June 27, 2002
Mr. X. Xxxxxxx Xxxxxx 00 Xxxxxxxxx Xxxxxx
Saunderstown, Rhode Island 02864
Dear Xxxxx:
This letter will acknowledge that you have requested that the Board of
Directors of Infinite Group, Inc. (the "Company") agree to the early termination
of your employment agreement with the Company dated July 1, 1999 (the
"Employment Agreement") in connection with your desire to retire and that you be
retained by the Company as a consultant in connection with its business. The
Board of Directors of the Company hereby agrees to acknowledge your retirement
request and to retain you as a consultant in consideration of your obligations
hereunder and in exchange for your execution of the Release annexed hereto as
Exhibit A (the "Release"), on the following terms and conditions.
1. The Employment Agreement is hereby terminated and of no further force
or effect.
2. You hereby resign from all offices which you may hold with the Company.
3. You hereby resign as a director of the Company.
4. You hereby resign as an officer and director of each subsidiary of the
Company.
5. The Company hereby retains you as a Special Consultant to its President
and Board of Directors and you agree to provide consulting services to the
Company during the period commencing on the date hereof and terminating on June
30, 2004 (the "Consulting Period"). In performing such services, you will report
to the President and Chief Executive Officer and/or Chairman of the Board of the
Company. Such services shall be consistent with the services which you have
previously provided to the Company and shall include providing the President and
Chief Executive Officer and/or Chairman with analysis and advice with respect to
those matters for which you previously had responsibility. During the Consulting
Period you shall provide such services at times and locations mutually
acceptable to you and the Company.
During the Consulting Period, the Company shall compensate you as follows:
(a) you shall receive a semi-monthly payment commencing on June 1, 2002
and terminating on May 15, 2003 in the amount of $5,700.00. These payments will
be made to you in your capacity as an independent consultant (and not an
employee) to the Company and will not reflect any tax or FICA withholding;
(b) the Company shall provide you with group health benefits through June
30, 2003 covering you and your family, on such terms as they are generally made
available to executive officers of the Company during such period;
(c) the Company shall reimburse you for all pre-approved expenses
reasonably incurred by you in connection with your performance of consulting
services hereunder.
6. (a) The Company hereby acknowledges that it currently owes Xxxxx
Xxxxxx, your wife, the sum of $10,000. The Company hereby agrees to repay this
amount to her in two equal installments with interest at the rate of 10% per
annum on or before July 15, 2002, and December 31, 2002, respectively. This
amount represents all amounts, absolute or contingent, owed by the Company to
Xxxxx Xxxxxx.
(b) The Company hereby acknowledges that there are no loans
currently outstanding from the Company to you.
7. The Company hereby acknowledges that you have been granted options to
purchase shares of Company Common Stock under the Company's Stock Option Plans.
The Company covenants and agrees that you shall have ninety (90) days from the
end of the Consulting Period (until September 30, 2004, except as otherwise
provided for herein) to exercise your options with respect to these shares. All
such options shall, as a matter of law, be deemed non-qualified stock options
and, upon exercise, shall be subject to applicable tax withholding obligations.
8. The Company and you acknowledge that there is presently a bona fide
dispute with respect to whether you entered into a contract on the Company's
behalf with the University of Rhode Island ("URI") with respect to a certain
Optimec Laser Engineered Net Shape machine known as an Optimec 750. XXX contends
that you entered into a contract with it on the Company's behalf and you have
contended that no such contract exists. In the event that the Company does not
receive documentation from URI on or before December 1, 2002, confirming that no
contract exists and/or that the Company has no liability to URI, then, in such
event, upon notice to you, the Company may terminate the Consulting Period and
its related obligations to you hereunder.
9. (a) In consideration of the Company's execution of this Agreement, you
hereby agree with the Company that during the period commencing on the date
hereof and terminating on June 30, 2005, you will not (1) solicit proxies with
respect to any voting securities of the Company in opposition to the slate of
directors proposed by the board of directors of the Company; (ii) become a
"participant" in any "election contest" relating to the election of directors of
the Company (as such terms are used in Rule 14(a)11 of Regulation 14A under the
Securities Act of 1934); or (iii) lend your support to or authorize your name to
be used in connection with any "election contest" (whether or not the lending of
your support or the use of your name would cause you to be a "participant"). In
addition, during the period commencing on the date hereof and terminating on
June 30, 2005, you will not disparage or denigrate in any manner the Company,
any or its subsidiaries or affiliates, or any of its or their respective
officers or directors.
(b) In consideration of the Company's execution of this Agreement, you
hereby agree that in connection with the sale by you or any of your affiliates
of shares of Company Common Stock, now owned or hereafter acquired ("Shares"),
except as otherwise agreed to in writing by the Company, (i) the maximum number
of Shares which may be sold on the NASDAQ Small Cap Market or a subsequent
market or exchange on which the shares are listed and/or traded (the "NSCM") on
any day shall be equal to twenty percent (20%) of the average of the number of
shares of Common Stock traded on the NSCM for the seven trading days preceding
such sale.
10. You hereby acknowledge and agree that your breach of any provision
contained in paragraph 9 hereof would cause irreparable damage to the Company
which would not be measurable; and that the Company's remedy at law for any such
breach would be inadequate and the Company shall be entitled, in addition to any
other remedy available to the Company, to temporary or permanent injunctive
relief to enjoin any actual or threatened breach of such provision.
11. In consideration of your execution of this Agreement, the Company
hereby agrees with you that during the period commencing on the date hereof and
terminating on June 30, 2005, the Company will not disparage or denigrate you in
any manner.
12. The Company hereby acknowledges and agrees that its breach of the
provisions contained in paragraph 10 hereof would cause irreparable damage to
you which would not be measurable; and that your remedy at law for any such
breach would be inadequate and you shall be entitled, in addition to any other
remedy available to you, to temporary or permanent injunctive relief to enjoin
any actual or threatened breach of such provision.
13. It is specifically acknowledged and agreed to by the Company and you
that the restrictions contained in the last sentence of Paragraph 9(a) and in
Paragraph 11 shall not restrict either party from testifying truthfully or
providing information if compelled to do so by applicable law.
14. Reference is made to Sections 12 and 14 of the Employment Agreement
wherein you have undertaken certain agreements and covenants with the Company
with respect to non-competition and confidential information. You hereby agree
that these provisions are fully incorporated herein by reference and shall
survive the termination of the Employment Agreement and shall be in full force
and effect. You further agree that the applicable period of your covenant not to
compete shall run from the date hereof through June 30, 2004.
15. Notwithstanding anything to the contrary contained in the Release, the
Company shall indemnify you with respect to any third party claim arising out
of, or related to, your service as an officer, director or employee of the
Company or any of its subsidiaries to the same extent and on the same terms and
conditions as shall apply from time to time to the Company's then current
officers, directors or employees under the Company's generally applicable
policies regarding indemnification.
16. All cash payments to be made hereunder shall be net of all applicable
income and employment taxes required to be withheld therefrom.
17. If any disputes, claims or controversies should arise between the
parties, the parties shall make a good faith attempt to resolve such issues on
an informal basis between themselves. Should such efforts fail, however, any and
all disputes, claims or controversies that may arise between the parties, their
employees or agents, relating to this Agreement or relating to or arising out of
the employment relationship or the termination of the employment relationship,
or where either party attempts to hold the other party, its employees or agents
liable, shall be submitted to arbitration. This includes, but is not limited to,
claims under the Age Discrimination in employment Act, Title VII of the Civil
Rights Act, the Americans with Disabilities Act, Sections 1981 through 1988 of
Title 42 of the United States Code, the Rhode Island laws against
discrimination, the Conscientious Employee Protection Act, federal and state
Family and Medical Leave laws, federal and state Equal Pay laws, defamation, as
well as any other federal, state or local law, ordinance or regulation, or based
on any public policy, contract, tort or common law or any claim for costs, fees
or other expenses including attorneys fees. Specifically excluded from any
agreement to or requirement to arbitrate are any claims by the Company that you
have violated Sections 9 or 14 of this Agreement or any claims by you that the
Company has violated Section 11 of this Agreement.
The parties agree that such arbitration shall be their sole and
exclusive remedy. The parties understand that other options such as federal and
state and judicial remedies exist and that regardless of the nature of the
dispute or claim, the parties agree to resolve such dispute or claim only by
arbitration and are waiving their rights to obtain any legal or equitable relief
from a court or agency.
The arbitration shall be pursuant to the Federal Arbitration Act and
shall be arbitrated by a single arbitrator in accordance with the rules for
employment disputes of the American Arbitration Association. The arbitrator
shall have the authority to award any type of legal or equitable relief that
would be available in a court of competent jurisdiction to the extent such
relief is available under law. The fees pertaining to the arbitration, including
the AAA's administrative fees and the arbitrator's fee shall be split between
the parties, subject to reallocation by the arbitrator in the award.
The parties agree that any arbitration claim will be timely only if
brought within the time which an administrative charge or complaint would have
to be filed if the claim is one which could be filed with an agency. If the
arbitration claim is one which raises an issue that might have been brought in
court, then the arbitration claim must be filed within the time set by the
appropriate statute of limitations.
18. In consideration of the Company's execution of this Agreement, you
hereby agree and acknowledge that the name "Laser Fare", and any derivative or
variation thereof, is the exclusive property of the Company and shall not be
used by you or any entity with which you are affiliated in any manner or
respect.
19. In consideration of the Company's execution of this Agreement, you
hereby acknowledge and represent to the Company that Schedule A annexed hereto
contains a list of all contracts which you have entered into on behalf of the
Company, or any of its affiliates or subsidiaries, which either require future
performance by the Company or pursuant to which the Company has any liability.
20. Miscellaneous. This Agreement may be amended only by a written
instrument signed by you and the Company. Except for separate agreements between
you and the Company specifically mentioned herein, this Agreement shall
constitute the entire agreement between the Company and you with respect to its
subject matter. The Separation Agreement and Release shall be governed by the
laws of the State of Rhode Island, other than the provisions thereof relating to
conflict of laws. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, heirs and assigns. This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
In the event that any of the terms and conditions of this Agreement are or
become invalid or unenforceable, the remaining provisions shall remain in force.
Any notices to be given and any payments to be made hereunder shall be delivered
in hand or sent by registered mail, return receipt requested, to the respective
party at (i) the Company's headquarters, if notice shall be to the Company, or
(ii) your address of permanent residence as listed on the Company's records from
time to time or to such other address as either such party shall direct in
accordance with the requirements of this Section 20.
This Agreement shall become effective on the seventh calendar day
following the date on which you sign the release provided that, in the event you
exercise your revocation right under the release, this Agreement shall become
null and void, ab initio.
Please acknowledge your understanding, acceptance and agreement with the
foregoing by signing this letter at the designated location below.
Sincerely,
Infinite Group, Inc
By:
---------------------------------
Xxxxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
Xxxxxx to and Accepted:
----------------------------
X. Xxxxxxx Xxxxxx
Solely with respect to Section 6 hereof:
----------------------------
Xxxxx Xxxxxx
EXHIBIT A
RELEASE OF CLAIMS BY X. XXXXXXX XXXXXX
(i) In consideration of the payments and other consideration set forth in
the annexed letter agreement (the "Agreement"), the receipt and sufficiency of
which you hereby acknowledge, on behalf of yourself, your family, your heirs,
executors, administrators, successors and assigns, you irrevocably and
unconditionally release, acquit and forever discharge the Company, and its past
and present employees, directors, officers, agents, stockholders, parents,
subsidiaries, affiliates, successors, predecessors and assigns (collectively
referred to as "Releasees"), from any and all claims, controversies,
liabilities, demands, causes of action, debts, obligations, promises, acts,
agreements, rights of contribution and/or indemnification, and damages of
whatever kind or nature, whether known or unknown, suspected or unsuspected,
foreseen or unforeseen, liquidated or contingent, actual or potential, joint or
individual, that you now have or may have against the Releasees to the date of
this Release of Claims ("Release"). Such released claims include, without
limitation, any and all claims related to all aspects of your employment with
The Company or your separation from that employment including, but not limited
to, claims for breach of contract, employment discrimination under Title VII of
the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the
Equal Pay Act of 1963, the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974, the Age Discrimination in Employment Act
of 1967, as amended, the Older Workers Benefit Protection Act of 1990, the Civil
Rights Act of 1866, the Family and Medical Leave Act of 1993, or under any other
federal, state, local or municipal laws, rules or regulations, including,
without limitation, the laws of the State of Rhode Island, as well as any and
all claims arising out of, based upon or relating to your employment or
termination of your employment with the Company, and all claims for punitive or
compensatory damages.
(ii) You acknowledge and agree that in consideration for the payments
provided to you by the Company in the Agreement, this Release constitutes a
knowing and voluntary waiver of all rights or claims you may have against The
Company including, but not limited to, all rights or claims arising under the
Age Discrimination in Employment Act of 1967. You further acknowledge and agree
that you have signed this Release freely and voluntarily and without duress or
coercion, and with full knowledge of its significance and consequences and of
the rights relinquished, surrendered, released and discharged.
(iii) You acknowledge and agree that the payments set forth in the
Agreement as consideration for this Release is in addition to anything of value
to which you are otherwise entitled by law or the Releasees' policies.
(iv) You acknowledge and agree that you have carefully read and understand
the terms of this Release, all of which have been fully explained to you.
(v) You acknowledge that the Company has advised you to consult with legal
counsel or a representative of your choice before signing this Release and that
you had a fair opportunity to do so.
(vi) You understand that, by signing this Release, you do not waive rights
or claims that (a) you have under the Agreement, or (b) may arise after the date
you execute this Release.
(viii) You acknowledge that you may revoke this Release in writing at any
time during the seven (7) calendar days following the date on which you sign
this Release, and the Separation Payment set forth in Section 1 of the
Separation Agreement and the terms of this Release, and the Agreement, shall not
be effective or enforceable until such seven-day revocation period has expired
without your exercising your revocation right.
Dated: Signed:
-------------------- -----------------------------
X. Xxxxxxx Xxxxxx
