Exhibit 10.2
SEPARATION AGREEMENT
AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is between
EDAC Technologies Corporation (the "Company") and Xxxxxxx X. Xxxxxxxxx
("Employee").
RECITALS
The Company and Employee desire to affect a final resolution and
settlement of all matters and issues relating directly or indirectly to
Employee's employment with the Company and his July 29, 2002, separation from
that employment, and have arrived at a compromise of all such matters in this
Agreement.
AGREEMENTS
1. Termination of Employment Agreement, Change of Control Agreement and
Employment. Employee acknowledges and agrees that the December 1, 2000
Employment Agreement between Employee and the Company, a copy of which is
attached as Exhibit A, the December 1, 2000 Change of Control Agreement, a copy
of which is attached as Exhibit B, and Employee's employment by the Company,
will all terminate effective July 29, 2002. Employee acknowledges and agrees
that he has received timely and appropriate notice from the Company of the
termination of the Employment Agreement, the Change of Control Agreement and his
employment. Employee further acknowledges that the Company was entitled to
terminate his employment pursuant to the Employment Agreement and the Change of
Control Agreement, and that he is not otherwise entitled to any further payments
pursuant to the Employment Agreement or the Change of Control Agreement, or to
the consideration called for by this Agreement.
2. Expense Reimbursement. Employee agrees that he will submit to the
Company a completed expense account form on or before August 31, 2002. The
Company shall reimburse Employee for all outstanding authorized business
expenses incurred by Employee through and including July 29, 2002, consistent
with the Company's normal business expense reimbursement practices. Employee
acknowledges and agrees that, with that payment, he will be entitled to no
additional expense reimbursement from the Company.
3. Acknowledgment of Full Compensation. Employee acknowledges and
agrees that, with the payment by the Company to Employee on August 1, 2002 of
$19,230.77, less ordinary tax withholding and all required deductions, an amount
representing four weeks of accrued vacation, Employee will have received all the
vacation pay owed by the Company to Employee through and including July 29,
2002. Employee further acknowledges and agrees that he has received from the
Company all salary and wages, fringe benefits (including without limitation by
enumeration bonuses and 401(k) plan contributions) and all other compensation
owed by the Company to Employee through and including July 29, 2002, and that he
is not entitled to any other compensation or payment from the Company arising
out of Employee's employment with the Company or pursuant to the terms of either
the Employment Agreement or the Change of Control Agreement.
4. Separation Payment. Conditioned upon Employee's signing of this
Agreement, expiration of the seven day revocation period without revocation, and
Employee's properly executing and returning the attached acknowledgment form to
the Company (Exhibit C) indicating his decision not to revoke this Agreement:
(i) The Company shall pay Employee a total gross separation
payment of $104,166.65, less ordinary tax withholding and all required
deductions. Employee shall receive five (5) equal installments of $20,833.33
gross each, less ordinary tax withholding and all required deductions, with an
installment payable on the first business day of each of five consecutive months
beginning on August 1, 2002 and ending on December 1, 2002, with the first such
payment being due no earlier than the first regular business day following the
expiration (without revocation) of the seven day revocation period, and only
following the proper execution and return of the acknowledgement form attached
as Exhibit C.
(ii) Provided that Employee takes all necessary steps to elect
continued group health insurance coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act ("COBRA") on a timely basis following his July 29,
2002 separation from employment, the Company will pay Employee's health
insurance premiums for the months of August 2002 through December 2002.
Beginning in January 2003, Employee will pay the entire premium, and shall be
responsible for making such payments directly to the insurer on a timely basis.
In no event will the Company continue paying any portion of the premium payments
beyond December 2002, or beyond the time that Employee secures group health
insurance through another employer, whichever occurs earlier. Employee agrees to
notify the Company immediately upon securing such coverage.
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(iii) The Company will continue to allow Employee to use the
vehicle currently being leased by the Company and in the possession of Employee
for the remaining 18 months of the lease. The Company will continue to make
monthly lease payments of $576 to the leasing company, with the first such
payment due August 1, 2002 and the final such payment due January 1, 2004.
Employee agrees to surrender the vehicle to the Company, at the Company's
offices, on or before January 31, 2004. The Company acknowledges and agrees that
it will obtain and maintain, at its expense, insurance coverage on the vehicle
for the remainder of the lease. Employee agrees that he will be responsible for
the maintenance of the vehicle, and will bear all costs of this maintenance.
Employee agrees that he will be responsible for any mileage charges that result
in the event that the vehicle is driven more than 15,000 miles in any lease
year. The Company agrees that it will be responsible for all state and local
personal property taxes arising out of or otherwise related to the use of the
vehicle.
(iv) The Company shall delay the date by which Employee must
exercise Employee's 60,000 vested stock options until March 31, 2003.
(v) The Company shall extend Directors and Officers liability
coverage to Employee in accordance with the terms of the Company's Directors,
Officers, and Corporate Securities Liability Coverage policy.
(vi) The Company shall pay Xxxxxxxx, Xxxxx-Xxxxxxx, Chimes &
Xxxxxxxxxx, P.C. an amount equal to the legal fees actually incurred and paid by
Employee in connection with this matter, in an amount not to exceed $5,000.
(vii) The Company shall provide Employee with up to 5 months
of outplacement services through Beam Pines. These outplacement services shall
not extend beyond December 31, 2002 or exceed $5,000 in total cost.
(viii) The long term disability and life insurance coverage
provided to Employee by the Company shall remain in force until December 31,
2002. The Company agrees that it will turn both the long term disability policy
and the life insurance policy relating to such coverage over to Employee, so
that Employee can renew either or both of the policies, at Employee's expense.
No payment under this paragraph shall be deemed "compensation" for purposes of
any of the Company's qualified retirement plans or other benefit programs.
Payment under this paragraph does not entitle Employee to any retirement plan
contributions by the Company for Employee's benefit or account. No payment under
this paragraph shall be due before the expiration (without revocation) of the
seven day revocation period, and only following the proper execution and return
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of the acknowledgement form attached as Exhibit C. The consideration specified
in this paragraph is an amount to which Employee is not otherwise entitled, and
constitutes additional consideration for Employee's release and waiver of
potential claims identified in paragraph 7 below, including without limitation a
potential claim for age discrimination under the Age Discrimination in
Employment Act, and additional consideration for the agreements made in
paragraphs 14 and 15 below.
5. Non-Disclosure. Both parties agree that they will not disclose
either the existence or particular provisions of this Agreement to anyone not a
party to this Agreement without the other's prior written consent, unless
required to do so by law. Notwithstanding the foregoing, Employee may disclose
the terms to his spouse, the Company may disclose the terms to its officers,
directors, legal staff and other management, and both parties may disclose the
terms to their attorneys or tax advisors to the extent such disclosure is
reasonably necessary to enable such person to perform his/her duties. Should
Employee choose to divulge the terms or conditions of this Agreement to his
spouse, he shall insure that his spouse will be similarly bound to keep the same
confidential. Should either party choose to divulge the terms or conditions of
this Agreement to his or its legal counsel or tax advisor, he or it shall insure
that they will be similarly bound to keep the same confidential. A breach of
this paragraph by Employee's spouse shall be considered a breach of this
paragraph by Employee. Further, a breach of this paragraph by either party's
legal counsel or tax advisor shall be considered a breach of this paragraph by
that party.
6. Non-Admission of Liability. Neither this Agreement nor any action
taken by the Company pursuant to it shall in any way be construed as an
admission by the Company of any liability, wrongdoing, or violation of law,
regulation, contract or policy regarding any of the Company's decisions and
actions regarding the employment or separation from employment of Employee.
7. Employee Releases the Company. For valuable consideration from the
Company as stated above, Employee, for himself and his heirs, personal
representatives, successors and assigns, hereby releases all claims of whatever
nature that he may have against the Company, its affiliates, subsidiaries,
predecessors, successors and assigns and its and their present, former or later
insurers, agents, representatives, officers, administrators, directors and
employees (collectively "Releasees"), which arise out of or are in any manner
based upon or related to the employment relationship between Employee and the
Company, and the end of that relationship, and from all other claims or
liabilities of any nature whatsoever which have arisen from any occurrence,
transaction, omission or communication which transpired or occurred at any time
before or on the date of
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this Agreement; provided, however, that this Agreement will not prevent any
party from asserting a claim against the other party in the event the other
party breaches this Agreement.
Without limitation to the foregoing, Employee specifically
releases, waives and forever discharges the Releasees from and against all
liabilities, claims, actions, demands, damages and costs of every nature,
whether known or unknown, asserted or unasserted, which arise under the State of
Wisconsin Fair Employment Act; the Connecticut Human Rights and Opportunities
Law; the Connecticut Reproductive Hazards Law; Wisconsin and Connecticut wage
and hour laws; the Connecticut Equal Pay Law; the Connecticut Age Discrimination
and Employee Insurance Benefits Law; the Connecticut Family and Medical Leave
Law; the Connecticut Family and Medical Leave Rules; Title VII of the Civil
Rights Act of 1964, as amended; the Age Discrimination in Employment Act (29
U.S.C. ss. 621 et seq.); the Americans With Disabilities Act; the Fair Labor
Standards Act; the Equal Pay Act; or arising under any other local, state or
federal statute, ordinance, regulation or order, or which involve a claim or
action for wrongful discharge, tortious interference with a business
relationship, breach of contract (express or implied) and/or any other tort or
common law cause of action including, but not limited to, any cause of action
alleging that the Company breached the Employment Agreement or the Change of
Control Agreement.
This waiver and release does not affect those rights or claims
which arise after the execution of this Agreement.
8. The Company Releases Employee. The Company hereby releases all
claims of whatever nature that it might have against Employee which arise out of
or are in any manner based upon the employment relationship between Employee and
the Company, and the conclusion of that relationship, and from all other claims
or liabilities of any nature whatsoever that have arisen from any occurrence,
transaction, omission or communication which transpired or occurred at any time
before or on the date of this Agreement; provided, however, that this Agreement
will not prevent any party from asserting a claim against the other party in the
event that the other party breaches this Agreement. This waiver and release does
not affect those rights or claims which arise after the execution of this
Agreement.
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9. No Reinstatement, Reemployment or Rehire. Employee expressly
declines reinstatement, reemployment or rehire by the Company and waives all
rights to claim such relief and agrees never to seek or apply for employment
with the Company or with any of its related entities in the future. If he should
do so, he agrees that he has no entitlement to employment and may be denied such
on the basis of this Agreement.
10. No Pending Matters. Employee warrants and represents that he has
not filed any pending complaint, charge, claim or grievance concerning his
compensation, termination or terms and conditions of employment against the
Company with any local, state or federal agency, court or commission, and that
if any agency, commission or court assumes jurisdiction of any such complaint or
charge on behalf of Employee, he will request that agency, commission, or court
to dismiss such proceeding. Similarly, the Company warrants and represents that
it has not filed any pending complaint, charge, claim or grievance against
Employee with any local, state or federal agency, court or commission, and that
if any agency, commission or court assumes jurisdiction of any such complaint or
charge on behalf of the Company, the Company will request that agency,
commission or court to dismiss such proceeding.
11. Non-Disparagement. Employee agrees to maintain a positive and
constructive attitude and demeanor towards the Company, its directors, officers,
employees and agents, and agrees to refrain from making derogatory comments or
statements of a negative nature about the Company, its directors, officers,
employees and agents, to anyone, including, but not limited to, current and
former Company customers, employees, suppliers, vendors and referral sources.
Similarly, the Company agrees that its officers and directors will maintain a
positive and constructive attitude and demeanor towards Employee and will
refrain from making derogatory comments or statements of a negative nature about
Employee to anyone.
12. Return of Company Property. Employee represents and agrees that he
has returned any and all Company records, files, keys, keyless entry cards,
documents, confidential or proprietary information, computer equipment, CD's,
computer software programs, credit cards and any other property owned by or
belonging to the Company in Employee's possession or under his control on or
after August 15, 2002 without any originals or copies being kept by Employee or
conveyed to any other person. Notwithstanding the above, the Company will allow
Employee to continue to use his company provided laptop until December 31, 2002.
Employee agrees that he will return the laptop to the Company on or before
December 31, 2002. Employee will be permitted to retain his company provided
cell phone. However, Employee agrees that he will obtain, at
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Employee's expense, service for the phone and a new phone number. Employee will
bear all costs associated with the use of this phone. Further, both parties
agree that Employee will be permitted to return any files pertaining to the
proxy fight in his possession to the Company's attorneys, and that such files
will remain sealed, until such time as the Company's Board votes to open such
files.
13. Continued Assistance. Employee agrees that, between July 29, 2002
and August 15, 2002, he will make himself reasonably available and will use his
best efforts to answer any of the Company's questions and to otherwise assist
the Company in making an orderly transition following Employee's separation from
employment. Employee acknowledges and agrees that he shall receive no additional
consideration for the time spent answering the Company's questions or providing
such assistance as described above, as the payment referenced in paragraph 4
above represents, in addition to adequate additional consideration for other
promises and obligations contained in this Agreement (including without
limitation Employee's release and waiver of claims and the agreements made in
paragraphs 14 and 15 below), consideration for his answering such questions and
providing such assistance.
14. Noncompetition. The parties agree that the Company's customer
contacts and relations are established and maintained at great expense and that
by virtue of Employee's employment with the Company, Employee has had unique and
extensive exposure to and personal contact with the Company's customers, and
that he has been able to establish a unique relationship with those individuals
and entities that would enable him to unfairly compete with the Company.
Further, the parties agree that the terms and conditions of the following
covenants are reasonable and necessary for the protection of the Company's
business, trade secrets and Confidential Information (as described in paragraph
15 below) and to prevent great damage or loss to the Company as a result of
action taken by Employee. Accordingly, in exchange for the consideration
provided in paragraph 4 of this Agreement, Employee covenants and agrees that,
for a period of one year following his July 29, 2002 termination from the
Company, he shall not, directly or indirectly, in any capacity substantially
similar to the capacity in which he performed services for the Company and in
any geographic area in which the Company does business:
(i) canvass, contact, solicit or service, for the purpose of
providing competitive services or business of a type provided
by the Company, any "Active Customers" of the Company;
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(ii) request or advise any "Active Customers," or any suppliers or
vendors, of the Company who currently have, or have had,
business relationships with the Company within 12 months
preceding Employee's July 29, 2002 termination of employment,
to withdraw, curtail or cancel any of their business or
relations with the Company; or
(iii) induce or attempt to induce any employee of the Company to
terminate his relationship or breach any agreement with the
Company.
"Active Customers" shall mean any customer which Employee
personally solicited or serviced during the one-year period immediately
preceding the termination of his employment with the Company, and any
prospective customer of the Company that Employee personally attempted to
service during the one-year period immediately preceding the termination of his
employment with the Company. The parties agree that a sufficient geographical
component is part of this noncompetition agreement because it is limited to the
geographic areas in which the Company does business and to Active Customers. The
parties also agree that Active Customers as described above do not comprise the
total number of the Company's customers or prospective customers, that they
represent a small percentage of all potential customers in the industry, and
that the restrictions in this paragraph will not prevent Employee from working
in the industry in Connecticut or any other area.
15. Confidential Information. The parties acknowledge that the Company
has created at great expense strategic plans, methods, financial information,
customer and supplier lists, procedures, operations, techniques, customer
profiles, pricing policies, personnel data and other similar confidential and
proprietary information, and has received from its customers certain
confidential and proprietary information (collectively, the "Confidential
Information"). The parties further acknowledge that the Company has taken and
will continue to take actions to protect its Confidential Information.
Accordingly, in consideration for the benefits described in paragraph 4 of this
Agreement, Employee agrees that until the sooner of (i) such time as the
Confidential Information becomes generally available to the public through no
fault of Employee, (ii) such time as the Confidential Information no longer
provides a benefit to the Company, or (iii) two years after Employee's July 29,
2002 termination of employment from the Company, Employee will not, in any
capacity, use or disclose, or cause to be used or disclosed, in any geographic
area in which the Company does business, any Confidential Information he
acquired while employed by the Company.
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16. Law of Torts and Trade Secrets. The parties agree that nothing in
this Agreement shall be construed to limit or negate the common law of torts or
trade secrets where it provides the Company with broader protection than that
provided herein.
17. Employee Announcement. Both parties agree that the EDAC Personnel
Announcement attached as Exhibit D will be used to announce Employee's
separation from employment to the Company's employees.
18. Binding Agreement. This Agreement shall be binding upon Employee
and upon his heirs, administrators, representatives, executors, successors and
assigns and shall inure to the benefit of the Releasees and to their heirs,
administrators, representatives, executors, successors and assigns.
19. Severability. It is understood and agreed that the provisions of
this Agreement shall be deemed severable, and the invalidity or unenforceability
of any one or more of the provisions herein shall not affect the validity and
enforceability of the other provisions herein.
20. Complete and Exclusive Agreement. The parties understand and agree
that this Agreement is final and binding and constitutes the complete and
exclusive statement of the terms and conditions of settlement, that no
representations or commitments were made by the parties to induce this Agreement
other than as expressly set forth herein and that this Agreement is fully
understood by the parties. This Agreement may not be modified or supplemented
except by a subsequent written agreement signed by the party against whom
enforcement is sought.
21. Consideration Period. Employee represents and agrees that he has
had the opportunity and time to consult with legal counsel concerning the
provisions of this Agreement and that the Company has given him up to twenty-one
(21) days to consider this Agreement.
22. Company Right to Revoke. Employee understands and agrees that the
Company has the right to revoke its offer of settlement at any time prior to
Employee's execution of this Agreement and the Company's receipt of this
Agreement from Employee, for any reason, including without limitation Employee's
making of derogatory comments or statements of a negative nature about the
Company, its directors, officers, shareholders, employees and agents, to anyone,
including, but not limited to, current and former Company customers, employees,
suppliers, vendors and referral sources.
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23. Acknowledgment. The undersigned parties acknowledge and agree that
they have carefully read the foregoing document, that a copy of the document was
available to them prior to execution, that they understand its contents
including its release of claims, that they have been given the opportunity to
ask any questions concerning the Agreement and its contents, and have signed
this Agreement as their free and voluntary act.
IN WITNESS WHEREOF, the parties herein executed this Separation
Agreement and General Release as of the date appearing next to their signatures.
EDAC TECHNOLOGIES CORPORATION
Date: July 29, 2002 ________ By:/s/Xxxxxx X. Xxxxx
----------------------------------
Its: Chairman
CAUTION: THIS IS A RELEASE. THE COMPANY HEREBY ADVISES EMPLOYEE TO CONSULT WITH
AN ATTORNEY AND READ IT BEFORE SIGNING. THIS AGREEMENT MAY BE REVOKED IN WRITING
BY EMPLOYEE WITHIN SEVEN (7) DAYS OF HIS EXECUTION OF THE DOCUMENT.
Dated: July 29, 2002 ______ /s/Xxxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx
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EXHIBIT A
EMPLOYMENT AGREEMENT
[To be attached.]
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EXHIBIT B
CHANGE OF CONTROL AGREEMENT
[To be attached.]
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EXHIBIT C
SEVEN DAY RIGHT TO REVOCATION
ACKNOWLEDGMENT FORM
I, Xxxxxxx X. Xxxxxxxxx, hereby acknowledge that EDAC Technologies
Corporation has tendered a Separation Agreement and General Release offer which
I voluntarily agreed to accept on ______________, 2002, a date at least seven
days prior to today's date.
I certify that seven calendar days have elapsed since my voluntary
acceptance of the above-referenced offer (i.e., seven days have elapsed since
the above date), and that I have voluntarily chosen not to revoke my acceptance
of the above-referenced Separation Agreement and General Release.
Signed this ___ day of _____________, 2002 at ___________, ___________.
--------------------------
Xxxxxxx X. Xxxxxxxxx
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EXHIBIT D
EDAC PERSONNEL ANNOUNCEMENT
[To be attached.]
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