Exhibit 10.1
May 13, 2009
SEPARATION AGREEMENT, CONSULTING
AGREEMENT AND GENERAL RELEASE
This Separation Agreement, Consulting
Agreement and General Release (this “Agreement”) is
entered into as of May 13, 2009 between Protective Products of
America, Inc., a Delaware corporation (the “Company”),
and Stephen Giordanella (the “Executive”).
WHEREAS, the Executive previously served
as the Chief Executive Officer of the Company pursuant to an
Employment Agreement between the Company and the Executive dated as
of January 1, 2007 (the “Employment
Agreement”);
WHEREAS, the Executive resigned as the
Company’s Chief Executive Officer on March 18, 2009;
and
WHEREAS, the Company and the Executive
desire to set forth herein their mutual agreement with respect to
the matters addressed herein, including matters pertaining to the
Executive’s resignation and cessation of employment with the
Company and its affiliates, certain other matters pertaining to the
relationship between the Company and the Executive, the
Executive’s release of claims, and the Company’s
release of claims relating solely to Executive’s employment
and specifically excluding any release associated with
Executive’s service as a Director of the Company, all upon
the terms set forth herein.
NOW, THEREFORE, in consideration of the
mutual promises and agreements contained herein, the adequacy and
sufficiency of which are hereby acknowledged, the Company and the
Executive hereby agree as follows:
1.
Resignation; Termination of
Employment . The
Executive resigned as Chief Executive Officer of the Company and
from all other positions (including as President of Protective
Products International Corp. (“ PPI ”)) with the
Company and its affiliates on March 18, 2009 (the “
Employment Termination Date ”); provided that the
Executive has not resigned, and is currently serving, as a director
of the Company.
2.
Amounts Related to Period Prior to
Employment Termination Date .
The Executive hereby waives all claims that he may otherwise
have to all amounts that may be owed to him in connection with his
service to the Company prior to the Employment Termination Date,
including any amounts attributable to (i) accrued salary through
the Employment Termination Date, (ii) any bonus with respect to
fiscal year 2008 or earlier periods and (iii) all amounts
attributable to accrued vacation; provided, however , that
the Executive does not waive his claim to be reimbursed for
reasonable business expenses incurred by the Executive prior to the
Employment Termination Date, which expenses shall be reimbursed by
the Company in accordance with its standard business expense
reimbursement practices and provided, further that
reimbursement of expenses related to airplane usage shall be
governed by Section 7 of this Agreement rather than by this Section
2.
3.
Treatment of Certain Amounts Currently
Owing Between the Parties
(a)
The Company made a $400,000 loan (the
“Outstanding Loan”) to the Executive at the time of the
acquisition by the Company of PPI. The Company acknowledges
the Executive paid this loan in full on May 5, 2009.
(b)
The Company has determined that it lacks
proper supporting documentation for a previously accrued $0.2
million receivable relating to the working capital adjustment
contemplated by Section 2.4 of the Agreement and Plan of Merger
(the “PPI Merger Agreement”) by and among the Company,
CPC Holding Corporation of America, PP Acquisition Corp.,
Protective Products International Corp. and the Executive dated as
of May 25, 2006 and accordingly will not attempt to collect such
adjustment from the Executive;
(c)
The Company acknowledges that on May 5,
2009, the Executive, on behalf of Albricas LLC, paid to the Company
$41,812.84 in full and final satisfaction of a promissory note
dated February 9, 2004 entered into by the Company and Albricas
LLC, which is wholly owned by the Executive.
(d)
This Agreement shall not affect the
rights, duties and/or obligations arising out of, relating to or in
connection with the Lease for the office and manufacturing facility
for the premises known as 530 Sawgrass Corporate
Parkway.
4.
Treatment of Lease Relating to
Residential Property 7115 Spyglass Avenue, Parkland, FL
. The Company and Armor World LLC
are parties to that certain Lease Agreement (the “Corporate
House Lease”), dated as of January 2007, pursuant to which
the Company leases the building located at 7115 Spyglass Avenue,
Parkland, Florida 33076. Armor World LLC is wholly owned by
Executive. The Company and the Executive (on behalf of Armor World
LLC) agree that, the Corporate House Lease is hereby amended so
that the term of the Lease shall expire on May 1, 2009 and the
Company shall have no further obligation or liability concerning
the property.
5.
Treatment of Equity Awards
. All equity awards previously
granted to the Executive during his employment with the Company
under the Company’s Stock Option Plan, dated April 26, 2001,
as amended from time to time, shall continue in full force and
effect pursuant to their respective terms.
6.
Return of Company Property
.
Promptly following the date
of this Agreement (but in no event later than three business days
following such date), the Executive shall return to the Company all
property of the Company in the Executive’s possession or
under the Executive’s control, including but not limited to
office, computing or communications equipment (including
laptop computers with air cards, Blackjack and cell phones
previously provided to the Executive by the Company); provided,
however, that Executive transferred the cell phone numbers into
his personal account and shall be entitled to keep those cell
phone
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numbers for continued personal,
Executive-paid, use following the execution of this Agreement.
In consideration for Executive continuing to serve as a
consultant pursuant to Section 16 of this Agreement, Executive
shall keep the lap top and one air card in his possession for his
continued personal, Executive paid use during the Consulting
Period.
7.
Treatment of Invoices Relating to Use
of Aircraft . Certain
invoices for the use by the Executive of aircraft managed by
Executive Jet Management (“EJM”) have been forwarded to
the Company for payment. The Company and the Executive agree
that payment responsibility for all invoices set forth on Exhibit A
attached hereto (Exhibit A includes 14 pages with invoices totaling
$213,973.63) shall be the responsibility of the Executive.
EJM invoice no. 3563875 in the amount of $27.673.68 is and
remains the responsibility of the Company. The Executive agrees
that he shall, with respect to the invoices for which he has been
allocated payment responsibility per Exhibit A, arrange to have EJM
reissue such invoices in his name. Executive agrees
that he shall fully indemnify the Company in relation to any costs
or expenses incurred by the Company in relation to the invoices set
forth on Exhibit A. The Company agrees that any EJM invoices
previously paid by the Company were the responsibility of the
Company and the Company waives any right to further reimbursement
by or claims against the Executive relating to the aircraft managed
by EJM.
8.
Treatment of Phone Lines at
Executive’s Home .
The bills for certain of the phone lines installed at the
home of the Executive are currently sent to the Company for
payment. The Executive agrees that he shall be responsible
for the payment of all expenses associated with such phone lines
from the Employment Termination Date forward. The Company and
the Executive shall take reasonable commercial steps to arrange to
have future bills associated with such phone lines sent directly to
Executive.
9.
Federal and State
Withholding . The
Company may withhold from all payments due to the Executive (or the
Executive’s estate or beneficiaries) hereunder all taxes
which, by applicable federal, state, local or other law, are
required to be withheld therefrom.
10.
Release by the Executive
. The Executive hereby
unconditionally and irrevocably releases and forever discharges the
Company and any of its subsidiaries or affiliates, of and from any
and all claims and demands whatsoever, known or unknown, at law and
in equity, in contract or in tort, and any statutory claim for
relief of any nature, and agrees not to sue and not to assert
against them any such claims or demands or any other causes of
action in any court or before any agency or commission of a local,
state and federal government, arising, alleged to have arisen,
which may have been alleged to have arisen, or which may arise
under any law whatsoever, and whether such claims are pursued
in a personal or individual capacity, or in a representational or
relator capacity, including, but not limited to, any federal,
state, or municipal anti-discrimination laws, anti-retaliation
laws, and “whistleblower” laws such as, the Fair Labor
Standards Act, the Equal Pay Act, the False Claims Act, the
Americans with Disabilities Act, Title VII of the Civil Rights Act,
as amended, the Family Medical Leave Act, Broward County Equal
Employment Ordinance, Palm Beach Equal Opportunity Ordinance, the
Florida Civil Rights Act of 1992, Section 440.205, Florida
Statutes, the National Labor Relations Act, OSHA, the Florida
Whistleblower Act, Sarbanes-Oxley, and the Patriot Act, that the
Executive on behalf of himself and on behalf of persons similarly
situated, ever had, now has, or which his heirs, executors,
administrators, attorneys, or assigns, or any of them, hereafter
can,
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shall or may have, for or by reason of
any cause whatsoever, based on any set of facts known or unknown,
occurring prior to, and including, the date of the execution of
this Agreement provided however nothing herein is to be interpreted
as prohibiting either party from filing an action enforcing the
terms of this Agreement; or enforcing the terms of any debentures,
notes, loans or other obligations still outstanding and referenced
in this Agreement.
11.
Release by the Company
. The Company, on behalf of itself
and its subsidiaries, hereby unconditionally and irrevocably
releases and forever discharges the Executive of and from any and
all claims and demands, but only to the extent such claims and
demands (i) arise out of the Executive’s employment by the
Company and its subsidiaries prior to the Employment Termination
Date (it being understood and agreed that the Company is not
releasing the Executive in his capacity as a director of the
Company or as a consultant to the Company pursuant to Section 16 of
this Agreement) and (ii) are based upon facts that are known or
should be known by any director of the Company (other than the
Executive) on the date of this Agreement (“Known
Facts”), ”),
provided, however
, that the parties agree that Known Facts
specifically excludes all facts and circumstances surrounding,
related to in any way, or uncovered as a result of the action
captioned Treiber et al. v. Protective Products International
Corp . (“Treiber Action”) filed May 8, 2009 in the
United States District Court for the Eastern District of Virginia,
civil action 3:09cv303, and the
Company agrees not to sue and not to assert against him any such
claims or demands or any other causes of action in any court or
before any agency or commission of a local, state and federal
government, arising, alleged to have arisen, which may have been
alleged to have arisen, or which may arise under any law
whatsoever, that the Company, on behalf of itself and its
subsidiaries, ever had, now has, or which its
