benefit plans in which he participates (the ”Vested Benefits”). The
      parties also acknowledge that after the date hereof, the Executive is not
      eligible to participate in the Company’s benefit plans except as specifically
      set forth in this Agreement. 

    

    E.    Payment
      of Employment Related Expenses. During
      the Executive’s employment and prior to the date hereof, the Executive incurred
      certain reimburseable expenses, including but not limited to travel expenses.
      The Company shall reimburse the Executive for such expenses which were incurred
      by him on or before the date hereof, upon presentation by the Executive to
      the
      Company of reasonably satisfactory statements and invoices, and subject to
      the
      Company’s normal approval process for reimbursement of expenses. 

    

    F.    Other
      Payments.
      Except
      for the Executive’s final paycheck for his services up to October 31, 2006,
      except for any earned but unused vacation pay, and except as is specifically
      provided herein, the Executive agrees that he has received all salary, benefits,
      bonuses, vacation and sick pay, and all other wages and benefits to which he
      was
      entitled from the Company, and he waives and releases any claim that he has
      not
      received the foregoing payments or benefits.

     

    G.    The
      Executive acknowledges and agrees that the payments and insurance coverage
      set
      forth in Section II (A-F) above, exceed any and all obligations of the Company
      with respect to the Executive’s employment, and the termination of his
      employment with Company, and constitutes sufficient consideration for the
      release of claims set forth in Section III below.

    

    H.    The
      Executive further agrees that he will not, at any time after the date hereof,
      make
      any
      remarks or comments, orally or in writing, to any person or entity which or
      who
      have, or could reasonably be anticipated to have, business dealings with the
      Company, which remarks or comments reasonably could be construed to be
      derogatory or disparaging the Company or any of its 5% or greater shareholders
      known to the Executive, officers, directors, employees, attorneys or agents,
      or
      which reasonably could be anticipated to be damaging or injurious to the
      Company’s reputation or good will or to the reputation or good will of any
      person associated with the Company.
      The
      Company further agrees that neither it nor any of its officers, directors,
      employees, attorneys or agents or anyone acting under the direction of or with
      express authority from the Company will, at any time after the date hereof,
      make
      any remarks or comments, orally or in writing, to any person or entity which
      or
      who have, or could reasonably be anticipated to have, business dealings with
      the
      Executive, which remarks or comments reasonably could be construed to be
      derogatory or disparaging the Executive or any entity with which he may become
      affiliated, or which reasonably could be anticipated to be damaging or injurious
      to the Executive’s reputation or to the reputation or good will of any person
      associated with the Executive.

    

    III.    Mutual General
      Release.

    

    A.    In
      consideration of the undertakings and obligations of the parties, as set forth
      herein, and except for those obligations arising out of this Agreement, the
      parties hereto, for themselves and for their respective officers, directors,
      shareholders, heirs, executors, administrators, successors and assigns, as
      the
      case may be, each hereby covenant not to sue and fully release the other party,
      and its and his past and present parents, subsidiaries and affiliates, and
      its
      past and present directors, shareholders, officers, agents, representatives,
      employees, successors and assigns, as the case may be (hereinafter collectively
      referred to as “releasees”), jointly and individually, from any and all actions,
      causes of action, obligations, liabilities, judgments, suits, debts, sums of
      money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
      controversies, agreements, promises, variances, trespasses, damages, extents,
      executions, claims and demands whatsoever, in law, admiralty or equity, whether
      liquidated or unliquidated, contingent or otherwise, whether specifically
      mentioned or not, which against the releasees, the releasing party ever had,
      now
      has or hereafter can, shall or may have, for, upon or by reason of any matter,
      cause or thing whatsoever from the beginning of the world to the date of
      execution of this Agreement; 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    B.    The
      Executive acknowledges that this Release covers, without limitation, any claims
      arising out of or connected in any way with his employment with the Company
      or
      the termination of that employment, including any claims of discrimination
      on
      the basis of sex, disability, race, color, national origin, ancestry, age
      (including, without limitation, any right or claims under the federal law known
      as the Age Discrimination in Employment Act 29 U.S.C. §621, et seq.), creed,
      handicap, citizenship, ethnic characteristics, sexual or affectional preference
      or marital status and also includes, no matter how denominated or described,
      any
      claims of discrimination under any federal, state or local law, rule, regulation
      or executive order, and any claims of wrongful discharge or termination, breach
      of contract, written or oral, express or implied, breach of promise, public
      policy, retaliation, defamation, impairment of economic opportunity, loss of
      business opportunity, fraud, misrepresentation, or other tort, perceived
      disability, history of disability, unpaid compensation (including, but not
      limited to, salary, wages, benefits, bonuses, severance pay, vacation pay and
      sick leave or personal leave pay) and any claims now known to the Executive
      arising under the Employee Retirement Income Security act of 1974;

    

    C.    Each
      party hereto further acknowledges and agrees that this release extends to all
      claims of every kind and nature whatsoever, known or unknown, suspected or
      unsuspected, and each party acknowledges that it or he, as the case may be,
      may
      hereafter discover facts in addition to or different from those which it or
      he,
      as the case may be, knows or believes to be true with respect to the subject
      matter of this mutual general release, but that it is each parties respective
      intention to fully and finally settle and release hereby, without limitation,
      all such matters as well and, in furtherance of that intention, the foregoing
      release shall be and remain in effect as a full and complete release
      notwithstanding the discovery or existence of such additional or different
      facts.

    

    IV.    Confidential
      Information, Invention and Non-Competition Agreement. 

    

    The
      Executive acknowledges that during the course of his employment with the Company
      he had access to and possession of valuable confidential, proprietary and trade
      secret information. The Executive further acknowledges and agrees that during
      his employment he was bound by, and following the effective date of his
      resignation he will continue to be bound by, the Confidential Information,
      Invention and Non-Competition Agreement, dated January 1, 2005 (the
“Confidentiality Agreement”), for the duration and to the extent provided
      therein. In consideration of the obligations undertaken by the Company pursuant
      to this Agreement, the Confidentiality Agreement is incorporated herein by
      reference and made a part hereof. To the extent that there is any inconsistency
      between this Agreement and the Confidentiality Agreement, the terms of this
      Agreement shall govern.

    

    V.    Insider
      Trading Policy.

    

    The
      Executive agrees to continue to abide by the Company’s Insider Trading Policy in
      effect on the date hereof, for a period of six (6) months from the date
      hereof.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    VI.    Other
      Terms of the Agreement.

    

    A.    The
      Executive agrees that he will use his reasonable efforts to make himself
      available to provide information within his knowledge to the Company and its
      representatives to the extent such information is necessary for the Company
      to
      defend itself in any pending or future litigation, and to testify as necessary
      in such litigation; provided, however, that the Company shall compensate the
      Executive for any costs reasonably incurred by him in connection with his
      compliance with this Section VI(A).

    

    B.    Nothing
      contained in this Agreement, nor its execution by the Company, shall be
      considered or deemed to be an admission by either party, or in the case of
      the
      Company, any of its affiliates, of any wrongdoing or any violation or breach
      of
      any federal, state or municipal law, statute, ordinance, rule, regulation or
      order.

    

    C.    The
      Executive and the Company represent and acknowledge that in executing this
      Agreement they are not relying, and have not relied, upon any representation
      or
      statement by either party, their agents, representatives, or attorneys not
      set
      forth herein, and that this Agreement constitutes the entire agreement between
      the parties. Any oral or written representations, prior agreements, or
      understandings not reflected in this Agreement, including without limitation,
      the employment letter agreement dated January 3, 2005 and Amendment No. 1
      thereto dated September 20, 2005, shall have no force or effect and are
      superseded by this Agreement, except that each of the Confidentiality Agreement,
      the Award Agreement and the Vested Benefits shall remain in full force and
      effect as set forth in Sections II and III of this Agreement.

    

    D.    This
      Agreement shall at all times be construed and governed in accordance with the
      laws of the State of New York. It may not be changed orally. This Agreement
      may
      be executed simultaneously in separate counterparts, each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Any dispute hereunder shall be subject to the jurisdiction and
      venue
      of the courts located in Monroe County, New York.

    

    E.    If
      any
      provision of this Agreement is found by a court of competent jurisdiction to
      be
      void or unenforceable, then such provision shall be severed from the Agreement
      and all other provisions of this Agreement shall remain in full force and
      effect.

    

    F.    No
      promises or agreements modifying the terms of this Agreement shall be binding
      unless in writing and signed by the Executive and the Company with specific
      reference to this Agreement.

    

    G.    By
      signing this Agreement, the Executive acknowledges and agrees that:

    

    
      	 	
              (1.)

            	
              He
                has been afforded a reasonable and sufficient period of time to review
                of
                this Agreement, for deliberation thereon and for negotiation of the
                terms
                thereof; 

            

    

    

    
      	 	
              (2.)

            	
              That
                he has been specifically urged by the Company in writing to consult
                with
                legal counsel of his choice before signing this Agreement and that
                he has
                been represented be counsel of his choice in the negotiation of this
                Agreement;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (3.)

            	
              He
                has carefully read and understands the terms of this
                Agreement;

            

    

    

    
      	 	
              (4.)

            	
              He
                has signed this Agreement freely and voluntarily and without duress
                or
                coercion and with full knowledge and understanding of its significance
                and
                consequences and of the rights relinquished, surrendered, released
                and
                discharged hereunder; and

            

    

    

    
      	 	
              (5.)

            	
              The
                only consideration for signing this Agreement are the terms stated
                herein
                and no other promise, agreement or representation of any kind has
                been
                made to him by any person or entity whatsoever to cause him to sign
                this
                Agreement.

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      witness whereof, the parties have executed this Agreement as of the date first
      above written.

     

    
      	 	 	 	 
	 	 	 	/s/ Michael
              D. Riedlinger
	
            	 	 	
              
Michael
              D. Riedlinger
	
              STATE
                OF NEW YORK    )

              COUNTY
                OF MONROE    ) ss:

            	 	 	 

    

     

    On
      October 31, 2006, before me came Michael D. Riedlinger to me personally known
      and known to me to be the same person described herein and who executed the
      foregoing Instrument, and he duly acknowledged to me that he executed the
      same.

     

    
      	 	 	 	 
	/s/ Mary
              Ellen O’Dell Schantz	 	 	 
	
              
Notary
              Public	 	 	
            
	 	 	 	 
	
              Mary
                Ellen O’Dell Schantz

              Notary
                Public, State of New York

              Qualified
                in Monroe County

              Commission
                Expires Sept. 16, 2010

            	 	 	 

    

     

    
      	 	 	 
	 	NATURALNANO,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Kathleen
              A. Browne
	 	
              
Kathleen
              A. Browne
	 	Chief
              Financial Officer

    

    

    STATE
      OF
      NEW YORK    )

    COUNTY
      OF
      MONROE    ) ss:

     

    On
      October 31, 2006, before me came Kathleen A. Browne, to me personally known
      and
      known to me to be the same person described herein and who executed the
      foregoing Instrument, and he duly acknowledged to me that he executed the
      same.

     

    
      	 	 	 	 
	/s/ Paul
              M.
              LeFrois, Jr.	 	 	 
	
              
Notary
              Public	 	 	
            
	 	 	 	 
	
              Paul
                M. LeFrois, Jr.

              Notary
                Public, State of New York, New York 

              Monroe
                County No. 01LE5019379

              Commission
                Expires 10/19/2009

            	 	 	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    ADDITIONAL
      DUTIES

     

    
      	1.	
              Coordinate
                with the Company’s officers and directors regarding the orderly transfer
                of information and relationships with various
                parties.

            

    

    
      	2.	
              Transition
                of all Company files and all equipment to its main office in Rochester,
                New York, including, but not limited to: computer hard drive, computer
                files, discs, paper files, correspondence (internal and external),
                presentations, planning documents, equipment, contacts (lists,
                identification, relationship and contact information) and software.
                The
                Company will allow the Executive to keep his laptop after transfer
                of
                files.

            

    

    
      	3.	
              Document
                outstanding items and actions
                initiated.

            

    

    
      	4.	
              Coordinate
                transfer of all external material contacts, discussions and negotiations
                initiated or in progress with external
                parties

            

    

    
      	5.	
              Coordinate
                transfer of all intellectual property related materials, documentation
                and
                work in progress.EXHIBIT
        10.1

       

       

    

    AMENDMENT
      TO EMPLOYMENT AGREEMENT

     

    AMENDMENT
      dated as of October 27, 2006 (the “Amendment”) to the Employment Agreement dated
      as of February 14, 2005 (the “Original Agreement”) between Iconix Brand Group,
      Inc. (the “Company” or “Employer”) and Warren Clamen (the
“Employee”).

    

    WHEREAS,
      the Company and the Employee wish, among other things, to continue the
      Employee’s employment with the Company beyond the term currently provided by the
      Original Agreement pursuant to the terms as provided herein;

    

    NOW,
      THEREFORE, in consideration with the mutual covenants and agreements hereinafter
      set forth and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Employer and Employee hereby
      agree
      that the following sections of the Original Agreement are hereby amended as
      follows:

    

    1.     
      The
      Term,
      as defined in Section 3, shall be two years from the date hereof and end on
      the
      October 27, 2008. 

    

    2.     
      The
      compensation provisions of Section 4 shall be modified to read that the “Company
      shall pay to the Employee an annual salary of $275,000 for the first year of
      the
      Term and of $300,000 for the second year of the Term paid in accordance with
      the
      Company’s payroll practices and procedures in effect.” 

    

    3.     
      The
      compensation provisions of Section 4 shall be further modified to add the
      following sentence at the end: 

    

    “The
      Company shall issue to the Employee that number of shares of restricted stock
      under the Company’s 2006 Equity Incentive Plan equal to $200,000, calculated
      using the closing price of the stock on October 27, 2006, subject to
      restrictions on the full enjoyment of such shares as set forth a separate
      restricted stock agreement, such restrictions to lapse with respect to one-half
      (1⁄2) of such shares on October 27, 2007, and with respect to one-half (1⁄2) of such
      shares on October 27, 2008, in accordance with the terms and conditions of
      the
      Restricted Stock Agreement.”

    

    4.     
      Section
      9
      shall be deleted and replaced with the following: 

    

    “If
      the
      Company terminates your employment without cause within 12 months after a Change
      in Control (as defined in herein), then the Company shall pay to you in complete
      satisfaction of its obligations under this Agreement, as severance pay and
      as
      liquidated damages (because actual damages are difficult to ascertain), in
      a
      lump sum, in cash, within 15 days after the date of your termination, an amount
      equal to $100 less than three times your “annualized includable compensation for
      the base period” (as defined in Section 280G of the Internal Revenue Code of
      1986); provided,
      however,
      that if
      such lump sum severance payment, either alone or together with other payments
      or
      benefits, either cash or non-cash, that you have the right to receive from
      the
      Company, including, but not limited to, accelerated vesting or payment of any
      deferred compensation, options, 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      EXHIBIT
        10.1

       

       

    

    stock
      appreciation rights or any benefits payable to you under any plan
      for the benefit of employees, which would constitute an “excess parachute
      payment” (as defined in Section 280G of the Internal Revenue Code of 1986), then
      such lump sum severance payment or other benefit shall be reduced to the largest
      amount that will not result in receipt by you of a parachute payment. A “Change
      in Control” shall mean any of the following:

     

    (1)     
      any
      consolidation or merger of the Company in which the Company is not the
      continuing or surviving corporation or pursuant to which shares of the Company’s
      common stock would be converted into cash, securities or other property, other
      than a merger of the Company in which the holders of the Company common stock
      immediately prior to the merger have the same proportionate ownership of common
      stock of the surviving corporation immediately after the merger;

     

    (2)     
      any
      sale,
      lease, exchange or other transfer (in one transaction or a series of related
      transactions) of all or substantially all of the assets of the
      Company;

     

    (3)     
      any
      approval by the stockholders of the Company of any plan or proposal for the
      liquidation or dissolution of the Company.” 

    

    Other
      than as specifically amended hereby, the Original Agreement shall remain in
      full
      force and effect unamended by this Amendment.

    

    IN
      WITNESS WHEREOF, the Company and Employee have executed this agreement as of
      the
      date above written.

    

    
      	
              ICONIX
                BRAND GROUP, INC.

            	 
	 	 
	
              By:

            	
              /s/
                Neil
                Cole                                               
                 

            	 	
              /s/
                Warren
                Clamen                                             
                

            
	 	 	
              WARREN
                CLAMEN

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