Exhibit 10.1
AGREEMENT
This AGREEMENT (this "Agreement") is made and entered into by
and between Xxxxxx X. Xxxxxxx (the "Executive") and Refac Optical Group, a
Delaware corporation (the "Company"), as of November 30, 2006.
WHEREAS, the Executive has been employed by the Company
pursuant to an Employment Agreement dated as of April 1, 2005 (the "Employment
Agreement");
WHEREAS, the Executive has determined not to continue his
employment with the Company beyond the term of the Employment Agreement, which
expires December 31, 2006;
WHEREAS, the Company and the Executive believe it is in the
best interests of the Company to enter into this Agreement and provide for an
orderly transition of the Executive from the Company, and the agreements
provided herein, in exchange for the benefits to the Executive set forth
herein.
NOW, THEREFORE, the Company and the Executive, intending to
be legally bound, hereby agree as follows:
1. Termination of Employment. The Executive's employment with the
Company shall terminate effective as of December 31, 2006 (the "Termination
Date").
2. Board of Directors. The Executive shall resign from the Board of
Directors of the Company and each of its subsidiary corporations effective as
of November 30, 2006.
3. Payments and Benefits.
Compensation. The Company shall continue to pay Executive his
current base salary through the Termination Date.
Accrued Compensation. On the next regular payroll date
following the Termination Date, the Company shall pay to the Executive all
accrued but unpaid salary, five accrued vacation days and shall reimburse the
Executive for any outstanding business expenses for which he is entitled to be
reimbursed.
Severance Payment. Subject to the execution of the Release
(as defined below), on April 30, 2007, the Company shall pay to the Executive a
severance amount of One Hundred and Seventy Five Thousand Dollars ($175,000),
less applicable withholding
for federal and state income taxes and any other mandatory deductions and, to
the extent allowable, the Executive's maximum 401(k) contribution for 2007.
Benefits. Through December 31, 2007 (such period, the
"Severance Period"), or if earlier, until the Executive obtains similar
benefits from a subsequent employer, the Company shall provide the Executive
and his eligible dependents, at the Company's expense, with health and dental
benefits available to the Executive under the New Jersey State Continuation
Coverage provisions regarding continuation of group health coverage.
Bonus. In consideration for his services to the Company
during 2006, on April 30, 2007, the Executive shall receive a bonus of One
Hundred and Seventy Five Thousand Dollars ($175,000), less applicable
withholding for federal and state income taxes and any other mandatory
deductions.
Automobile. During the Severance Period, the Company shall
continue to provide the Executive with use of the automobile being provided to
the Executive for his use on the date hereof under Section 6(b) of the
Employment Agreement, under the terms of the current lease for such automobile
by making a lump-sum payment of $9,120.00 on the Company's next regular payroll
date following the Termination Date. The Company shall have no responsibility
with respect to the lease or the automobile following the Termination Date; the
Executive shall make all payments and perform all other obligations thereunder
from and after the Termination Date.
4. Stock Options. All outstanding stock options held by the Executive
as of the Termination Date shall become vested and exercisable on the
Termination Date and shall remain exercisable in accordance with the option
agreement(s) pursuant to which they were granted.
5. Repayment of Note.
On or before the Termination Date, the Executive shall pay
the third installment due pursuant to the Promissory Note between the Executive
and the Company, dated December 13, 1996 (the "Note"), in the sum of
$49,591.80. After taking this installment payment into account, the balance due
under the Note as of the Termination Date shall be $276,840.37.
As of the Termination Date, the Executive will own 31,184
shares of the Company's common stock, par value $0.001 per share (the
"Shares"), all of which are entitled to the benefit of the Payment Right (as
defined in the Agreement and Plan of Merger, dated as of August 19, 2002 (the
"Merger Agreement"), between the Company and Palisade Concentrated Equity
Partnership, L.P.). On January 2, 2007, the Executive shall exercise the
Payment Right with respect to the Shares and the Company shall apply the entire
Payment Amount (as defined in the Merger Agreement) to repay $258,515.36 of the
amount due on the Note.
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On January 2, 2007, the Executive shall pay the Company the
sum of $18,416.03 representing the principal balance of $18,325.01 due under
the Note after applying the Payment Right proceeds, plus accrued interest of
$91.02. Following the payments provided for in this Paragraph 5, the Note shall
be deemed to be paid in full and cancelled and the Company shall deliver the
Note so marked to the Executive.
6. Nondisparagement.
The Executive shall not make, participate in the making of,
or encourage any other person to make, any statements, written or oral, that
criticize, disparage, or defame the goodwill or reputation of, or which is
intended to embarrass or adversely affect the morale of, the Company, or any of
its present, former or future directors, officers, executives, employees and/or
affiliates.
The Company shall not make, participate in the making of, or
encourage any other person to make, any statements, written or oral, that
criticize, disparage, or defame the goodwill or reputation of, or which is
intended to embarrass or adversely affect the morale of, the Executive. In
addition, the Company shall use reasonable efforts consistent with prudent
business practices to discourage its present, former or future directors,
officers, executives, employees and/or affiliates from making any such
disparaging remarks about the Executive.
Each of the Company and the Executive shall not make any
negative statements, written or oral, relating to Executive's employment or the
termination of his employment, or any aspect of the business of the Company or
any of its affiliates.
Nothing contained in the foregoing shall be deemed to
prohibit or restrict truthful testimony or statements in any legal or
administrative proceeding, action, investigation or inquiry regarding the
Company or the Executive's employment.
7. Confidentiality. The Executive shall hold in a fiduciary capacity
consistent with the Company's code of ethics and Section 18 of the Employment
Agreement for the benefit of the Company all information, knowledge or data
(whether written or oral) relating to the Company or any of its affiliates that
he has obtained during his employment by the Company or any of its affiliates
that is not public knowledge (other than as a result of the Executive's
violation of this Section 7 or Section 18 of the Employment Agreement)
("Confidential Information"). The Executive shall not communicate, divulge or
disseminate Confidential Information at any time, except with the prior written
consent of the Company or as otherwise required by law or legal process. The
Executive shall return to Company, within five business (5) days after the
Termination Date, all Confidential Information, including, but not limited to,
documents and memoranda, and all other property belonging to the Company which
is in the Executive's possession or control and of which he is aware. If he
subsequently discovers that he has any additional Confidential Information, he
shall promptly turn same over to the Company.
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8. Release. On the Termination Date, each of the Company and the
Executive shall execute the General Release and Waiver set forth in Exhibit A
hereto (the "Release").
9. Entire Agreement; Other Benefits. This Agreement contains the
entire agreement of the parties, relating to the Executive's employment by
Company and termination of employment and all other matters arising between
Company and the Executive prior to the date and time of execution hereof, and
supersedes all prior discussions, agreements, contracts and understandings
between the parties, including the Employment Agreement, other than Sections 10
and 18 of the Employment Agreement, which shall survive.
10. Successors. This Agreement is personal to the Executive and shall
not be assignable by the Executive other than by will or the laws of descent
and distribution.
11. Amendment. This Agreement may be amended, modified or changed only
by a written instrument executed by the Executive and the Company.
12. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware or federal law, where
applicable. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
13. Notices. All notices and other communications hereunder shall be
in writing; shall be delivered by hand delivery to the other party or mailed by
registered or certified mail, return receipt requested, postage prepaid; shall
be deemed delivered upon actual receipt; and shall be addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxxx
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Tel: 000-000-0000
If to the Company:
Refac Optical Group.
0 Xxxxxx Xxxxx
Xxxxxxxx X
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer
Tel: 000-000-0000, ext. 2881
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With a copy to:
Xxxxxxx X Xxxxxx, Esq.
Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
14. Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement, or any other benefits received pursuant hereto, such minimum
federal, state and/or local taxes as shall be required to be withheld under any
applicable law or regulation. Each of the Executive and the Company shall bear
their respective tax liabilities, if any, resulting from this Agreement. The
Executive acknowledges that the Company has made no representations about the
tax consequences of any amount received by him pursuant to the terms of this
Agreement.
15. Remedies. The Executive acknowledges and agrees that it would be
difficult to measure any damages caused to the Company which might result from
any breach of the provisions of this Agreement or Sections 10 or 18 of the
Employment Agreement, and that, in any event, money damages would be an
inadequate remedy for any such breach. Accordingly, the Executive acknowledges
and agrees that if he breaches or threatens to breach, any portion of this
Agreement or Section 10 or 18 of the Employment Agreement, the Company shall be
entitled, in addition to all other remedies that it may have, to an injunction
or other appropriate equitable relief to restrain any such breach without
showing or proving any actual damage to the Company and without the necessity
of posting any bond or other security.
16. Counterparts; Facsimile Signature. This Agreement may be executed
in two counterparts, each of which will be deemed an original and both of which
together will constitute one and the same instrument. This Agreement may be
executed and accepted by facsimile signature and any such signature shall be of
the same force and effect as an original signature.
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IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first set forth above.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
REFAC OPTICAL GROUP
By: J. Xxxxx Xxxxxxx
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Name: J. Xxxxx Xxxxxxx
Title: Chief Executive Officer and
President
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