Exhibit 10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE
This Separation Agreement and
General Release (“Agreement”) is made and entered into
as of April 20, 2006, by and between Benny A. Noens, an adult
individual residing in Florida (“Employee”), and
Metrologic Instruments, Inc., a New Jersey corporation, and all of
its subsidiaries (“Company”).
RECITALS
Employee has been employed by
Company, pursuant to the Employment Agreement, dated July 1,
2004, between Employee and Company (the “Employment
Agreement”), since July 1, 2004.
Employee and Company have mutually
agreed to terminate with Good Reason, as defined by the Employment
Agreement, Employee’s employment with the Company.
Employee has been afforded at least
twenty one days (21) days to consider this Agreement after it
was first presented to him.
Company has urged Employee to
consult and he has consulted with and obtained advice from counsel
of his choice before signing this Agreement.
Employee may sign and deliver two
copies of this Agreement to Company at any time prior to
5:00 p.m. on May 11, 2006. If Employee does not deliver
two (2) executed copies of this Agreement by such date,
Company’s offer will be withdrawn and Employee will have no
rights under this Agreement. By signing this Agreement, Employee
acknowledges that he was advised to and did consult with legal
counsel and that he knowingly and voluntarily entered into this
Agreement. Employee may choose to sign the Agreement before the
entire twenty-one (21) days have elapsed, which will begin the
seven (7) day revocation period. The choice whether to sign
the Agreement before the twenty-one (21) days have expired is
voluntary and entirely Employee’s. By signing this Agreement
before the twenty-one (21) days have expired, Employee is
acknowledging that Company did not coerce him to sign and his
signature is entirely voluntary and of his own choice. This offer
cannot be withdrawn before the twenty-one (21) days have
expired.
Employee may revoke his approval of
this Agreement within seven (7) days after he signs it by
giving written notice of revocation to Company as provided herein.
If Employee does not properly revoke this Agreement within seven
(7) days after signing, the Agreement will be deemed effective
as of the date he signed it. This Agreement shall not become
enforceable until the revocation period has expired. After the
revocation period has expired, the Agreement is irrevocable, final
and binding, and the waiver of rights contained in the Release,
including the waiver of the right to sue, is permanent.
If this Agreement does not become
final and binding, Employee’s employment with Company will
terminate effective September 15, 2006.
TERMS
For good and valuable consideration,
including the promises and mutual covenants contained herein, and
intending to be legally bound, Company and Employee agree as
follows:
1. TERMINATION OF
EMPLOYMENT
Employee’s employment with
Company will end effective at the close of business on
September 15, 2006 (“Final Employment Date”).
Employee will continue to receive his regular compensation,
$300,000 per year and benefits through September 15, 2006.
Employee will resign from the Board of Directors of the Company and
any of its affiliates, effective immediately. Employee will resign
as President and Chief Executive Officer effective June 30,
2006. During the period between the execution of Separation
Agreement and September 15, 2006, Employee shall assist
Company with the transition by supporting the office of the CEO as
needed.
Except as provided in this
Agreement, Employee’s entitlement to and participation in all
of Company’s benefit plans ceases on the Final Employment
Date.
2. SEVERANCE
(a) Salary Continuation.
Beginning on the first regular payday following September 15,
2006, Company shall pay Employee his current salary through
June 30, 2007 at the annual rate of $300,000. Employee’s
salary will be paid in accordance with the Company’s regular
payroll practices for executives, at the equivalent of the
Employee’s salary on the day prior to his termination
(exclusive of all additional forms of compensation including
bonuses, commissions, overtime, etc.), less all applicable
withholdings and deductions, until March 15, 2007, and on or
before March 15, 2007, the Company will make a lump sum
payment equal to all payments then due for the period
March 16, 2007 through June 30, 2007.
(b) Incentive Compensation.
Company will pay to Employee one quarter (1/4) of the
incentive compensation that would have otherwise been due had
Employee remained CEO for the full year at his most recent rate of
compensation. Such incentive compensation will be calculated based
upon the Company’s actual financial performance for the full
calendar year of 2006 compared with the original budget approved by
the Board of Directors on or about February 15, 2006. The
incentive compensation calculated on this basis, if any, shall be
paid by March 15, 2007.
(c) Business Expenses.
Company will pay to Employee all out-of-pocket business expenses as
may be accrued and unpaid on the Final Employment Date.
(d) Other Entitlements.
Company shall pay to Employee, within five (5) business days
of the Final Employment Date any vacation or personal days accrued
on or before the Final Employment Date pursuant to Company’s
standard policies and procedures and as set forth in the
Company’s Employee Manual, less all applicable withholdings
and deductions.
(e) Benefit Continuation.
Effective September 16, 2006, Employee will no longer be
eligible to receive benefits under Company benefit plans. Nor will
Employee
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be entitled to continue to pay into
Company’s 401(k) plan. Employee will be entitled to benefit
continuation under COBRA. If Employee elects to continue health
insurance benefits under COBRA, Company will continue to pay the
same monthly subsidy of the premiums for such insurance
continuation as was being paid by Company before the Final
Employment Date and the remainder of the premium payment shall be
deducted from Employee’s severance payments, through the
earlier of the end of the severance period and the date Employee
becomes eligible to receive and/or obtain comparable health
insurance coverage.
(f) Rental Payments. Company
shall pay Employee $1500 per month through July 2006 for the rental
of Employee’s leased residence located in New
Jersey.
(g) Options. The Company
acknowledges that options scheduled to vest on or before
September 15, 2006 may be exercised in accordance with
prevailing agreement(s) between the parties.
3. RELOCATION
EXPENSES
Company shall pay reasonable costs
to relocate Employee’s possessions from his leased residence
in New Jersey to his home in Florida. All such payments shall be
made by March 15, 2007.
4. TAX
EQUALIZATION
Company shall continue to provide
tax equalization payments in connection with Employee’s prior
overseas assignments until any foreign tax obligations in
connection with those assignments are extinguished.
5. GENERAL RELEASE OF CLAIMS AND
COVENANT NOT TO SUE
In exchange for the Severance
Payment and other good and valuable consideration set forth in this
Agreement, Employee agrees to execute and be bound by the General
Release Agreement attached hereto as Exhibit A (“General
Release”). Employee acknowledges that receipt of the
Severance Payment and the other benefits provided by this
Agreement, some of which Employee acknowledges he is not otherwise
entitled to, are expressly conditioned on his execution of this
Agreement, including the General Release Agreement.
6. NON-DISCLOSURE AND
NON-COMPETE
While employed by the Company and
through the period ending three (3) years after termination of
employment (regardless of the reason for termination), Employee
agrees that, unless he obtains written approval in advance from the
Chairman of the Company, he shall not, except on behalf of the
Company and/or its affiliates, in any way, directly or
indirectly:
(a) engage, directly or indirectly,
in, or permit his name to be used in connection with, any Protected
Business within any of the countries in which the Company or its
affiliates is doing business as of the Final Employment Date,
either individually or as an agent, employee, consultant, partner,
officer, director, stockholder, proprietor, owner or otherwise, of
any person, firm, corporation or organization; provided, however,
that ownership of less than
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five (5%) percent of the outstanding stock
of any publicly traded corporation will not be deemed to be
violative of this restrictive covenant. The parties agree that at
the end of three (3) years after the Final Employment Date,
Employee may become employed with any Protected Business. In such
employment, Employee shall abide by the trade secrets and
confidential information restrictions set forth in paragraph
(c);
(b) contact in connection with any
of the activities prohibited in this paragraph 6, employ, hire,
solicit or attempt to persuade any person or entity that has at any
time within the one (1) year period before the Final
Employment Date, been an employee of or independent contractor of
the Company or any of its affiliates to terminate his, her or its
relationship with the Company and/or its affiliates or do any act
that may result in the impairment of the relationship between the
Company or any of its affiliates on the one hand and the employees
or independent contractors of the Company or any of its affiliates
on the other hand;
(c) contact, solicit, serve or sell
to, in furtherance of or on behalf of any Protected Business, any
person or entity that has any time within the one (1) year
period before the Final Employment Date been a client or customer
or prospective client or customer of the Company or any of its
affiliates or attempt to persuade any such person or entity to
purchase or otherwise acquire or use any product or service(s)
offered by any business of the same or similar nature as products
or services offered by the Company or any of its affiliates. (For
purposes of this subparagraph, a “prospective client or
customer” means a person or entity with whom or which the
Company or its affiliates has had direct contact with and made a
proposal to provide products or services; or
For purposes of paragraph 6,
“Protected Business” means the design, development,
manufacture, production, marketing, sale or servicing of any
product or the provision of any service that competes with any
service offered by Company or any product sold by Company or under
development by Company.
7. REMEDIES
In the event of the breach of any
covenant contained in this paragraph 6, Company shall be entitled
to an injunction restraining such breach in addition to any other
remedies provided by law or equity. The compensation and benefits
provided under Section 2 of this Agreement are in part
consideration for Employee’s undertakings in this paragraph
6, and any breach of his undertakings herein will terminate
Company’s obligations set forth in paragraph 2(a)
above.
8. REASONABLENESS OF
RESTRICTIONS
Employee agrees and acknowledges
that the type and scope of restrictions described in paragraphs 6
and 7 are fair and reasonable and that the restrictions are
intended to protect the legitimate interests of Company and not to
prevent him from earning a living. Employee recognizes that his key
position as President and Chief Executive Officer and his access to
confidential information make it necessary for Company to restrict
his post-employment activities as set forth in this Agreement.
Employee represents and warrants that the knowledge, ability and
skill he currently possesses are sufficient to enable him to earn a
livelihood
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satisfactory to him for a period of three
(3) years in the event his employment with Company terminated,
without violating any restriction in this Agreement. If however,
the restrictions set forth in paragraph 6 are held invalid by a
court by reason of length of time, area covered, activity covered
or any or all of them, then such restriction
