EXHIBIT 10.3
SETTLEMENT AND RELEASE AGREEMENT
This SETTLEMENT AND RELEASE AGREEMENT (the "Settlement Agreement") is
made and entered into by and between Raymond J. Skiptunis (the "Executive") and
Power Efficiency Corporation (the "Corporation") is dated June 6, 2003 (the
"Effective Date").
WITNESSETH
WHEREAS, Executive is presently employed by the Corporation as Chief
Executive Officer pursuant to an Employment Agreement dated November 7, 2002;
WHEREAS, Executive and the Corporation have engaged in discussions and
negotiations concerning Executive's continued employment by the Corporation as
Chief Financial Officer;
WHEREAS, in an effort to preserve Executive's employment with the
Corporation and to provide certainty for all parties, the Corporation desires to
offer Executive continued employment as Chief Financial Officer of the
Corporation, pursuant to a new employment agreement (the "Employment
Agreement"), and Executive desires to accept this Employment Agreement and the
offer of continued employment on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and promises herein
contained, the parties agree as follows:
1. New Employment Agreement.
In exchange for Executive's release of claims and other promises as
described below, and upon the Effective Date of this Settlement Agreement, the
Corporation agrees to enter into the Employment Agreement and continue
Executive's employment pursuant to its terms. Executive acknowledges and agrees
that the Corporation's willingness to enter into the Employment Agreement
constitutes valuable and sufficient consideration for his promises contained
herein, and provides him with benefits and other consideration to which he would
not otherwise be entitled.
2. Release Terms.
In exchange for the Corporation's promise to continue his employment
pursuant to the Employment Agreement and for other valuable consideration,
Executive agrees to the following.
2.1 General Release of All Claims. Executive, on behalf of
himself, his heirs, assigns, estate and trustees, hereby releases and forever
discharges the Corporation, its parents, stockholders, subsidiaries, affiliates
and investors, and the officers, directors, trustees, employees, agents,
assigns, representatives, attorneys, insurers of each of these entities as well
as their employee benefit plans and the trustees, administrators and
parties-in-interest of such plans and all persons or entities acting by,
through, under or in concert with any of the foregoing persons or entities
(collectively "Releasees"), of and from any and all liabilities, claims,
obligations, promises, agreements, demands, damages, actions, charges,
complaints, cost, losses, debts and expenses (including attorney's fees and
costs), causes of action of every kind, known or unknown, disclosed or
undisclosed, matured or unmatured, including, but not limited to, all claims
under state, federal, or common law, whether based in contract, tort, statute or
otherwise, and including but not limited to claims of discrimination, harassment
or retaliation and claims related to or arising from the Employment Agreement
between Executive and the Corporation dated November 7, 2002. The foregoing
release shall not apply to any claims based on any actions, omissions or events
which occur after the Effective Date of this Settlement Agreement.
2.2 Express Release of Claims for Age Discrimination. Without
limiting the scope of Section 2.1, Executive specifically acknowledges that his
releases under this Settlement Agreement include, without limitation, a full and
complete waiver of any and all claims and rights he may have under the federal
Age Discrimination in Employment Act ("ADEA") which prohibits discrimination
against employees because of their age. Executive understands that, as a result
of his execution of this Settlement Agreement, he will be forever barred from
asserting against Releasees any claims for age discrimination based on actions
or events occurring on or before the Executive signs this Settlement Agreement.
2.3 Covenant Not to Pursue Other Complaints. Executive
represents that he will not initiate, file, prosecute or pursue any claim,
complaint or charge against any of the Releasees with any agency or body that
licenses, regulates, or otherwise monitors the activities of any of the
Releasees, or with any other local, state or federal agency, court or
arbitration panel, based on any occurrences or events which precede the date he
signs this Settlement Agreement. If any such association, agency or court
assumes jurisdiction of any such complaint, claim or charge against any of the
Releasees on behalf of Executive, he will request such association, agency, or
court to withdraw from the matter. Notwithstanding the foregoing, nothing in
this Settlement Agreement shall be construed as prohibiting Executive from
seeking to enforce the terms of this Agreement or challenging the validity of
his waiver therein of claims under the ADEA.
2.4 Waiver of Unknown Claims. There is a risk that subsequent
to the execution of this Settlement Agreement, Executive will incur or suffer
violations of personal rights or other losses or damages which are in some way
related to occurrences or events which precede the signing of this Settlement
Agreement by Executive, but which are unknown and unanticipated at the time this
Settlement Agreement is signed. Executive shall assume these risks, and the
releases in this Settlement Agreement shall apply to all unknown or
unanticipated results of any occurrences or events which precede the signing of
this Settlement Agreement, as well as those known and anticipated; the releases
herein shall not apply to events or occurrences which take place after the date
on which Executive signs this Settlement Agreement. Executive hereby waives all
rights under California Civil Code Section 1542, which section reads as follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor.
2.5 No Admission of Liability. Executive acknowledges and
agrees in good faith that this Settlement Agreement is the result of a
compromise and shall never at any time or for any purpose be considered as an
admission of liability or responsibility of the parties hereby released, who
continue to deny such liability and to disclaim such responsibility.
3. Timing and Revocation.
3.1 Consideration Period and Advice of Counsel. Executive
acknowledges that he has been afforded twenty-one (21) days to consider this
Settlement Agreement, its benefits, and its consequences. He understands that he
has the option of signing this Settlement Agreement at any time before the end
of the twenty-one (21) day period, but that any election to do so is completely
within his discretion. Executive further acknowledges that he has been advised
that he may seek the advice of an attorney before signing this Settlement
Agreement, and that he has had a full and adequate opportunity to do so.
3.2 Revocation Period. It is understood and agreed by
Executive that he will have seven (7) days after signing this Settlement
Agreement to revoke his release to any possible age discrimination claims in a
writing which must be received by the Corporation before the expiration of the
seven (7) day period to be effective. The age discrimination provisions of this
Settlement Agreement will not become effective and enforceable until the eighth
(8th) calendar day after the Executive has signed it and providing that he has
not previously revoked his assent in writing. In the event the Executive timely
revokes his assent to the age discrimination claims of this Settlement Agreement
in writing, such revocation shall also be deemed an effective and final
revocation of his acceptance of the terms of the Employment Agreement, and all
rights and obligations of the parties under the Employment Agreement shall also
never mature or be immediately extinguished without recourse.
4. No Reliance On Other Representations.
Executive represents and acknowledges that in executing this Settlement
Agreement, he does not rely and has not relied upon any representation or
statements made by any of the Releasees with regard to the subject matter,
basis, or effect of this Agreement or otherwise beyond those explicitly set
forth in this Settlement Agreement. Executive represents that he has carefully
read and fully understands all provisions of this Settlement Agreement,
including the Employment Agreement, and that he is voluntarily entering into
this Settlement Agreement after adequate time to consider its terms.
5. Miscellaneous.
In further consideration of this Settlement Agreement, Executive and
Corporation agree as follows:
(a) The terms mentioned in the preceding paragraphs of this
Settlement Agreement are the entire and only consideration for it, and
each party shall be responsible for payment of his or its own
attorney's fees, costs, and legal expenses, if any;
(b) The language of all parts of this Settlement Agreement
shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against any of the parties;
(c) This Settlement Agreement shall be construed and
interpreted in accordance with New York law, without regard to the
choice of law rules of any jurisdiction;
(d) The various provisions of this Settlement Agreement are
severable and if any is unenforceable, at law or in equity, that
provision may be severed, leaving the others remaining in full force
and effect;
(e) Paragraph headings contained in this Settlement Agreement
are for convenience only and shall not be considered for any purpose in
construing this Agreement;
(f) This Settlement Agreement may only be modified or amended
by a written instrument which must attach a copy of this Agreement, and
be signed by the parties hereto; and
(g) This Settlement Agreement contains the entire agreement
between the parties to it with regard to the matters set forth in it
and shall be binding upon and inure to the benefit of the executors,
administrators, personal representatives, heirs, successors and assigns
of each. This Agreement fully supersedes and supplants any and all
negotiations, and all prior written, oral, or implied agreements or
understandings between the parties pertaining to the subject matters
hereof.
PLEASE READ CAREFULLY. THIS SETTLEMENT AND RELEASE
AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
Raymond J. Skiptunis, individually
___________________________________
POWER EFFICIENCY CORPORATION,
a Delaware Corporation
By: _______________________________
Name: Steven Strasser
Title: Chairman of the Board