SEPARATION AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS
Exhibit 10.1
SEPARATION AGREEMENT AND
MUTUAL RELEASE OF ALL CLAIMS
This Separation Agreement and Mutual
Release of All Claims (“Agreement”) is entered into between Xxxx X. Grow
(“Grow”) and Sharps Compliance Corp. (“Sharps”), for itself and its subsidiary,
Sharps Compliance, Inc. (collectively “the Company”), to be effective as of
April 27, 2009, and is made and done in consideration of the promises and
agreements contained herein.
1. Recitals
1.1. There
now exist between Grow and Sharps two contracts, a Sharps Compliance Corp.
Restricted Stock Award Agreement (“Stock Agreement”) of October 27, 2008, and an
Employment Agreement (“Employment Agreement”) of the same date (collectively,
the “Grow Agreements”).
1.2. The
parties hereto agree that it is in their best interests to compromise and amend
the Grow Agreements as provided for herein, to provide for the orderly
resignation of Grow from his positions under the Employment Agreement, which
resignations become effective with the execution of this Agreement, and to
provide for certain benefits and releases, all as more particularly described
and made herein. The parties further agree that it is in their best
interests, and is a quid pro
quo of the agreement among the parties made hereby, that the terms,
conditions, and facts of this Agreement, other than that required to be made
public in Sharps’ filings with the Securities and Exchange Commission, be kept
strictly confidential in accordance with the provisions hereof.
2. Agreements
2.1. Stock
Agreement: Subject to the remaining express paragraphs of this
Agreement, the Board of Directors of Sharps have voted to amend the Stock
Agreement, and the Stock Agreement is hereby amended to provide that Grow shall
retain upon his resignation, as hereafter provided, 206,250 unregistered shares
of Sharps stock awarded by the Stock Agreement, despite anything seemingly to
the contrary stated therein (i.e., Grow forfeits 93,750 unregistered
shares). Grow acknowledges and agrees that 75,000 of the 206,250
unregistered shares shall be considered vested under the Stock Agreement on
April 1, 2009, and cannot be sold or offered for sale under the Securities Act
Rule 144 of the Securities and Exchange Commission prior to April 1,
2010. The parties acknowledge and agree that the remaining 131,250 of
the 206,250 unregistered shares provided for by this paragraph shall vested in
Grow (notwithstanding anything to the contrary in the Stock Agreement) on April
1, 2009, and cannot be sold or offered for sale under the Securities Act Rule
144 and Exchange Commission prior to October 31, 2010. The terms and provisions
of this Agreement shall supersede and control over any of the terms and
provisions of the Stock Agreement to the contrary.
2.2. Payments and Benefits Other Than
Group Health: (a) Sharps shall pay Grow a lump-sum settlement
payment of $67,743.21 within seven (7) business days after the tendering of
Grow’s resignation as herein provided, subject to the provisions of paragraph
2.9. hereof and (b) Sharps shall pay Grow a severance amount equal to four (4)
months’ salary at Grow’s
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current
pay-rate and consistent with prior practices. This will be accomplished by the
continuation of salary to Grow on a bi-weekly basis consistent with the current
practice for a four (4) month period and with continued participation by Grow in
the Company’s 401(k) and Flexible Spending Plan. All sums paid to Grow reflected
in this section shall be subject to customary withholding and deductions as
wages pursuant to Sharps’ customary payroll practices.
2.3. Resignation: Contemporaneous
with the execution by the parties of this Agreement, Grow shall tender to the
Board of Directors of Sharps a letter evidencing his full, effective, and
immediate resignation from all positions, including President and Chief
Operating Officer, in which he was employed under the Employment
Agreement. Grow shall not be required to resign from the Board of
Directors of Sharps.
2.4. Healthcare Benefits: Grow
will be eligible for the Continuation of Health Coverage under the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”) beginning on May 1, 2009. Sharps
agrees to reimburse Grow monthly an amount equal to the excess of
the COBRA-required premiums per month over Grow’s current group
health insurance premium of $425.00 per month. Subsequent to the eighteen (18)
month COBRA period, Sharps agrees to reimburse Grow monthly an amount equal to
the excess of the premiums per month for a comparable individual health
insurance policy (comparable deductible, limits, coverage,
etc...) over Grow’s group health insurance of $425.00 per month for
an additional twenty-five (25) month period (i.e., a total of forty-three (43)
months). Grow agrees to use reasonable best efforts to minimize the
cost of the individual insurance policy. The Company and Grow will mutually and
reasonably agree to the individual health insurance carrier selected by Grow.
Grow’s request for reimbursement must be supported by evidence of the actual
health insurance premium paid by Grow. Any obligation for Sharps to make
payments towards Grow’s health insurance premiums under this paragraph shall
cease immediately in the event that Grow becomes eligible for health insurance
under a subsequent employer’s health insurance plan. Grow further
agrees to provide written notice to Sharps within seven calendar days
of accepting employment during the forty-three month period following
his resignation from employment at Sharps.
2.5. Apartment: Grow
shall vacate the corporate apartment in which he now resides by May 10,
2009.
2.6. Confidentiality: The
parties hereto, and their officers, agents, employees, representatives, and
counsel, hereby agree to keep the fact, terms, and conditions of this Agreement
(collectively the “Confidential Information”) strictly confidential and shall
not disclose the Confidential Information to any person, firm, or other entity
except as provided herein. The parties hereto are authorized to make
disclosure of the Confidential Information: (a) to the extent as is actually
required by any local, state, or federal agency or regulatory authority; (b) to
the extent as is actually required pursuant to any valid order of a court of
competent jurisdiction respecting confidential materials; (c) to the extent as
is actually required in any subsequent litigation seeking enforcement of or
damages for breach of this Agreement; (d) to all other parties hereto; and, (e)
only otherwise to the extent as is actually required to effectuate bona fide
accounting, legal, or insurance purposes of the party making the
disclosure. Any party to this Agreement who is served with a court
order, subpoena, or other similar process
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(“Process”)
that the party believes, in good faith, will likely compel disclosure of the
Confidential Information shall provide Xxxxxxx X. Xxxxxx, at 000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and Grow , with a copy of the Process
as soon as practicable, but no later than ten days after service of the Process
or within such shorter period as will allow a party that wishes to oppose the
Process a reasonable opportunity to do so, and will cooperate with any party who
wishes to oppose such Process.
2.7. General
Releases:
2.7.1. Subject
to the remaining express paragraphs of this Agreement, and any exceptions noted
therein, Sharps, in all capacities, and with the intention of binding
itself and its parents, subsidiaries, affiliates, officers, directors,
employees, agents, representatives, predecessors, successors, attorneys,
insurers, and assigns, hereby expressly RELEASES and forever DISCHARGES Grow and
his affiliates, agents, representatives, successors, heirs, attorneys, insurers,
and assigns, from any and all liabilities, claims, demands, actions, and causes
of action, of whatever nature or character, whether in contract or in tort or
otherwise, arising under common law or state or federal statute, fixed or
contingent, liquidated or unliquidated, primary or secondary, known, unknown, or
knowable, suspected or unsuspected, which arise out of any facts or occurrences
that exist or have happened prior to the effective date of this
Agreement.
2.7.2. Claims Not
Released. This General Release shall be and remain in effect
in all respects as a complete General Release as to the matters released, except
that this General Release does not extend to the rights granted to Sharps under
this Agreement. The Parties agree that Sharps’ release of liability
shall not include any claims arising out of criminal acts, illegal conduct, or
fraud committed by Grow during his employment, which was unknown to
Sharps.
2.7.3. Subject
to the remaining express paragraphs of this Agreement, Grow, with the intention
of binding himself and his affiliates, agents, representatives, successors,
heirs, attorneys, insurers, and assigns, hereby expressly RELEASES and forever
DISCHARGES the Company and their affiliates, agents, representatives,
successors, attorneys, insurers, and assigns, from any and all liabilities,
claims, demands, actions, and causes of action, of whatever nature or character,
whether in contract or in tort or otherwise, arising under common law or state
or federal statute, fixed or contingent, liquidated or unliquidated, primary or
secondary, known, unknown, or knowable, suspected or unsuspected, which arise
out of any facts or occurrences that exist or have happened prior to the
effective date of this Agreement.
2.7.4. Claims
Released. By signing this General Release, I am providing a
complete waiver of all rights and claims that may have arisen, whether known or
unknown, up until the date this General Release is signed (the “Release Date”),
except as expressly provided otherwise by law. This General Release
includes, but is not limited to, the following:
(a) Any
and all claims under the law of any jurisdiction relating to employment or the
termination of employment, including, but not limited to, wrongful discharge of
employment; constructive discharge from employment; termination in violation of
public policy; breach of contract, both express and implied; any plans or
policies providing for severance payments upon the termination of employment
with the exception of the severance
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provisions
provided in this Agreement; and, any and all claims arising out of any other
laws and regulations relating to employment or employment discrimination;
and
(b) Any
and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination
in Employment Act of 1967 (including the Older Workers Benefit Protection Act of
1990), the Americans with Disabilities Act of 1990, the Fair Labor Standards
Act, the Worker Adjustment and Retraining Notification Act, the Texas Commission
on Human Rights Act, and any other applicable state and local fair employment
laws.
2.7.5. Claims Not
Released. This General Release shall be and remain in effect
in all respects as a complete General Release as to the matters released, except
that this General Release does not extend to any claims by Grow arising under
this Agreement or to:
(a) Any
rights or claims for benefits Grow may have under any “employee benefit plans”
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended) maintained by Sharps in the course of Grow’s employment
and any causes of action relating to such a benefit claim; and
(b) Any
claim for benefits under state workers’ compensation laws and state unemployment
insurance laws.
2.8. Miscellaneous:
2.8.1. All
parties hereto acknowledge and affirmatively represent that they are the owners
of the claims released by them herein, that they have full power and authority
to release the claims, and that they have not conveyed or agreed to convey the
claims to third parties except as is expressly disclosed herein.
2.8.2. All
parties hereto agree in good faith to execute any and all other documents, and
take such further action, as are reasonably necessary to effectuate the purposes
of this Agreement as expressed herein.
2.8.3. All agreements made herein,
including to perform actions or execute documents, are expressly conditional
upon all other agreements made herein, and the releases contained herein shall
not be effective (as of the indicated effective date) in favor of the parties
released until all actions required of the released parties, as described
herein, have occurred or shall have been excused in writing by the releasing
party.
2.8.4. This
Agreement represents the entire agreement between the parties hereto with
respect to any and all matters addressed herein and supersedes any prior or
contemporaneous oral or written agreements or understandings. The
parties have utilized or declined to utilize attorneys of their choosing to
counsel them concerning the nature and effect of this Agreement, and enter into
it upon such advice from such counsel and others as they deem appropriate, of
their own will and accord, in good faith.
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2.8.5. Although
initially drafted by counsel for one party or another hereto, this Agreement has
been freely and fully negotiated by all parties. Consequently, the
terms of this Agreement shall not be construed either for or against any party
hereto.
2.8.6. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original instrument, but all of which together shall constitute
but one Agreement. Fax and electronic signatures shall have the same
validity as original signatures on all counterparts.
2.8.7. This
Agreement is performable in Houston, Xxxxxx County, Texas, and shall be
construed under and governed by the laws of the United States of America and the
State of Texas, as each shall apply, without reference to the conflicts of laws
principles of either body of law.
2.8.8.
This Agreement shall not be assignable by Grow or Sharps except that it shall be
assigned by Sharps without the consent of Grow to any successor to substantially
all of the stock, assets or business of Sharps.
2.8.9.
For the purpose of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the execution page of this Agreement, provided that all notices to
Sharps shall be directed to the attention of the Secretary of Sharps, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
2.9. Acknowledgment of Waiver of Claims
Under ADEA. The provisions of this Paragraph 2.9. only apply
if Grow is at least 40 years old, as of the date he executes this General
Release.
“If I am 40 years of age or older as of the date I execute this General Release,
I acknowledge that by signing this General Release I am waiving and releasing
any rights I may have under the Age Discrimination in Employment Act of 1967
(“ADEA”), as amended by the Older Workers Benefit Protection Act of 1990, and
that I have done so knowingly and voluntarily. This General Release
does not apply to any rights or claims that may arise under ADEA after the
Release Date. I acknowledge that I am required to execute this
General Release as a condition of receiving the benefits described in this
Agreement.”
“I further acknowledge that I have been advised by this writing:
(a) To
consult with an attorney prior to executing this General Release;
(b) I
understand that this General Release does not preclude me from instituting a
judicial proceeding for the sole purpose of enforcing this General Release or
from contesting the knowing and voluntary nature of this General Release under
the ADEA;
(c) I
have seven (7) days following my execution of this General Release to revoke my
acceptance of the General Release (the “Revocation Period”); and
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(d) This
General Release shall not be effective until the Revocation Period has expired
without revocation, and I acknowledge that I shall not receive the benefits
provided by this Agreement until after expiration of the Revocation
Period.”
“I acknowledge, agree to and accept all
the terms of this General Release.”
EXECUTED by the parties whose names
appear below on the dates shown next to their names, to be effective as of the
date first stated above.
Date: April
27,
2009
XXXX X. GROW
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Date: April
27,
2009 SHARPS
COMPLIANCE CORP.
By__________________________
Name:______________________
Title:_______________________
0000 Xxxxx Xxxxx, Xxxxx
000
Xxxxxxx, Xxxxx 00000
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