Exhibit 10.44
SEPARATION AGREEMENT AND RELEASE
It is hereby agreed by and between Xxxxxxx X. Xxxxx of 00 Xxxxxxx Xxxx,
Xxxxxxx, XX 00000, ("Xx. Xxxxx") and MFIC Corporation, a Delaware corporation,
together with its Microfluidics Corporation subsidiary, Epworth Mill and
Xxxxxxxxx-XXXXXX operating divisions, (collectively the "Company"), for good and
sufficient consideration more fully described below, that:
1. Employment Status. Effective as of November 30, 2000 (the
"Termination Date"), Xx. Xxxxx was terminated from employment with the Company
and has resigned any officer position(s) he holds or has held with the Company,
as evidenced by his execution of the resignation(s) attached as Exh. 1. As of
such Termination Date, Xx. Xxxxx'x salary ceased and any entitlement he has or
might have under any Company provided benefit program terminated except as
required by federal or state law or as otherwise described below.
2. Consideration.
(A) Post-Termination Separation Compensation.
(i) For a period commencing as of November 30, 2000 and continuing
through February 28, 2001 (the "Severance Period"), the Company shall pay to Xx.
Xxxxx a bi-weekly gross amount of Five Thousand One Hundred Fifty Three Dollars
and Eighty Five Cents ($5,153.85) ("Bi-Weekly Severance Payment") for a total of
Thirty Two Thousand Nine Hundred Eighty Four Dollars and Sixty Four Cents
$32,984.64 (collectively, the "Severance Payment"). The first such Bi-Weekly
Severance Payment is to be made on the first regularly scheduled payday
immediately after the expiration of the Revocation Period in para. 20.
(ii) In addition, Xx. Xxxxx shall be paid Five Thousand ($5,000)
Dollars immediately after the expiration of the Revocation Period in para. 20.
(iii) All payments set forth in this clause (A) of Section 2 shall be
made in accordance with the Company's normal payroll practices and are subject
to all applicable (if any) federal, state, and/or local withholding, payroll and
other taxes.
(B) Bonus Compensation. Xx. Xxxxx shall be entitled to receive 100% of
any bonus compensation due him pursuant to the Bonus Compensation Plan between
the Company and Xx. Xxxxx dated February 2, 2000 (the "Bonus Comp Plan"),
attached hereto as Exh. 2. As provided in the Bonus Comp Plan, such bonus, if
any, shall be calculated and payable only after the earlier to occur of: (i) the
availability of the calendar year 2000 audited financial statements of MFIC
Corporation, or (ii) ninety (90) days after the end of the Company's fiscal
year, ended December 31, 2000.
(C) Stock Options. Xx. Xxxxx holds certain "Qualified Stock Options" to
purchase the Company's Common Stock issued pursuant to the Company's 1988 Stock
Option Plan (the "Qualified Option Plan"), as identified in Exh. 3. The Company,
its Board of Directors, and the Administrator under the Qualified Option Plan
agree or shall agree that Xx. Xxxxx'x termination date solely for purposes of
vesting of stock options will be extend to January 3, 2001. To accomplish this,
Xx. Xxxxx'x acknowledges and agrees that the Administrator of the
Company's Qualified Option Plan may, pursuant to Section 13 thereof, reclassify
such options from "qualified" under the Qualified Option Plan to "non-qualified"
options if acceleration of vesting or continuation of vesting after the
Termination Date would or may adversely impact or endanger the tax "qualified"
status of the Company's Qualified Option Plan. Xx. Xxxxx may execute any such
vested options on a "net" basis, i.e. in a cashless exercise.
3. Insurance and Other Benefits.
(A) Group Health and Dental Coverage. Xx. Xxxxx shall be continued on
the Company group health insurance plan at the same contribution rate until the
end of the Severance Period. Thereafter, Xx. Xxxxx may continue receiving group
medical coverage at his own expense as provided by federal COBRA law, provided
that Xx. Xxxxx elects, within the established COBRA guidelines, COBRA
continuation. Eligibility to continue this insurance under COBRA ceases upon the
termination of any period allowed by law.
(B) Life Insurance Coverage. The Company shall continue to provide Xx.
Xxxxx with the existing group life insurance at the same contribution rate until
the Termination Date. After that date, Xx. Xxxxx may apply to convert the
existing group life insurance to an individual policy at his own expense.
(C) Disability Insurance. Disability insurance will cease as of the
Termination Date, and there is no right of individual conversion.
(D) Retirement Plans. Xx. Xxxxx shall be entitled to his vested benefit
in the Company's 401(k) plan as determined by the plan provisions. Service
credit will cease as of the Termination Date, and he may not make further
contributions or salary reduce after the Termination Date.
(E) Vacation Pay. Xx. Xxxxx has received full payment for all accrued
unused vacation as of the Termination Date.
(F) Cessation of Benefits. Unless otherwise provided for expressly in
this Agreement, all other benefits have ceased as of the Termination Date,
including without limitation, the accrual of vacation time.
4. Return of Property. Xx. Xxxxx has returned or shall return all
papers, files, documents, computers, reference guides, equipment, keys,
identification, credit cards, software, computer access codes, disks and
institutional manuals, or other property belonging to the Company on or before
the Termination Date. Xx. Xxxxx shall not retain any copies, duplicates,
reproductions or excerpts thereof.
5. Nondisclosure of Confidential Information. Xx. Xxxxx agrees not to
use to his own advantage or to disclose to any person or entity any confidential
information of the Company or of any past or present customer of the Company,
vendor, subcontractor or supplier of the Company, including but not limited to
financial data or projections, customer lists, projects, economic information,
pricing, systems, plans, methods, procedures, operations, techniques, know-how,
trade secrets or merchandising or marketing strategies. Xx. Xxxxx reaffirms and
shall adhere to his obligations, in their entirety, to protect and to refrain
from disclosing the Company's confidential information, trade secrets, and
customer relationships as
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such obligations and restrictions are set forth in the Invention, Assignment and
Proprietary Information Agreement between Xx. Xxxxx and the Company dated June
26, 1997 (the "Invention Agreement"), which agreement is hereby incorporated by
reference, made a part hereof, and is attached hereto as Exh. 4.
6. Cooperation in Execution of Documents, Patent Related Applications,
Assignment Elections, and other Instruments.
(i) With regard to the Company's applied-for patents relating to its
Multiple Stream Mixer Reactor device, processes and products produced thereby,
of which invention Xx. Xxxxx is listed as a co-inventor (the "Invention"), Xx.
Xxxxx agrees to, without the payment of additional compensation or
consideration, execute any assignments, transfers, elections, extensions,
amendments, country entry applications or other reasonably necessary documents
relating to patent application of the Invention and prosecution thereof at the
direction of the Company, in order to more completely vest control and ownership
of the Invention in the Company.
(ii) Xx. Xxxxx agrees to execute any and all other necessary and proper
documents relating to his resignation as an officer of the Company, signatory to
Company bank accounts, Trustee of the Company's Retirement Program ("401(k)
Program") and to sign such other documents as are required for an effective and
orderly termination and transition of his authority and responsibilities. Xx.
Xxxxx shall execute a 401(k) Trustee Resignation in the form of Exh. 5.
7. Settlement of Amounts Due Xx. Xxxxx. The amounts set forth above in
Section 2 together with any amounts including earned but unused vacation pay,
the consideration set forth in Section 3 shall constitute the complete and
unconditional payment, settlement, satisfaction and accord with respect to all
obligations and liabilities of the Company (including its successors and
assigns, its officers and directors, shareholders, employees and/or agents) to
Xx. Xxxxx, and any claims, causes of action and damages by Xx. Xxxxx against the
Company and/or any such other party regarding Xx. Xxxxx'x employment with the
Company, including without limitation, all claims for back wages, salary, draws,
commissions, bonuses, vacation pay, expenses, compensation, severance pay,
attorney's fees, compensatory damages, exemplary damages, or other costs of any
kind or nature whatsoever.
8. Release.
(A) Release from Xx. Xxxxx to Company. In exchange for the amount and
actions described in Section 2 and other good and valuable consideration,
receipt of which is hereby acknowledged, Xx. Xxxxx and his representatives,
agents, estate, successors and assigns, absolutely and unconditionally hereby
release and forever discharge the Company, and its successors, assigns,
shareholders, officers, directors, employees, including but not limited to Xxxxx
Xxxxxxxxx, Xxxx Xxxx and Xxxx Xxxx and/or agents, both individually and in their
official capacities, for and on account of any and all liabilities, agreements,
promises, debts and damages, whether existing or contingent, known or unknown,
which arise out of Xx. Xxxxx'x employment with, separation from, or termination
from the Company, and with respect to, any and all debts, demands, actions,
causes of action, suits, covenants, contracts, wages, bonuses, damages and any
and all claims, demands, liabilities, and expenses (including attorneys' fees
and
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costs) whatsoever of any name or nature both in law and in equity ("Claim")
which Xx. Xxxxx now has, ever had or may in the future have against the Company
by reason of any matter, cause or thing which has happened, developed or
occurred before the signing of this Agreement, including, but not limited to,
any and all suits in tort or contract, and any Claims or suits relating to
salary, wages, raises, bonuses and commissions, stock or stock options, the
breach of an oral or written contract, misrepresentation, defamation, and
interference with prospective economic advantage, interference with contract,
intentional, or negligent infliction of emotional distress, negligence, breach
of the covenant of good faith and fair dealing, and Claims arising out of, based
on, or connected with his employment by the Company and the termination of that
employment as set forth in this Agreement, including any causes of action or
Claims for unlawful employment discrimination of any kind, including
discrimination due to age, sex, disability, race, national origin, or harassment
arising under or based on Title VII of the Civil Rights Act of 1964, as amended;
the Age Discrimination in Employment Act of 1967 ("ADEA"), as amended; the Equal
Pay Act of 1963; the Massachusetts Fair Employment Practices Act; the
Massachusetts Civil Rights Act; the Massachusetts Equal Rights Law and any other
state or federal equal employment opportunity or anti-discrimination law,
policy, order or regulation affecting or relating to Claims or rights of
employees, which Xx. Xxxxx ever had, now has, or claims to have against the
Company. Xx. Xxxxx further agrees not to institute any charge, complaint, or
lawsuit to challenge the validity of this Agreement or the circumstances
surrounding its execution, subject to the provisions of Section 14. This is a
General Release, including a waiver for any claims of age discrimination under
federal and state statutes, such as the ADEA.
(B) Release from Company to Xx. Xxxxx. In exchange for good and
valuable consideration, receipt of which is hereby acknowledged, the Company
absolutely and unconditionally hereby releases and forever discharges Xx. Xxxxx
for and on account of any and all liabilities, agreements, promises, debts and
damages, whether existing or contingent, known or unknown, which arise out of
Xx. Xxxxx'x employment with, separation from, or termination from the Company,
and with respect to, any and all debts, demands, actions, causes of action,
suits, covenants, contracts, damages and any and all claims, demands,
liabilities, and expenses (including attorneys' fees and costs) whatsoever of
any name or nature both in law and in equity ("Claim") which the Company has by
reason of any matter, cause or thing which has happened, developed or occurred
before the signing of this Agreement, excluding enforcement of the terms of this
Agreement and any past violations(s) of the Invention Agreement.
9. Covenant Not to Xxx. Xx. Xxxxx agrees not only to release and
discharge the Company and/or its successors, assigns, shareholders, officers,
directors, employees and/or agents from any and all claims as stated above that
Xx. Xxxxx could make on his own behalf or on the behalf of others, but also
those claims which might be made by any other person or organization on behalf
of Xx. Xxxxx, and Xx. Xxxxx specifically waives any right to become a member of
any class, participate in or induce or encourage participation in any case,
proceeding or undertaking in which a claim or claims against the Company and/or
its successors, assigns, shareholders, officers, directors, employees and/or
agents are made involving any matters which arise out of Xx. Xxxxx'x employment
with or termination from employment with the Company, or any shareholder or
shareholder derivative action.
Xx. Xxxxx represents and warrants that he has not filed any complaints,
charges, or claims for relief against the Company with any local, state or
federal court or administrative agency.
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Xx. Xxxxx agrees and covenants not to xxx or bring any claims or charges against
the Company with respect to any matters arising out of or relating to his
employment with or separation from the Company, other than enforcement of the
terms of this Agreement, or any claims that as a matter of law cannot be
released, such as under the Massachusetts workers compensation system, for
unemployment benefits or any claims related to the Company's future involvement
with, if any, Xx. Xxxxx'x 401(k) retirement plan with the Company or except as
set forth in Section 14. In the event that Xx. Xxxxx on his own behalf
institutes any such action, that claim shall be dismissed upon presentation of
this Agreement and he shall reimburse the Company for all legal fees and
expenses incurred in defending such claim and obtaining its dismissal.
10. Non-Interference/Non-Solicitation. Xx. Xxxxx agrees that during the
term of this Agreement and for a period of eighteen (18) months following the
expiration or termination of this Agreement, he will not, without the prior
written agreement of the Company: (i) solicit, or solicit for hire or cause any
other person or entity to solicit, or solicit for hire any individual who is or
has been employed by the Company or any of its affiliates, or any customer,
vendor, subcontractor or technical consultant of the Company with whom Xx. Xxxxx
had contact at any time during the period Xx. Xxxxx was President of the
Company; or (ii) solicit, participate in, or ally himself with any person or
entity to engage in or be engaged in any tender offer or so-called "hostile
take-over" of or concerning the Company or its securities. Notwithstanding the
provisions of para.10, subsection (i) neither Xx. Xxxxx nor any entity with
which he enters into employment or becomes otherwise affiliated with shall be
prohibited from the solicitation of any customer, vendor, subcontractor or
technical consultant of the Company so long as such solicitation (i) does not
result in any direct competition with the Company or its products, and (ii) the
result of such solicitation does not utilize proprietary manufacturing or
technical information of the Company and its products. Xx. Xxxxx will inform
prospective employers and any entity with which he becomes affiliated, including
but not limited to one for which he performs services as an independent
contractor, of the obligations of Xx. Xxxxx under this Agreement while such
obligations continue in effect.
11. Pejorative Statements/DET Claim. The Company hereby represents,
warrants and covenants that it shall avoid making pejorative statements about
Xx. Xxxxx and the terms of the his separation from employment with the Company,
to the fullest extent possible, except as required by legal process, law or
regulation. Company will not hereafter oppose an application for unemployment
benefits to the DET by Xx. Xxxxx, and will respond appropriately thereto. Xx.
Xxxxx understands that the DET, not the Company, makes the determination as to
such benefits, and that the Company cannot assure that Xx. Xxxxx will receive
such benefits or the amount of such benefits. In response to an employment
reference request, the Company will respond only with his dates of employment
and positions held. Xx. Xxxxx hereby represents, warrants and covenants that he
will not make pejorative statements about the Company and/or its officers,
directors, employees, or agents except as required by legal process, law or
regulation. Xx. Xxxxx further represents, warrants and covenants that he shall
not make any detrimental or disparaging remarks about the products, equipment,
machinery or systems, manufactured, distributed or sold by the Company.
12. Nonadmissions Clause. It is understood and agreed that this
Agreement does not constitute any admission by the Company that any action taken
with respect to Xx. Xxxxx was unlawful or wrongful, or that such action
constituted a breach of contract or violated any federal or state law, policy,
rule or regulation.
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13. Nondisclosure of this Agreement. Xx. Xxxxx expressly agrees, and
hereby instructs his attorney and immediate family, if any, that the nature and
terms of this Agreement are confidential, and expressly agrees not to discuss or
disclose them, or the facts and contentions contained therein, without the prior
written consent of the Company, with or to any person, except to the Internal
Revenue Service, state tax authorities, his accountant or tax advisor, his
attorneys, his immediate family, his therapist or healthcare provider, or as
required by law.
14. Exclusion. Nothing in this Agreement shall preclude Xx. Xxxxx from
filing a charge or complaint, including a challenge to the validity of this
Agreement, with the Equal Employment Opportunity Commission or the Massachusetts
Commission Against Discrimination or from participating or cooperating in any
investigation or proceeding conducted by either of those agencies. In the event
that a charge or complaint is filed with any administrative agency or in the
event of an authorized investigation, charge or lawsuit filed by any
administrative agency, Xx. Xxxxx expressly waives and shall not accept any award
or damages therefrom.
15. Breach. Xx. Xxxxx agrees that the compensation and benefits
contained in this Agreement and which flow to him from the Company are subject
to termination, reduction or cancellation in the event that he takes any action
or engages in any conduct deemed by the Company to be in violation of this
Agreement. In the event that Xx. Xxxxx institutes legal proceedings to enforce
this Agreement, he agrees that the sole remedy available to him shall be
enforcement of the terms of this Agreement and/or a claim for damages resulting
from the breach of this Agreement, but that under no circumstances shall he be
entitled to receive or collect any damages for claims that he has released under
this Agreement in accordance with the General Release contained in Section 8 of
this Agreement.
16. Injunctive Relief. The parties hereto acknowledge that any breach,
by either party, of the representations, warranties and covenants contained in
this Agreement (particularly in Sections 5, 9, 10 and 11 hereof) would cause
irreparable harm not adequately compensable by money damages. Consequently, the
parties hereby stipulate that the non-breaching party may seek injunctive relief
to prevent an actual or threatened violation of this Agreement. The parties
consent to jurisdiction and venue of any state or federal court for the purposes
of any suit for equitable relief hereunder, and to service of process by
certified or registered mail, return receipt requested. All equitable rights,
remedies and damages available to the parties shall be considered cumulative and
use of a particular right, remedy, damage or relief shall not preclude the
non-breaching party's further exercise of other rights, remedies and damages.
17. Arbitration. With the exception in Section 16 seeking injunctive
relief sought by the Company, or as otherwise provided in this Agreement, any
controversy or claim regarding this Agreement, its enforcement or
interpretation, shall be settled by final and binding arbitration administered
by the American Arbitration Association sitting in Boston, under its Employment
Dispute Resolution Rules (one arbitrator) and the award rendered by the
Arbitrator shall be enforceable in any court of competent jurisdiction.
18. Representations. Xx. Xxxxx acknowledges that in exchange for
entering into this Agreement he has received good and valuable consideration in
excess of that to which he would otherwise have been entitled in the absence of
this Agreement. This consideration includes, but
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is not limited to, the Company's Severance Payment to Xx. Xxxxx as described in
Section 2. Xx. Xxxxx further acknowledges the sufficiency of that consideration.
19. Time To Consider Agreement. Xx. Xxxxx acknowledges that he has been
advised in writing to consult with an attorney and has had ample opportunity to
consult with and review this Agreement with an attorney of his choice, and has
been given a period of at least twenty-one (21) days within which to consider
whether to sign this Agreement. Xx. Xxxxx may sign this Agreement prior to the
end of this twenty-one (21) day period, provided Xx. Xxxxx does this knowingly
and voluntarily.
20. Revocation. It is agreed and understood that for a period of seven
(7) days following the execution of this Agreement, which period shall end at
5:00 p.m. on the seventh day following the date of execution, Xx. Xxxxx may
revoke this Agreement. This Agreement will not become effective until this
revocation period has expired. This seven (7) day revocation period cannot be
shortened by agreement of the parties or by any other means.
21. Severability. If any of the terms of this Agreement shall be held
to be invalid and unenforceable, the remaining terms of this Agreement are
severable and shall not be affected thereby. The invalidity or unenforceability
of any provision of this Agreement shall be revised, construed and reformed, to
the fullest extent possible to effectuate the purpose and intent of this
Agreement. This Agreement shall be binding upon and inure to the benefit of the
Company and Xx. Xxxxx and their respective heirs, successors and assigns.
22. Entire Agreement. This Agreement and its Exhibits constitutes the
entire agreement between the parties about or relating to Xx. Xxxxx'x separation
from employment with the Company, or the Company's obligations to him with
respect his termination and fully supersedes any and all prior agreements or
understanding between the parties. The terms of this Agreement are contractual
in nature and not a mere recital, and they shall take effect as a sealed
document. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, and may not be changed orally, but only by agreement in writing
signed by both parties. The parties attest that no other representations were
made regarding this Agreement other than those contained herein.
IN WITNESS WHEREOF, the parties have signed this agreement as an
instrument under seal as of the date set forth below.
_______________________________________________ December ___, 2000
Xxxxxxx X. Xxxxx
MFIC Corporation
By:____________________________________________ December ___, 0000
Xxxxx Xxxxxxxxx, President, CEO and Chairman
M.A.L. TERMINATION AGREEMENT
Exhibit 1. Resignation from MFIC Officer Positions (attached)
Exhibit 2. Bonus Compensation Plan
Exhibit 3. Summary of "Qualified Stock Options"
Exhibit 4. Invention Assignment & Proprietary Information Agmt. - 6/26/97
Exhibit 5. Resignation as Trustee from 401(k) Plan (attached)
Exhibit 1.
Xxxxxxx X. Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
December 14, 2000
MFIC Corporation
00 Xxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Gentlemen,
This letter will confirm my resignation from the positions of President and
Treasurer of MFIC Corporation, a Delaware corporation, effective as of November
20, 2000.
Yours truly,
Exhibit 5.
Xxxxxxx X. Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
December 14, 2000
MFIC Corporation
00 Xxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Gentlemen,
This letter will confirm my resignation, effective November 20, 2000, from the
position of Trustee of MFIC Corporation's 401(k) Plan.
Yours truly,
