Exhibit 99(d)(iii)
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (this "Agreement") is made
and entered into this 19th day of January, 2000, by Trigen Energy Corporation, a
Delaware corporation (the "Company"), and Thomas R. Casten (the "Employee").
WITNESSETH:
WHEREAS, the Employee and the Company are parties to an
Employment Agreement dated as of August 10, 1994 (the "Employment Agreement");
WHEREAS, the Employee desires to resign his employment with the
Company and the Company is willing to accept the Employee's resignation, subject
to the terms and conditions of this Agreement set forth below; and
WHEREAS, the Company has made certain awards to the Employee of
shares of restricted common stock (the "Common Stock") of the Company, par value
$.01 per share (the "Restricted Stock"), and options (the "Options") to acquire
the Common Stock, in each case, pursuant to the Trigen Energy Corporation 1994
Stock Incentive Plan (the "Plan") (the number of vested and unvested Options and
the number of shares of Restricted Stock are set forth on Exhibit A hereto).
NOW THEREFORE, the Company and Employee, in consideration of the
covenants and agreements herein expressed, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
agree as follows:
1. RESIGNATION. The Employee hereby resigns from all of his
positions as a director and officer of the Company and all of its subsidiaries
and affiliates effective as of the date hereof (the "Termination Date").
Notwithstanding the foregoing, the Employee shall be entitled to remain a
general partner of the Trenton District Energy Company ("TDEC") in accordance
with the terms of the governing instruments of TDEC; PROVIDED, HOWEVER, that the
Employee shall in no way interfere with or participate in the management or
day-to-day operations of TDEC. From and after the Termination Date, the Employee
shall not be authorized to incur or commit to any expenses, obligations or
liabilities on behalf of the Company, its subsidiaries or affiliates.
2. SEVERANCE PAYMENTS. For and in consideration of all of the
Employee's acknowledgments, releases and covenants set forth in this Agreement,
the Employee shall be entitled to the following compensation and benefits
(collectively, the "Severance Payments"):
a) INITIAL SALARY CONTINUATION. In accordance with the
terms of the Employment Agreement, the Company shall continue to pay the
Employee 1/12 of his annual base salary at the rate in effect on the Termination
Date for each completed month
of service until August 10, 2000. Such payments shall be made in accordance with
the normal payroll procedures of the Company and be pro-rated for any partial
payroll period.
b) SUPPLEMENTARY SEVERANCE AND BENEFITS.
(i) ADDITIONAL SALARY CONTINUATION. The Company
shall continue to pay the Employee 1/12 of his annual base salary at the rate in
effect on the Termination Date for each completed month of service from August
11, 2000 until the expiration of the Severance Period (as defined below). Such
payments shall be made in accordance with the normal payroll procedures of the
Company and be pro-rated for any partial payroll period. "Severance Period"
shall mean the period ending on the earlier of (A) the second anniversary of the
Termination Date, (B) the date the Employee breaches any of his obligations
under this Agreement or (C) the date the Employee becomes a participant in a
proxy contest or solicits proxies to challenge actions recommended by the
Company's Board of Directors.
(ii) RESTRICTED STOCK. Subject to Section 2(f)
below, the shares of the Restricted Stock which are not vested as of the
Termination Date shall remain outstanding and become vested upon the earlier of
(A) the attainment by the Company of cumulative diluted earnings of $2.08 per
share on the Company's Common Stock in any four consecutive fiscal quarters, (B)
the second anniversary of the Termination Date or (C) such earlier time as
vesting occurs under the Plan. Notwithstanding the foregoing, immediately before
the "Effective Time" (as such term is defined in the Agreement and Plan of
Merger, dated as of January 19, 2000, among Elyo S.A., T Acquisition Corp. and
the Company (the "Merger Agreement")), 100% of the shares of Restricted Stock
shall be canceled and the Company shall, subject to Section 2(f) below, make a
cash payment to the Employee on the "Closing Date" (as such term is defined in
the Merger Agreement) equal to the product obtained by multiplying 9,550 by the
"Merger Consideration" (as such term is defined in the Merger Agreement), and on
the second anniversary of the Closing Date, the Company shall, subject to
Section 2(f) below, make a cash payment to the Employee equal to product
obtained by multiplying 28,649 by the Merger Consideration.
(iii) OPTIONS. Subject to Section 2(f) below, all
Options which are not vested as of the Termination Date shall remain outstanding
and continue to vest and become exercisable in accordance with the vesting
schedule in effect immediately prior to the Termination Date as if the Employee
had remained continuously employed by the Company following the Termination
Date, provided, however, that all Options to the extent not vested on the second
anniversary of the Termination Date shall become vested on such anniversary. All
Options shall remain exercisable for a period of thirty (30) days following the
second anniversary of the Termination Date, after which all such Options shall
be canceled. Notwithstanding the foregoing, all Options that remain outstanding
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immediately before the Effective Time, if any, shall be treated in accordance
with the terms of the Merger Agreement.
(iv) BENEFITS CONTINUATION. Subject to Section 2(f)
below, for a period of two years following the Termination Date or, if earlier,
until the Employee obtains new employment, the Company shall permit the Employee
to continue to participate in the insurance plans (including life, disability,
health and medical) provided by the Company to its employees from time to time
in accordance with the terms of such plans as if the Employee continued to be
employed by the Company for such period. Subject to Section 2(f) below, for a
period of two years following the Termination Date or, if earlier, until the
Employee obtains new employment, the Company will provide the Employee such
administrative support that he may reasonably request, including reasonable
access to the Company's information technology department for technical support
for his personal computer and the reasonable assistance of Mrs. Linda Prime or,
if at no additional cost to the Company, a different senior administrative
assistant if Mrs. Prime is no longer employed by the Company. Subject to Section
2(f), the Employee shall be entitled to retain the office furniture, laptop
computer and personal computer which the Company made available to the Employee
immediately prior to the Termination Date.
c) ACCRUED VACATION. Within ten (10) days of the date
hereof, the Company shall pay the Employee a lump sum cash payment of $31,976.92
in respect of the Employee's accrued vacation through the Termination Date.
d) OUTPLACEMENT/FINANCIAL ADVISOR SERVICES. For a period
of one (1) year following the Termination Date, the Company shall provide the
Employee outplacement and financial advisor services at a cost not to exceed
$25,000 on a pre-tax basis, through the outplacement service firm and financial
advisor selected by the Employee.
e) 1999 BONUS. The Employee shall be entitled to receive
an annual cash bonus in respect of the Company's 1999 fiscal year in accordance
with the terms of the Company's annual incentive plan in effect as of December
31, 1999. The Company shall disclose the bonus calculation to the Employee. If
as of the date hereof, the Employee had a good faith belief that certain
"extraordinary items" or "asset impairment" write-offs that are taken into
account in such calculation should not have been so accounted for and the
Employee can demonstrate that the treatment of such item or write-off was
inconsistent with the Company's past practices, the Company shall recalculate
the Employee's bonus; PROVIDED, HOWEVER, that the Employee acknowledges that the
Company included a reserve of $3 million in its latest 1999 forecast for the
write-off of certain assets located in London, Canada and agrees that, if such
write-down is taken into account in the Company's 1999 financial statements and
is used to compute the 1999 bonuses of the other incentive plan participants, it
shall be taken into account in
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computing the Employee's bonus. Such bonus shall be paid to the Employee at the
time the Company pays bonuses in respect of fiscal 1999 to all annual incentive
plan participants.
f) FORFEITURE OF THE SEVERANCE PAYMENTS. If the
Severance Period expires prior to the Second Anniversary of the Termination
Date, the Company's obligations to make any payments or to provide any benefits
under Section 2(b) shall immediately cease and all of the unexercised Options
shall be canceled and all of the shares of the Restricted Stock shall be
immediately forfeited.
g) NO MITIGATION. The Employee shall not be required to
mitigate the amount of any payment or benefit contemplated by this Section 2.
h) OTHER PLAN. The Company shall satisfy its obligations
to the Employee under the Omnibus Deferral Program in accordance with the terms
thereof.
3. WITHHOLDING. The Company shall have the right to deduct
from any amounts payable under this Agreement or otherwise any taxes or other
amounts required by law to be withheld.
4. EMPLOYEE RELEASE. In consideration of this Agreement, the
Employee agrees to release and forever discharge the Company, its stockholders,
subsidiaries, directors, officers and employees, and any affiliates, agents,
representatives, successors, and assigns of any of the foregoing, including Elyo
S.A., Suez Lyonnais des Eaux, Tractebel S.A./N.V., and Societe Generale de
Belgique, and their respective affiliates, stockholders, officers and directors
(collectively referred to as the "Releasees"), from and against any and all
obligations, liabilities, damages, costs, claims, complaints, charges, or causes
of actions in law or equity (collectively "Claims") that the Employee or his
heirs, administrators, successors, or assigns may now have or may ever have
against any Releasee, whether accrued, absolute, contingent, unliquidated or
otherwise, and whether known or unknown on the date hereof, and which have or
may have arisen out of any act or omission occurring, or state of facts
existing, prior to the date of execution of this Agreement, in any way related
to the Employee's employment with, and services as a director of, the Company
and its affiliates and the termination thereof, or in connection with the
Employee's ownership of any securities of the Company or any of its affiliates,
including, without limitation, (i) Claims arising under the Employment Agreement
or any arrangement, plan, program, or policy for employee benefits, with the
exception of any tax qualified plans under which the Employee has a vested
accrued interest, (ii) any other Claims related to the Employee's employment
with the Company or the termination of that employment and (iii) Claims based on
federal, state, or local law or regulation or the common law, including but not
limited to, Claims in any way related to Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Equal Pay Act, the Fair
Labor Standards Act, the Americans with Disabilities Act, the Employee
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Retirement Income Security Act of 1974, as amended, the New York Human Rights
Law, and all other applicable state and local labor and employment laws
(including all laws concerning unlawful and unfair labor and employment
practices), breach of contract, wrongful discharge, defamation or intentional
infliction of emotional distress. If and to the extent a court of competent
jurisdiction shall determine any part or portion of the foregoing release to be
invalid or unenforceable, the same shall not affect the remainder of the release
which shall be given full effect without regard to the invalid part or portion
of the release.
5. EMPLOYEE ACKNOWLEDGMENT. Employee acknowledges that he: (i)
has been given the opportunity to consider the terms of this Agreement for more
than twenty-one (21) days and has determined that it is in his best interest to
execute this Agreement on the date hereof; (ii) is waiving claims under the Age
Discrimination in Employment Act; (iii) has been advised to consult with legal
counsel of his own choosing prior to the execution of this Agreement; (iv) fully
understands the terms and conditions contained herein; (v) has entered into this
Agreement of his own free will and was not under any undue pressure or duress;
(vi) is not waiving rights or claims that may arise after the date this
Agreement is executed; (vii) has received as consideration for the waivers
contained herein money and other benefits in addition to that which he is
already entitled; (viii) understands that for a period of seven (7) days
following the execution of this Agreement that he may revoke his waiver and
release of any claims under the Age Discrimination in Employment Act. In the
event the Employee so revokes his waiver and release of claims under the Age
Discrimination in Employment Act, the Employee shall not be entitled to any of
the payments or benefits provided in Section 2(b) hereof and in all other
respects this Agreement shall remain in full force and effect.
6. ADDITIONAL COVENANTS.
a) NON DISPARAGEMENT. The Employee shall not make or
publish any negative or disparaging statements, comments or remarks (whether
written or oral) regarding (i) the Company, its subsidiaries, or their directors
or officers, Elyo S.A., Suez Lyonnais des Eaux, Tractebel S.A./N.V., or Societe
Generale de Belgique, and (ii), any person that the Employee knows to be a
director, officer, employee or affiliate of any of the persons or entities named
in clause (i). Except in furtherance of the Employee's employment after the date
hereof, which employment does not violate Section 6(c) hereof, the Employee
further agrees that he shall not discourage, or attempt to discourage, any
person, firm, corporation or business entity from doing business with, or
utilizing the services of, any of (iii) the Company, its subsidiaries, or their
directors, officers or employees, Elyo S.A., Suez Lyonnais des Eaux, Tractebel
S.A./N.V., or Societe Generale de Belgique and (iv) any person that the Employee
knows to be a director, officer, employee or affiliate of any of the persons or
entities named in clause (iii). The Company, its subsidiaries, their officers
and directors and Elyo S.A., Suez Lyonnais des
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Eaux, Tractebel S.A./N.V., and Societe Generale de Belgique and their officers
and directors shall not make or publish any negative or disparaging statements,
comments or remarks (whether written or oral) regarding the Employee.
b) UNAUTHORIZED DISCLOSURE. The Employee agrees and
understands that in the Employee's position with the Company, the Employee has
been exposed to and has received information relating to the confidential
affairs of the Company, its subsidiaries and affiliates, including but not
limited to technical information, intellectual property, business and marketing
plans, strategies, customer information, other information concerning the
products, promotions, development, financing, expansion plans, business policies
and practices of the Company, its subsidiaries and affiliates, and other forms
of information considered by the Company to be confidential and/or in the nature
of trade secrets ("Confidential Information"). The term Confidential Information
shall not include any information which is known, or becomes known, to the
general public through no wrongful act on the part of the Employee. The Employee
agrees that from and after the date of this Agreement, the Employee will not
disclose such Confidential Information, either directly or indirectly, to any
third person or entity without the prior written consent of the Company. In the
event that the Employee becomes legally required to disclose any Confidential
Information, he will provide the Company with prompt notice thereof so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 6(b) to permit a particular
disclosure. In the event that such protective order or other remedy is not
obtained, or that the Company waives compliance with the provisions of this
Section 6(b) to permit a particular disclosure, the Employee will furnish only
that portion of the Confidential Information which he is legally required to
disclose and, at the Company's expense, will cooperate with the efforts of the
Company to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information. This
confidentiality covenant has no temporal, geographical or territorial
restriction. The Employee will promptly supply to the Company all property,
keys, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical
data or any other tangible product or document which has been produced by,
received by or otherwise submitted to the Employee during the Employee's
employment with the Company.
c) NON-COMPETITION. By and in consideration of the
Company's entering into this Agreement and the payments to be made and benefits
to be provided by the Company hereunder, the Employee agrees that he will not
for a period of two years following the Termination Date, directly or
indirectly, own, manage, operate, join, control, be employed or retained as a
consultant by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including but not limited to holding any
position as a shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor in (other than in TDEC in a
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manner not prohibited by Section 1 hereof), any "Restricted Enterprise" (as
defined below) doing or proposing to do business in any of the territories in
which, as of the Termination Date, the Company or its subsidiaries have or are
developing operations; PROVIDED, that in no event shall the passive ownership as
an inactive investor of less than 5% of the outstanding equity securities of any
issuer (other than the Company, except for shares owned or subject to Options
held on the date hereof) whose securities are registered under the Securities
Exchange Act of 1934, as amended, standing alone, be prohibited by this Section
6(c). For purposes of this Section 6(c), the term "Restricted Enterprise" shall
mean any person, corporation, partnership or other entity that engages, directly
or indirectly, in the development, ownership or operation of commercial or
industrial energy systems, including, but not limited to, district heating or
cooling, cogeneration relating to industrial and district heating and cooling,
or the provision of building management services with respect to heating,
ventilating or air conditioning.
d) NON-SOLICITATION. The Employee shall not, and shall
not cause or encourage any other person to, interfere with or harm, or attempt
to interfere with or harm, the relationship of the Company or any of its
subsidiaries or affiliates with, or endeavor to entice away from the Company or
any of its subsidiaries or affiliates, or hire or retain as a consultant or
advisor, any person who was an employee of the Company, or any of its
subsidiaries or affiliates on or within six month prior to the Termination Date,
other than an individual who has not been employed by the Company, or any of its
subsidiaries or affiliates for more than one year following such individual's
termination.
e) COOPERATION. The Employee agrees to reasonably
cooperate with the Company, its subsidiaries and affiliates and to be reasonably
available to the Company, its subsidiaries and affiliates with respect to past,
continuing and/or future matters arising out of the Employee's employment or any
other relationship with the Company, its subsidiaries and affiliates, whether
such matters are business-related, legal (including litigation) or otherwise;
provided such cooperation does not materially interfere with his new full time
employment. The Company shall reimburse the Employee for all reasonable
out-of-pocket expenses incurred in connection with such cooperation.
f) NO EXISTING LITIGATION. The Employee represents that
with respect to any act or omission occurring, or state of facts existing, on or
prior to the date of execution of this Agreement, he has not filed any
complaints, charges or lawsuits against any Releasee with any government agency
or any court or other tribunal.
g) REMEDIES. The Employee agrees that any breach of the
terms of Section 6(a), (b), (c) or (d) would result in irreparable injury and
damage to the Company, its subsidiaries and/or affiliates for which the Company,
its subsidiaries and/or affiliates would have no adequate remedy at law; the
Employee therefore also agrees that in the event of said breach or any threat of
breach, the Company, its subsidiaries and/or
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affiliates, as applicable, shall, in addition to the remedies provided in
Section 2(f) above, be entitled to an immediate injunction and restraining order
to prevent such breach and/or threatened breach and/or continued breach by the
Employee and/or any and all persons and/or entities acting for and/or with the
Employee, without having to prove damages, in addition to any other remedies to
which the Company, its subsidiaries and/or affiliates may be entitled at law or
in equity. The terms of this Section 6(g) shall not prevent the Company, its
subsidiaries and/or affiliates from pursuing any other available remedies for
any breach or threatened breach hereof, including but not limited to the
recovery of damages from the Employee and enforcing the provisions of Section
2(f) of this Agreement. The Employee and the Company further agree that the
provisions of the covenants contained in Section 6(a), (b), (c) and (d) are
reasonable and necessary to protect the businesses of the Company, its
subsidiaries and affiliates because of the Employee's access to Confidential
Information and his material participation in the operation of such businesses.
The Employee acknowledges that the Company would not have entered into this
Agreement absent the inclusion of Section 6(a), (b), (c) and (d). Should a court
or arbitrator determine, however, that any provision of the covenants contained
in this Section 6 are not reasonable or valid, either in period of time,
geographical area, or otherwise, the parties hereto agree that such covenants
should be interpreted and enforced to the maximum extent which such court or
arbitrator deems reasonable or valid.
The Company agrees that any breach of this Agreement by the
Company or its affiliates shall result in the immediate acceleration of all
amounts due the Employee. The terms of this Section 6(g) shall not prevent the
Employee from pursuing any other available remedies for any breach or threatened
breach hereof, including but not limited to the recovery of damages and
enforcing the provisions of Section 6(a) hereof.
The existence of any claim or cause of action by the Employee
against the Company, its subsidiaries and/or affiliates, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants contained in this Section 6.
h) TDEC. In the event TDEC refinances or restructures
its debt obligations, the Company shall use its good faith efforts to allocate
sufficient debt basis to the Employee so that the Employee does not recognize
income as a result of such refinancing or restructuring or offer the Employee
the opportunity to guaranty sufficient debt to avoid income recognition on such
refinancing or restructuring, but only if, in the sole discretion of the
Company, such efforts (i) could not adversely impact the Company or its
affiliates or TDEC, (ii) are consistent with the Company's and TDEC's
obligations to their securityholders, (iii) are permitted by all applicable laws
and regulations and (iv) are commercially reasonable; it being understood that
the foregoing shall in no way impose any obligations upon the Company or TDEC to
engage in or to refrain from
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engaging in any transaction, including, but not limited to, those impacting
TDEC's capital structure.
7. NO ADMISSIONS. Nothing in this Agreement shall be construed
as an admission by any Releasee of any liability on its part under any federal,
state, or local law or regulation or the common law. The Employee also
acknowledges that he has had the opportunity to consult with an attorney prior
to signing this Agreement, and that he has read and understood all of the
provisions of this Agreement.
8. ENTIRE AGREEMENT. This Agreement, the agreements governing
the Options and Restricted Stock as amended by this Agreement and the letter
agreement dated the date hereof between Elyo S.A. and the Employee, constitute
the entire agreement between the parties with respect of the subject matter
hereof and supersedes any and all other agreements either oral or in writing
between the parties hereto with respect to the subject matter hereof, including,
but not limited to, the Employment Agreement, and contain all of the covenants
and agreements between the parties with respect to said matters. Each party to
this Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any Releasee, or anyone
acting on behalf of any Releasee, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Agreement shall be
valid or binding.
9. BINDING EFFECT. This Agreement shall be binding upon any
and all successors and assigns of the Employee and the Company.
10. GOVERNING LAW. Except for issues or matters as to which
federal law is applicable, this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof.
11. SEVERABILITY. If and to the extent that any court of
competent jurisdiction holds any provision or part of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
12. HEADINGS. The headings contained herein are solely for the
purpose of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two
counterparts.
14. PRESS RELEASE; CONFIDENTIALITY. Subject to applicable law,
the Parties shall mutually agree on the form of any press release relating to
the Employee's resignation from the Company. Other than with respect to
information provided in any
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such press release or required to be disclosed by court order, the Employee
agrees not to disclose the terms of this Agreement to any person or entity,
other than the Employee's immediate family and financial or legal advisors who
agree to be bound by this confidentiality provision.
15. ARBITRATION. Except as qualified below, any dispute arising
under, out of or in connection with this Agreement shall be submitted to binding
arbitration in the City of New York by and in accordance with the rules and
procedures of the American Arbitration Association. The decision of the
arbitrator(s) shall be final and binding on all parties and judgment may be
entered thereon in any court. The Employee acknowledges that the Company's
remedy at law for any breach or threatened breach by the Employee of Sections
6(a), (b), (c) or (d) will be inadequate. Therefore, the Company shall be
entitled to injunctive and other equitable relief from a court of law or other
tribunal restraining the Employee from violating those covenants until such time
as a final and binding determination is made by the arbitrator(s).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and date indicated below.
THOMAS R. CASTEN
/S/ THOMAS R. CASTEN
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Dated: JANUARY 19, 2000
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TRIGEN ENERGY CORPORATION
By: /S/ RICHARD E. KESSEL
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Title: EXECUTIVE VICE PRESIDENT
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Dated: JANUARY 19, 2000
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Exhibit A
Separation Agreement and Release
Shares of Restricted Stock 38,199
Shares Underlying Vested and Unvested Options 75,900