SEPARATION, SEVERANCE AND RELEASE AGREEMENT
Exhibit
10.1
THIS
SEPARATION, SEVERANCE AND RELEASE AGREEMENT (the “Agreement”)
is made and entered into by and between TechPrecision Corporation (hereinafter the “Company”)
and Xxxxx Xxxxxx (“Employee”),
as of March 31, 2009 (the “Effective
Date”). Company and Employee are each a “Party” and
together, the “Parties”.
RECITALS
WHEREAS,
Employee and the Company are parties to an Employment Agreement dated April 1,
2007 (the “Employment
Agreement”) in connection with his employment with the
Company;
WHEREAS,
Employee has resigned from his employment with the Company, effective March 31,
2009 (the “Resignation
Date”), and Employee shall not be entitled to payments under the
Employment Agreement related to his separation of employment;
WHEREAS,
the Parties desire to enter into an Agreement whereby Employee will be able to
receive certain payments to which he is not otherwise entitled upon resignation
of his employment, and he will make himself available and perform transition
services when and as needed for three months following the Resignation
Date.
NOW
THEREFORE, in consideration of the covenants and promises contained herein, the
Parties hereto agree as follows:
1. Agreement and Acknowledgment
By
Employee. Employee hereby acknowledges that he has resigned from his
employment with Company as of the Resignation Date. In exchange for
the payments and other consideration described in Section 2 below, Employee
agrees to be bound by the terms of this entire Agreement.
2. Agreements By the
Company. Conditioned on Employee not breaching any of its
representations or covenants hereunder, the Company agrees to the
following:
a. the
Company shall make severance payments to Employee during the twelve (12) months
after the expiration of the Revocation Period (as defined in Section 14) (the
“Severance
Period”) in a gross amount of up to $162,500.04 which amount shall be
subject to applicable tax withholdings and shall be paid as
follows:
(i) during
the first six (6) months of the Severance Period, the Company shall pay Employee
at a gross monthly rate of $16,666.67; and
(ii) during
the remaining six (6) months of the Severance Period,
the Company shall pay Employee at a gross monthly rate of
$10,416.67.
All such
amounts shall be payable according to the Company’s normal payroll schedule,
commencing on the first regular payroll date during the Severance
Period.
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3. Transition
Services.
a. As of the
Effective Date and for three (3) months thereafter (the “Transition
Period”),
Employee shall make himself available when and as reasonably requested by the
Interim Chief Executive Officer or his designee, and will respond to inquiries
and otherwise provide assistance in transitioning Employee’s duties to the
Interim Chief Executive Officer and other members of Company
management. Employee shall perform any such services in exchange for
the amounts to be paid to him under Section 2 hereof, and without any additional
compensation therefore.
b. During
the Transition Period, Employee shall have access to and use of the
Company’s facilities and resources at its Centreville, Delaware office (the
“Centreville
Office”), in accordance with the Company’s policies and procedures for
such access and use, provided that the Company continues to lease such
space. Employee shall not, during the Transition Period or after, (i)
access any Company facility or any Ranor facility (other than the Centreville
Office, as described above), or (ii) communicate, in any format or medium, with
any employee, customer, vendor, service provider or acquisition candidate,
without the express prior consent of the Interim Chief Executive Officer in each
case.
c. Following
the expiration of the Transition Period, and in partial consideration of the
payments to be made to Employee under Section 2 hereof, Employee shall sign and
not revoke or breach a general release in favor of the Company in a form
acceptable to the Company and substantially similar to the release contained in
Section 6 hereof.
4. Breach by
Employee. If Employee commits a breach of this Agreement, in
addition to any other rights which the Company may have, the Company’s
obligations under Section 2, Section 7 and Section 8 of this Agreement
shall immediately cease.
5. Company’s
Obligations. Employee acknowledges that, absent this Agreement, he
has no legal, contractual or other entitlement to the consideration set forth in
this Agreement and that the payments and benefits set forth in this section
constitute valid and sufficient consideration for Employee’s release of claims
and other obligations set forth herein.
6. Employee Release of
Claims.
a. Other
than duties arising in favor of Employee under this Agreement, Employee hereby expressly waives,
releases, acquits and forever discharges the Company and all of its present or
former officers, directors, shareholders, investors, executives, managers,
employees, agents, attorneys, representatives, successors and assigns and the
Company’s divisions, subsidiaries, affiliates, parents, related entities, and
its or their partners, officers, directors, shareholders, investors, employees,
agents, attorneys, representatives (hereinafter collectively referred to as
“Releasees”),
from any and all claims, demands, and causes of action which Employee has, had
or may have, whether known or unknown, of whatever nature, which exist or may
exist on Employee’s behalf from the beginning of time up to and including the
date of this Agreement.
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b. As used
in this Section 6, “claims,” “demands,” and “causes of action” include, but are
not limited to, claims based on contract, whether express or implied, invasion
of privacy, fraud, stock fraud, defamation, wrongful termination, estoppel,
equity, tort, retaliation, intellectual property, personal injury, spoliation of
evidence, emotional distress, public policy, wage and hour law, statute or
common law, claims for severance pay, claims related to stock options and/or
fringe benefits, claims under the Company’s 2006 Long-Term Incentive Plan,
claims for attorneys’ fees, vacation pay, debts, accounts, compensatory damages,
punitive or exemplary damages, liquidated damages, and any and all claims
arising under any federal, state, or local statute, law, or ordinance
prohibiting discrimination on account of race, color, sex, age, religion, sexual
orientation, disability or national origin, including but not limited to, the
Pennsylvania Human Relations Act, the Age Discrimination in Employment Act,
Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964
as amended, the Americans with Disabilities Act, the Family and Medical Leave
Act, the Worker Adjustment Retraining Notification Act or the Employee
Retirement Income Security Act.
c. Notwithstanding
the foregoing, Employee’s right to coverage as a director and/or officer of the
Company under any D&O insurance policies maintained by the Company, and
Employee’s right to seek indemnification from the Company in matters which arose
during the course of his employment, either under the by-laws of the Company as
in effect during such employment or under the Delaware General Corporation Law,
is expressly excluded from the foregoing release, and Employee shall retain the
right to seek indemnification from the Company, either under the Company’s
by-laws as in effect during such employment or under the Delaware General
Corporation Law with respect to actions arising in connection with his
employment.
7. Limited Release of Company
Claims. Except for claims of breach of this Agreement or of
the Surviving Covenants, as defined in Section 13(b) below, Employee and his
heirs are released and forever discharged of and from any and all claims
whatsoever, whether known or unknown, both in law and in equity, which the
Company now has or ever had against Employee, including any claims resulting
from Employee’s misstatement regarding his degree from University of Delaware;
except for any claims the Company might otherwise have against Employee to
recover any damages, fines, losses or expenses the Company may suffer arising
out of any unknown actions or omissions or willful misconduct or misfeasance by
Employee not now known by Company or disclosed by Employee prior to signature
hereof while serving as an employee of the Company which were or are detrimental
to the Company.
8. D&O
Insurance and
Indemnification. After the Effective Date, Employee shall
remain eligible for coverage as a director and/or officer of the Company under
all D&O insurance policies maintained by the Company as of the Effective
Date, subject, however, to the terms, conditions, exclusions and limitations of
such policies.
9. Last Date of
Employment. Employee acknowledges that as of the Resignation Date,
all privileges, rights and authority he held in connection with his positions
with the Company and any of its subsidiaries or affiliates, including Ranor Inc.
(“Ranor”)
ceased and that he will not from and after the Resignation Date hold himself out
as holding such positions or having any authority to act on behalf of any such
entities. Notwithstanding the foregoing, Employee may include on his
resume or curriculum vitae the positions he held with the Company and/or Ranor,
the dates such positions were held, and a description of his duties in each such
position.
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10. Non-Disparagement/Employment
Verification.
a. Employee
will not, directly or indirectly disparage the Releasees or otherwise take any
action which could reasonably be expected to adversely affect the personal or
professional reputation of any of the Releasees.
b. The
members of the Company’s Board of Directors and its executive management team
will not, directly or indirectly disparage Employee or otherwise take any action
which could reasonably be expected to adversely affect the personal or
professional reputation of Employee.
c. The
Parties acknowledge and agree that in connection with any reference check or
employment verification check regarding the Employee, the Company shall only
verify Employee’s title and dates of employment with the Company. The
Parties further agree that such limited verification by the Company or its
failure to provide additional detail shall not be deemed to breach the Company’s
obligations under Section 10(b).
d. The
Parties acknowledge and agree that public disclosure by the Company of the
Employee’s biographical misstatement, including but not limited to public
disclosure of such biographical misstatement in any Company press release, any
Company disclosure or report filed with or furnished to the Securities and
Exchange Commission or any Company disclosure made to any other governmental
organization, shall not be deemed to breach the Company’s obligations under
Section 10(b) so long as such disclosure is factually accurate.
11. Employee Biographical
Representation. Employee hereby represents and warrants to the
Company that except with respect to (i) the information relating to his degree
from University of Delaware and (ii) the specific dates of Employee’s tenure as
president and chief executive officer of Critical Components Corporation, there
are no other misstatements in his biographical information that have been
included in any of the Company's filings with the U.S. Securities and Exchange
Commission.
12. Receipt of Wages and Other
Compensation. Employee acknowledges and agrees that, prior to his
execution of this Agreement, he has received payment or confirmation of payment
for all wages; salary; accrued vacation, personal or sick days; and all properly
reimbursable expenses owed to Employee by the Company for services rendered
prior to the Resignation Date.
13. Company Property/Proprietary
Information
& Restrictive
Covenants.
a. Employee
agrees to return to the Company all Company property and Company documents in
his possession or control, including all copies of such property and/or
documents (in whatever form) and all computers and equipment, within five (5)
days after the Effective Date. Employee further agrees to return all
additional Company property and documents, including copies thereof (in whatever
form) and all computers and equipment, that are or come to be in his possession
or control during the Transition Period, immediately upon termination of the
Transition Period. For the avoidance of doubt, all Company property
shall be maintained and/or stored at the Company’s Centreville Office and not in
a home office maintained by Employee. Company Property shall include
all original documents but shall not include copies of any document included as
an exhibit to any statement or report filed or furnished by the Company with or
to the Securities and Exchange Commission.
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b. Employee
acknowledges and agrees that the provisions of Articles 6, 7, 8 and 9 of his
Employment Agreement (the “Surviving
Covenants”), regarding (i) Trade Secrets and Proprietary Information,
(ii) Covenants not to Solicit or Compete, (iii) Inventions and Discoveries, and
(iv) Injunctive Relief, expressly survive any termination of Employee’s
employment with the Company and continue pursuant to their terms, as provided in
and subject to the terms of the Employment Agreement. Notwithstanding
the foregoing, the parties hereby agree that the terms of Section 7 of the
Employment Agreement shall survive through and until the twenty-four (24) month
anniversary of the Effective Date. All of the terms of the Surviving
Covenants are hereby incorporated by reference into this Agreement and made a
part hereof. Any breach of the Surviving
Covenants by Employee or Company from and after the Effective Date shall be
deemed a breach of this Agreement.
14. Advice of Counsel;
Revocation Period. Employee is hereby advised to seek the
advice of counsel prior to signing this Agreement. Employee
acknowledges that he is acting of his own free will, that he has been afforded a
reasonable time to read and review the terms of this Agreement, and that he is
voluntarily entering into this Agreement with full knowledge of its provisions
and effects. Employee further acknowledges that he has been given at
least twenty-one (21) days within which to consider this Agreement and that he
has seven (7) days following his execution of this Agreement to revoke his
acceptance, with this Agreement not becoming effective until the 7-day
revocation period has expired (the “Revocation
Period”). If Employee elects to revoke his acceptance of this
Agreement, he must provide written notice of such revocation by certified mail
(postmarked no later than seven days after the date Employee accepted this
Agreement) to:
TechPrecision
Corporation
Xxxxx
Xxxxx
Xxxxxxxxxxx,
XX 00000
Attention:
Chief Executive Officer
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With a copy
to:
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Xxxxxx
Xxxxxxxx LLP
000
Xxxxxx Xxxx
000
Xxxxxxx Xxxx
Xxxxxx,
XX 00000
Attention: Xxxxxxx X.
Xxxxx, Esq.
15. Cooperation. Employee
further agrees that during the Severance Period he will cooperate fully with the
Company and its counsel with respect to any matter (including, workplace
inquiries, litigation, investigations, or governmental proceedings) in which
Employee was in any way involved during his employment with, or while performing
transition services to, the Company. Employee shall render such
cooperation in a timely manner on reasonable notice from the
Company.
16. No Filing of
Claims. Employee represents and warrants that he does not presently
have on file, and further represents and warrants that he will not hereafter
file, any claims, charges, grievances or complaints against any of the Releasees
(defined above) in or with any administrative, state, federal or governmental
entity, agency, board or court, or before any other tribunal or panel or
arbitrators, public or private, based upon any actions or omissions by the
Releasees occurring prior to the date of this Agreement.
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17. Ownership of
Claims. Employee represents and warrants that he is the
sole and lawful owner of all rights, title and interest in and to all released
matters, claims and demands referred to herein. Employee further
represents and warrants that there has been no assignment or other transfer of
any interest in any such matters, claims or demands which he may have against
the Releasees.
18. Employee’s Equity
Interests. For purposes of clarification, nothing in this
Agreement shall be deemed to adversely affect any of Employee’s right, title or
interest in or to any equity interests of the Company owned by him as of the
Resignation Date.
19. Pennsylvania Law
Applies. This Agreement, in all respects, shall be
interpreted, enforced and governed by and under the laws of the Commonwealth of
Pennsylvania. Any and all actions relating to this Agreement shall be
filed and maintained in the federal and/or state courts located in the
Commonwealth of Pennsylvania, and the parties consent to the jurisdiction of
such courts. In any action arising out of this Agreement, or
involving claims barred by this Agreement, the prevailing party shall be
entitled to recover all costs of suit, including reasonable attorneys’
fees.
20. Successors and
Assigns. The Parties expressly understand and agree that this
Agreement, and all of its terms, shall be binding upon their representatives,
heirs, executors, administrators, successors and assigns, including, without
limitation, upon any successor in interest to the Company upon any change in
control of the company. In addition, this Agreement and the Company’s
obligation to make payments under Section 2 hereof shall not terminate or be
diminished in any way in the event of Employee’s death, in which case the right
to receive payments under Section 2 shall pass to Employee’s estate as may be
set forth therein.
21. Consultation with
Counsel. Employee acknowledges
that he has been advised to consult with legal counsel of his choice prior to
execution and delivery of this Agreement.
22. Integration. Except
as otherwise specifically provided for, this Agreement constitutes an
integrated, written contract, expressing the entire agreement between the
Parties with respect to the subject matter hereof. In this regard,
Employee represents and warrants that he is not relying on any promises or
representations which do not appear written herein. Employee further
understands and agrees that this Agreement can be amended or modified only by a
written agreement, signed by all of the Parties hereto.
23. Counterparts. This
Agreement may be executed in separate counterparts and by facsimile or other
electronic means, and each such counterpart shall be deemed an original with the
same effect as if all Parties had signed the same document.
24. Headings. The
headings in each section herein are for convenience of reference only and shall
be of no legal effect in the interpretation of the terms hereof.
25. Severability. If any provision in this
Agreement is held to be invalid, the remainder of this Agreement shall not be
affected by such a determination and this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained
herein.
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26. Waivers. The failure
or delay on the part of either Party to exercise any right under this Agreement
shall not be deemed a waiver of any rights under this Agreement, nor shall any
single or partial exercise thereof preclude any other or further exercise of
such right, power or privilege.
27. Voluntary
Agreement. EMPLOYEE UNDERSTANDS AND AGREES THAT HE MAY BE WAIVING
SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT, AND REPRESENTS THAT HE HAS
ENTERED INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, WITH A FULL UNDERSTANDING
OF AND IN AGREEMENT WITH ALL OF ITS TERMS.
[signature
page follows]
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IN
WITNESS WHEREOF, the Parties hereto have executed this Separation, Severance and
Release Agreement on the dates set forth below.
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EMPLOYEE:
/s/Xxxxx Xxxxxx
Xxxxx
Xxxxxx
Date:
March 31, 2009
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TECHPRECISION,
INC.
By:
/s/Xxxxxxx X.
Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
Chief Financial Officer
Date:
March 31, 2009
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