EXHIBIT 10.1
SEVERANCE AGREEMENT AND RELEASE OF CLAIMS
THIS SEVERANCE AGREEMENT AND RELEASE OF CLAIMS ("Agreement"), is
made and entered on May 23, 2005 into by and between TRANS INDUSTRIES, INC.
("the Company") and XXXX X. XXXXXX ("Employee") with an Effective Date as
described below.
WITNESSETH:
WHEREAS, Employee has been employed by the Company as its Chief
Executive Officer; and
WHEREAS, each of the parties acknowledge that the Employee has
voluntarily resigned as Chief Executive Officer effective as of the close of
business on March 16, 2005 (the "Date of Separation"); and
WHEREAS, the Company and Employee wish to resolve all matters and
issues between them arising from or relating to Employee's employment by the
Company and Employee's resignation from employment by the Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, Employee and the Company hereby agree as follows:
1. Severance Term. The term of the severance shall be for a period
of eight (8) months commencing March 16, 2005 and ending November 16, 20s05.
2. Severance Payment. Upon the Effective Date of this Agreement as
set forth in Section 24 herein, the Company shall pay Employee a severance
payment in the gross amount of $120,000.00, less applicable payroll taxes and
withholdings. The gross amount shall be paid in eight equal installments of
$15,000.00, on the 16th of each month commencing with March, 2005 and ending
with November, 2005. Employee shall not be eligible to participate in the
Company profit sharing plan or 401k plan subsequent to the effective date of
this Agreement.
3. Accrued Vacation. The Employee shall not receive vacation pay.
4. Health Insurance. The Company will provide to Employee the
current health care coverage at the current employee cost (deducted from the
payment described in Section1 above) until November 16, 2005. Employee shall not
be eligible for all life insurance coverages, workers compensation insurance and
short and long term disability as of March 16, 2005. At the expiration of the
severance period described in Section1 above, Employee shall be entitled to
continuation of coverage under the Company's health/medical insurance plan at
his/her own expense pursuant to any rights he/she may have under the federal
Consolidated Omnibus Budget Reconciliation Act, as amended ("COBRA"), part VI of
Subtitle B of Title I of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended; Internal Revenue Code Section 4980(B)(f). Such
continuation shall be afforded up to the maximum period provided by law so long
as Employee submits payments for elected coverage and otherwise complies with
conditions of continuation on a timely basis.
5. Trans-Industries, Inc. Board of Directors. In consideration of
the foregoing, Employee shall not receive Director fees during the calendar year
2005. Employee shall be reimbursed for properly documented normal and ordinary
expenses incurred directly in connection with meetings of the Board of Directors
attended by Employee, including standard class travel and overnight
accommodations.
6. Automobile and other Company Property and Reimbursements. Company
shall pay the lease expense for the Company vehicle currently used by Employee
in New York until November 1, 2005. All other Company property, including but
not limited to laptop computers, cell phones, credit cards, keys, and other
electronic devices was returned to the Company by Employee by March 16, 2005.
Final expense account reports were submitted by March 16, 2005.
7. Non-Disclosure of Confidential Information. Employee understands
and hereby acknowledges that, as a result of his employment with the Company, he
has necessarily become informed of, and had access to, confidential information
of the Company including, without limitation, its computer programs and
software, inventions, processes, trade secrets, technical information, know-how,
plans, specifications, identity of customers and identity of suppliers, and that
such information, even though it may be developed or otherwise acquired by
Employee, is the exclusive property of the Company and solely for the Company's
benefit. Accordingly, Employee hereby agrees that he shall not, at any time,
use, copy, reveal, report, publish, transfer or otherwise disclose to any
person, corporation or other entity, any of the Company's confidential
information without the written consent of the Company. Notwithstanding the
foregoing, the provisions of this Section shall not apply to any information
which (i) becomes generally available to the public other than as a result of
disclosure by Employee; (ii) was available on a nonconfidential basis prior to
its disclosure to Employee by the Company or its representatives, or (iii)
becomes available to Employee on a nonconfidential basis from a source other
than the Company or its representatives provided that such source is not bound
by a confidentiality agreement with the Company or its representatives. For the
purposes of this Section, the term "the Company" shall also mean and include its
parents, subsidiaries, joint ventures and other affiliates. The obligations of
this Section shall also apply to proprietary or confidential information of
another party which the Company receives in the normal course of Employee's
employment with the Company.
8. Covenant Not to Compete. Employee hereby agrees that for a period
of one (1) year from the effective date hereof, he shall not directly or
indirectly engage in any geographical area in which the Company shall be doing
business in any line of business that is similar to or competitive with that
then being conducted by the Company, either for his own account or as a member
of any type of partnership or legal entity, or as a stockholder, investor,
officer or director of a corporation or other legal entity, nor lend, afford or
furnish money or assistance, financial or otherwise, nor organize, direct,
counsel or advise anyone in any line of business that is similar to or
competitive with that then being conducted by the Company in any geographical
area in which the Company shall be doing business, and, in particular, shall not
in any way, directly or indirectly, (i) solicit or attempt to solicit any
customers or clients of the
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Company; (ii) solicit or attempt to solicit for any business endeavor any
employee of the Company; or (iii) otherwise divert or attempt to divert from the
Company and business whatsoever or interfere with any business relationship
between the Company and any other person. In the event that any portion of this
noncompetition agreement is deemed not to be enforceable by a court of competent
jurisdiction because it is deemed overly broad in terms of time or the
geographic area covered, this noncompetition agreement shall not be void but
shall be modified to extend through a reasonable time period and/or geographic
area.
9. Noninterference. Employee shall not, at any time, without the
prior written consent of the Board, directly or indirectly induce or attempt to
induce any employee, agent or other representative or associate of the Company
or any affiliate to terminate its relationship with the Company or any
affiliate, or in any way directly or indirectly interfere with any relationship
between the Company or any affiliate and any of its suppliers or customers.
10. Equitable Relief. Because the Company does not have an adequate
remedy at law to protect its business from Employee's competition or to protect
its interests in its trade secrets, privileged, proprietary or confidential
information and similar commercial assets, the Company shall be entitled to
injunctive relief, in addition to such other remedies and relief that would, in
the event of a breach of the provisions of this Agreement, be available to the
Company. In the event of such a breach, in addition to any other remedies, the
Company shall be entitled to receive from Employee payment of, or reimbursement
for, its reasonable attorneys' fees and disbursements incurred in enforcing any
such provision.
11. Adequacy of Consideration. Employee hereby agrees and
acknowledges that the payments and benefits described in Section 2, 3, 4 and 6
of this Agreement are over and above any entitlements, severance or otherwise,
that he may have by reason of his separation from employment with the Company,
and that such payments and amounts constitute adequate consideration for all of
Employee's covenants and obligations set forth herein, including, but not
limited to, the Release of Claims set forth in Section 12 of this Agreement.
12. Employee's Release. In consideration of the promises and
agreements set forth herein, other than the obligations and covenants set forth
in this Agreement, the Agreement for Management Succession, Resignation and
Severance of CEO, and Other Miscellaneous Matters, the Stock Purchase Agreement,
Right of First Refusal Agreement, Amendment No. 3, and Stock Restriction
Agreement entered into commensurate herewith, Employee does hereby for himself
and for his heirs, executors, successors and assigns, release and forever
discharge the Company, its parents, subsidiaries, divisions, and affiliated
businesses, direct or indirect, if any, together with its and their respective
officers, directors, trustees, shareholders, management, representatives,
agents, employees, successors, assigns, and attorneys, both known and unknown,
in both their personal and agency capacities (collectively, "the Company
Entities") of and from any and all claims, demands, damages, actions or causes
of action, suits, claims, charges, complaints, contracts, whether oral or
written, express or implied and promises, at law or in equity, of whatsoever
kind or nature, including but not limited to any alleged violation of any state
or federal anti-discrimination statutes or regulations, including but not
limited to Title VII of The Civil Rights Act of 1964 as amended, ERISA, the
Americans With Disabilities Act, the
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Age Discrimination in Employment Act, Michigan's Xxxxxxx-Xxxxxx Civil Rights
Act, as amended; Michigan's Persons with Disabilities Civil Rights Act, as
amended; the Michigan Whistleblowers' Protection Act; the Michigan Worker's
Compensation Act; Michigan common law or doctrines, in law or in equity; the
Older Workers Benefit Protection Act, breach of any express or implied contract
or promise, wrongful discharge, violation of public policy, or tort, all demands
for attorney's fees, back pay, holiday pay, vacation pay, bonus, group
insurance, any claims for reinstatement, all employee benefits and claims for
money, out of pocket expenses, any claims for emotional distress, degradation,
humiliation, that Employee might now have or may subsequently have, whether
known or unknown, suspected or unsuspected, by reason of any matter or thing,
arising out of or in any way connected with, directly or indirectly, any acts or
omissions of the Company or any of its directors, officers, shareholders,
employees and/or agents arising out of Employee's employment and termination
from employment which have occurred prior to and including the Effective Date of
this Agreement, EXCEPT those matters specifically set forth herein and EXCEPT
for any pension or retirement benefits which may have vested on Employee's
behalf, if any.
13. Trans-Industries, Inc. Release.
a. Release. Subject to Section 13(b), for good and valuable
consideration, the sufficiency of which is acknowledged, the Company does hereby
release and forever discharge Employee, his heirs, administrators, agents and
assigns, none of whom admit any liability, from any and all claims, demands,
damages, actions or causes of action or suits, and all such claims, losses, or
damages which occur or arise out of Employee's employment with the Company.
b. Intentional Acts. This Agreement does not release Employee
from (i) any intentional or grossly negligent acts or omissions which have been,
at any time, whether continuing or not, intentionally or grossly and negligently
secreted or hidden from the Company or any member of its Board of Directors by
Employee or (ii) the obligations and covenants set forth in this Agreement, the
Agreement for Management Succession, Resignation and Severance of CEO, and Other
Miscellaneous Matters, the Stock Purchase Agreement, Right of First Refusal
Agreement, Amendment No. 3, and Stock Restriction Agreement entered commensurate
herewith.
14. Older Workers Benefit Protection Act ("OWBPA"). Employee
recognizes and understands that, by executing this Agreement, he/she shall be
releasing the Company Entities from any claims that he/she now has, may have, or
subsequently may have under the Age Discrimination in Employment Act of 1967, 29
U.S.C. Section 621, et seq., as amended, by reason of any matter or thing
arising out of, or in any way connected with, directly or indirectly, any acts
or omissions which have occurred prior to and including the Effective Date of
this Agreement. In other words, Employee will have none of the legal rights
against the aforementioned that he would otherwise have under the Age
Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., as
amended, by his/her signing this Agreement.
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15. Consideration Period. The Company hereby notifies Employee of
his right to consult with his chosen legal counsel before signing this
Agreement. The Company shall afford, and Employee acknowledges receiving, not
less than twenty-one (21) calendar days in which to consider this Agreement to
ensure that Employee's execution of this Agreement is knowing and voluntary. In
signing below, Employee expressly acknowledges that he has been afforded the
opportunity to take at least twenty-one (21) days to consider this Agreement and
that his execution of same is with full knowledge of the consequences thereof
and is of his own free will. Notwithstanding the fact that the Company has
allowed Employee twenty-one (21) days to consider this Agreement, Employee may
elect to execute this Agreement prior to the end of such 21-day period. If
Employee elects to execute this Agreement prior to the end of such 21-day
period, then by his signature below, Employee represents that his decision to
accept this shortening of the time was knowing and voluntary and was not induced
by fraud, misrepresentation, or any threat to withdraw or alter the benefits
provided by the Company herein, or by the Company providing different terms to
any similarly-situated employee executing this Agreement prior to end of such
21-day consideration period.
16 Revocation Period. Both the Company and Employee agree and
recognize that, for a period of seven (7) calendar days following Employee's
execution of this Agreement, Employee may revoke this Agreement by providing
written notice revoking the same, within this seven (7) day period, delivered by
hand or by certified mail, addressed to Xxxxxxx X. Xxxxx, Trans Industries,
Inc., 0000 Xxxxx Xxxxx Xx., Xxxxxxxxx Xxxxx, Xxxxxxxx, 00000 , delivered or
postmarked within such seven (7) day period. In the event Employee so revokes
this Agreement, each party will receive only those entitlements and/or benefits
that he would have received regardless of this Agreement.
17 Acknowledgments. Employee acknowledges that Employee has
carefully read and fully understands all of the provisions of this Agreement,
that Employee has not relied on any representations of the Company or any of its
representatives, directors, officers, employees and/or agents to induce Employee
to enter into this Agreement, other than as specifically set forth herein and
that Employee is fully competent to enter into this Agreement and has not been
pressured, coerced or otherwise unduly influenced to enter into this Agreement
and that Employee has voluntarily entered into this Agreement of Employee's own
free will and has had the opportunity to consult with his own counsel.
18 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and replaces any prior agreements, contracts and/or
promises, whether written or oral, with respect to the subject matters included
herein. This Agreement may not be changed orally, but only in writing, signed by
each of the parties hereto.
19. Warranty/Representation. Employee and the Company each warrant
and represent that, prior to and including the Effective Date of this Agreement,
no claim, demand, cause of action, or obligation which is subject to this
Agreement has been assigned or transferred to any other person or entity, and no
other person or entity has or has had any interest in any such
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claims, demands, causes of action or obligations, and that each has the sole
right to execute this Agreement.
20. Invalidity. The parties to this Agreement agree that the
invalidity or unenforceability of any one (1) provision or part of this
Agreement shall not render any other provision(s) or part(s) hereof invalid or
unenforceable and that such other provision(s) or part(s) shall remain in full
force and effect.
21. No Assignment. This Agreement is personal in nature and shall
not be assigned by Employee. All payments and benefits provided Employee herein
shall be made to his/her estate in the event of his/her death prior to his
receipt thereof.
22. Originals. Two (2) copies of this Agreement shall be executed as
"originals" so that both Employee and the Company may possess an "original"
fully executed document. The parties hereto expressly agree and recognize that
each of these fully executed "originals" shall be binding and enforceable as an
original document representing the agreements set forth herein.
23. Governing Law. This Agreement shall be governed under the laws
of the State of Michigan.
24. Effective Date. This Agreement shall become effective only upon
(a) execution of this Agreement by Employee after the expiration of the
twenty-one (21) day consideration period described in Section 15 of this
Agreement, unless such consideration period is voluntarily shortened as provided
by law; and (b) the expiration of the seven (7) day period for revocation of
this Agreement by Employee described in Section 16 of this Agreement.
CAUTION TO EMPLOYEE: READ BEFORE SIGNING. THIS DOCUMENT CONTAINS A RELEASE OF
ALL CLAIMS AGAINST THE COMPANY ENTITIES PRIOR TO THE EFFECTIVE DATE OF THIS
AGREEMENT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
[SIGNATURE PAGE IMMEDIATELY FOLLOWING.]
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IN WITNESS WHEREOF, Employee and the Company agree as set forth
above:
DATE OF RECEIPT BY EMPLOYEE: SIGNATURE OF EMPLOYEE
ACKNOWLEDGING DATE OF RECEIPT:
May 9, 2005 /s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
____________________________________
RECEIPT WITNESSED BY:
DATE OF EXECUTION BY EMPLOYEE: AGREED TO AND ACCEPTED BY:
May 9, 2005 /s/ Xxxx X. Xxxxxx
------------------------------------
XXXX X. XXXXXX
____________________________________
EXECUTION WITNESSED BY:
DATE OF EXECUTION BY COMPANY: AGREED TO AND ACCEPTED BY
THE COMPANY
May 23, 2005 BY: /s/ Xxxxxxx Xxxxx
-------------------------------
XXXXXXX XXXXX
TITLE: Chief Operating Officer
EXECUTION WITNESSED BY:
____________________________________
